SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of June 25,
2002, between Wellsford Real Properties, Inc., a Maryland corporation with
offices at 535 Madison Avenue, New York, New York 10022 (the "Company"), and
David M. Strong, an individual residing at 700 Franklin Street, Denver, Colorado
80128 ("Executive").
WHEREAS, the Company and the Executive are party to an Amended and Restated
Employment Agreement, dated as of January 1, 2000 (the "Amended and Restated
Agreement");
WHEREAS, the Company and the Executive desire to amend and restate the
Amended and Restated Agreement (the "Second Amended and Restated Agreement");
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 the Company shall employ the Executive as Vice
President for Development to perform such executive or administrative services
for the Company consistent with those of a Vice President as may be assigned to
the Executive by the directors, Chairman of the Board or President of the
Company. The Executive hereby accepts such employment and agrees to perform such
services.
(b) The Executive shall devote substantially all of his time, attention and
energies during business hours to the performance of his duties hereunder. The
Executive shall give advance written notice to the Chairman of the Board and
President of any intended active involvement in any other business enterprise.
(c) The Executive shall cooperate with the Company, including taking such
medical examinations as the Company reasonably shall deem necessary, if the
Company shall desire to obtain medical, disability or life insurance with
respect to the Executive.
(d) Except as hereinafter set forth, the Executive shall not be required to
relocate or conduct the Company's business outside the Denver, Colorado area in
order to perform his duties under this Second Amended and Restated 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). If, after the
disposition by the Company of its entire interest in the Palomino Project, as
defined in Section 3(f), the Company notifies the Executive in writing that it
desires Executive to relocate, Executive will have 90 days from such written
notification by the Company to Executive to relocate within which to notify the
Company as to whether he agrees to relocate. If Executive elects not to
relocate, Executive's employment by the Company will be deemed terminated on the
90th day after such written notice is given by the Company. The failure of
Executive to respond in writing to the Company's notification for him to
relocate within the aforesaid 90-day period shall be deemed to be an election by
him not to relocate in which case his employment shall be deemed to have
terminated automatically upon expiration of the aforesaid 90 day period. In the
event that Executive's employment is terminated pursuant to this Section 1(d),
the Executive will then have 180 days from such termination date within which to
exercise all non-incentive options vested prior to any termination pursuant to
this Section 1(d) and Executive's "rollover options" existing prior to any
termination pursuant to this Section 1(d) shall be exercisable in accordance
with their terms.
2. Employment Term. The term of employment shall continue in effect through
December 31, 2004; provided, however, that, on January 1, 2005 and on each
January 1 thereafter, the term of this Second Amended and Restated Agreement
shall automatically be extended for one additional year beyond such January 1
unless, not later than the immediately preceding September 30, either the
Executive or the Company shall have given notice to the other not to extend this
Second Amended and Restated Agreement.
3. Compensation. For all services rendered by the Executive pursuant to
this Second Amended and Restated Agreement:
(a) The Company shall pay to the Executive an annual base salary at the
following rates:
(i) for the period from January 1, 2002 through December 31, 2002-
$185,658; and
(ii) for each additional year thereafter, the annual base salary for the
immediately preceding year plus three percent (3%) of such annual base salary.
All such compensation shall be paid bi-weekly or at such other regular
intervals, not less frequently than monthly, as the Company may establish from
time to time for executive officers of the Company.
(b) In addition to the compensation set forth in Section 3(a) above, during
the term of this Second Amended and Restated Agreement, the Executive may be
entitled to a cash bonus after the end of each calendar year based upon the
Executive's and the Company's performance during such calendar year, as may be
determined by the Company's Compensation Committee. The Company shall announce
to the Executive the amount of his bonus for each year during December of such
year (or during the month in which this Second Amended and Restated Agreement
shall expire, if applicable) and pay such bonus during the following January (or
during the month following expiration of this Second Amended and Restated
Agreement, as the case may be), unless otherwise agreed to by the Executive and
the Company.
