Exhibit 10.1


 


	
  PRIVILEGED AND CONFIDENTIAL

  	
  Execution Copy

  



 


December 18,
2008


 


Mr. Jay
N. Levine


[redacted]


 


Dear
Jay:


 


We
are all extremely pleased that you have agreed to accept the position of
President and Chief Executive Officer (“CEO”) of
Capmark Financial Group Inc. (the “Company”),
effective December 4, 2008, (the “Commencement Date”),
in accordance with the terms and conditions of this letter (the “Letter Agreement”), which shall govern your employment with
the Company.


 


1.                                      Duties and Responsibilities. With respect to the terms of your employment
with the Company, you shall be the President and Chief Executive Officer of the
Company and shall be responsible for the general management of the business and
affairs of the Company and shall have all of the duties, responsibilities and
authorities customarily exercised by a President and CEO at a corporation of a
similar size and nature as the Company. You will report directly and solely to
the Board of Directors of the Company (the “Board”)
and it is intended that you will be a member of the Board for so long as you
are employed with the Company hereunder. By executing this Letter Agreement,
you acknowledge that you will devote your full business time to performing as
the President and CEO of the Company, and that you will perform your duties to
the Company at the Company’s corporate offices in Horsham, Pennsylvania, at the
Company’s offices in New York, New York, or at such other location as your
duties require. In no event will you be required to change your current
residence in connection with your duties hereunder. Notwithstanding the
foregoing, nothing herein shall preclude you from (i) serving on the
boards of directors of a reasonable number of other corporations, (ii) serving
on the boards of a reasonable number of trade associations and/or charitable
organizations, (iii) engaging in charitable activities and community
affairs and (iv) managing your personal investments and affairs, subject
to, in the case of clauses (i) and (ii), the prior written approval of the
Board (which approval shall not be unreasonably withheld) and provided that, in
the case of clauses (i) — (iv), such activities (x) do not conflict
or interfere with the effective discharge of your duties and responsibilities
hereunder, (y) are subject to the Company’s corporate governance policies
that are applicable to all senior executives of the Company and (z) are
not in violation of Section 4 or any other restrictive covenants by which
you may be bound.


 


2.                                      Compensation and Benefits. With respect to compensation for your
services as President and CEO of the Company, you will receive the following
compensation and benefits, from which the Company shall be entitled to withhold
any amount required by law, for so long as you are employed hereunder:


 


(a)  The Company shall pay you a base salary at an annual rate
equal to $5,000,000 (your “Compensation”).
Such Compensation shall be payable in equal installments on a bi-weekly basis
in arrears in accordance with the Company’s normal payroll practices. Any
increase in your Compensation shall be in the discretion of the Executive
Development and Compensation


 


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Committee
of the Board (the “Compensation Committee”),
provided that no decrease shall be made to your Compensation.


 


(b)  In addition to your Compensation, but in the sole discretion
of the Compensation Committee, the Company may pay you a bonus, in such
amount(s), at such time(s), and pursuant to such terms and conditions as the
Compensation Committee shall determine.


 


(c)  The Company shall provide you and your eligible dependents,
to the extent applicable and permitted by applicable law, with coverage under
all retirement and welfare benefit programs, plans and practices and other
fringe benefits which the Company makes available to its senior management
(commensurate with your position in the Company and to the extent permitted
under any such employee benefit plan) in accordance with the terms thereof.


 


(d)  The Company will reimburse you for (i) all reasonable
and necessary business expenses incurred by you in the conduct of your duties
hereunder in accordance with the Company’s policies with respect thereto, as in
effect from time to time, including, without limitation, reasonable expenses
for business travel, lodging, meals away from home and transportation to the
Company’s offices (and from the Company’s offices to your home) related to the
discharge of your official duties hereunder and (ii) your reasonable legal
fees and expenses incurred in connection with the review and negotiation of
this Letter Agreement.


 


(e)  You will be entitled to 20 days of paid vacation for each
calendar year during which you are employed hereunder.


 


3.                                      At-Will Employment; Rights on
Termination.


 


(a) 
The nature of your employment is at-will, and as such, your employment may be
terminated by yourself or the Company for any or no reason at any time
following thirty (30) days’ advance written notice to you at the address set
forth above or to the Company at 116 Welsh Road Horsham, PA 19044, attention:
Thomas L. Fairfield, General Counsel, as applicable (during which notice period
you will continue to be entitled to your Compensation, bonus, if any, and
benefits set forth in Section 2 above); provided, however, that any
termination by the Company for Cause (as defined below) shall be effective
immediately.


