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EXHIBIT 10.32
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of October 11,
2006
(the "Effective Date"), among Wellsford Real Properties, Inc., a
Maryland
corporation ("WRP"), Reis Services LLC, a Maryland limited
liability company and
a wholly-owned subsidiary of WRP ("LLC", and together with WRP,
the
"Employers"), and Lloyd Lynford ("Employee").
Recitals
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WHEREAS, Employee is currently employed by Reis, Inc., a
Delaware corporation ("Reis"), under an Amended and Restated
Employment
Agreement dated as of July 25, 2003 (the "Original Agreement");
and
WHEREAS, WRP, LLC and Reis have entered into that certain
Agreement and Plan of Merger, dated as of the date hereof (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 and will be a wholly owned subsidiary of
WRP; and
WHEREAS, the Employers desire to employ Employee and Employee
desires to be employed by the Employers effective immediately
following (i) the
Effective Time (as such term is defined in the Merger Agreement)
and (ii) the
repayment by Employee of the Shareholder Note (as defined in the
Original
Agreement) pursuant to the terms thereof (the "Employment
Date").
NOW, THEREFORE, Employee and Employers, in consideration of
the agreements, covenants and conditions contained herein, hereby
agree as
follows:
1.
Basic Employment
Provisions.
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(a)
Employment and Term. Subject to the terms and conditions of
this Agreement, the Employers hereby employ Employee, and Employee
agrees to be
employed by the Employers, for a period (the "Employment Period")
of three years
from the Employment Date.
(b)
Duties. Employee shall serve as the President and Chief
Executive Officer of WRP and as President and Chief Executive
Officer of
LLC. Employee's duties and responsibilities and powers as set from
time to time
by WRP's Board of Directors (the "Board") or a committee thereof,
shall be
commensurate with Employee's positions. During the Employment
Period, Employee
agrees to perform his duties hereunder faithfully and to the best
of his ability
and to devote his full professional working time, attention and
energies to the
transaction of the Employers' business, in each case subject to the
terms
hereof. During the Employment Period, Employee shall not be
employed or
otherwise engaged in any other business or enterprise without the
written
consent of the Employers. Notwithstanding any other term hereof but
subject to
the terms and provisions of Sections 8 and 9, nothing contained
herein shall
preclude Employee from (i) serving on the boards of a reasonable
number of other
trade associations and/or civic or charitable organizations and
businesses which
do not compete with the business of the Employers, (ii) engaging in
charitable
activities and community affairs, (iii) managing his personal
investments and
affairs, in each case as long as such activities do not materially
interfere
with the discharge of his duties and responsibilities under this
Section 1(b).
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2.
Compensation.
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(a)
Salary. As compensation for the services to be rendered by
Employee hereunder, the Employers are jointly and severally
obligated to pay to
Employee for each year of the Employment Period, commencing on the
Employment
Date, a gross annual base salary of $375,000 per year (the "Gross
Annual Base
Salary"), payable in accordance with the payroll practices of the
Employers in
effect from time to time.
(b) Bonus.
Promptly following the Effective Date, WRP shall
establish an executive incentive plan, which shall provide bonuses
to senior
executive employees of the Employers ("Executive Incentive Plan").
Employee
shall be eligible to receive an annual bonus (the "Annual Bonus")
under such
Executive Incentive Plan, in accordance with the terms of such
plan; provided,
however, that for (i) the period beginning on the Employment Date
and ending 12
months thereafter, Employee's minimum Annual Bonus shall be
$270,000 (the "2007
Minimum Annual Bonus"), (ii) for the period beginning on the first
anniversary
of the Employment Date and ending 12 months thereafter, Employee's
minimum
Annual Bonus shall be $270,000 (the "2008 Minimum Annual Bonus")
and (iii) for
the period beginning on the second anniversary of the Employment
Date and ending
12 months thereafter, Employee's minimum Annual Bonus shall be
$270,000 (the
"2009 Minimum Annual Bonus"; and each such 12-month period referred
to in
clauses (i) and (ii) and this clause (iii), an "Employment Year").