(c) (i) In addition to the base salary set forth in 3(a) above and any
bonus to which he may be entitled pursuant to Section 3(b) above, the Executive
shall also be entitled to receive a one-time bonus (the "Special Bonus"),
subject to the provisions of this Section 3(c) and (d), in the event of and
subject to the disposition by the Company of at least 90% of its entire interest
in the Palomino Project. Such disposition shall be deemed to have occurred at
such time as the Company and any of its Affiliates, as defined in Section 3(f)
hereof, collectively, have an ownership interest of less than 10% in the
Palomino Project either by the ownership of assets or an equity interest in any
entity now existing or hereinafter organized, which has an ownership interest in
the Palomino Project. Executive acknowledges that the Company has not made any
representation or warranty to him regarding the possibility or timing of a sale
of the Palomino Project. The Special Bonus will be determined for the first time
immediately after the disposition of the interest in the Palomino Project
resulting in the Company disposing of at least 90% of its interest in the
Palomino Project and calculated as the sum of the following:
(A) $250,000 if the Company has received the return of 100% of all monies
it has invested or expended in connection with the Palomino Project and an
Internal Rate of Return (as defined in Section 3(f)) of at least 10% and less
than 11%;
(B) An additional $50,000 if the Company has received the return of 100% of
all monies it has invested or expended in connection with the Palomino Project
and an Internal Rate of Return of at least 11%;
(C) An additional $50,000 if the Company has received the return of 100% of
all monies it has invested or expended in connection with the Palomino Project
and an Internal Rate of Return of at least 12%;
(D) An additional $50,000 if the Company has received the return of 100% of
all monies it has invested or expended in connection with the Palomino Project
and an Internal Rate of Return of at least 13%;
(E) An additional $50,000 if the Company has received the return of 100% of
all monies it has invested or expended in connection with the Palomino Project
and an Internal Rate of Return of at least 14%; and
(F) An additional $50,000 if the Company has received the return of 100% of
all monies it has invested in or expended in connection with the Palomino
Project and a 15% Internal Rate of Return.
An additional amount, not to exceed $500,000 if the Internal Rate of Return
is greater than 15%, which shall be equal to the product of $500,000 and a
fraction, the numerator of which is the amount by which the Internal Rate of
Return exceeds 15% and the denominator of which is 15%.
Any Special Bonus vested and earned will be paid within 60 days after the
Company has disposed of 90% of its entire interest in the Palomino Project;
(ii) If after disposition by the Company of 90% of its interest in the Palomino
Project, Executive has not received a Special Bonus of $1,000,000, then the
Internal Rate of Return, as defined in Section 3(f), shall be recalculated
immediately after such time as the Company has disposed of at least 95% of
its entire interest in the Palomino Project. After the Internal Rate of
Return, as defined in Section 3(f), is recalculated, the Special Bonus
shall be recalculated and there shall be paid to Executive an amount equal
to the amount by which the recalculated Special Bonus exceeds any Special
Bonus previously paid to Executive. Any additional Special Bonus vested and
earned by Executive at such time will be paid within 60 days after the
Company has disposed of 95% of its entire interest in the Palomino Project;
(iii)If after disposition by the Company of 95% of its entire interest in the
Palomino Project Executive has not received a Special Bonus of $1,000,000,
then the Internal Rate of Return, as defined in Section 3(f), shall be
recalculated immediately after such time as the Company has disposed of its
entire interest in the Palomino Project. After the Internal Rate of Return,
as defined in Section 3(f), is recalculated, the Special Bonus shall be
recalculated and there shall be paid to Executive an amount equal to the
amount by which the recalculated Special Bonus exceeds any Special Bonus
previously paid to Executive. Any additional Special Bonus vested and
earned by Executive at such time will be paid within 60 days after the
Company has disposed of its entire interest in the Palomino Project.
(d) Executive's right to receive the Special Bonus will vest on the sooner
of the disposition by the Company of 90% of its entire interest in the Palomino
Project and January 1, 2005. In the event of the death of Executive during the
term of this Second Amended and Restated Agreement or if the Company has
determined that the Executive is disabled pursuant to Section 6(b) (a
"Termination Event") at the time of such death or determination of disability,
as the case may be, 20% of the Special Bonus shall be deemed to have vested with
respect to each full calendar year of the term hereof expiring after December
31, 1999 and prior to such Termination Event up to a maximum of 60% of such
Special Bonus.
