EXECUTION COPY


 


EMPLOYMENT AND NONCOMPETITION AGREEMENT


 


This EMPLOYMENT AND NONCOMPETITION AGREEMENT
(“Agreement”) is made as of the 7th day of June, 2012, between Gordon DuGan (“Executive”) and Gramercy
Capital Corp., a Maryland corporation (the “Employer”), to be effective as of July 1, 2012 (the “Effective Date”).


 


1.            Term.
The term of this Agreement shall commence on the Effective Date and shall continue through, and terminate on, June 30, 2017 (the
“Original Term”) unless earlier terminated as provided in Section 6 below. The Original Term shall automatically be
extended for a single one (1) year period on the same terms as are set forth herein for the Original Term (the “Renewal Term”),
unless either party gives the other party at least three (3) months written notice of non-renewal prior to the expiration of the
Original Term, which notice shall constitute a Notice of Termination pursuant to Section 6(d) terminating Executive’s employment
without Cause (if given by the Employer) or without Good Reason (if given by Executive) as of the end of the Original Term. The
period of Executive’s employment hereunder consisting of the Original Term and the Renewal Term, if applicable, is herein
referred to as the “Employment Period.”


 


2.            Employment
and Duties.


 


(a)          Duties.
During the Employment Period, Executive shall be employed in the business of the Employer and its affiliates. Executive shall serve
as Chief Executive Officer (“CEO”) of the Employer and, for so long as so elected, as a voting member of the Board
of Directors of the Employer (the “Board”). In his capacity as Chief Executive Officer, Executive’s duties and
authority shall be those as would normally attach to Executive’s position as Chief Executive Officer, including such duties
and responsibilities as are customary among persons employed in similar capacities for similar companies, but in all events such
duties shall be commensurate with his position as Chief Executive Officer of the Employer. Executive’s duties and authority
shall be as further set forth by the Employer. The Board shall appoint Executive, effective as of the Effective Date, as a member
of the Board to serve as a Class II director.


 


(b)          Best
Efforts. Executive agrees to his employment as described in this Section 2 and agrees to devote substantially all of his business
time and efforts to the performance of his duties under this Agreement, except as otherwise approved by the Employer; provided,
however, that nothing herein shall be interpreted to preclude Executive, so long as there is no material interference with his
duties hereunder, from (i) participating as an officer or director of, or advisor to, any charitable or other tax exempt organization
or otherwise engaging in charitable, fraternal or trade group activities; (ii) investing and managing his assets as an investor
in other entities or business ventures; provided that he performs no management or similar role (or, in the case of investments
other than those in entities or business ventures engaged in the Business (as defined
in Section 8), he performs a management role comparable to the role that a significant limited partner would have,
but performs no day-to-day management or similar role) with respect to such entities or ventures and such investment does not violate
Section 8 hereof; and provided, further, that, in any case in which Executive knows that another party involved in the investment
has a business relationship with the Employer, Executive shall give prior written notice thereof to the Employer; (iii) serving
as a member of the Advisory Board of India 2020, Limited; or (iv) serving as a member of the Board of Directors of a for-profit
corporation with the approval of the Employer.


 



    	 



    	 



    

 


(c)          Travel.
In performing his duties hereunder, Executive shall be available for all reasonable travel as the needs of the Employer’s
business may require. Executive shall be based in, or within 50 miles of, Manhattan.


 


3.            Compensation
and Benefits. In consideration of Executive’s services hereunder, the Employer shall compensate Executive as provided
in this Agreement, and the Employer shall have the obligations as set forth herein.


 


(a)          Base
Salary. The Employer shall pay Executive a minimum annual salary at the rate of $750,000 per annum during the Employment Period
(“Base Salary”). Base Salary shall be payable in periodic installments in accordance with the regular payroll practices
of the Employer and shall be reviewed by the Employer at least annually.


 


(b)          Signing
Bonus; Incentive Compensation Bonuses. In addition to Base Salary, during the Employment Period, Executive shall be eligible
for and shall receive such discretionary annual bonuses as the Employer, in its sole discretion, may deem appropriate to reward
Executive for job performance. Any bonuses awarded for a fiscal year shall be paid after the end of such fiscal year and on or
before the 15th day of the third month of the following fiscal year (e.g., a bonus for 2013 will be paid sometime between
January 1, 2014 and March 15, 2014). In lieu of a bonus for 2012, the Employer shall pay Executive a signing bonus of $400,000
(the “Signing Bonus”), of which $200,000 shall be payable as of the Effective Date and the remainder shall be payable
in three equal installments on June 30, 2013, June 30, 2014 and June 30, 2015; provided that Executive remains employed by the
Employer on each such date.


 


(c)          Initial
Equity Awards. On the Effective Date, the Employer shall grant 250,000 shares of restricted stock (the “Restricted Stock
Award”) and 750,000 restricted stock units (the “Restricted Stock Unit Award”) to Executive under the Gramercy
Capital Corp. 2012 Inducement Equity Incentive Plan upon the terms summarized on Exhibit A hereto and pursuant to definitive
documentation consistent with the Employer’s general practices for documenting such equity awards. In addition, on the Effective
Date, Executive shall also be entitled to receive an award pursuant to an outperformance plan (the “Outperformance Plan”)
in accordance with definitive documentation which is consistent with the terms summarized on Exhibit B hereto. Each of the
Restricted Stock Award, the Restricted Stock Unit Award and the Outperformance Plan award is intended to constitute an employment
inducement award pursuant to Section 303A.08 of the New York Stock Exchange Listed Company Manual, and Executive acknowledges that
the granting of each of these awards is a material inducement to Executive agreeing to accept employment by the Employer.


 


(d)          Other
Equity Awards. Executive shall be eligible to receive equity awards from the Employer to the extent the Employer maintains
an equity award plan or similar program in which senior officers may participate; provided that the actual amount and terms of
any such equity awards shall be determined by the Employer in its sole discretion.


 


(e)          Expenses.
Executive shall be reimbursed for all reasonable business related expenses incurred by Executive at the request of or on behalf
of the Employer, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established
by the Employer. Any expenses incurred during the Employment Period but not reimbursed by the Employer by the end of the Employment
Period, shall remain the obligation of the Employer to so reimburse Executive.


 



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(f)          Health
and Welfare Benefit Plans. During the Employment Period, Executive and Executive’s immediate family shall be entitled
to participate in such health and welfare benefit plans as the Employer shall maintain from time to time for the benefit of senior
executive officers of the Employer and their families, on the terms and subject to the conditions set forth in such plan. Nothing
in this Section shall limit the Employer’s right to change or modify or terminate any benefit plan or program as it sees
fit from time to time in the normal course of business so long as it does so for all senior executives of the Employer.


 


(g)          Vacations.
Executive shall be entitled to paid vacations in accordance with the then regular procedures of the Employer governing senior executive
officers, except that Executive shall be credited with a minimum of 20 vacation days per calendar year, pro-rated for any partial
year. The Employer will pay Executive for unused accrued vacation upon termination of his employment.