(In the event
that the Executive Incentive Plan awards bonuses which are based on
a calendar
year or fiscal year that is not congruent with an Employment Year,
any Minimum
Annual Bonus shall be attributed to the Executive Incentive Plan
award period on
a pro rata basis.) The minimum Annual Bonuses referred to in each
of clause (i),
(ii) and (iii) above shall be paid 30 days from the end of the
period in which
it was earned. All Annual Bonus payments shall be subject to
deduction and
withholding required by applicable law. For purposes of clarity,
each of the
parties hereto acknowledges and agrees that the 2007 Minimum Annual
Bonus, the
2008 Minimum Annual Bonus and the 2009 Minimum Annual Bonus are the
minimum
guaranteed Annual Bonus for such periods and that the Compensation
Committee of
the Board may, in its discretion, pay a higher amount as an Annual
Bonus.
Further, the Executive Incentive Plan, as such plan is adopted or
amended from
time to time by the Compensation Committee of the Board, may
provide for a bonus
in excess of the 2007 Minimum Annual Bonus, the 2008 Minimum Annual
Bonus and
the 2009 Minimum Annual Bonus.
(c)
Benefits. During the Employment Period, Employee shall be
entitled to the benefits which senior executives of the Employers
become
entitled under the terms of any benefit plans or programs
instituted by
Employers, as in effect from time to time (it being understood that
WRP or LLC
may amend or terminate such benefit plans or programs in accordance
with such
plans or programs at any time during the Employment Period). For
purposes of
determining Employee's eligibility for participation in employee
benefit plans
and for other fringe benefits, Employee shall be deemed to be a
full time
employee of whichever Employer provides more favorable benefits, in
the
aggregate, to its senior executives. In addition, Employee shall be
entitled to
four weeks paid vacation per year, which shall be taken in
accordance with the
policies of WRP governing vacation of senior executive
employees.
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(d) Stock
Options and Restricted Stock.
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(i) WRP shall,
as soon as practicable following the Effective
Date (A) amend the Wellsford Real Properties, Inc. 1997 Management
Incentive
Plan (the "1997 Option Plan) and the Wellsford Real Properties,
Inc. 1998
Management Incentive Plan (the "1998 Option Plan") or take such
other action,
including adoption of a new plan, as may be necessary to provide
for the grant
of restricted stock units of WRP (the 1998 Option Plan together
with the 1997
Option Plan and any new plan, the "WRP Option Plans") and (B)
register with the
Securities and Exchange Commission any securities which will be
issued to settle
the grants of restricted stock units contemplated by this Agreement
if such
securities have not previously been registered.
(ii) As of the
Employment Date, Employee shall be granted
100,000 restricted stock units of WRP (the "Initial Units")
pursuant to the WRP
Option Plans, which shall provide for customary adjustment
provisions in the
event of a stock split, reverse stock split, merger or other change
in the
capitalization of WRP similar to the adjustment provisions in the
1998 Option
Plan. The Initial Units shall be equally divided among three
separate tranches,
hereinafter defined as, "Tranche 1", "Tranche 2" and "Tranche 3",
respectively.
(A)
Tranche 1 shall vest on the first anniversary of
the Employment Date if the growth in EBITDA (as defined on Schedule
2(d)(ii)),
for the Tranche 1 Measuring Period (as defined on Schedule
2(d)(ii)) exceeds
10%. If Tranche 1 has not vested by the first anniversary of the
Employment
Date, it shall vest on the second anniversary of the Employment
Date if the
cumulative growth in EBITDA for the Tranche 1 Measuring Period and
the Tranche 2
Measuring Period (as defined on Schedule 2(d)(ii)), exceeds 20%. If
Tranche 1
has not vested on the first or second anniversary of the Employment
Date, it
shall vest on the third anniversary of the Employment Date if the
cumulative
growth in EBITDA for the Tranche 1 Measuring Period, the Tranche 2
Measuring
Period and the Tranche 3 Measuring Period (as defined on Schedule
2(d)(ii)),
exceeds 30%.
