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EXHIBIT 10.1
THIRD AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement"),
dated as of
May 17, 2007, between WELLSFORD REAL PROPERTIES, INC., a
Maryland corporation,
with offices at 535 Madison Avenue, New York, New York 10022
(the "Company" or
"Employer"), REIS SERVICES, LLC, a Maryland limited liability
company and a
wholly owned subsidiary of the Company, with offices at 535
Madison Avenue, New
York, New York 10022 ("LLC" or "Employer" and together with the
Company, the
"Employers"), and JEFFREY H. LYNFORD, an individual residing at
10 Holly Branch
Road, Katonah, NY 10536 (the "Executive").
WHEREAS, the Company and the Executive are party to an
Employment Agreement
dated as of May 30, 1997 (the "Original Agreement");
WHEREAS, the Original Agreement was amended and restated
pursuant to that
certain Amended and Restated Employment Agreement, dated as
December 7, 2001,
between the Company and the Executive (the "First
Restatement");
WHEREAS, the First Restatement was amended and restated pursuant
to that
certain Second Amended and Restated Employment Agreement dated
August 19, 2004,
between the Company and the Executive (the "Second
Restatement");
WHEREAS, the Company, LLC and Reis, Inc, a Delaware corporation
("Reis"),
have entered into that certain Agreement and Plan of Merger,
dated as of October
11, 2006 (the "Merger Agreement"), pursuant to which, and
subject to the terms
and conditions of which, Reis will merge (the "Merger") with and
into LLC and
LLC will be the survivor in the Merger;
WHEREAS, in anticipation of the consummation of the Merger, the
Company
desires to ensure the services of the Executive beyond the term
of employment
provided for in the Second Restatement and LLC desires to secure
the services of
Executive and the parties hereto desire to modify the Second
Restatement in
certain other respects; and
WHEREAS, the Employers and the Executive desire to amend and
restate the
Second Restatement and desire that this Agreement become
effective immediately
following, and subject to the occurrence of the Effective Time,
as defined in
the Merger Agreement, (the "Employment Date").
NOW, THEREFORE for good and valuable consideration received by
the parties
hereto.
IT IS AGREED:
1. Duties. (a) During the term of the Executive's employment
hereunder the
Executive shall serve and (i) the Company shall employ the
Executive as Chairman
of the Board and (ii) LLC shall employ the Executive as
Chairman. The Executive
shall preside over the meetings of the Board of Directors of the
Company (the
"Board") and of the stockholders of the Company at which he
shall be present and
shall in general oversee all of the business and affairs of
the
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Company and LLC and will perform such services consistent with
those of a
Chairman of the Board as may be assigned to the Executive by the
Board. The
Executive hereby accepts such employment and agrees to perform
such services.
(b) Subject to the other provisions of this subsection 1(b),
the
Executive shall devote such portion of his time, attention and
energies during
business hours as may be necessary for him to perform his duties
hereunder. The
foregoing shall not be construed to prevent Executive from
devoting time during
business hours to (i) charitable and civic endeavors and (ii)
performing
services for and engaging in business activities with other
persons, so long as
such endeavors, services and activities do not prevent Executive
from fulfilling
his fiduciary responsibilities to the Employers.
(c) The Executive shall cooperate with the Employers, including
taking
such medical examinations as the Employers reasonably shall deem
necessary, if
the Employers shall desire to obtain medical, disability or life
insurance with
respect to the Executive. Where reasonably possible, the
Employers shall
cooperate with the Executive's request to have such examinations
performed by
the Executive's personal physician or another physician
reasonably acceptable to
the Executive.
(d) The Executive shall not be required to relocate or conduct
the
Employers' business outside the New York, New York area in order
to perform his
duties under this Agreement but shall undertake such reasonable
business travel
as may be necessary to perform said duties (for which the
Executive shall be
reimbursed pursuant to Section 4 below for costs and expenses
incurred in
connection therewith).
2. Employment Term. This Agreement shall be for the period
commencing on
the Employment Date and terminating on the third anniversary
thereof (the
"Termination Date" and each 12 month period during the term,
with the first such
period commencing on the Employment Date, a "Contract Year"). In
the event that
the Merger Agreement is terminated for any reason whatsoever,
this Agreement
shall be void ab initio, and the Executive hereby acknowledges
and agrees that
nothing in this Agreement shall be deemed to obligate the
Company, Reis or LLC
to consummate the Merger pursuant to the Merger Agreement or
otherwise.