 


(h)          Other
Benefits. During the Employment Period, the Employer shall provide to Executive such other benefits, as generally made available
to other senior executives of the Employer. In addition, the Employer shall maintain term life
insurance for the benefit of Executive’s beneficiaries in a face amount equal to $5,000,000; provided, however, that such
coverage shall only be required if available to the Employer at reasonable rates; and provided, further, that Executive cooperates
as reasonably requested by the Employer in the Employer’s efforts to obtain such insurance. If such insurance is not available
at reasonable rates, then the Employer shall provide such coverage on a self-insured basis, with a benefit to Executive’s
beneficiaries not to exceed the amount of cash severance that Executive would receive upon a termination by the Employer without
Cause (as defined in Section 6(a)(iii) below) under Section 7(a)(i) – (iii).


 


(i)          Timing
of Expense Reimbursement. All in-kind benefits provided and expenses eligible for reimbursement under this Agreement, if any,
must be provided by the Employer or incurred by Executive during the time periods set forth in this Agreement. All reimbursements
shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the
taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable
expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement
in any other taxable year. Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another
benefit.


 


4.          Indemnification
and Liability Insurance. The Employer agrees to indemnify Executive to the full extent permitted by applicable law, as the
same exists and may hereafter be amended, from and against any and all losses, damages, claims, liabilities and expenses asserted
against, or incurred or suffered by, Executive (including the costs and expenses of legal counsel retained by the Employer to defend
Executive and judgments, fines and amounts paid in settlement actually and reasonably incurred by or imposed on such indemnified
party) with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”)
in which Executive is made a party or threatened to be made a party or is otherwise involved, either with regard to his entering
into this Agreement with the Employer or in his capacity as an officer or director, or former officer or director of the Employer
or any affiliate thereof for which he may serve in such capacity. The Employer also agrees to secure promptly and maintain officers
and directors liability insurance providing coverage for Executive. The provisions of this Section 4 shall remain in effect after
this Agreement is terminated irrespective of the reasons for termination.


 



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5.            Employer’s
Policies. Executive agrees to observe and comply with the reasonable written rules and regulations of the Employer regarding
the performance of his duties and to carry out and perform orders, directions and policies communicated to him from time to time
by the Employer, so long as same are otherwise consistent with this Agreement.


 


6.            Termination.
Executive’s employment hereunder may be terminated under the following circumstances:


 


(a)           Termination
by the Employer.


 


(i)          Death.
Executive’s employment hereunder shall terminate upon his death.


 


(ii)         Disability.
If, as a result of Executive’s incapacity due to physical or mental illness or disability, Executive shall have been incapable
of performing his duties hereunder even with a reasonable accommodation on a full-time basis for the entire period of four consecutive
months or any 120 days in a 180-day period, and within 30 days after written Notice of Termination (as defined in Section 6(d))
is given he shall not have returned to the performance of Executive’s duties hereunder on a full-time basis, the Employer
may terminate Executive’s employment hereunder.


 


(iii)        Cause.
The Employer may terminate Executive’s employment hereunder for Cause. For purposes of this Agreement, “Cause”
shall mean Executive’s: (A) engaging in conduct which is a felony; (B) material breach of any of his obligations under Sections
8(a) through 8(e) of this Agreement; (C) willful misconduct of a material nature or gross negligence with regard to the Employer
or any of its affiliates; (D) material fraud with regard to the Employer or any of its affiliates; (E) willful or material violation
of any reasonable written rule, regulation or policy of the Employer applicable to senior executives unless such a violation is
cured within 30 days after written notice of such violation by the Employer; or (F) failure to competently perform his duties which
failure is not cured within 30 days after receiving notice from the Employer specifically identifying the manner in which Executive
has failed to perform (it being understood that, for this purpose, the manner and level of Executive’s performance shall
not be determined based on the financial performance of the Employer (including without limitation the performance of the stock
of the Employer)).


 


(iv)        Without
Cause. Executive’s employment hereunder may be terminated by the Employer at any time without Cause (as defined in Section
6(a)(iii) above), subject only to the severance provisions specifically set forth in Section 7. If the Employer terminates Executive’s
employment hereunder as of the end of the Original Term by giving a notice of non-renewal to Executive pursuant to Section 1, such
termination shall be deemed to be termination without Cause.


 


(b)           Termination
by Executive.


 


(i)          Disability.
Executive may terminate his employment hereunder for Disability within the meaning of Section 6(a)(ii) above.


 


(ii)         With
Good Reason. Executive’s employment hereunder may be terminated by Executive with Good Reason by written notice to the
Employer providing at least ten (10) days notice prior to such termination. For purposes of this Agreement, termination with “Good
Reason” shall mean the occurrence of one of the following events within sixty (60) days prior to such termination:


 



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(A)         a
material change or, if a Change-in-Control has occurred, any change in Executive’s duties, responsibilities, status or positions
with the Employer caused by the Employer that does not represent a promotion from or maintaining of Executive’s duties, responsibilities,
status or positions as CEO of a publicly traded company (which, so long as Executive is the CEO of the Employer, shall include
the appointment of another person as co-CEO of the Employer), except in connection with the termination of Executive’s employment
for Cause, disability, retirement or death;


 


(B)         a
failure by the Employer to pay compensation when due in accordance with the provisions of Section 3, which failure has not been
cured within 10 business days after the notice of the failure (specifying the same) has been given by Executive to the Employer;


 


(C)         a
material breach or, if a Change-in-Control has occurred, any breach by the Employer of any provision of this Agreement, which breach
has not been cured within 30 days after notice of noncompliance (specifying the nature of the noncompliance) has been given by
Executive to the Employer;


 


(D)         the
Employer requiring Executive to be based in an office more than 50 miles outside of Manhattan;


 


(E)         a
reduction by the Employer in Executive’s Base Salary to less than the minimum Base Salary set forth in Section 3(a);


 


(F)         a
material reduction in Executive’s benefits under any benefit plan (other than an equity award program) compared to those
currently received (other than in connection with and proportionate to the reduction of the benefits received by all or most senior
executives or undertaken in order to maintain such plan in compliance with any federal, state or local law or regulation governing
benefits plans, including, but not limited to, the Employee Retirement Income Security Act of 1974); or


 


(G)         the
failure by the Employer to obtain from any successor to the Employer an agreement to be bound by this Agreement pursuant to Section
15 hereof, which has not been cured within 30 days after the notice of the failure (specifying the same) has been given by Executive
to the Employer.


 


(iii)        Without
Good Reason. Executive shall have the right to terminate his employment hereunder without Good Reason, subject to the terms
and conditions of this Agreement. If Executive terminates his employment hereunder as of the end of the Original Term by giving
a notice of non-renewal to the Employer pursuant to Section 1, such termination shall be deemed to be termination without Good
Reason.


 



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(c)          Definitions.
The following terms shall be defined as set forth below.


