Exhibit 10.1


 


Execution Copy


 


December 4, 2008


 


William F. Aldinger III


[redacted]


 


Re:   Separation Agreement


 


Dear Bill:


 


This letter (the “Letter
Agreement”) will confirm our agreement regarding your separation from
service with Capmark Financial Group Inc. (together with its subsidiaries and
affiliates, “Capmark”).  Effective
as of December 4, 2008 (the “Termination Date”), you will resign
from your employment with Capmark and from any officer and director positions
you may hold with Capmark, including, without limitation, all positions on the
Board of Directors of Capmark (the “Board”) and any committees thereof.


 


1.             Consulting:  Commencing
on the Termination Date and ending no later than January 30, 2009, you
agree to provide such consulting services as may reasonably be requested by
Capmark (but which consulting shall in no event require you to provide more
than 20% of the average level of services to Capmark that you provided prior to
the Termination Date), for no additional consideration.


 


2.                                      Separation Payment; Employee
Benefits; Accrued Rights:


 


(a)           Separation
Payment.  As soon as practicable
following the Termination Date, Capmark shall pay you, in a lump sum, an
amount, such that, after payment by you of all federal, California state and
local payroll and income taxes imposed on such amount, you shall retain an
amount equal to $2,280,000.


 


(b)           Other
Benefit Plans.  You shall be entitled
to all benefits that you have accrued or in which you have become vested under
any tax-qualified retirement benefit plans or other benefit plans maintained by
Capmark in accordance with their terms.


 


(c)           Accrued
Rights.  In
addition to the foregoing, you shall also be entitled receive (i) any
accrued but unpaid base salary earned through the Termination Date, (ii) reimbursement,
within forty-five (45) days following submission by you to Capmark of
appropriate supporting documentation, for any unreimbursed business expenses
(including business use of your personal aircraft at the previously-agreed
hourly rate) properly incurred by you in accordance with Capmark’s policies
prior to the Termination Date, so long as the claims for such reimbursement
(accompanied by appropriate supporting documentation) are submitted to Capmark
within sixty (60) days (or such additional time as may be reasonable) following
the Termination Date or as soon as practicable thereafter, and (iii) payment
for any accrued but unused vacation days.


 


3.             Treatment of
Purchased Stock:  In connection with your termination of
employment with Capmark, notwithstanding any provisions of that certain
Management Stockholder’s Agreement, dated as of June 15, 2006, by and
between Capmark and you (the “Stockholder’s Agreement”) to the contrary,
Capmark shall purchase from you and each of the Management Stockholder Trusts
(as defined in the Stockholder’s Agreement) to which you have previously
transferred shares of Purchased Stock (as defined in the Stockholder’s
Agreement), and you and each of your Management Stockholder Trusts shall sell
to Capmark, all Purchased Stock originally purchased by you for an aggregate
amount equal to  $12,720,000 (less any taxes or
other amounts required by law to be withheld) (the “Stock Purchase


 

















 


Price”). 
The Stock Purchase Price is equal to the product of (x) the
3,000,000 shares of Purchased Stock held by you and your Management Stockholder
Trusts in the aggregate and (y) $4.24 per share (i.e.,
the Fair Market Value of the Purchased Stock). 
Capmark will pay to you and your Management Stockholder Trusts, as
applicable, the full amount of the Stock Purchase Price (allocated as set forth
in the Transfer Agreement (attached hereto as Exhibit A), subject to
receipt by the General Counsel of Capmark of a copy of the Transfer Agreement
executed by you, as promptly as possible after the Transfer Agreement is
received by Capmark.  At such time,
Capmark will send to you and each of your Management Stockholder Trusts, at the
address set forth on the first page of this Letter Agreement, via
overnight delivery, a check in the amount of the Stock Purchase Price as set
forth in the Transfer Agreement. 
Alternatively, Capmark will pay the Stock Purchase Price to you and each
of your Management Stockholder Trusts by wire transfer, if you and each of your
Management Stockholder Trusts notify Capmark in writing of your desire to
receive the Stock Purchase Price via wire transfer, and provide wire
instructions, on or before the time that you deliver your executed Transfer
Agreement.  The Company hereby reserves
all of its rights under the Stockholder’s Agreement; provided, however, that it
hereby waives its right to exercise any call rights under Section 6 of the
Stockholder’s Agreement.


