WELLSFORD REAL PROPERTIES, INC.
535 Madison Avenue, 26th Floor
New York, New York 10022
As of July 1, 2001
Mr. William H. Darrow II
7 Hunt Road
Darien, CT 06820
Dear Mr. Darrow:
We are pleased to offer you employment with Wellsford Real Properties, Inc.
(the "Company"). This letter agreement (this "Agreement") sets forth our
understanding regarding your employment.
1. Duties. The Company hereby employs you as Managing Director to perform
such services for the Company and its affiliated entities commensurate with your
position as Managing Director as may be assigned to you from time to time. You
shall devote your full business time, attention and energies to the performance
of your duties hereunder as requested by the Company from time to time.
2. Term. The term of this Agreement shall commence as of the date hereof
and, unless sooner terminated in accordance with the provisions of this
Agreement, shall continue up to and including, June 30, 2003. The term of this
Agreement may be extended by the written agreement of you and the Company.
3. Salary. For all services rendered by you pursuant to this Agreement, you
shall receive a salary at a rate per annum at least equal to $200,000 to be paid
at such regular intervals, not less frequently than monthly, as the Company may
establish from time to time with respect to its employees generally.
4. Bonuses. You shall also be eligible for bonuses in the sole discretion
of the Company.
5. Health Insurance & Benefits. The Company shall provide you with the same
standard health and other insurance coverages as is afforded to all employees of
the Company pursuant to the contributory coverages maintained by the Company
from time to time. You shall also be entitled to participate in the Company's
401(k) Plan consistent with, and subject to, the terms of such plan. The Company
may also provide you with other benefits in accordance with the policies of the
Company in effect from time to time.
6. Expenses. You shall be reimbursed for all reasonable business related
expenses incurred by you at the request of or on behalf of the Company in
connection with the performance of your duties and responsibilities hereunder,
consistent with, and subject to, the Company's policies for expense
reimbursement.
7. Termination.
(a) Your employment hereunder may be terminated by the Company (i) for
Cause (as defined below) or (ii) for any reason other than Cause,
(b) "Cause" shall mean (i) you have committed fraud, willful misconduct or
gross negligence in the performance of your obligations hereunder, (ii) you
shall be convicted of a felony or (iii) you shall violate any of the terms,
covenants or conditions of this Agreement.
8. Results of Termination.
(a) If your employment under this Agreement is terminated by the Company by
reason of Cause or as a result of your disability (as determined in the
reasonable discretion of the Company) or as a result of your death or by you for
any reason (other than as provided for in subparagraph 8 (c) below) you shall
not be entitled to receive salary for periods following termination.
(b) If your employment under this Agreement is terminated by the Company
other than by reason of Cause or your death or disability, you shall be entitled
to receive a lump sum payment equal to twice the amount of your then annual
salary in lieu of any salary, bonus or other compensation which you would
otherwise be entitled to under this Agreement. Such amount shall be paid within
60 days of the effective date of termination.
(c) If you terminate your employment hereunder following a "change in
control of the Company" (as described below) and provided you have not been
offered "comparable employment" (as defined below) within 60 days after the
event resulting in the change in control of the Company you shall be entitled to
receive a lump sum payment equal to twice the amount of your annual salary for
the calendar year in which the event resulting in the change in control of the
Company occurs in lieu of any salary, bonus or other compensation to which you
would otherwise be entitled to under this Agreement. Such amount shall be paid
within 60 days of the effective date of termination.
(d) For purposes of this Agreement, a "change in control of the Company"
shall be deemed to occur if:
(i) 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 (1) you are the other
party to the transaction that would otherwise result in a "change in control of
the Company" or (2) you are an executive officer, trustee, director or more than
5% equity holder of the other party to the transaction or of any entity,
directly or indirectly, controlling such other party or (B)(1) the shareholders
of the Company immediately before such Transaction own, directly or indirectly,
immediately following such Transaction in excess of sixty-nine percent (69%) 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 Directors 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,
(ii) the Company acquires assets of another company or a subsidiary of the
Company merges or consolidates with another company (each, an "Other
Transaction") and (i) the shareholders of the Company, immediately before such
Other Transaction own, directly or indirectly, immediately following such Other
Transaction 69% 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 (ii) the individuals who were
members of the Company's Board of Directors 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 an 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)(1) or (i)(A)(2) above exist, or
(iii) any person or entity or group of affiliated persons or entities owns
at any time 30% or more of the outstanding voting securities of the Company,
provided that such person, entity or group shall not be deemed to own 30% or
more of the outstanding voting securities of the Company if the last event or
transaction which results in such ownership is (a) the issuance of such
securities in connection with the sale by the Company of less than all or
substantially all of its assets or (b) the acquisition by the Company of any
such voting securities.
(e) For purposes of this Agreement, you shall be deemed to have received an
offer of "comparable employment" if you receive an offer to continue your
employment for at least the balance of the term covered by this Agreement, with
the same title set forth in Paragraph 1 hereof, pursuant to which you would
perform the same type of duties you had been performing under this Agreement and
at a salary not less than that provided for in Paragraph 3 hereof.
9. Governing Law; Severability. This Agreement shall be governed and
construed in accordance with the laws of the State of New York. If any provision
of this Agreement is determined to be invalid, it shall not affect the validity
or enforceability of any of the other remaining provisions hereof.
10. Entire Agreement. This 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 Agreement may be waived or
changed, except by a writing signed by the party to be charged with such waiver
or change. Notwithstanding the foregoing, this Agreement is subject to the
policies of the Company in effect from time to time with respect to the terms of
the employment of the Company's employees.
11. Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute but one and the same agreement.
Please acknowledge your agreement to the foregoing by signing this
Agreement in the space indicated and returning it to the Company.
Very truly yours,
WELLSFORD REAL PROPERTIES, INC.
By: /s/ Edward Lowenthal
------------------------
Name: Edward Lowenthal
Title: President
ACCEPTED AND AGREED TO:
/s/ William H. Darrow II
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William H. Darrow II