Exhibit 10.1

 

GRAMERCY CAPITAL CORP.

420 Lexington Avenue

New York, New York 10170

 

April 16, 2008

 

Hugh F. Hall

69 Calhoun Drive

Greenwich, CT  06831

 

Dear Hugh:

 

GKK Manager LLC (“GKK Manager”) and you are parties to an Employment and
Noncompetition Agreement entered into between you and GKK Manager on July     ,
2004 (the “Employment and Noncompetition Agreement,” attached at Exhibit A)
which also provides for certain obligations between you and Gramercy Capital
Corp. (“Gramercy”).  As you know, the Original Term (as defined in the
Employment and Noncompetition Agreement; all terms used and not defined herein
shall be as defined in the Employment and Noncompetition Agreement) was to have
expired on August 2, 2008 (the “Initial Expiration Date”).  This letter shall
reflect the mutual agreement between Gramercy and you to terminate all positions
you may have with Gramercy effective on April 16, 2008.  This letter also sets
forth the agreement (the “Agreement”) between you and Gramercy for ending your
relationship, including releasing Gramercy and related persons or entities from
any claims and permitting you to receive a continuation of certain benefits. 
Specifically, you are agreeing to resign from your positions now, and Gramercy
is agreeing to continue to provide for the vesting of equity that you would
otherwise have received had you continued working through August 2, 2008.

 

With those understandings, you and Gramercy agree as follows:

 

1.                                       Resignation from Employment

 

You are resigning from any and all positions that you hold with Gramercy, as an
officer, director or otherwise, effective on April 16, 2008 (the “Resignation
Date”).

 

2.                                       Equity Awards

 

All equity awards that you received from Gramercy (“Gramercy Equity Awards”),
including without limitation, all options to purchase shares of Gramercy common
stock, restricted shares of Gramercy common stock and LTIP Units in GKK Capital
LP, that are to vest on or before the Initial Expiration Date will vest: 
(a) with respect to all Gramercy Equity Awards other than options to purchase
shares of Gramercy common stock, on the date for which they are currently
provided so long as you have not breached your agreements hereunder through such
date and (b) with respect to options to purchase shares of Gramercy common
stock, on the Effective Date, and all other Equity Awards shall lapse on the
Resignation Date and will not be exercisable.

 

You acknowledge that the chart attached as Exhibit B contains a complete listing
of all outstanding Gramercy Equity Awards that are vested as of the date hereof
and that will vest on

 

 

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or prior to the Initial Expiration Date in accordance with this Agreement.  You
agree that all Gramercy Equity Awards that are not listed as vested on Exhibit B
are forfeited as of the Resignation Date.

 

Except for the provisions relating to the vesting and forfeiture of the Equity
Awards, this Paragraph 2 is not intended to modify in any respect the terms of
your Equity Awards.

 

3.                                       Tax Treatment

 

Gramercy shall withhold from any compensation or benefits payable under this
agreement all Federal, State, City, or other taxes as shall be required or
determined in good faith to be necessary pursuant to any law or governmental
regulations or rulings.  Nothing in this Agreement shall be construed to require
Gramercy to make any payments to compensate you for any adverse tax effect
associated with any payments or benefits or for any deduction or withholding
from any payment or benefit.

 

4.                                       Confidentiality; Prohibited Activities

 