 


4.             Treatment of Options:  In connection with your termination of
employment with Capmark, you and Capmark each acknowledge and agree that, as of
the Termination Date, the option to purchase 12,000,000 shares of Common Stock
(as defined in the Option Agreement (as defined below)) that was granted to you
pursuant to the terms of that certain Option Agreement, dated June 1, 2006
(the “Grant Date”), by and between you and Capmark (the “Option
Agreement”), will be vested as to 8,000,000 shares of Common Stock, and the
unvested portion of the Option will terminate as of the Termination Date.  In addition, notwithstanding anything in the
Option Agreement to the contrary, the vested portion of the Option will remain
exercisable until the first to occur of the following: (i) the tenth (10th)
anniversary of the Grant Date and (ii) the events set forth in Section 3.2(a)(vi) of
the Option Agreement (i.e.,
pertaining to the occurrence of a merger or other corporate event). Your rights
under the Sale Participation Agreement with GMACCH Investor LLC, dated June 1,
2006, and your rights under Capmark’s Dividend Equivalent Rights Plan shall
continue in full force and effect with respect to your Option on the same basis
as if your employment had not terminated. 
Other than as specifically provided for herein, the Option shall
continue to be subject to, and you shall continue your rights under, the terms
and conditions of the Option Agreement and each agreement incorporated by
reference therein.  This Letter
Agreement, upon execution by both parties, hereby serves as an amendment to the
Option Agreement.


 


5.             Return of Property;
Expense Reports: Within thirty (30) days following the
Termination Date or as soon as practicable following the Termination Date, you
shall return to Capmark all documents, manuals, computers, computer programs,
CDs and/or diskettes, customer lists, notebooks, reports and other written or
graphic materials, including all copies thereof, relating in any way to Capmark’s
business and prepared by you or obtained by you from Capmark, its affiliates,
clients or its suppliers during the course of your employment with Capmark, as
well as all expense reimbursement requests and reports, prepared and provided
in accordance with the terms of Capmark’s expense reimbursement policy to which
you are currently subject.


 


6.             Litigation and Regulatory
Cooperation:  You agree to
cooperate fully with Capmark in the defense or prosecution of any claims or
actions now in existence or which may be brought in the future against or on
behalf of Capmark that relate to events or occurrences that transpired during
your employment with Capmark.  Your full
cooperation in connection with such claims or actions shall include, but not be
limited to, being available to meet with counsel to prepare for discovery or
trial and to act as a witness on behalf of Capmark at mutually convenient
times.  In scheduling your time to
prepare for discovery or trial, Capmark shall use reasonable efforts to attempt
to minimize interference with any 


 


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other employment obligations that you may have.  You also will cooperate with Capmark in
connection with any investigation or review of any foreign, federal, state or
local regulatory authority as any such investigation or review relates to
events or occurrences that transpired while you were employed by Capmark.  Capmark will reimburse you for any reasonable
out-of-pocket expenses incurred in connection with any litigation and
regulatory cooperation provided after the Termination Date and will pay you a
per diem fee equal to $1,000 for any 7 hour period during which you provide any
such cooperation.  This provision will
survive the termination of this Letter Agreement.


 


7.             Post-Employment
Restrictions; Entire Agreement: 
This Letter Agreement constitutes the entire agreement between the
parties on the subject of any payments and benefits due to you upon your
termination of employment with Capmark; and, except as expressly provided
herein, supercedes all other prior agreements concerning the terms of any and
all payments and benefits to which you may be entitled upon termination of
employment, except that the restrictive
covenants contained in the Stockholder’s Agreement and any provisions related
thereto shall continue to apply and are hereby made a part of this Letter
Agreement by reference.  Notwithstanding
any provision in this Letter Agreement to the contrary, all payments hereunder
are expressly made contingent on your compliance in all respects with such
restrictive covenants.


 


8.             Non-Disclosure of Letter
Agreement:  You agree
that, to the extent that this Letter Agreement and the terms herein are not
required by applicable law to be disclosed in Capmark’s public securities
filings, you will keep the terms of this Letter Agreement confidential and you
agree that you will not disclose the terms of this Letter Agreement or its terms
to anyone other than your spouse, legal counsel and/or financial advisors, whom
you agree to inform of your obligations under this Paragraph 9 and of this
Letter Agreement’s highly confidential subject matter.  Notwithstanding the foregoing, you may disclose
to a future employer or potential future employer the terms and conditions of
your obligations under the restrictive covenants referenced in Paragraph 8 of
this Letter Agreement and you may disclose to any person or party the fact that
you and Capmark have entered into an amicable separation agreement.