 


(i)          A
“Change-in-Control” shall be deemed to have occurred if:


 


(A)         any
“person,” including a “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), but excluding the Employer, any entity controlling, controlled by or
under common control with the Employer, any trustee, fiduciary or other person or entity holding securities under any employee
benefit plan or trust of the Employer or any such entity, and Executive and any “group” (as such term is used in Section
13(d)(3) of the Exchange Act) of which Executive is a member), is or becomes the “beneficial owner” (as defined in
Rule 13(d)(3) under the Exchange Act), directly or indirectly, of securities of the Employer representing 25% or more of either
(1) the combined voting power of the Employer’s then outstanding securities or (2) the then outstanding common stock (or
other similar equity interest, in the case of a company other than a corporation) of the Employer (in either such case other than
as a result of an acquisition of securities directly from the Employer); or


 


(B)         there
shall occur any consolidation or merger of the Employer that would result in the voting securities of the Employer outstanding
immediately prior to such merger or consolidation representing (either by remaining outstanding or by being converted into voting
securities of the surviving entity) less than 50% of the total voting power of the voting securities of the surviving entity outstanding
immediately after such merger or consolidation or ceasing to have the power to elect at least a majority of the board of directors
or other governing body of such surviving entity; or


 


(C)         there
shall occur (1) any sale, lease, exchange or other transfer (in one transaction or a series of transactions contemplated or arranged
by any party as a single plan) of all or substantially all of the assets of the Employer, other than a sale or disposition by the
Employer of all or substantially all of the Employer’s assets to an entity at least 50% of the combined voting power of the
voting securities of which are owned by “persons” (as defined above) in substantially the same proportion as their
ownership of the Employer, as applicable, immediately prior to such sale, or (2) the approval by shareholders of the Employer of
any plan or proposal for the liquidation or dissolution of the Employer; or


 


(D)         the
members of the Board (the “Directors”) at the beginning of any consecutive 24-calendar-month period (the “Incumbent
Directors”) cease for any reason other than due to death to constitute at least a majority of the members of the Board; provided
that any Director whose election, or nomination for election by the Employer’s shareholders was approved or ratified by a
vote of at least a majority of the Incumbent Directors shall be deemed to be an Incumbent Director.


 


Notwithstanding the foregoing,
a Change-in-Control shall not be deemed to have occurred upon the sale, lease, exchange or other transfer by the Employer or its
direct and indirect subsidiaries of (1) all of their collateral management agreements (or their rights thereunder) with respect
to the assets owned by the indirect subsidiaries of the Employer that have issued CDO bonds that are outstanding as of the date
hereof (the “CDO Entities”), (2) all or substantially all of their interests in (or the underlying assets of) the CDO
Entities, and/or (3) all or substantially all of the assets of the Employer and its direct and indirect subsidiaries relating to
the CDO Entities or the Employer’s mortgage business generally.


 



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(d)          Notice
of Termination; Termination Date. Any termination of Executive’s employment by the Employer or by Executive (other than
on account of death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11
of this Agreement. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and, as applicable, shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated.
Except in the case of a written notice of non-renewal pursuant to Section 1, Executive’s employment shall terminate as of
the effective date set forth in the Notice of Termination, which date shall not be more than thirty (30) days after the date of
the Notice of Termination. The date on which Executive’s employment terminates is referred to herein as the “Termination
Date.”


 


(e)          Resignation
Upon Termination. In the event that Executive’s employment with the Employer is terminated, Executive (i) shall, within
five business days of receipt of a written request for resignation, resign as a director of the Employer, and shall resign all
other positions (including, without limitation, as officer, employee, director and member of any committee) with the Employer and
its subsidiaries, and (ii) shall provide such written confirmation thereof as may be reasonably required by the Employer.


 


7.            Compensation
Upon Termination; Change-in-Control.


 


(a)          Termination
By the Employer Without Cause or By Executive With Good Reason. If, during the Employment Period, (i) Executive is terminated
by the Employer without Cause pursuant to Section 6(a)(iv) above, or (ii) Executive shall terminate his employment hereunder with
Good Reason pursuant to Section (6)(b)(ii) above, then the Employment Period shall terminate as of the Termination Date, Executive
shall be entitled to receive his earned and accrued but unpaid Base Salary on or before the time required by law (but in no event
more than 30 days after the Termination Date), and Executive shall also be entitled to the following payments and benefits, subject
to Executive’s execution of a mutual release agreement in form and substance satisfactory to the Employer, whereby, in general,
each party releases the other from all claims such party may have against the other (other than (A) claims against the Employer
relating to the Employer’s obligations under this Agreement, the Outperformance Plan award agreement, and certain other specified
agreements arising in connection with or after Executive’s termination, including, without limitation, the Employer’s
obligations hereunder to provide severance payments and benefits and accelerated vesting of equity awards and (B) claims against
Executive relating to or arising out of any act of fraud, intentional misappropriation of funds, embezzlement or any other action
with regard to the Employer or any of its affiliated companies that constitutes a felony under any federal or state statute committed
or perpetrated by Executive during the course of Executive’s employment with the Employer or its affiliates, in any event,
that would have a material adverse effect on the Employer, or any other claims that may not be released by the Employer under applicable
law) (the “Release”), and the effectiveness and irrevocability thereof on or within 30 days after the Termination Date:


 


(i)          Executive
shall receive any unpaid installments of the Signing Bonus on the first regular payroll payment date occurring more than 30 days
after the Termination Date.


 



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(ii)         Executive
shall receive an aggregate amount equal to two (2) multiplied by the sum of (A) Executive’s average annual Base Salary in
effect during the twenty-four (24) months immediately prior to the Termination Date (the “Prior Salary”), and (B) the
highest annual cash bonus paid to Executive during the three fiscal years prior to the Termination Date (including any portion
of the annual cash bonus paid in the form of equity awards, as determined at the time of grant by the Compensation Committee of
the Board, in its sole discretion, and reflected in the minutes or consents of the Compensation Committee of the Board relating
to the approval of such equity awards, but excluding any annual or other equity awards made other than as payment of a cash bonus)
or, if the Termination Date occurs prior to the date Executive’s annual performance bonus for 2013 has been determined, the
amount of $200,000 (with the applicable amount being referred to herein as the “Prior Bonus”), which amount shall be
payable in twenty-four (24) equal monthly installments beginning on the first regular payroll payment date occurring more than
30 days after the Termination Date; provided that if the Executive is terminated by the Employer without Cause by the non-renewal
of the Original Term pursuant to Section 1, then the Executive shall instead receive an aggregate amount equal to one times the
sum of the Prior Salary and the Prior Bonus, which amount shall be payable in twenty-four (24) equal monthly installments beginning
on the first regular payroll payment date occurring more than 30 days after the Termination Date.


 


(iii)        If
the Termination Date is during 2013 or any later year, the Employer shall pay Executive a prorated annual performance bonus (the
“Prorated Annual Bonus”) equal to (x) the Prior Bonus multiplied by (y) a fraction, the numerator of which is
the number of days in the fiscal year in which Executive’s employment terminates through the Termination Date (and the number
of days in the prior fiscal year (other than 2012), in the event that Executive’s annual cash bonus for such year had not
been determined as of the Termination Date) and the denominator of which is 365, provided that the Prorated Annual Bonus shall
be less the amount of any annual performance bonus, or advance thereof, previously paid for the period associated with the Prorated
Annual Bonus. Such payment shall be made on the first regular payroll payment date occurring more than 30 days after the Termination
Date.