You acknowledge that the Employment and Noncompetition Agreement contains
certain obligations in Section 8 (Confidentiality; Prohibited Activities) that
survive the termination of your service as an officer of Gramercy, including
without limitation Section 8(a) (Confidentiality), 8(b)(i) (Noncompetition),
8(b)(ii)(Nonsolicitation), 8(d) (Return of Employer Property); 8(e) (No
Disparagement), 8(g) (Transition), and 8(h) (Cooperation with Respect to
Litigation) continue in full force and effect and remain binding obligations on
your part to be performed; provided, however, that: (a) your obligations not to
compete with Gramercy, contained in Section 8(b)(i) of the Employment and
Noncompetition Agreement, are waived for the period beginning 12 months after
the Resignation Date (the “Outside Date”) provided that and so long as you have
not breached your agreements hereunder during such period and (i) for the period
from the Resignation Date through the Initial Expiration Date, you do not
solicit or respond to any inquires from any parties who are borrowers,
counterparties, brokers or other persons participating in the arrangement of any
loans or investments held or proposed to be held by Gramercy as of the
Resignation Date, (ii) for the 12-month period following the Resignation Date,
you do not solicit or respond to inquires from any parties for the purpose of
refinancing, making or participating in any loans or investments held or
proposed to be held by Gramercy as of the Resignation Date, including not
soliciting or responding to inquiries concerning, or acquiring or participating
in the acquisition (directly or indirectly) of any securities issued by Gramercy
or its affiliates, including preferred stock, trust preferred securities or
bonds issued in connection with collateralized debt obligations or other
securitization vehicles, and (iii) you do not solicit or respond to inquires
from any parties for the purpose of refinancing any loans or investments held or
proposed to be held by Gramercy as of the Resignation Date; and (b) you agree
that the term of your obligations set forth in Section 8(b)(ii) will be extended
through the date that is 30 months after the Resignation Date.  Notwithstanding
the foregoing, this Agreement shall not be deemed to prohibit you from
soliciting or responding to inquiries from

 

 

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banks, insurance companies, investment banks, loan brokers or financial advisors
regarding potential financing or investments that would not violate (i), 
(ii) or (iii) above, unless such parties represent counterparties to any
investments held by Gramercy. You acknowledge all of these continuing
obligations and agree to abide by them as provided in the Employment and
Noncompetition Agreement as modified herein.

 

5.                                       Mutual Release of Claims

 

(A)           BY YOU

 

In consideration for, among other terms, the payments and benefits described in
Paragraph 2, some of which you acknowledge you would otherwise not be entitled
to, you voluntarily release and forever discharge Gramercy, its affiliated and
related entities, its predecessors, successors and assigns, and its employee
benefit plans and fiduciaries of such plans, and the current and former
officers, directors, shareholders, employees, attorneys, accountants and agents
of the foregoing in their official and personal capacities (collectively
referred to as the “Releasees”) generally from all claims, demands, debts,
damages and liabilities of every name and nature, known or unknown (“Claims”)
that, as of the date when you sign this Agreement, you have, ever had, now claim
to have or ever claimed to have had against any or all of the Releasees.  This
release includes, without limitation, all Claims:

 

·

relating to your service as an officer of Gramercy;

·

of wrongful discharge;

·

of breach of contract, including but not limited to the Employment and
Noncompetition Agreement;

·

of retaliation or discrimination under federal, state or local law (including,
without limitation, Claims of age discrimination or retaliation under the Age
Discrimination in Employment Act, Claims of disability discrimination or
retaliation under the Americans with Disabilities Act, and Claims of
discrimination or retaliation under Title VII of the Civil Rights Act of 1964);

·

under any other federal or state statute;

·

of defamation or other torts;

·

of violation of public policy;

·

for wages, bonuses, incentive compensation, stock, stock options, vacation pay
or any other compensation or benefits; and

·

for damages or other remedies of any sort, including, without limitation,
compensatory damages, punitive damages, injunctive relief and attorney’s fees;

 

provided, however, that this release shall not affect (i) your rights under this
Agreement, (ii) your vested rights in any 401(k) plans in which you participated
during your employment, (iii) your continuing rights to indemnification, if any,
under the terms of Paragraph 4 of the Employment and Noncompetition Agreement,
or (iii) your right to seek damages of any kind for any act of

 

 

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fraud, misappropriation of funds, embezzlement or any other action with regard
to Gramercy by any other officer of Gramercy that constitutes a criminal act
under any federal or state statute.

 

You agree that you shall not seek or accept damages of any nature, other
equitable or legal remedies for your own benefit, attorney’s fees, or costs from
any of the Releasees with respect to any Claim released by this Agreement.  As a
material inducement to Gramercy to enter into this Agreement, you represent that
you have not assigned to any third party and you have not filed with any agency
or court any Claim released by this Agreement.

