SL GREEN REALTY CORP. (NYSE:SLG) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

SL GREEN REALTY CORP. (NYSE:SLG) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

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Retirement of Stephen L. Green as Executive Chairman

On April27, 2018, Stephen L. Green informed the Board of Directors of SL Green Realty Corp. (the “Company”) that he will retire as Executive Chairman effective January17, 2019. Following his retirement, Mr.Green will no longer be an employee of the Company and will transition into the role of Chairman Emeritus. Mr.Green and the Company intend for Mr.Green to continue to serve as a director of the Company.

Extension of Marc Holliday as Chief Executive Officer and Chairman

On April30, 2018, Marc Holliday and the Company agreed to extend Mr.Holliday’s term as Chief Executive Officer for an additional three years through January17, 2022. In addition, Mr.Holliday will assume the role of Chairman upon Mr.Green’s transition into the role of Chairman Emeritus in January2019. Mr.Holliday’s current employment agreement will remain in effect until the effective date of the new employment agreement on January18, 2019. In connection with the new agreement, Mr.Holliday also consented to a reduction in base salary under his current agreement from $1,350,000 per year to $1,250,000 per year (retroactive to January18, 2018) to a letter agreement, dated as of April30, 2018, between Mr.Holliday and the Company.

The following summarizes the material terms of the new agreement entered into by the Company and Mr.Holliday in connection with this extension:

Term:

Three years (1/18/19 — 1/17/22), with automatic renewals for successive one-year periods unless either party provides prior written notice of non-renewal. In the event that a Change-in-Control occurs within 18 months prior to the scheduled expiration of the term, Mr.Holliday may extend the term until the date that is 18 months after the Change-in-Control.

Base Salary:

$1,250,000 per year.

Formulaic Annual Cash Bonus:

Opportunity to earn 50-300% of base salary upon the achievement of specific goals established in advance by the Compensation Committee.

Annual Time-Based Awards:

Beginning in January2020, Mr.Holliday will be eligible to receive an annual award of time-based LTIP units based on the Company’s performance during the prior year, with one-third of each award vesting on January1stof each of the first three years following such award. The value of the award each year will be determined by the Compensation Committee based on its evaluation of Mr.Holliday’s performance during the prior year, provided that the amount for target performance will not be less than $4,500,000. Each award will provide for full acceleration upon a termination of Mr.Holliday’s employment without Cause or for Good Reason, whether during or after the term of the employment agreement, or upon Mr. Holliday’s resignation following expiration of the term.

Annual Performance-Based Awards:

Beginning in January2019, Mr.Holliday will receive an annual award of performance-based LTIP units with a target value of $7,500,000.

As set forth below, earning of the performance-based LTIP units will be based one-half on operating performance over a one-year period (as modified by absolute TSR over a three-year period) and one-half on relative TSR performance over a three-year period (with linear interpolation applying between levels):

Operating Performance over 1 Year (50% of Award)*

PerformanceLevel

Threshold

Target

Maximum

Percentage Earned

%

%

%

Relative TSR over 3 Years (50% of Award)

PerformanceLevel

Threshold

Target

Maximum

Percentage Earned

%

%

%

* Amount earned to be modified up or down by up to 12.5% of the amount otherwise earned based on absolute TSR over three years.

The specific hurdles will be determined by the Compensation Committee at the time of each award; provided

that the absolute TSR modifier and relative TSR hurdles for the 2019 award are specified in the agreement.

Each award will provide that the LTIP units will remain outstanding following a termination of Mr.Holliday’s employment without Cause or for Good Reason, whether during or after the term of the employment agreement, or following Mr. Holliday’s resignation following expiration of the term. In addition, upon any termination for Good Reason or without Cause (including as a result of non-renewal by the Company) prior to the conclusion of a performance period, operating performance (but not relative performance) will be deemed to have been achieved at maximum, subject to the absolute TSR modifier, which will continue to apply in accordance with its terms.

In connection with a Change-in-Control prior the conclusion of any performance period, operating performance will be deemed to have been achieved at target performance and absolute and relative TSR performance will be determined based on actual, annualized performance through the date of the Change-in-Control.