(B)
Tranche 2 shall vest on the second anniversary
of the Employment Date if either (1) the growth in EBITDA for the
Tranche 2
Measuring Period exceeds 10% or (2) the cumulative growth in EBITDA
for the
Tranche 1 Measuring Period and the Tranche 2 Measuring Period
exceeds 20%. If
Tranche 2 has not vested by the second anniversary of the
Employment Date, it
shall vest on the third anniversary of the Employment Date if
either (x) the
cumulative growth in EBITDA for the Tranche 2 Measuring Period and
the Tranche 3
Measuring Period, exceeds 20% or (y) if the cumulative growth in
EBITDA for the
Tranche 1 Measuring Period, the Tranche 2 Measuring Period and the
Tranche 3
Measuring Period exceeds 30%.
(C)
Tranche 3 shall vest on the third anniversary of
the Employment Date if either (1) the growth in EBITDA for the
Tranche 3
Measuring Period exceeds 10% or (2) the cumulative growth in EBITDA
for the
Tranche 1 Measuring Period, the Tranche 2 Measuring Period and the
Tranche 3
Measuring Period exceeds 30%.
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In the event a change of control (as defined herein) occurs before
the third
anniversary of the employment date, then the requirements for
ebitda growth (as
described in this section 2(d)(ii)) shall be deemed to be satisfied
for any
tranche of the initial units which had not vested as of the
effective date of
such change of control, and any tranche that was scheduled to vest
on any
anniversary date before the effective date of such change of
control shall vest
on the effective date of the change of control.
The Employee must be employed as of each anniversary date for
vesting to occur
on that date. Notwithstanding the foregoing, the Initial Units
shall vest
immediately (1) upon termination of the Employment Period other
than for Cause,
or (2) if Employee leaves for Good Reason. The restricted stock of
WRP to be
delivered pursuant to the terms of the Initial Units shall be
delivered to
Employee on the third anniversary of the Employment Date or at such
earlier time
as (x) termination of the Employment Period other than for Cause,
or (y)
Employee leaves for Good Reason; provided, however, that delivery
shall be
delayed to the first date such delivery can be made without
incurring additional
tax under ss. 409A of the Code.
(iii) Employee shall be eligible to be considered for
participation in any other incentive compensation methods or
programs
established by the Compensation Committee and offered to senior
executives of
WRP or LLC.
3.
Termination.
Employee's employment may be terminated prior to the
expiration of the Employment Period under the following conditions,
in each
case subject to the terms of Section 4. In the event any party or
parties
(in the case of the Employers) elect to terminate the Employment
Period, such
party or parties shall deliver written notice thereof (other than a
termination
pursuant to clause (a) below) in accordance with the terms of this
Section 3,
which written notice shall set forth the provision of this Section
3 under
which such termination is effective. A notice of termination
hereunder may not
be retracted or withdrawn by the party or parties delivering the
same, without
the consent of the other party or parties hereto.
(a)
Death. The Employment Period shall terminate automatically,
without notice, effective upon the death of Employee.
(b) Disability.
The Employers may terminate the Employment Period
at any time effective upon not less than 10 days prior written
notice to
Employee after Employee has been unable to perform the essential
duties of his
positions because of Disability (as defined below) for a period of
(i) 180
consecutive days in any 12-month period or (ii) 270 days in any
12-month period,
subject to reasonable accommodation provisions of applicable law.
For purposes
of this Agreement, "Disability" shall mean that Employee is unable
to engage in
any substantial gainful activity by reason of any medically
determinable
physical or mental impairment which can be expected to result in
death or can be
expected to last for a continuous period of not less than 12
months.