 

(b)                                 By Gramercy

 

In consideration for, among other terms, your release of Claims pursuant to
Paragraph 5(a), Gramercy, on behalf of itself and the Releasees, voluntarily
release and forever discharge you generally from all Claims that, as of the date
when Gramercy signs this Agreement, Gramercy has, ever had, now claims to have
or ever claimed to have had against you, including, without limitation, all
Claims relating to your service as an officer of Gramercy, except that this
release shall not apply to any act of fraud, misappropriation of funds,
embezzlement or any other action with regard to Gramercy that constitutes a
criminal act under any federal or state statute committed or perpetrated by you
during the course of your service as an officer of Gramercy.

 

6.                                       Communications Regarding Your
Separation

 

Gramercy will issue a press release announcing your resignation as part of a
reorganization of Gramercy’s senior executive team.  Each of the parties to this
Agreement agree that it will not make any written or oral statements regarding
the termination of your employment or other business relationship with Gramercy
that are inconsistent with the terms of the such press release.   The
obligations set forth in this Paragraph 6 shall not in any way affect the
obligations as otherwise set forth in this Agreement or the Employment and
Noncompetition Agreement.

 

7.                                       Suspension or Termination of Payments

 

In the event that you fail to comply with any of your obligations under this
Agreement, in addition to any other legal or equitable remedies it may have for
such breach Gramercy shall have the right to terminate or suspend its payments
to you under this Agreement.  The termination or suspension of such payments in
the event of such breach by you will not affect your continuing obligations
under this Agreement.  Notwithstanding the foregoing, this provision shall not
apply to the extent that your breach of this Agreement consists of initiating a
legal action in which you contend that the release set forth in Paragraph
5(a) is invalid, in whole or in part, due to the provisions of 29 U.S.C.
§ 626(f).

 

 

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8.                                       Legal Representation

 

This Agreement is a legally binding document and your signature will commit you
to its terms.  You acknowledge that you have been advised to discuss all aspects
of this Agreement with your attorney, that you have carefully read and fully
understand all of the provisions of this Agreement and that you are voluntarily
entering into this Agreement.

 

9.                                       Absence of Reliance

 

In signing this Agreement, you are not relying upon any promises or
representations made by anyone at or on behalf of Gramercy.

 

10.                                 Enforceability

 

If any portion or provision of this Agreement (including, without limitation,
any portion or provision of any paragraph of this Agreement) shall to any extent
be declared illegal or unenforceable by a court of competent jurisdiction, then
the remainder of this Agreement, or the application of such portion or provision
in circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.

 

11.                                 Waiver

 

No waiver of any provision of this Agreement shall be effective unless made in
writing and signed by the waiving party.  The failure of any party to require
the performance of any term or obligation of this Agreement, or the waiver by
any party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.

 

12.                                 Enforcement

 

(a)           Jurisdiction.  You and Gramercy hereby agree that the Supreme
Court of the State of New York and the United States District Court for the
Southern District of New York shall have the exclusive jurisdiction to consider
any matters related to this Agreement, including without limitation any claim
for violation of this Agreement.  With respect to any such court action, you
(i) submit to the jurisdiction of such courts, (ii) consent to service of
process, and (iii) waive any other requirement (whether imposed by statute,
rule of court or otherwise) with respect to personal jurisdiction or venue.

 

(b)           Relief.  You agree that it would be difficult to measure any harm
caused to Gramercy that might result from any breach by you of your promises set
forth in Paragraphs 4 and 5(a), and that in any event money damages would be an
inadequate remedy for any such breach.  Accordingly, you agree that if you
breach, or propose to breach, any portion of your obligations under

 

 

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Paragraphs 4 and/or 5(a), Gramercy shall be entitled, in addition to all other
remedies it may have, to an injunction or other appropriate equitable relief to
restrain any such breach, without showing or proving any actual damage to
Gramercy and without the necessity of posting a bond.  In the event that
litigation is commenced by either party to enforce the terms of this Agreement,
the prevailing party shall be entitled to have its reasonable attorneys’ fees
and costs reimbursed by the other party.  In addition, in the event that you
breach any portion of Paragraph 4, you agree that the restrictions and
obligations of Paragraph 4 shall remain in effect for the period of such breach
notwithstanding the period provided for by those restrictions and obligations
and you further agree that the same restrictions shall apply for an equal period
of time commencing effective upon the cessation of any such breach.