(e) If a Change of Control of the Company, as defined in paragraph 6(f),
occurs prior to the expiration of the term of this Second Amended and Restated
Agreement and prior to the disposition by the Company of its entire interest in
the Palomino Project, the entire Special Bonus will vest if Executive's
employment is terminated by the Company other than for Cause and prior to
January 1, 2005. Notwithstanding any vesting of the Special Bonus pursuant to
Sections 3(c) and (d), payment of such Special Bonus shall be subject to the
Company's disposition of 90% and 95% of its entire interest in the Palomino
Project as provided for in Sections 3(c)(i) and 3(c)(ii) and such Special Bonus
will not be paid until 60 days after each said disposition.
(f) For purposes of this Second Amended and Restated Agreement, the
following terms shall have the meanings set forth in this Section 3(f):
(i) An "Affiliate" of, or a person "Affiliated" with, a specified person, is a
person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the person
specified. Notwithstanding the foregoing, the term Affiliate shall not
include Equity Residential Properties Trust and its Affiliates.
(ii) The term "control" (including the terms "controlling," "controlled by" and
"under common control with") means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies
of a person, whether through the ownership of voting securities, by
contract, or otherwise.
(iii)"Internal Rate of Return" shall mean, that the Company has achieved an
internal rate of return of a specified percentage per annum for the period
commencing on May 30, 1997 and ending on the date the calculation is made,
which shall occur when an amount equal to the total amount of monies
directly or indirectly expended or invested by the Company or any of its
Affiliates, including, without limitation, monies expended or invested by
the Company or its predecessor-in-interest or any of their Affiliates (e.g.
Wellsford Residential Property Trust and its Affiliates ("Wellsford
Residential")) (other than any portion thereof provided by any other
partner, shareholder, member or venturer), as the case may be, (who is not
otherwise Affiliated with the Company) of any entity Affiliated with the
Company) from time to time with respect to the Palomino Project (including
any Special Bonus payable pursuant to Section 3 hereof as a result of the
calculation of the Internal Rate of Return at such time) are returned to
the Company and its Affiliates (other than any portion thereof returned to
any other partner, shareholder, member or venturer, as the case may be,
(who is not otherwise Affiliated with the Company) of any entity Affiliated
with the Company) as a result of the disposition by the Company of any
portion of its interest in the Palomino Project together with an annual
return equal to such specified percentage calculated commencing on the date
each of such expenditures are or were made, compounded annually, taking
into account the timing and amounts of all expenditures by the Company and
its Affiliates (other than any portion thereof provided by any other
partner, shareholder, member or venturer, as the case may be, (who is not
otherwise Affiliated with the Company) of any entity Affiliated with the
Company) and all previous cash receipts (regardless of how these expenses,
investments and receipts are characterized by the Company) of the Company
and its Affiliates (other than any portion thereof returned to any other
partner, shareholder, member or venturer, as the case may be, (who is not
otherwise Affiliated with the Company) of any entity Affiliated with the
Company) as a result of the operation and disposition of the Palomino
Project. For purposes of computing such Internal Rate of Return, any
expenditures made by the Company and its Affiliates (other than any portion
thereof provided by any other partner, shareholder, member or venturer, as
the case may be, (who is not otherwise Affiliated with the Company) of any
entity Affiliated with the Company) and any funds received by the Company
and its Affiliates (other than any portion thereof returned to any other
partner, shareholder, member or venturer, as the case may be, (who is not
otherwise Affiliated with the Company) of any entity Affiliated with the
Company) at any time during a month shall be deemed to be made or received
on the first day of such month and there shall be included in expenditures
by the Company or an Affiliate (other than any portion thereof provided by
any other partner, shareholder, member or venturer, as the case may be,
(who is not otherwise Affiliated with the Company) of any entity Affiliated
with the Company) with respect to the Palomino Project any portion of an
expenditure made for any purpose attributable to the Palomino Project
except that the only portion of the general and administrative expenses of
the Company that shall be included in calculating expenditures shall be
that portion related to the staff, rent, supplies and other costs of the
Denver, Colorado office of the Company as reasonably determined by the
Company's Chief Accounting Officer to relate to the Palomino Project.