Severance Benefits:

If Mr.Holliday’s employment is terminated by the Company without Cause (including upon non-renewal of the term by the Company) or by Mr.Holliday for Good Reason during the term, Mr.Holliday will be entitled to the following payments or benefits:

TerminationWithoutChange-in-Control

TerminationinConnectionwithChange-in- Control

· 2x the sum of base salary, formulaic bonus (assuming all criteria were achieved at maximum) and target value of annual time-based equity award (or 1x in the case of non-renewal of the term)

· Pro-rata bonus and pro-rata portion of target value of annual time-based award for partial year

· Acceleration of all unvested equity awards (other than performance-based awards, which are governed by the terms described above)

· 24 months of benefit continuation payments (including life insurance)

· 3x the sum of base salary, average annual bonus for prior two years and target value of annual time-based award

· Pro-rata bonus and pro-rata portion of target value of annual time-based award for partial year

· Acceleration of all unvested equity awards (other than performance-based awards, which are governed by the terms described above)

· 36 months of benefit continuation payments (including life insurance)

Restrictive Covenants:

Mr.Holliday will not compete with the Company while employed (including after the end of the term of employment if employment continues) and until 12 months after termination of employment during the term (or 6 months after a termination in connection with or within 18 months after a Change-in-Control or a termination of employment upon or after the expiration of the term of employment). Mr.Holliday has also agreed to non-solicitation, non-disparagement and non-interference covenants.

In the event of a Change-in-Control, the employment agreement also provides for Mr.Holliday to receive a prorated cash bonus based on Mr.Holliday’s average annual bonus for prior two years and the target value of his annual time-based equity award, which will offset any prorated bonus that Mr.Holliday would be entitled to receive upon termination in connection with the Change-in-Control, and, to the extent Mr.Holliday remains employed following the Change-in-Control and unless otherwise agreed, for cash compensation for future periods equal to Mr.Holliday’s cash bonus for the prior year and target amounts for all other cash and equity compensation in lieu of the compensation otherwise provided. The employment agreement also requires the Company to maintain a life insurance policy for the benefit of Mr.Holliday’s beneficiaries in the face amount of $10 million and provides for certain payments and benefits if Mr.Holliday’s employment is terminated due to death or disability, although any payments or benefits due in connection with a termination due to death will be offset by the proceeds of the life insurance that the Company is required to maintain to the agreement.

The terms Cause, Good Reason and Change-in-Control, as used above, are specifically defined in Mr.Holliday’s new employment agreement. The discussion above is qualified in its entirety by reference to the copies of the employment agreement by and between the Company and Mr.Holliday and the letter agreement by and between the Company and Mr.Holliday, which are being filed with this Current Report on Form8-K as Exhibits 10.1 and 10.2 and are incorporated herein by reference.


SL GREEN REALTY CORP Exhibit
EX-10.1 2 a18-12708_1ex10d1.htm EX-10.1 Exhibit 10.1   AMENDED AND RESTATED EMPLOYMENT AND NONCOMPETITION AGREEMENT   This AMENDED AND RESTATED EMPLOYMENT AND NONCOMPETITION AGREEMENT (“Agreement”) is made as of the 30th day of April,…
To view the full exhibit click here

About SL GREEN REALTY CORP. (NYSE:SLG)

SL Green Realty Corp. is a self-managed real estate investment trust, with in-house capabilities in property management, acquisitions and dispositions, financing, development and redevelopment, construction and leasing. The Company acquires, owns, repositions, manages and leases commercial office, retail and multifamily properties in the New York Metropolitan area. It operates through two segments: real estate, and debt and preferred equity investments. It owns or holds interests in approximately 30 consolidated and over five unconsolidated commercial office buildings encompassing approximately 21.0 million rentable square feet and approximately 3.0 million rentable square feet, for a total of over 24.0 million rentable square feet, located primarily in midtown Manhattan. It invests in well-collateralized debt and preferred equity investments. It manages an office building owned by a third-party encompassing over 336,000 square feet and holds debt and preferred equity investments.

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