3. Compensation. (a) (a) For all services rendered by the
Executive
pursuant to this Agreement the Employers are jointly and
severally obligated to
pay to the Executive a base salary at the annual rate of
$375,000 per annum,
commencing on the Employment Date. All such compensation shall
be paid
semi-monthly or at such other regular intervals, not less
frequently than
monthly, as the Employers may establish from time to time for
executive
employees of the Employers.
(b) During the term of this Agreement, the Company shall pay to
the
Executive on an annual basis (but not later than the 15th day of
the third month
following the calendar year in which the premiums are paid by
Executive) an
additional amount grossed up such that after payment by
Executive of all income
taxes payable on such grossed up amount, the net after tax
amount is equal to
Executive's annual premiums under the insurance policies
referenced in that that
certain Split Dollar Life Insurance Agreement dated November 18,
1993
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between Wellsford Residential Property Trust and Jeffrey H.
Lynford, as modified
by the Split Dollar Life Insurance Agreement dated December 11,
1995, which
annual premiums currently aggregate approximately $19,500.
(c) In addition to the compensation set forth in Section 3
hereof, the
Executive shall be awarded such bonus by the Employers for each
year or partial
year of his employment hereunder as the Board shall determine in
its sole
discretion. In determining such bonus, the Executive understands
that the Board
will consider, without limitation, the following factors with
respect to the
applicable year or partial year or any fiscal year or period of
the Employers
ending prior to the expiration of such year or partial year: the
Employers'
financial performance, business performance and growth during
such period;
Executive's performance and responsibilities (including his
participation in
transactions of particular financial or business significance to
the Employers)
during such period; and such other factors as the Board may deem
appropriate in
their sole discretion. Such bonus may consist of cash; grants of
shares of
common stock of the Company ("Shares"); grants of restricted
stock units;
options to purchase Shares; share appreciation rights (whether
independent of or
in conjunction with awards of options); and such other awards as
the Board in
its sole discretion may deem appropriate and which it believes
is in furtherance
of the growth of stockholder value. As previously provided for
in the Second
Restatement, the bonus payable by Employers to Executive shall
not be less than
$375,000 for the calendar year ended December 31, 2007. Any
bonus payable
hereunder shall be paid not later than the 15th day of the third
month following
the calendar year for which it is determined by the Board to pay
such bonus.
(d) Pursuant to resolutions of the committee that administers
the
Company's stock option plans and incentive plans, which
resolutions were
ratified by the board of directors of the Company on January 26,
2006, among
other things, the expiration dates of certain options held by
Executive were
extended. Specifically, the expiration date of all non-incentive
stock options
that were "out of the money" on December 14, 2005 that would
otherwise expire
prior to December 31, 2008 were extended to the later of (a)
December 31 of the
year in which they would otherwise expire or (b) the fifteenth
day of the third
month following the date the options would otherwise expire
based on the terms
of each option at their original grant date. The committee
wanted to extend to
December 31, 2008 such options that would expire prior to
December 31, 2008, but
limited the term of the extension in the manner set forth to
comply with the
rules of Section 409A of the Internal Revenue Code of 1986 (the
"Code"). In the
event extensions of such options can, at a later date, be
extended to December
31, 2008 without subjecting the Executive to additional tax
under Section 409A
of the Code, then the Company shall do so.
4. Expenses. (a) The Company shall pay for all legal and
accounting fees
and expenses incurred by the Executive in connection with the
structuring,
negotiation and preparation of this Agreement. Each Employer
shall reimburse the
Executive for all out-of-pocket expenses actually and
necessarily incurred by
him in the conduct of the business of such Employer against
reasonable
substantiation submitted with respect thereto.