(iv) "Palomino Project" shall mean the Company's residential development located
in Highlands Ranch, Colorado known as Palomino Park at Highlands Ranch,
including without limitation, all land (whether or not developed),
buildings and improvements comprising each of the five phases of such
development known as Blue Ridge, Red Canyon, Silver Mesa, Green River and
Gold Peak and all common and recreational facilities contiguous to all or
any part of, or related to or used in connection with, the foregoing, and
any non-cash assets, including, without limitation, other properties,
promissory notes, debt instruments and interests in any entity, received in
connection with the sale, transfer, exchange or other disposition of any of
the foregoing.
4. Expenses. (a) The Company shall reimburse the Executive for all
out-of-pocket expenses actually and necessarily incurred by him in the conduct
of the business of the Company or in connection with a relocation requested by
the Company pursuant to Section 1(d) against reasonable substantiation submitted
with respect thereto.
(b) Unless the provisions of subsection 4(c) below shall apply, the Company
shall 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 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 Second Amended and Restated Agreement or by any other
plan or arrangement maintained by the Company under which the Executive is or
may be entitled to receive benefits or (iii) any action taken by the Company
against the Executive; provided, however, that the Company shall reimburse the
legal fees and related expenses described in this subsection 4(b) only if and
when a final judgment has been rendered in favor of the Executive and all
appeals related to any such action have been exhausted.
(c) The Company shall 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 Second Amended and
Restated Agreement or by any other plan or arrangement maintained by the Company
under which the Executive is or may be entitled to receive benefits or (iii) any
action taken by the Company against the Executive, unless and until such time
that a final judgement has been rendered in favor of the Company and all appeals
related to any such action have been exhausted; provided, however, that the
circumstances set forth above occurred on or after a Change in Control of the
Company, as defined in Section 6(f).
5. Benefits. The Executive shall be entitled to such paid vacation time
each year and such other medical benefits as are afforded from time to time to
all executive officers of the Company (other than the Chairman of the Board and
the President). The Company shall indemnify the Executive in the performance of
his duties pursuant to the bylaws of the Company and to the fullest extent
allowed by applicable law, including, without limitation, legal fees.
6. Earlier Termination. (a) If the Executive shall die during the term of
this Second Amended and Restated Agreement, this Second Amended and Restated
Agreement shall be deemed to have been terminated as of the date of the
Executive's death, and the Company shall pay to the legal representative of the
Executive's estate all monies due hereunder prorated through the last day of the
month during which the Executive shall have died, as well as a bonus equal to
the product of (x) the base salary payable to the Executive pursuant to
subsection 3(a) from January 1 of the year in which the Executive shall have
died through the last day of the month during which the Executive shall have
died and (y) the greater of (i) 1/2 or (ii) the percentage of the Executive's
base salary for the immediately preceding fiscal year that was paid to the
Executive or into the Wellsford Real Properties, Inc. Deferred Compensation Plan
as a bonus on his behalf for the immediately preceding fiscal year, expressed as
a fraction (the greater of clauses (i) and (ii) being herein referred to as the
"Deemed Bonus Fraction");
(b) If the Executive shall fail, because of illness or incapacity, to
render the services contemplated by this Second Amended and Restated Agreement
for six consecutive months or for shorter periods aggregating nine months in any
calendar year, the Company may determine (as set forth in subsection (d) below)
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 continuing full-time performance of
his duties hereunder, this Second Amended and Restated Agreement and the
employment of the Executive hereunder shall be deemed terminated and the Company
shall pay to the Executive all monies due hereunder prorated through the last
day of the month during which such termination shall occur, as well as a bonus
equal to the product of (x) the base salary payable to the Executive pursuant to
subsection 3(a) from January 1 of the year in which this Second Amended and
Restated Agreement is terminated through the last day of the month during which
this Second Amended and Restated Agreement is terminated and (y) the Deemed
Bonus Fraction.