 


(iv)        If
Executive was participating in the Employer's group health plan immediately prior to the Termination Date, then the Employer shall
pay to Executive a monthly cash payment for a period of twenty-four (24) months after the Termination Date equal to the amount
of monthly employer contribution that the Employer would have made to provide health insurance to Executive if Executive had remained
employed by the Employer. Notwithstanding the foregoing, the Employer shall in no event be required to make the payments otherwise
required by this Section 7(a)(iv) after such time as Executive becomes entitled to receive health insurance benefits from another
employer or recipient of Executive’s services (such entitlement being determined without regard to any individual waivers
or other similar arrangements).


 



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(v)         On
the date that is 30 days after the Termination Date, (A) all unvested equity awards granted by the Employer (other than the Outperformance
Plan award, the Restricted Stock Unit Award and any future equity award that is subject to performance-based vesting requirements
other than continued employment) that would have vested had Executive remained as an employee of the Employer through the date
that is twenty-four (24) months after the Termination Date will vest; provided that if the Termination Date occurs in connection
with or within eighteen (18) months following a Change-in-Control, then all such equity awards shall fully vest, (B) in the event
Executive is terminated prior to any Change-in-Control and the Restricted Stock Unit Award has not yet fully vested, a number of
unvested restricted stock units subject to such award equal to two-fifths of the total number of restricted stock units initially
subject to such award will vest, and (C) in the event Executive is terminated on or after a Change-in-Control, the unvested equity
awards granted by the Employer pursuant to the Restricted Stock Unit Award will be treated in the same manner as other equity awards
pursuant to clause (A) above after giving effect to the measurement of the performance-based hurdles under the Restricted Stock
Unit Award as of the Change-in-Control. Additionally, in the event that any unvested equity awards (or portion thereof) made by
the Employer to Executive would, in the absence of this Agreement, terminate or be forfeited as a result of a termination of employment,
then such equity awards shall only terminate or be forfeited upon the later of (A) the date upon which it is determined that such
equity awards will not vest pursuant to this Section 7(a)(v) or (B) the date otherwise provided for in such equity awards; provided
that the period during which a stock option or similar equity award may be exercised shall not be extended beyond the maximum period
(assuming Executive continued as an employee of the Employer) provided for in such equity award and no additional vesting shall
occur solely as a result of the operation of this sentence. The Outperformance Plan award and any future equity award that is subject
to performance-based vesting requirements other than continued employment will be treated in accordance with their terms.


 


Other than as may be provided under Section 4 or as
expressly provided in this Section 7(a), the Employer shall have no further obligations hereunder following such termination.


 


(b)          Termination
By the Employer For Cause or By Executive Without Good Reason. If, during the Employment Period, (i) Executive is terminated
by the Employer for Cause pursuant to Section 6(a)(iii) above, or (ii) Executive voluntarily terminates his employment hereunder
without Good Reason pursuant to Section 6(b)(iii) above, then the Employment Period shall terminate as of the Termination Date
and Executive shall be entitled to receive his earned and accrued but unpaid Base Salary on or before the time required by law
(but in no event more than 30 days after the Termination Date), but, for avoidance of doubt, shall not be entitled to any annual
cash bonus for the year in which the termination occurs, severance payment, continuation of benefits or acceleration of vesting
or extension of exercise period of any equity awards, except as otherwise provided in the documentation applicable to such equity
awards. Other than as may be provided under Section 4 or as expressly provided in this Section 7(b), the Employer shall have no
further obligations hereunder following such termination.


 


(c)          Termination
by Reason of Death. If, during the Employment Period, Executive’s employment terminates due to his death, Executive’s
estate (or a beneficiary designated by Executive in writing prior to his death) shall be entitled to the following payments and
benefits:


 


(i)          On
or before the time required by law (but in no event more than 30 days after the Termination Date), Executive’s estate (or
a beneficiary designated by Executive in writing prior to his death) shall receive from the Employer an amount equal to any earned
and accrued but unpaid Base Salary.


 


(ii)         On
the first regular payroll payment date after the Termination Date occurs, Executive’s estate (or a beneficiary designated
by Executive in writing prior to his death) shall receive from the Employer an amount equal to (A) any unpaid installments of the
Signing Bonus and (B) if the Termination Date is during 2013 or any later year, the Prorated Annual Bonus, less the amount of any
annual performance bonus, or advance thereof, previously paid for the period associated with the Prorated Annual Bonus.


 



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(iii)        On
the Termination Date, (A) all unvested equity awards granted by the Employer (other than the Outperformance Plan award, the Restricted
Stock Unit Award and any future equity award that is subject to performance-based vesting requirements other than continued employment)
that would have vested had Executive remained as an employee of the Employer through the date that is twelve (12) months after
the Termination Date will vest, (B) in the event the Termination Date occurs prior to any Change-in-Control and the Restricted
Stock Unit Award has not yet fully vested, a number of unvested restricted stock units subject to such award equal to one-fifth
of the total number of restricted stock units initially subject to such award will vest, and (C) in the event the Termination Date
occurs following a Change-in-Control, the unvested equity awards granted by the Employer pursuant to the Restricted Stock Unit
Award will be treated in the same manner as other equity awards pursuant to clause (A) above after giving effect to the measurement
of the performance-based hurdles under the Restricted Stock Unit Award as of the Change-in-Control. The Outperformance Plan award
and any future equity award that is subject to performance-based vesting requirements other than continued employment will be treated
in accordance with their terms.


 


Notwithstanding the foregoing and any provision to
the contrary in the Outperformance Plan or any other equity awards (except to the extent expressly provided otherwise, making specific
reference to this Section of this Agreement, in a future equity award), Executive shall only be entitled to receive the vesting
credit, payments and other benefits set forth in Sections 7(c)(ii) and (iii) above and any accelerated vesting or other benefits
under the Outperformance Plan or any other equity award to the extent that the aggregate value of such vesting credit, payments
and other benefits and any other such accelerated vesting or benefits, on the date of Executive’s death, exceeds the amount
payable to Executive’s beneficiaries under the life insurance (or self-insurance) provided pursuant to the second and third
sentences of Section 3(h) as determined in good faith by the Employer. In the event excess value exists, then the Employer shall
have discretion to determine which of the vesting credit, accelerated vesting, payments and other benefits shall be provided to
the Executive’s estate (or a beneficiary designated by Executive in writing prior to his death) to provide such excess value.
Other than as may be provided under Section 4 or as expressly provided in this Section 7(c), the Employer shall have no further
obligations hereunder following such termination.