(b) Unless the provisions of subsection 4(c) hereof shall apply,
the
Employers shall be jointly and severally obligated to reimburse
the Executive
for all legal fees and related expenses (including the costs of
experts,
evidence and counsel) paid by the Executive as a result
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of (i) the termination of Executive's employment (including all
such fees and
expenses, if any, incurred in contesting or disputing any such
termination of
employment), (ii) the Executive seeking to obtain or enforce any
right or
benefit provided by this Agreement or by any other plan or
arrangement
maintained by the Employers under which the Executive is or may
be entitled to
receive benefits, (iii) the Executive's hearing before the Board
as contemplated
in subsection 6(c) hereof or (iv) any action taken by the
Employers against the
Executive; provided, however, that the Employers shall reimburse
the legal fees
and related expenses described in this subsection 4(b) only if
and when (A) the
dispute is settled by the parties or resolved pursuant to a
binding arbitration
award in a manner that is more favorable to the Executive than
offered by the
Employers or (B) a final judgment, order or decree of a court of
competent
jurisdiction has been rendered in favor of the Executive and the
time for appeal
therefrom has expired and no appeal has been perfected. All
reimbursements shall
be made within 30 days of submission of reasonable
substantiation thereof.
(c) The Employers shall be jointly and severally obligated to
pay all
legal fees and related expenses (including the costs of experts,
evidence and
counsel) incurred by the Executive as they become due as a
result of (i) the
termination of Executive's employment (including all such fees
and expenses, if
any, incurred in contesting or disputing any such termination of
employment),
(ii) the Executive seeking to obtain or enforce any right or
benefit provided by
this Agreement or by any other plan or arrangement maintained by
the Employers
under which the Executive is or may be entitled to receive
benefits, (iii) the
Executive's hearing before the Board as contemplated in
subsection 6(c) hereof
or (iv) any action taken by the Employers against the Executive,
until such time
as (A) the dispute is settled by the parties or resolved
pursuant to a binding
arbitration award in a manner that is more favorable to the
Executive than
offered by the Employers or (B) a final judgment, order or
decree of a court of
competent jurisdiction has been rendered in favor of the
Employers and the time
for appeal therefrom has expired and no appeal has been
perfected; provided,
however, that the circumstances set forth above occurred on or
after a change in
control of either Employer, as defined in subsection 6(e). In no
event shall the
Executive be required to reimburse the Employers for any legal
fees or related
expenses paid by the Employers pursuant to this subsection
4(c).
5. Benefits. The Executive shall be entitled to six weeks of
paid vacation
each year and such other medical and other benefits as are
afforded from time to
time to all executive employees of the Company. The Employers
shall be jointly
or severally obligated to indemnify the Executive in the
performance of his
duties pursuant to the bylaws or organization documents of the
Employers and to
the fullest extent allowed by applicable law, including, without
limitation,
legal fees, and shall continue to maintain the Executive as a
named beneficiary
under any liability insurance policies maintained for directors
and/or officers
of the Employers for so long as Executive shall remain a
director or officer of
either Employer. In addition, following the termination of the
Executive's
employment with the Employers, the Company shall maintain in
effect a directors'
and officers' liability insurance policy pursuant to which the
Executive shall
be insured for a period of six years following such date of
termination for all
claims relating to matters occurring on or prior to such date of
termination to
the extent the Executive was insured by the Company prior to
such termination.
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6. Earlier Termination. (a) If the Executive shall fail, because
of
disability to render the services contemplated by this Agreement
for six
successive months or for shorter periods aggregating nine months
in any of the
three Contract Years, the Board may determine, on the basis of
medical evidence
satisfactory to the Board, in the Board's sole discretion, that
the Executive
has become disabled. If within thirty (30) days after the date
on which written
notice of such determination is given to the Executive, the
Executive shall not
have returned to the full-time performance of his duties
hereunder, this
Agreement and the employment of the Executive hereunder shall be
deemed
terminated on such 30th day in accordance with Section 8
hereof.
(b) Except as otherwise provided in this Agreement, if the
Executive
shall die during the term of this Agreement, this Agreement
shall be deemed to
have been terminated as of the date of death of the
Executive.