(c) The Company, by written notice to the Executive specifying the reason
therefor, may terminate this Second Amended and Restated Agreement for Cause as
determined pursuant to subsection (d) below. As used herein, "Cause" shall be
defined as actions by the Executive which constitute malfeasance. Malfeasance
includes, but is not limited to, the Executive engaging in fraud, dishonest
conduct or other criminal conduct.
(d) A determination of disability or Cause shall be made in the reasonable
and sole discretion of the Company's Chairman of the Board of the Company. The
Company's Board of Directors shall, upon request of the Executive, review the
decision of whether the Executive has become disabled or has been discharged,
released or terminated for Cause and the Board of Directors shall confirm,
modify or reverse such determination in its sole discretion.
(e) The Executive shall have the right to terminate this Second Amended and
Restated Agreement if any Change in Control of the Company occurs upon notice to
the Company within 90 days after the Change of Control of the Company.
(f) For purposes of this Second Amended and Restated Agreement, a "Change
in Control of the Company" shall be deemed to occur if:
A. (i) there shall have occurred a change in control 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 Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as in effect on the date hereof, whether or not the
Company is then subject to such reporting requirement, provided, however, that
there shall not be deemed to be a "Change in Control" of the Company if
immediately prior to the occurrence of what would otherwise be a "Change in
Control" of the Company (a) the Executive is the other party to the transaction
(a "Control Event") that would otherwise result in a "Change in Control" of the
Company or (b) the Executive is an executive officer, trustee, director or more
than 5% equity holder of the other party to the Control Event or of any entity,
directly or indirectly, controlling such other party,
(ii) the Company merges or consolidates with, or sells all or substantially
all of its assets to, another company (each, a "Transaction"), provided,
however, that a Transaction shall not be deemed to result in a "Change in
Control" of the Company if (a) immediately prior thereto the circumstances in
(i)(a) or (i)(b) above exist, or (b) (1) the shareholders of the Company,
immediately before such Transaction own, directly or indirectly, immediately
following such Transaction in excess of fifty percent (50%) of the combined
voting power of the outstanding voting securities of the corporation or other
entity resulting from such Transaction (the "Surviving Corporation") in
substantially the same proportion as their ownership of the voting securities of
the Company immediately before such Transaction and (2) the individuals who were
members of the Company's Board of Trustees immediately prior to the execution of
the agreement providing for such Transaction constitute at least a majority of
the members of the board of directors or the board of trustees, as the case may
be, of the Surviving Corporation, or of a corporation or other entity
beneficially directly or indirectly owning a majority of the outstanding voting
securities of the Surviving Corporation, or
(iii) the Company acquires assets of another company or a subsidiary of the
Company merges or consolidates with another company (each, an "Other
Transaction") and (a) the shareholders of the Company, immediately before such
Other Transaction own, directly or indirectly, immediately following such Other
Transaction 50% or less of the combined voting power of the outstanding voting
securities of the corporation or other entity resulting from such Other
Transaction (the "Other Surviving Corporation") in substantially the same
proportion as their ownership of the voting securities of the Company
immediately before such Other Transaction or (b) the individuals who were
members of the Company's Board of Trustees immediately prior to the execution of
the agreement providing for such Other Transaction constitute less than a
majority of the members of the board of directors or the board of trustees, as
the case may be, of the Other Surviving Corporation, or of a corporation or
other entity beneficially directly or indirectly owning a majority of the
outstanding voting securities of the Other Surviving Corporation, provided,
however, that any Other Transaction shall not be deemed to result in a "Change
in Control" of the Company if immediately prior thereto the circumstances in
(i)(a) or (i)(b) above exist; and
B. If Jeffrey H. Lynford is the Chairman of the Board, President, Chief
Executive Officer or Chief Operating Officer of the Company, the Surviving
Corporation or the Other Surviving Corporation, immediately following a Control
Event, Transaction or Other Transaction, as the case may be, then
notwithstanding A.(i), A.(ii) and A.(iii) above, no Change in Control of the
Company will be deemed to have occurred.