 


(b) 
Upon any termination of your employment hereunder, you shall, unless otherwise
agreed by the Company, only be entitled to: (i) all benefits that you have
at such time accrued or in which you have become vested under any tax-qualified
retirement benefit plans and other benefit plans maintained by the Company in
accordance with their terms; (ii) any then accrued but unpaid Compensation
earned through the date of your termination, which shall be paid to you within
thirty (30) days following the date of your termination (the “Accrued Compensation”); (iii) reimbursement, within
forty-five (45) days following submission by you to the Company of appropriate
supporting documentation, for any unreimbursed business expenses properly
incurred by you in accordance with the Company’s policies prior to the date of
your termination, so long as that claims for such reimbursement (accompanied by
appropriate supporting documentation) are submitted to the Company within
thirty (30) days following the date of your termination; and (iv) payment
for any then accrued but unused vacation days, which shall be paid to you
within thirty (30) days following the date of your termination. Except as


 


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otherwise
provided for herein, by executing this Letter Agreement, you agree that you are
not eligible to be a participant in any severance plan or incentive
compensation plan of the Company or any of its subsidiaries.


 


(c) 
Notwithstanding the foregoing, in the event that your employment with the
Company hereunder is terminated by the Company without Cause (other than due to
death or disability) or by you for Good Reason (as defined below), in either
case, on or prior to the six month anniversary of the Commencement Date, then
subject to your (x) continued compliance with the provisions of Section 4
and any other restrictive covenants agreed to by you in writing and (y) execution,
delivery and non-revocation of a general release of claims against the Company
and its affiliates in a form reasonably acceptable to the Company (which shall
not include any change to or extension of the restrictive covenants set forth
in Section 4 below or add any additional restrictive covenants, without
your written consent), you shall be entitled to receive an amount equal to the
excess of (x) $2.5 million over (y) the amount paid to you by the
Company pursuant to Section 2(a) as of the termination date (less any
Accrued Compensation payable pursuant to Section 3(b)), which amount shall
be payable in a lump sum cash payment no later than sixty (60) days following
your termination date.


 


For
purposes of this Letter Agreement:


 


A.
“Cause” shall exist if the Board reasonably determines that any one or more of
the following events has occurred while employed by the Company: (i) your
willful and continued failure (except where due to a physical or mental
incapacity) to attempt in good faith to substantially perform your material
duties with respect to the Company which continues beyond ten (10) days
after a written demand for substantial performance is delivered to you by the
Company (such ten-day period, the “Cure Period”); (ii) any
gross misconduct by you in the conduct of your duties hereunder that causes
material and demonstrable injury, monetarily or otherwise, to the Company or
any of its subsidiaries; (iii) conviction of, or plea of guilty or nolo
contendere to, the commission of (x) a felony by you or (y) any
misdemeanor involving theft, fraud, misappropriation or moral turpitude (other
than in connection with any traffic violations); (iv) your
disqualification or bar by any governmental or self-regulatory authority from
serving in your position with the Company or your loss of any governmental or
self-regulatory license that is reasonably necessary for you to perform your
material duties with respect to the Company, in any such case, as a result of
willful misconduct by you (and for the avoidance of doubt, in connection with
an investment in or to the Company by such governmental authority, any willful
action or willful failure to act by you that adversely affects such
governmental authority’s willingness or ability to make any such investment
shall constitute willful misconduct by you hereunder; but  any requirement by such governmental
authority of any such disqualification or bar, absent any such willful action
or willful failure to act by you, shall not constitute willful
misconduct by you); (v) your willful obstruction of, or willful failure to
cooperate with (except where due to a physical or mental incapacity), any
investigation authorized by the Board; provided that exercise by you of your
constitutional rights under the Fifth Amendment of the United States
Constitution in the event of any criminal investigation of you shall not be
treated as obstruction of or failure to cooperate with any such investigation; (vi) your
material breach of the Company’s or any subsidiary’s written code of conduct
and business ethics, which breach is customarily punishable by termination of
employment by the Company; or (vii) a material breach by you of Section 4
hereof or any other restrictive covenants agreed to by you in writing, if any,
which continues beyond the Cure Period (to the extent that, in the Board’s
reasonable judgment, such breach can be cured).