 


(d)          Termination
by Reason of Disability. In the event that, during the Employment Period, Executive’s employment terminates due to his
disability as defined in Section 6(a)(ii) above, Executive shall be entitled to receive his earned and accrued but unpaid Base
Salary on or before the time required by law (but in no event more than 30 days after the Termination Date) and Executive shall
be entitled to the following payments and benefits, subject to Executive’s execution of the Release and the effectiveness
and irrevocability thereof on or within 30 days after the Termination Date:


 


(i)          Executive
shall receive any unpaid installments of the Signing Bonus on the first regular payroll payment date occurring more than 30 days
after the Termination Date.


 


(ii)         Executive
shall receive an aggregate amount equal to one times the sum of the Prior Salary plus the Prior Bonus, which amount shall be payable
in twenty-four (24) equal monthly installments beginning on the first regular payroll payment date occurring more than 30 days
after the Termination Date.


 



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(iii)        If
the Termination Date is during 2013 or any later year, the Employer shall pay Executive the Prorated Annual Bonus on the first
regular payroll payment date occurring more than 30 days after the Termination Date, provided that the Prorated Annual Bonus shall
be less the amount of any annual performance bonus, or advance thereof, previously paid for the period associated with the Prorated
Annual Bonus.


 


(iv)        On
the date that is 30 days after the Termination Date, (A) all unvested equity awards granted by the Employer (other than the Outperformance
Plan award, the Restricted Stock Unit Award and any future equity award that is subject to performance-based vesting requirements
other than continued employment) that would have vested had Executive remained as an employee of the Employer through the date
that is twelve (12) months after the Termination Date will vest, (B) in the event the Termination Date occurs prior to any Change-in-Control
and the Restricted Stock Unit Award has not yet fully vested, a number of unvested restricted stock units subject to such award
equal to one-fifth of the total number of restricted stock units initially subject to such award will vest, and (C) in the event
the Termination Date occurs following a Change-in-Control, the unvested equity awards granted by the Employer pursuant to the Restricted
Stock Unit Award will be treated in the same manner as other equity awards pursuant to clause (A) above after giving effect to
the measurement of the performance-based hurdles under the Restricted Stock Unit Award as of the Change-in-Control. Additionally,
in the event that any unvested equity awards (or portion thereof) made by the Employer to Executive would, in the absence of this
Agreement, terminate or be forfeited as a result of a termination of employment, then such equity awards shall only terminate or
be forfeited upon the later of (A) the date upon which it is determined that such equity awards will not vest pursuant to this
Section 7(d)(iv) or (B) the date otherwise provided for in such equity awards; provided that the period during which a stock option
or similar equity award may be exercised shall not be extended beyond the maximum period (assuming Executive continued as an employee
of the Employer) provided for in such equity award and no additional vesting shall occur solely as a result of the operation of
this sentence. The Outperformance Plan award and any future equity award that is subject to performance-based vesting requirements
other than continued employment will be treated in accordance with their terms.


 


(v)         If
Executive was participating in the Employer's group health plan immediately prior to the Termination Date, then the Employer shall
pay to Executive a monthly cash payment for a period of twelve (12) months after the Termination Date equal to the amount of monthly
employer contribution that the Employer would have made to provide health insurance to Executive if Executive had remained employed
by the Employer. Notwithstanding the foregoing, the Employer shall
in no event be required to make the payments otherwise required by this Section 7(d)(v) after such time as Executive becomes entitled
to receive health insurance benefits from another employer or recipient of Executive’s services (such entitlement being determined
without regard to any individual waivers or other similar arrangements).


 


Other than as may be provided under Section 4 or as
expressly provided in this Section 7(d), the Employer shall have no further obligations hereunder following such termination.


 



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8.            Confidentiality;
Prohibited Activities. Executive and the Employer recognize that due to the nature of Executive’s employment and relationship
with the Employer, Executive has access to and develops confidential business information, proprietary information, and trade secrets
relating to the business and operations of the Employer. Executive acknowledges that (i) such information is valuable to the business
of the Employer, (ii) disclosure to, or use for the benefit of, any person or entity other than the Employer, would cause irreparable
damage to the Employer, (iii) the principal business of the Employer as of the date hereof is the acquisition, development, asset
management and servicing of commercial real estate property (the business of the Employer as of the
date hereof and from time to time hereafter, is referred to as the “Business”), (iv) the Employer is
one of the limited number of persons who have developed a business such as the Business, and (v) the Business is national in scope.
Executive further acknowledges that his duties for the Employer include the duty to develop and maintain client, customer, employee,
and other business relationships on behalf of the Employer; and that access to and development of those close business relationships
for the Employer render his services special, unique and extraordinary. In recognition that the goodwill and business relationships
described herein are valuable to the Employer, and that loss of or damage to those relationships would destroy or diminish the
value of the Employer, and in consideration of the compensation (including severance) arrangements hereunder, and other good and
valuable consideration the receipt and sufficiency of which are hereby acknowledged by Executive, Executive agrees as follows:


 


(a)           Confidentiality.
During the Employment Period and at all times thereafter, Executive shall maintain the confidentiality of all confidential or proprietary
information of the Employer (“Confidential Information”), and, except in furtherance of the business of the Employer
or as specifically required by law or by court order, he shall not directly or indirectly disclose any such information to any
person or entity; nor shall he use Confidential Information for any purpose except for the benefit of the Employer. For purposes
of this Agreement, “Confidential Information” includes, without limitation: client or customer lists, identities, contacts,
business and financial information (excluding those of Executive prior to employment with the Employer); investment strategies;
pricing information or policies, fees or commission arrangements of the Employer; marketing plans, projections, presentations or
strategies of the Employer; financial and budget information of the Employer; new personnel acquisition plans; and all other business
related information which has not been publicly disclosed by the Employer. This restriction shall apply regardless of whether such
Confidential Information is in written, graphic, recorded, photographic, data or any machine readable form or is orally conveyed
to, or memorized by, Executive.


 


(b)           Prohibited
Activities. Because Executive’s services to the Employer are essential and because Executive has access to the Employer’s
Confidential Information, Executive covenants and agrees that:


 


(i)          During
the period when Executive is employed by the Employer and for the eighteen (18) month period thereafter (or, if Executive does
not commence employment pursuant to this Agreement, during the eighteen (18) month period commencing on the Effective Date), Executive
will not, anywhere in the United States, without the prior written consent of the Employer, directly
or indirectly (individually, or through or on behalf of another entity as owner, partner, agent, employee, consultant, or in any
other capacity), engage, participate or assist, as an owner, partner, employee, consultant, director, officer, trustee or agent,
in any element of the Business, provided, however, that (A) such eighteen (18) month period shall only be twelve (12) months if
Executive’s employment is terminated upon a non-renewal of the Original Term, (B) such eighteen (18) month period shall only
be six (6) months if, following a Change-in-Control, Executive’s employment is terminated by the Employer or any successor
thereto without Cause or by Executive for Good Reason, and (C) such eighteen (18) month period shall only be six (6) months if
Executive’s employment is terminated upon or after the expiration of the Renewal Term; with this subparagraph (i) being subject,
however, to Section 8(c) below; and


 



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(ii)         Executive
will not, without the prior written consent of the Employer, directly or indirectly (individually, or through or on behalf of another
entity as owner, partner, agent, employee, consultant, or in any other capacity), during the period when Executive is employed
by the Employer and (A) during the two (2) year period following the termination of Executive’s employment for any reason
(including upon or after the expiration of the term of the Agreement) solicit, encourage, or engage in any activity to induce any
employee of the Employer to terminate employment with the Employer, or to become employed by, or to enter into a business relationship
with, any other person or entity, or (B) during the one (1) year period following such termination, engage in any activity intentionally
to interfere with, disrupt or damage the relationship of the Employer with any existing borrower, tenant, client or, supplier,
or disrupt or damage any other existing business relationship of the Employer. For purposes of this subsection, the term “employee”
means any individual who is an employee of or consultant to the Employer (or any affiliate of either) during the six (6) month
period prior to Executive’s last day of employment.