7. Compensation Upon Termination Upon a Change in Control of the Company.
(a) If after a Change in Control of the Company the Executive's employment shall
be terminated (I) by the Company other than for Cause or (II) by the Executive
pursuant to Section 6(e), then the Executive shall be entitled to receive from
the Company, as severance pay, not later than the date of termination an amount
equal to the greater of:
(i) an amount equal to his full base salary through the then expiration date of
the term of this Second Amended and Restated Agreement, compensation for
accrued vacation time as well as a bonus equal to the product of (a) the
aggregate base salary payable to the Executive pursuant to subsection 3(a)
from January 1 of the year in which the Change in Control occurs through
the then expiration date of the term of this Second Amended and Restated
Agreement and (b) the greater of (A)1/2or (B) the percentage of the
Executive's base salary for the immediately preceding fiscal year that was
paid to the Executive or into the Wellsford Real Properties, Inc. Deferred
Compensation Plan as a bonus on his behalf for the immediately preceding
fiscal year, expressed as a fraction; or
(ii) an amount (the "Severance Payment") equal to two times the average of the
Executive's annual compensation during the three calendar year period
preceding the calendar year in which the date of termination occurs. For
purposes of determining annual compensation in the preceding sentence,
compensation payable to the Executive by the Company (including Wellsford
Residential) shall include every type and form of compensation includible
in the Executive's gross income in respect of his employment by the Company
(including Wellsford Residential) (including, without limitation, all
income reported on an Internal Revenue Service Form W-2), compensation
income recognized as a result of the Executive's exercise of stock options
and including, without limitation, any annual bonus payments previously
paid to such Executive or deferred under the Wellsford Real Properties,
Inc. Deferred Compensation Plan, on his behalf and specifically excluding
(a) any Special Bonus paid to Executive, and (b) any income of the
Executive that constitutes a "parachute payment" within the meaning of
Section 280G(b)(2) of the Code; and
(b) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 7 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this Section 7 be
reduced by any compensation earned by him as the result of employment by another
employer or by retirement benefits after the date of termination, or otherwise,
except as specifically provided in this Section 7.
8. Protection of Confidential Information; Non-Competition.
(a) The Executive acknowledges that (i) the Company will suffer substantial
damage which will be difficult to compute if the Executive violates any of the
provisions of this Section 9, and (ii) the provisions of this Second Amended and
Restated Agreement are reasonable and necessary for the protection of the
business of the Company.
(b) The Executive agrees that he will not at any time, either during the
term of this Second Amended and Restated Agreement or thereafter, divulge to any
person, firm or corporation any material information obtained or learned by him
during the course of his employment with the Company, with regard to the
operational, financial, business or other affairs of the Company, its officers
or directors, except (i) in the course of performing his duties hereunder, (ii)
with the Chairman of the Board's or President's express written consent; (iii)
to the extent that any such information is in the public domain other than as a
result of the Executive's breach of any of his obligations hereunder; or (iv)
where required to be disclosed by court order, subpoena or other government
process.
(c) Upon termination of his employment with the Company, or any time the
Company may so request, the Executive will promptly deliver to the Company all
memoranda, notes, records, reports, manuals, drawings, blueprints, software and
other documents (and all copies thereof) relating to the business of the Company
and all property associated therewith, which he may then possess or have under
his control.