 


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B.
The term “Good Reason” shall mean, without your consent, (i) the material
reduction of your annual rate of base salary (excluding any general salary
reduction affecting all of the Company’s senior executives and substantially
all of the full-time, salaried employee population of the Company) or annual
bonus opportunity (excluding reductions in the value of any performance bonus
pool as a result of Company or business unit’s performance or changes in the
goal amount or type of performance targets of the applicable bonus
arrangement), (ii) the Company’s removal of you from, or failure to
reelect you to, the positions set forth in Section 1 above, a material
diminution in your employment duties or responsibilities, or your failure to be
elected as a member of the Board, in each case, following a reasonable period
(not to exceed 20 days) by the Company to cure such event following receipt of
written notice by you indicating the event giving rise to Good Reason; or (iii) relocation
of your principal workplaces (i.e., corporate
offices in Horsham, Pennsylvania and Company offices in New York, New York) to
a location or locations more than 50 miles away from either such principal
workplaces. You may terminate your employment with Good Reason by providing the
Company ten (10) days’ prior written notice setting forth in reasonable
specificity the event that constitutes Good Reason, within one hundred eighty
(180) days after the occurrence of such event.


 


4.                                      Restrictive Covenants.


 


(a)   In consideration of the provisions of this Letter
Agreement, including the compensation to which you are entitled hereunder, you
hereby agree that you shall not, directly or indirectly, (i) at any time
during or after your employment with the Company, disclose any Confidential
Information (as defined below) pertaining to the business of the Company or any
of its affiliates, except when required (w) to perform your duties to the
Company or any of its subsidiaries, (x) when disclosure is required by law
or by any court, arbitrator, mediator or administrative or legislative body
(including any committee thereof) with apparent jurisdiction to order you to
disclose or make accessible any information, (y) with respect to any
litigation, arbitration or mediation involving this Letter Agreement,
including, but not limited to, to enforcement of this Letter Agreement or (z) as
to Confidential Information that becomes generally known to the public or in
the trade or industry in which the Company operates, in any case, other than
due to your violation of this Section 4(a); and (ii) at any time
during your employment with the Company and for a period of sixty (60) days
thereafter, directly or indirectly (A) own (other than less than 2% of a
publicly traded company), manage, control, be employed by, participate in or be
connected in any manner with the ownership, management, operation or control
of  any business or entity, that is
engaged primarily in commercial mortgage loan origination, commercial mortgage
lending, commercial mortgage loan servicing or investment management of
commercial real estate related assets in the United States, or any division,
subsidiary or affiliate of any such business or entity unless such division,
subsidiary or affiliate is not itself engaged in any such business activity and
you do not provide services to, or have any responsibilities regarding, such
business activities or (B) solicit or offer employment to any person who
has been employed by the Company or any of its subsidiaries at any time during
the twelve (12) months immediately preceding the termination of your
employment with the Company, other than any person who you have, directly or
indirectly, hired for employment by the Company while employed hereunder,
excluding, however, any person who becomes a member of the Company’s Executive
Committee, including, without limitation, the Chief Financial Officer or
Treasurer of the Company or any of its subsidiaries. Anything to the contrary
notwithstanding, the Company agrees that the following shall not be deemed a
violation of this Section 4(a)(ii)(B): (i) your responding to an
unsolicited request for an employment reference regarding any former employee
of the Company or any


 


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of
its subsidiaries from such former employee or from a third party by providing a
reference setting forth your personal views about such former employee or (ii) if
an entity with which you are associated offers employment or engages any
employee of the Company or any of its subsidiaries, if you were not, directly
or indirectly, involved in identifying such person as a potential recruit or
assisting in the recruitment of such employee. For purposes hereof, you shall
only be deemed to have been involved “indirectly” in soliciting or identifying
any employee if you (x) direct a third party to solicit the employee, (y) identify
an employee to a third party as a potential recruit or (z) aid, assist or
participate with a third party in soliciting an employee. If you agree in
writing to become bound by any other agreement with the Company containing
restrictive covenants of a type set forth in this Section 4(a), the
provisions of that agreement shall be read in conjunction with this Section 4.
For purposes of this Letter Agreement, the term “Confidential
Information” means all non-public information concerning trade
secrets, know-how, software, developments, inventions, processes, technology,
designs, financial data, strategic business plans or any proprietary or confidential
information, documents or materials in any form or media, including any of the
foregoing relating to research, operations, finances, current and proposed
products and services, vendors, customers, advertising and marketing, and other
non-public, proprietary, and confidential information of the Company, its
subsidiaries, GMACCH Investors LLC and any of its members.