 


(c)          Other
Investments/Activities. Notwithstanding anything contained herein to the contrary, Executive is not prohibited by this Section
8 from making investments (i) solely for investment purposes and without participating in the business in which the investments
are made, in any entity, if (x) Executive’s aggregate investment in each such entity constitutes less than one percent of
the equity ownership of such entity, (y) the investment in the entity is in securities traded on any national securities exchange,
and (z) Executive is not a controlling person of, or a member of a group which controls, such entity; or (ii) if (A) except with
the prior written consent of the Employer, Executive has less than a 10% interest in the investment in question, (B) except with
the prior written consent of the Employer, Executive does not have the role of a general partner or managing member, or any similar
role, (C) the investment is not an appropriate investment opportunity for the Employer, and (D) the investment activity is not
directly competitive with the businesses of the Employer.


 


(d)          Employer
Property. Executive acknowledges that all originals and copies of materials, records and documents generated by him or coming
into his possession during his employment by the Employer are the sole property of the Employer (the “Employer Property”).
During his employment, and at all times thereafter, Executive shall not remove, or cause to be removed, from the premises of the
Employer, copies of any record, file, memorandum, document, computer related information or equipment, or any other item relating
to the business of the Employer, except in furtherance of his duties under this Agreement. When Executive terminates his employment
with the Employer, or upon request of the Employer at any time, Executive shall promptly deliver to the Employer all originals
and copies of the Employer Property in his possession or control and shall not retain any originals or copies in any form, except
that Executive may retain a copy of his Rolodex or other similar contact list. The Employer Property excludes any personal property
of Executive.


 



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(e)          No
Disparagement. For one (1) year following termination of Executive’s employment for any reason, Executive shall not intentionally
disclose or cause to be disclosed any negative, adverse or derogatory comments or information about (i) the Employer and its affiliates
or subsidiaries; (ii) any product or service provided by the Employer its affiliates or subsidiaries; or (iii) the Employer’s
and its affiliates’ or subsidiaries’ prospects for the future. For one (1) year following termination of Executive’s
employment for any reason, the Employer shall not disclose or cause to be disclosed any negative, adverse or derogatory comments
or information about Executive. Nothing in this Section shall prohibit either the Employer or Executive from testifying truthfully
in any legal or administrative proceeding.


 


(f)          Remedies.
Executive declares that the foregoing limitations in Sections 8(a) through 8(e) above are reasonable and necessary for the adequate
protection of the business and the goodwill of the Employer. If any restriction contained in this Section 8 shall be deemed to
be invalid, illegal or unenforceable by reason of the extent, duration or scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration, scope, or other provisions hereof to make the restriction consistent
with applicable law, and in its reduced form such restriction shall then be enforceable in the manner contemplated hereby. In the
event that Executive breaches any of the promises contained in this Section 8, Executive acknowledges that the Employer’s
remedy at law for damages will be inadequate and that the Employer will be entitled to specific performance, a temporary restraining
order or preliminary injunction to prevent Executive’s prospective or continuing breach and to maintain the status quo. The
existence of this right to injunctive relief, or other equitable relief, or the Employer’s exercise of any of these rights,
shall not limit any other rights or remedies the Employer may have in law or in equity, including, without limitation, the right
to arbitration contained in Section 9 hereof and the right to compensatory and monetary damages. Executive hereby agrees to waive
his right to a jury trial with respect to any action commenced to enforce the terms of this Agreement. Executive shall have remedies
comparable to those of the Employer as set forth above in this Section 8(f) if the Employer breaches Section 8(e).


 


(g)          Transition.
Regardless of the reason for his departure from the Employer, Executive agrees that at the Employer’s sole costs and expense,
for a period of not more than 30 days after termination of Executive, he shall take all steps reasonably requested by the Employer
to effect a successful transition of client and customer relationships to the person or persons designated by the Employer, subject
to Executive’s obligations to his new employer.


 


(h)          Cooperation
with Respect to Litigation. During the Employment Period and at all times thereafter, Executive agrees to give prompt written
notice to the Employer of any claim relating to the Employer and to cooperate fully, in good faith and to the best of his ability
with the Employer in connection with any and all pending, potential or future claims, investigations or actions which directly
or indirectly relate to any action, event or activity about which Executive may have knowledge in connection with or as a result
of his employment by the Employer hereunder. Such cooperation will include all assistance that the Employer, its counsel or its
representatives may reasonably request, including reviewing documents, meeting with counsel, providing factual information and
material, and appearing or testifying as a witness; provided, however, that the Employer will reimburse Executive for all reasonable
expenses, including travel, lodging and meals, incurred by him in fulfilling his obligations under this Section 8(h) and, except
as may be required by law or by court order, should Executive then be employed by an entity other than the Employer, such cooperation
will not materially interfere with Executive’s then current employment.


 


(i)          Survival.
The provisions of this Section 8 and any other provisions relating to the enforcement thereof shall survive (i) the termination
or expiration of this Agreement, and (ii) termination of Executive’s employment.


 



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9.            Arbitration.
Any controversy or claim arising out of or relating to this Agreement or the breach of this Agreement (other than a controversy
or claim arising under Section 8, to the extent necessary for the Employer (or its affiliates, where applicable) to avail itself
of the rights and remedies referred to in Section 8(f)) that is not resolved by Executive and the Employer (or its affiliates,
where applicable) shall be submitted to arbitration in New York, New York in accordance with New York law and the procedures of
the American Arbitration Association. The determination of the arbitrator(s) shall be conclusive and binding on the Employer (or
its affiliates, where applicable) and Executive and judgment may be entered on the arbitrator(s)’ award in any court having
jurisdiction.


 


10.          Conflicting
Agreements. Executive hereby represents and warrants that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he is a party or is bound, and that he is not now
subject to any covenants against competition or similar covenants which would affect the performance of his obligations hereunder.


 


11.          Notices.
All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand
and or sent by prepaid telex, cable or other electronic devices or sent, postage prepaid, by registered or certified mail or telecopy
or overnight courier service and shall be deemed given when so delivered by hand, telexed, cabled or telecopied, or if mailed,
three days after mailing (one business day in the case of express mail or overnight courier service), as follows:


 


(a)           if
to Executive:


 


Gordon DuGan, at the address shown on the execution
page hereof.