 


9.             Section 409A of the
Code:  Notwithstanding
anything herein to the contrary, if any payment of money or other benefits due
to you hereunder could cause the application of an accelerated or additional
tax under Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), such payment or other benefits will be deferred if
deferral will make such payment or other benefits compliant under Section 409A
of the Code (for instance, if you are a “specified employee” within the meaning
of Section 409A of the Code and you receive a payment or benefit
constituting deferred compensation hereunder upon a separation from service
(within the meaning of Section 409A of the Code, such payment or benefit
shall not be delivered to you until six months and one day following your
separation from service), or otherwise such payment or other benefits will be
restructured, to the extent possible, in a manner, determined by the Board,
that does not cause such an accelerated or additional tax. This Letter
Agreement is intended to comply with Section 409A of the Code and will be
interpreted accordingly.  References
under this Agreement to your termination of employment shall be deemed to refer
to the date upon which you have experienced a “separation from service” within
the meaning of Section 409A of the Code. 
Each payment made under this Letter Agreement shall be designated as a “separate
payment” within the meaning of Section 409A of the Code.  To the extent any reimbursements or in-kind
benefits due to you under this Letter Agreement constitute “deferred
compensation” under Section 409A of the Code, any such reimbursements or
in-kind benefits shall be paid to you in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv).


 


10.           No Additional Payments:  The payments, rights and benefits described
in this Letter Agreement will be the only such payments, rights and benefits
you are to receive as a result of your termination of employment and you agree
you are not entitled to any additional payments, rights or 


 


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benefits not otherwise described in this Letter Agreement.  You hereby acknowledge and agree that you are
not eligible to be a participant in any severance or incentive compensation
plan of Capmark.  Any payments, rights or
benefits received under this Letter Agreement will not be taken into account
for purposes of determining benefits under any employee benefit plan of
Capmark, except to the extent required by law, or as otherwise expressly
provided by the terms of such plan.


 


11.           Severability; Applicable
Law: The provisions of this Letter Agreement shall be deemed
severable, and the invalidity or unenforceability of any provision hereof shall
not affect the validity or enforceability of the other provisions hereof.  Any controversy or claim arising out of or
relating to this Letter Agreement or the breach of this Letter Agreement that
cannot be resolved by you and Capmark, including any dispute as to the
calculation of your benefits or any payments hereunder, shall be submitted to
arbitration in New York, New York, in accordance with the procedures of the
American Arbitration Association, which arbitration shall be a binding and
conclusive settlement of any such claims or disputes.  This Letter Agreement and any dispute
hereunder shall be construed, interpreted and governed in accordance with the
laws of the State of New York without reference to rules relating to
conflicts of law.  Each party shall bear
the costs of any legal fees and other fees and expenses which may be incurred
in respect of enforcing its respective rights under this Letter Agreement.


 


12.           Amendment:         This Letter
Agreement may only be amended or modified by a written agreement executed by
you and Capmark (or any successor).


 


13.           Counterparts:  This Letter Agreement may be executed in one
or more counterparts, which shall, collectively or separately, constitute one
agreement.


 


Please sign below to signify
your understanding and acceptance of the terms and conditions contained herein
and return a copy to me by no later than December 10, 2008.


 


Bill,
on behalf of the entire Board, I want to thank you for all you have done to
lead Capmark during these difficult times, and wish you the best in your future
endeavors.


 


 


	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Scott Nuttall

  
	
   

  	
   

  	
  Scott Nuttall

  
	
   

  	
   

  	
  Chairman,

  
	
   

  	
   

  	
  Executive Development and
  Compensation Committee

  
	
   

  	
   

  	
  Board of Directors

  
	
   

  	
   

  	
  Capmark Financial Group
  Inc.

  



 


 


The foregoing has been read
and accepted as a binding agreement between Capmark and the undersigned this 4th
day of December, 2008.


 


 


	
  /s/ William F. Aldinger
  III

  	
   

  
	
  William F. Aldinger III

  	
   

  



 


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