 


(b) 
If at any time a court holds that the restrictions stated herein are
unreasonable or otherwise unenforceable under circumstances then existing, the
parties hereto agree that the maximum period, scope or geographic area
determined to be reasonable under such circumstances by such court will be
substituted for the stated period, scope or area. Because your services are
unique and because you will have had access to Confidential Information, the
parties hereto agree that money damages will be an inadequate remedy for any
breach of this Section 4. In the event of a breach or threatened breach of
this Section 4, the Company or its successors or assigns may, in addition
to other rights and remedies existing in their favor, apply to any court of
competent jurisdiction for specific performance and/or injunctive relief in
order to enforce, or prevent any violations of, the provisions hereof (without
the posting of a bond or other security).


 


5.                                      Severability; Applicable Law.


 


(a)  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 the Company, other than as provided in Section 4(b) above,
shall be submitted to arbitration in New York, New York, Borough of Manhattan,
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. Judgment upon the arbitration award may be entered by any
court having jurisdiction thereof.


 


(b) 
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.


 


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6.                                      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 the
earlier of your death or six months and one day following your separation from
service), or otherwise such payment or other benefits will be restructured (but
not reduced), to the extent possible, in a manner, reasonably 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).


 


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7.                                      Entire Agreement; Amendment.


 


(a) 
This Letter Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof; and, except as expressly provided herein,
supersedes all other prior written or oral agreements concerning such subject
matter. In the event of any inconsistency between this Letter Agreement and any
other plan, program or practice of the Company, the terms of this Letter
Agreement will control unless the Company and you otherwise agree in writing
with specific reference to this provision.


 


(b) 
This Letter Agreement may only be amended or modified by a written agreement
executed by you and the Company (or any successor).


 


8.                                      Indemnification. During your employment with the Company and
thereafter, the Company will indemnify you and your heirs and legal
representatives, to the extent applicable, for all acts or omissions occurring
while you are an officer or employee of the Company or a member of the Board to
the maximum extent provided under the Company’s charter, by-laws, and
applicable law. During your employment with the Company and thereafter, the
Company will also insure you under a policy of directors and officers’
liability insurance during your employment and thereafter to the same extent as
provided to active members of the Board.


 


9.                                      Counterparts. This Letter Agreement may be executed in
counterparts and by fax or pdf.


 


10.                               Assignment. This Agreement and all of your rights and
obligations hereunder shall not be assignable or delegable by you. Any
purported assignment or delegation by you in violation of the foregoing shall
be null and void ab initio and of no force and effect. No rights or obligations
of the Company under this Letter Agreement may be assigned or transferred by
the Company without your prior written consent, except that such rights or
obligations may be assigned or transferred pursuant to a merger, consolidation
or other similar transaction in which the Company is not the continuing entity
or a sale, liquidation or other disposition of all or substantially all of the
assets of the Company, provided that the assignee or transferee is the
successor to all or substantially all of the assets of the Company. Upon any
such assignment or transfer, the rights and obligations of the Company
hereunder shall become the rights and obligations of such assignee or
transferee.


 


11.                               Representations. You hereby represent to the Company that
the execution and delivery of this Letter Agreement by you and the Company and
the performance by you of your duties hereunder shall not constitute a breach
of, or otherwise contravene, the terms of any employment agreement or other
agreement or policy to which you are a party of otherwise bound. The Company
represents and warrants to you that (i) the execution, delivery and
performance of this Letter Agreement by the Company has been fully and validly
authorized by all necessary corporate action, (ii) the officer or
director, as applicable, signing this Letter Agreement on behalf of the Company
is duly authorized to do so, (iii) the execution, delivery and performance
of this Letter Agreement does not violate any applicable law, regulation,
order, judgment or decree or any agreement, plan or corporate governance
document to which the Company is a party or by which it is bound and (iv) upon
execution and delivery of this Letter Agreement by you and the Company, it
shall be a valid and binding obligation of the Company enforceable against it
in accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally.


 


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If
the foregoing terms and conditions are acceptable and agreed to by you, please
sign on the line provided below to signify such acceptance and agreement and
return the executed copy to the undersigned.


 


	
   

  	
   

  	
  Capmark
  Financial Group Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Scott Nuttall

  
	
   

  	
   

  	
  Name:  

  	
  Scott
  Nuttall

  
	
   

  	
   

  	
  Title:

  	
  Chairman,
  Executive Development and

  
	
   

  	
   

  	
   

  	
  Compensation
  Committee

  
	
   

  	
   

  	
   

  	
  of
  the Board of Directors

  
	
   

  	
   

  	
   

  	
   

  
	
  Accepted
  and Agreed

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Jay N. Levine

  	
   

  	
   

  	
   

  
	
  Jay
  N. Levine

  	
   

  	
   

  	
   

  



 


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