 

13.                                 Governing Law; Interpretation

 

This Agreement shall be interpreted and enforced under the laws of the State of
New York, without regard to conflict of law principles.  In the event of any
dispute, this Agreement is intended by the parties to be construed as a whole,
to be interpreted in accordance with its fair meaning, and not to be construed
strictly for or against either you or Gramercy or the “drafter” of all or any
portion of this Agreement.

 

14.                                 Entire Agreement

 

This Agreement constitutes the entire agreement between you and Gramercy.  This
Agreement supersedes any previous agreements or understandings between you and
Gramercy, including but not limited to the Employment and Noncompetition
Agreement attached at Exhibit A, except for those obligations contained in
Section 4 of the Employment and Noncompetition Agreement as referenced in
Paragraph 5(a), above, and those obligations contained in Section 8 of the
Employment and Noncompetition Agreement as referenced and modified in Paragraph
4, above, which remain in full force and effect.

 

15.                                 Time for Consideration; Effective Date

 

You have the opportunity to consider this Agreement for twenty-one (21) days
before signing it.  To accept this Agreement, you must return a signed original
of this Agreement so that it is received by the undersigned at or before the
expiration of this twenty-one (21) day period.  If you sign this Agreement
within less than twenty-one (21) days of the date of its delivery to you, you
acknowledge by signing this Agreement that such decision was entirely voluntary
and that you had the opportunity to consider this Agreement for the entire
twenty-one (21) day period.  For the period of seven (7) days from the date when
this Agreement becomes fully executed, you have the right to revoke this
Agreement by written notice to the undersigned.  For such a revocation to be
effective, it must be delivered so that it is received by the undersigned at or
before the expiration of the seven (7) day revocation period.  This Agreement
shall not become

 

 

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effective or enforceable during the revocation period.  This Agreement shall
become effective on the first business day following the expiration of the
revocation period (the “Effective Date”).

 

16.                                 Counterparts

 

This Agreement may be executed in any number of counterparts, each of which when
so executed and delivered shall be taken to be an original, but all of which
together shall constitute one and the same document.

 

Please indicate your agreement to the terms of this Agreement by signing and
returning to me the original of this letter within the time period set forth
above.

 

Very truly yours,

 

GRAMERCY CAPITAL CORP.

 

 

 

 

By:

/s/ Marc Holliday

 

 

Marc Holliday

 

 

Chief Executive Officer

 

 

 

 

 

 

 

 

April 16, 2008

 

 

Date

 

 

 

Enclosures:

 

Exhibit A: Employment and Noncompetition Agreement

 

Exhibit B: Summary of Vested Equity Awards

 

You are advised to consult with an attorney before signing this Agreement. The
foregoing is agreed to and accepted by:

 

 

 

/s/ Hugh F. Hall

 

April 16, 2008

Hugh F. Hall

 

Date

 

 

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Exhibit B: Summary of Vested Equity Awards

 

The following sets forth a complete listing of all of your outstanding Gramercy
Equity Awards that are vested as of April 16, 2008 and would vest if you
remained employed through August 2, 2008:

 

Gramercy Stock Options

 

Grant Date

 

Number of Shares

 

Exercise Price

 

Shares Vested as
of April 16, 2008

 

Shares to be Vested as of
August 2, 2008

 

12/31/2007

 

15,000

 

24.31

 

5,000

 

5,000

 

1/2/2007

 

25,000

 

30.89

 

8,333

 

8,333

 

4/20/2005

 

16,667

 

19.85

 

8,333

 

16,667

 

8/2/2004

 

62,500

 

15.00

 

31,250

 

62,500

 

 

Gramercy Restricted Stock

 

Grant Date

 

Number of Shares

 

Shares Vested as of
April 16, 2008

 

Shares to be Vested as of
August 2, 2008

 

12/31/2007

 

10,000

 

3,333

 

3,333

 

1/2/2007

 

30,000

 

17,481

 

17,481

 

8/2/2004

 

25,000

 

18,750

 

25,000

 

 

GKK Capital LP LTIP Units

 

All LTIP Units in GKK Capital LP previously granted will be forfeited.

 

 

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