 


and:


 


Kleinberg, Kaplan, Wolff & Cohen, P.C.


551 Fifth Avenue


New York, New York 10176


Attn: Jonathan Ain


 


(b)          if
to the Employer:


Gramercy Capital Corp.


420 Lexington Avenue


New York, New York 10170


Attn: Corporate Secretary


 


and:


 


Goodwin Procter LLP


Exchange Place


Boston, Massachusetts 02109


Attention: Daniel Adams


 


or such other address as either party may from time
to time specify by written notice to the other party hereto.


 



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12.          Amendments.
No amendment, modification or waiver in respect of this Agreement shall be effective unless it shall be in writing and signed by
the party against whom such amendment, modification or waiver is sought.


 


13.          Severability.
If any provision of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to
any person or circumstances shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion hereof) or
the application of such provision to any other persons or circumstances.


 


14.          Withholding.
The Employer shall be entitled to withhold from any payments or deemed payments any amount of tax withholding it determines to
be required by law.


 


15.          Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of both
parties and their respective successors and assigns, including any corporation with which or into which the Employer may be
merged or which may succeed to its assets or business, provided, however, that the obligations of Executive are personal and
shall not be assigned by him. This Agreement shall inure to the benefit of and be enforceable by Executive’s personal
and legal representatives, executors, administrators, assigns, heirs, distributees, devisees and legatees.


 


16.          Counterparts.
This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall
become effective when one or more such counterparts have been signed by each of the parties and delivered to the other party.


 


17.          Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements
made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.


 


18.          Choice
of Venue. Subject to the provisions of Section 9, Executive agrees to submit to the jurisdiction of the United States District
Court for the Southern District of New York or the Supreme Court of the State of New York, New York County, for the purpose of
any action to enforce any of the terms of this Agreement.


 


19.          Limitation
of Severance Payments


 


(a)          Anything
in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by
the Employer to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”) and the applicable regulations thereunder (the “Severance Payments”), would be subject to
the excise tax imposed by Section 4999 of the Code, the following provisions shall apply:


 


(i)          If
the Severance Payments, reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and
employment taxes payable by the Executive on the amount of the Severance Payments which are in excess of the Threshold Amount,
are greater than or equal to the Threshold Amount, the Executive shall be entitled to the full benefits payable under this Agreement.


 



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(ii)         If
the Threshold Amount is less than (x) the Severance Payments, but greater than (y) the Severance Payments reduced by the sum of
(1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Severance
Payments which are in excess of the Threshold Amount, then the Severance Payments shall be reduced (but not below zero) to the
extent necessary so that the sum of all Severance Payments shall not exceed the Threshold Amount. In such event, the Severance
Payments shall be reduced in the following order: (1) cash payments not subject to Section 409A of the Code; (2) cash payments
subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits. To the extent
any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological
order.


 


(b)          For
the purposes of this Section 19, “Threshold Amount” shall mean three times the Executive’s “base amount”
within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00); and “Excise
Tax” shall mean the excise tax imposed by Section 4999 of the Code, and any interest or penalties incurred by the Executive
with respect to such excise tax.


 


(c)          The
determination as to which of the alternative provisions of Section 19(a) shall apply to Executive shall be made by a nationally
recognized accounting firm selected by the Employer (the “Accounting Firm”), which shall provide detailed supporting
calculations both to the Employer and Executive within 15 business days of the Termination Date, if applicable, or at such earlier
time as is reasonably requested by the Employer or Executive. For purposes of determining which of the alternative provisions of
Section 19(a) shall apply, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income
taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes
at the highest marginal rates of individual taxation in the state and locality of Executive’s residence on the Termination
Date, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.
Any determination by the Accounting Firm shall be binding upon the Employer and Executive.


 


20.          Section
409A.


 


(a)          Anything
in this Agreement to the contrary notwithstanding, if at the time of Executive’s separation from service within the meaning
of Section 409A of Code, the Employer determines that Executive is a “specified employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that Executive becomes entitled to under this Agreement
would be considered deferred compensation subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code
as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall
not be provided until the date that is the earlier of (A) six months and one day after Executive’s separation from service,
or (B) Executive’s death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment
shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application
of this provision, and the balance of the installments shall be payable in accordance with their original schedule. Any such delayed
cash payment shall earn interest at a simple annual rate equal to 5% per annum, from the date such payment would have been made
if not for the operation of this Section until the payment is actually made.


 


(b)          The
parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision
of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner
so that all payments hereunder comply with Section 409A of the Code. The parties agree that this Agreement may be amended, as reasonably
requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations
in order to preserve the payments and benefits provided hereunder without additional cost to either party.


 



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(c)          To
the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation”
under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination
of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.”
The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions
set forth in Treasury Regulation Section 1.409A-1(h).


 


(d)          The
Employer makes no representation or warranty and shall have no liability to Executive or any other person if any provisions of
this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption
from, or the conditions of, such Section.


 


21.          Other
Existing Agreements. Other than that certain Employment Agreement dated June 8, 2011, between Executive and Fixed Income Discount
Advisory Company, which Executive has disclosed to the Employer, Executive represents to the Employer that he is not subject or
a party to any employment or consulting agreement, non-competition covenant or other agreement, covenant or understanding which
might prohibit him from executing this Agreement or limit his ability to fulfill his responsibilities hereunder.


 


22.          Entire
Agreement. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings relating to such subject matter. The parties hereto shall
not be liable or bound to any other party in any manner by any representations, warranties or covenants relating to such subject
matter except as specifically set forth herein.


 


23.          Paragraph
Headings. Section headings used in this Agreement are included for convenience of reference only and will not affect the meaning
of any provision of this Agreement.


 


[Remainder of page
intentionally left blank]


 



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IN WITNESS WHEREOF, this Agreement
is entered into as of the date and year first written above, and is being executed on this 7th day of June, 2012.


 


	 	GRAMERCY CAPITAL CORP.
	 	 	 
	 	By:	/s/ Jon W. Clark
	 	 	Name:  Jon W. Clark
	 	 	Title:    Chief Financial Officer and
	 	 	             Treasurer
	 	 	 
	 	EXECUTIVE:
	 	 
	 	/s/ Gordon DuGan
	 	Gordon DuGan


 





[Signature Page to Employment and Noncompetition
Agreement]


 








    	 



    	 



    

 


EXHIBIT
A


 


RESTRICTED STOCK AND RESTRICTED STOCK
UNIT AWARDS


 


Definitions


 


As used in this Exhibit A:


 


“Committee” means the Compensation
Committee of the Employer’s Board of Directors.


 


“Common Stock” means the Employer’s
Common Stock, par value $.001 per share, either currently existing or authorized hereafter.