(d) During the term of this Second Amended and Restated Agreement and any
renewal hereof (including any remaining portion of the stated term of this
Second Amended and Restated Agreement or any renewal term hereof following the
termination of the Executive's employment by the Executive unless such
termination occurs after a Change in Control of the Company), and provided the
Executive's employment has not been terminated by the Company with or without
Cause, the Executive without the prior written permission of the Chairman of the
Board or President shall not in the United States, its territories or
possessions, directly or indirectly, (i) enter into the employ of or render any
services to any person, firm or corporation engaged in any competitive business;
(ii) engage in any competitive business for his own account; (iii) become
associated with or interested in any competitive business as an individual,
partner, shareholder, creditor, director, officer, principal, agent, employee,
director, consultant, advisor or in any other relationship or capacity; (iv)
employ or retain, or have or cause any other person or entity to employ or
retain, any person who was employed or retained by the Company while the
Executive was employed by the Company; or (v) solicit, interfere with, or
endeavor to entice away from the Company any of its customers or sources of
supply. However, nothing in this Second Amended and Restated Agreement shall
preclude the Executive from investing his personal assets in the securities of
any corporation or other business entity which is engaged in a competitive
business if such securities are traded on a national stock exchange or in the
over-the-counter market and if such investment does not result in his
beneficially owning, at any time, more than 1% of the publicly-traded equity
securities of such competitor. A competitive business shall not include (i) any
privately owned enterprise or (ii) any publicly owned enterprise engaged in such
a business outside of the geographic regions and states in which the Company
operates at the time of the termination of this Second Amended and Restated
Agreement.
(e) If the Executive commits a breach of any of the provisions of
subsection (b) or (d) above, the Company shall have the right and remedy to have
the provisions of this Second Amended and Restated Agreement specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed by the Executive that the services being rendered hereunder to the
Company are of a special, unique and extraordinary character and that any such
breach or threatened breach will cause irreparable injury to the Company and
that money damages will not provide an adequate remedy to the Company. Each of
the rights and remedies enumerated in this subsection (e) shall be independent
of the other, and shall be severally enforceable, and such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company under law or equity.
(f) If any provision of subsection (b) or (d) is held to be unenforceable
because of the scope, duration or area of its applicability, the tribunal making
such determination shall have the power to modify such scope, duration, or area,
or all of them, and such provision or provisions shall then be applicable in
such modified form.
9. Governing Law; Arbitration. This Second Amended and Restated Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New York, without regard to New York's conflicts of law principles. Any
dispute or controversy arising under this Second Amended and Restated Agreement,
or out of the interpretation hereof, or based upon the breach hereof, shall be
resolved by arbitration held at the offices of the American Arbitration
Association in the City of New York in accordance with the rules and regulations
of such association prevailing at the time of the demand for arbitration by
either party hereto, and the decision of the arbitrator or arbitrators shall be
final and binding upon both parties hereto, provided, however, that the
arbitrator or arbitrators shall only have the power and authority to interpret,
and not to modify or amend, the terms and provisions hereof. Judgment upon an
award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof. Notwithstanding anything contained in this Section
10, either party shall have the right to seek preliminary injunctive relief in
any court in the City of New York in aid of, and pending the final decision in,
the arbitration proceeding.
10. Entire Agreement. This Second Amended and Restated Agreement sets forth
the entire agreement of the parties and is intended to supersede all prior
employment negotiations, understandings and agreements. No provision of this
Second Amended and Restated Agreement may be waived or changed, except by a
writing signed by the party to be charged with such waiver or change.
11. Successors; Binding Agreement. This Second Amended and Restated
Agreement shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
12. Notices. All notices provided for in this Second Amended and Restated
Agreement shall be in writing, and shall be deemed to have been duly given when
delivered personally to the party to receive the same, when given by telex,
telegram or mailgram, or when mailed first class postage prepaid, by registered
or certified mail, return receipt requested, addressed to the party to receive
the same at his or its address above set forth, or such other address as the
party to receive the same shall have specified by written notice given in the
manner provided for in this Section 13. All notices shall be deemed to have been
given as of the date of personal delivery, transmittal or mailing thereof.
13. Severability. If any provision in this Second Amended and Restated
Agreement is determined to be invalid, it shall not affect the validity or
enforceability of any of the other remaining provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Second Amended
and Restated Agreement as of the date first above written.
WELLSFORD REAL PROPERTIES, INC.
By: /s/ Jeffrey H. Lynford
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Jeffrey H. Lynford
President
EXECUTIVE:
/s/ David M. Strong
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David M. Strong