(c) Cause.
The Employers may terminate the Employment Period at
any time for Cause, effective upon delivery of prior written notice
to Employee.
For the purposes of this Agreement, "Cause" shall mean Employee's
(i) breach of
Section 9, (ii) material breach of any other term or provision of
this Agreement
which is not cured by Employee within 20 days written notice
thereof from either
Employer (which notice shall specify that such notice is being
delivered for
purposes of this clause (c)(ii)), (iii) fraud or dishonesty in the
course of his
employment, (iv) continued gross neglect of the duties to be
performed by him
hereunder for reasons other than Disability which is not cured by
Employee
within 20 days written notice thereof from the Employers (which
notice shall
specify that such notice is being delivered for purposes of this
clause
(c)(iv)), or (v) conviction or pleading guilty or nolo contendre to
any felony
charge. Notwithstanding the foregoing, Employee shall not be deemed
to have been
terminated for Cause pursuant to clause (i) through (iv) hereof
unless and until
there shall have been delivered to Employee a copy of a resolution
duly adopted
by the affirmative vote of not less than either (a) a majority of
the members of
the Board or (b) two-thirds of the independent members of the
Board, at a
meeting of the Board called and held for such purpose (after
reasonable notice
to Employee and an opportunity for Employee, 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,
Employee conducted himself as set forth above in clause (i) through
(iv) of this
Section 3(c) and specifying the particulars of such conduct in
detail.
Notwithstanding anything contained in this Agreement to the
contrary, no failure
to perform by Employee after a notice of termination is given by
Employee shall
constitute proper Cause for purposes of this Agreement.
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(d) Change
of Control.
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(i)
In the event there is a termination by the Employers
without Cause or a termination by Employee for Good Reason, in
either case
within the two-year period following a Change of Control (as
defined below),
Employee shall be entitled to payment under Section 4(d) of this
Agreement. If
Employee remains continuously employed for six months following the
effective
date of a Change of Control, Employee shall have the right to
resign during the
30-day period which begins on the date 6 months after the effective
date of such
Change of Control (such 30-day period, the "Window Period").
Employee's
resignation for any reason during the Window Period shall be deemed
to be
treated as a resignation for Good Reason after a Change of Control,
and upon his
resignation during the Window Period Employee shall be entitled to
payment under
Section 4(d) of this Agreement.
(ii) For
purposes of this Agreement, "Change of Control"
shall mean the occurrence of any of the following after the
Employment Date,
whether directly or indirectly, voluntarily or involuntarily,
whether as part of
a single transaction or a series of transactions: (A) during any
period of
twelve consecutive months or less, individuals who at the beginning
of such
period constitute the Board cease, for any reason, to constitute at
least a
majority of the Board, unless the election or nomination for
election of each
new director was approved by at least two-thirds of the directors
then still in
office who were directors at the beginning of the period (either by
a specific
vote of such directors or by the approval of the Employer proxy
statement in
which each such individual is named as a nominee for a director
without written
objection to such nomination by such directors); provided, however,
that no
individual initially elected or nominated as a director as a result
of an actual
or threatened election contest with respect to directors or as a
result of any
other actual or threatened solicitation of proxies or consents by
or on behalf
of any person other than the Board shall be deemed to be approved
(solely for
purposes of this Section 3(d)(ii)); or (B) the sale, transfer or
other
disposition of all or substantially all of the assets of either
Employer (other
than to a wholly owned direct or indirect subsidiary of either
Employer or a
benefit plan of either Employer); or (C) any person or entity or
group of
affiliated persons or entities (other than Employee, Jonathan
Garfield or a
group including either of them) acquiring beneficial ownership (as
that term is
used in Rules 13d-3, 13d-5 or 16a-1 under the Securities Exchange
Act of 1934,
as amended, whether or not applicable) of 30% or more of the shares
of capital
stock or other equity of either Employer, having by the terms
thereof voting
power to e