(c) The Employers, by notice to the Executive, may terminate
this
Agreement for proper cause. As used herein, "proper cause" shall
mean (i) the
willful and continued failure by the Executive to substantially
perform his
duties with the Employers (other than any such failure resulting
from the
Executive's incapacity due to physical or mental illness or any
such actual or
anticipated failure resulting from termination by the Executive
for Good Reason
(as defined below)) after a written demand for substantial
performance is
delivered to the Executive by the Board, which demand
specifically identifies
the manner in which the Board believes that the Executive has
not substantially
performed his duties, or (ii) the willful engaging by the
Executive in conduct
which is demonstrably and materially injurious to the Employers,
monetarily or
otherwise. For purposes of this subsection 6(c), no act, or
failure to act, on
the Executive's part shall be deemed "willful" unless done, or
omitted to be
done, by the Executive otherwise than in good faith and in a
manner that the
Executive reasonably believed was in or not opposed to the best
interests of the
Employers and their equity owners. Notwithstanding the
foregoing, the Executive
shall not be deemed to have been terminated for proper cause
unless and until
there shall have been delivered to the Executive a copy of a
resolution duly
adopted by the affirmative vote of not less than three-quarters
of the members
of the Board at a meeting of the Board called and held for such
purpose (after
reasonable notice to the Executive and an opportunity for the
Executive,
together with counsel of his choosing, to be heard before the
Board not less
than 10 business days after the giving of such notice), finding
that in the good
faith opinion of the Board, the Executive conducted himself as
set forth in
clause (i) or (ii) above and specifying the particulars of such
conduct in
detail. Notwithstanding anything contained in this Agreement to
the contrary, no
failure to perform by the Executive after a notice of
termination is given by
the Executive to the Employers shall constitute "proper cause"
for purposes of
this Agreement.
(d) The Executive may terminate this Agreement for "Good Reason"
if
any of the following events occurs:
(i) the assignment to the Executive of any duties materially
inconsistent with his status as a senior executive officer of
the
Employers or a substantial alteration in the nature or status of
his
responsibilities;
(ii) the Employers' material breach of any of their agreements
or
obligations under this Agreement and the failure of the
Employers to
remedy such
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material breach within 20 days following delivery by the
Executive to
the Employers of written notice setting forth such breach
with
specificity;
(iii) the failure by the Employers to pay the Executive any
installment of a previous award under any bonus or incentive
compensation arrangement;
(iv) the failure of the Employers to obtain a satisfactory
agreement from any successor to assume and agree to perform
this
Agreement, as contemplated in Section 15 hereof;
(v) any "change in control", as defined in subsection 6(e);
or
(vi) Executive being removed from, not nominated for
re-election
to, or not re-elected to the Board, other than for proper cause,
or at
his request.
(e) For purposes of this Agreement, a "change in control" shall
be
deemed to occur if:
(A) Any of the following occurs: (1) an LLC Sale Change of
Control, (2) an LLC Acquisition Change of Control, (3) an LLC
14A Change of
Control, or (4) an LLC Percentage Change of Control (each
capitalized term as
defined below). For purposes of this Agreement:
(i) an "LLC Sale Change of Control" shall mean LLC has
engaged in a merger, consolidation or reorganization or sells
all or
substantially all of its assets to a "Person" (as such term is
used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended
(the "Exchange Act"), provided, however, that an LLC Sale Change
of Control
shall not be deemed to have occurred hereunder if (x)
immediately prior thereto
the circumstance in clause (iii)(x) or (y) below exist, or (y)
the Company owns,
directly or indirectly, immediately following such transaction
in excess of 50%
of the combined voting power of the outstanding equity
securities of the
corporation or other entity resulting from such LLC Sale
Transaction;
(ii) an "LLC Acquisition Change of Control" shall mean LLC
has acquired the assets of another company or a subsidiary of
LLC merges,
consolidates or reorganizes with another company and the Company
owns, directly
or indirectly, immediately following such transaction 50% or
less of the
combined voting power of the outstanding voting securities of
the corporation or
other entity resulting from such transaction, provided, however,
that an LLC
Acquisition Change of Control shall not be deemed to have
occurred hereunder if
immediately prior thereto the circumstance in clause (iii)(x) or
(y) below
exist;
(iii) an "LLC 14A Change of Control" shall mean there shall
have occurred a change in control relating to LLC of a nature
that would be
required to be reported in response to Item 6(e) of Schedule 14A
of Regulation
14A promulgated under the Exchange Act, as in effect on the date
hereof, whether
or not LLC is then subject to such reporting requirement,
provided, however,
that an LLC Percentage Change of Control shall not be deemed to
have occurred
hereunder if immediately prior to the occurrence of what would
otherwise be a
change in control hereunder (x) the Executive is the other party
to
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