 


“Common Stock Price” means,
as of a particular date, the average of the Fair Market Values of one share of the Common Stock for the thirty (30) trading days
ending on, and including, such date (or, if such date is not a trading day, the most recent trading day immediately preceding such
date); provided that appropriate adjustment will be made if any of such trading days is the ex-dividend date for a dividend
or other distribution on the Common Stock and provided, further, that if such date is the date upon which a Transactional
Change-in-Control occurs, the Common Stock Price as of such date shall be equal to the fair market value in cash, as determined
by the Committee, of the total consideration paid or payable in the transaction resulting in the Transactional Change-in-Control
for one share of Common Stock.


 


“Fair Market Value” per share
of Common Stock as of a particular date means (i) if shares of Common Stock are then listed on a national stock exchange, the closing
sales price per share on the exchange for such date, as determined by the Committee, (ii) if shares of Common Stock are not then
listed on a national stock exchange but are then traded on an over-the-counter market, the average of the closing bid and asked
prices for the shares of Common Stock in such over-the-counter market for such date, as determined by the Committee, or (iii) if
shares of Common Stock are not then listed on a national stock exchange or traded on an over-the-counter market, such value as
the Committee in its discretion may in good faith determine; provided that, where the shares of Common Stock are so listed or traded,
the Committee may make such discretionary determinations where the shares of Common Stock have not been traded for 10 trading days.


 


“Measurement Stock Price” means,
as of a particular date, the highest Common Stock Price where each of the days included in the 30-day period used to calculate
such Common Stock Price is within the period of one hundred and twenty (120) days immediately preceding such date; provided, however,
that if such date is the date upon which a Transactional Change-in-Control occurs, the Measurement Stock Price shall be equal to
the Common Stock Price on such date.


 


“Transactional Change-in-Control”
means (a) a Change-in-Control described in clause (a) of the definition thereof where the “person” or “group”
makes a tender offer for Common Stock, or (b) a Change-in-Control described in clauses (b) or (c)(1) of the definition thereof.


 



    	 



    	 



    

 


Restricted Stock Awards (Time-Based Vesting)


 


		1.	Plan: Gramercy Capital Corp. 2012 Inducement Equity Incentive Plan (the “Plan”)



 


		2.	Grant Date: July 1, 2012



 


		3.	Total Number of Shares: 250,000



 


		4.	Dividends: Dividends shall be paid to Executive in cash at each dividend payment date.



 


		5.	Vesting: Subject to acceleration as set forth in the Agreement, the shares shall vest, if and as employment continues, at the
times (each, a “Vesting Date”) and in the amounts set forth below:



 


	Vesting Date	 	Number of Shares	 
	June 30, 2013	 	 	50,000	 
	June 30, 2014	 	 	50,000	 
	June 30, 2015	 	 	50,000	 
	June 30, 2016	 	 	50,000	 
	June 30, 2017	 	 	50,000	 



  


Restricted Stock Units (Performance-Based Vesting)


 


		1.	Plan: The Plan



 


		2.	Grant Date: July 1, 2012



 


		3.	Total Number of Units: 750,000



 


		4.	Dividends: Dividend equivalents will accrue on the restricted stock units from the grant date and be paid, with respect to
each dividend equivalent, if and when it vests.



 


		5.	Settlement: Restricted stock units will be settled upon vesting.



 


		6.	Form of Payment of Units: Shares of Common Stock



 


		7.	Vesting: Subject to acceleration as set forth in the Agreement, the following is the vesting schedule and stock price targets
(the “Stock Price Targets”) for the restricted stock units:



 


	Vesting Date	 	Number of Units	 	 	Stock Price Target	 
	June 30, 2013	 	 	150,000	 	 	$	3.00	 
	June 30, 2014	 	 	150,000	 	 	$	3.50	 
	June 30, 2015	 	 	150,000	 	 	$	4.00	 
	June 30, 2016	 	 	150,000	 	 	$	4.50	 
	June 30, 2017	 	 	150,000	 	 	$	5.00	 



 


The Stock Price Targets will be
reduced by the per share amount of all dividends declared between July 1, 2012 and the Vesting Date.


 



    	 



    	 



    

 


As of each Vesting Date, the number of restricted
stock units set forth beside such Vesting Date shall vest if (i) Executive remains continuously employed through such date and
(ii) either of the following performance hurdles is achieved: (A) the Employer achieves funds from operations (“FFO”)
per diluted share for the most recent prior fiscal year at an amount to be agreed upon by Executive and the Employer, and with
such adjustments to FFO as are agreed upon by Executive and the Employer, within 30 days of the Grant Date, or (B) the Employer’s
Measurement Stock Price equals or exceeds the Stock Price Target for such Vesting Date. If the performance hurdles are not met
as of any Vesting Date, the units scheduled to vest on such date will vest as of any future Vesting Date if (i) Executive remains
continuously employed through such date and (ii) either of the following performance hurdles is achieved: (A) the FFO per diluted
share hurdles have been met on a cumulative basis from 2012 through the most recent fiscal year prior to such future vesting date
or (B) the Employer’s Measurement Stock Price equals or exceeds the Stock Price Target for such Vesting Date.


 


In the event of a Change-in-Control, the
performance hurdles shall be deemed to be achieved with respect to a number of restricted stock units equal to (i) the greater
of (A) a number of restricted stock units equal to the Change-in-Control Amount listed below based on the attainment of the corresponding
Measurement Stock Price as of the date of the Change-in-Control, and (B) if the FFO hurdles have been met on a cumulative basis
through the most recent quarter prior to the consummation of the Change-in-Control, then a number of restricted stock units equal
to 750,000 multiplied by a fraction, the numerator of which is the number of fiscal quarters that have elapsed from the Grant Date
to and including the most recently completed fiscal quarter, and the denominator of which is 20, less (ii) the number of restricted
stock units that have vested prior to the Change-in-Control. All unvested restricted stock units with respect to which performance
hurdles are not deemed to be achieved as of the Change-in-Control will be forfeited as of such date. Following a Change-in-Control,
performance hurdles will cease to apply to restricted stock units with respect to which performance hurdles are deemed to be achieved,
and such restricted stock units will vest in equal installments on each of the remaining Vesting Dates subject to continued employment
through each of such Vesting Dates. Following a Change-in-Control, remaining restricted stock units are treated solely as time-based
equity awards for the purpose of potential acceleration in connection with termination of Executive.


 


	Change-in-Control Amount	 	Measurement Stock Price	 
	0	 	$	0.00 - $2.99	 
	150,000	 	$	3.00 - $3.49	 
	300,000	 	$	3.50 - $3.99	 
	450,000	 	$	4.00 - $4.49	 
	600,000	 	$	4.50 - $4.99	 
	750,000	 	$	5.00 +	 




 



    	 



    	 



    

 


EXHIBIT
B


 


OUTPERFORMANCE PLAN AWARD


 


Executive shall be entitled to receive an award under the Outperformance
Plan pursuant to which Executive may earn up to $10,000,000 of LTIP Units in GKK Capital LP. The terms of the Outperformance Plan
shall be substantially as set forth in the form of award agreement attached hereto as Exhibit C.


 



    	 



    	 



    

 


EXHIBIT
C


 


OUTPERFORMANCE PLAN AWARD AGREEMENT