Exhibit 10.6

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is entered into as of the 1st day
of January, 2013 by and between Paul Cooper (“Executive”), an individual
residing at 46 Rose Lane, East Rockaway, New York 11518, and GTJ REIT, Inc., a
Maryland corporation (the “Company”) with principal offices at 444 Merrick Road,
Suite 370, Lynbrook, New York 11563.  Executive and Company may be referred to
collectively as the “Parties.”

 

WHEREAS, the Company desires to employ the Executive on the terms and conditions
set forth herein and acknowledges and agrees that Executive has the professional
and personal skills to perform under the terms and conditions of this Agreement;
and

 

WHEREAS, the Executive desires to be employed by the Company on such terms and
conditions.

 

NOW, THEREFORE, in consideration of the mutual covenants, promises and
obligations set forth herein, the parties agree as follows:

 

Section 1.                                          Term.  The Company hereby
employs Executive and Executive hereby accepts such employment, upon the terms
and conditions hereinafter set forth, from January 1, 2013 (the “Employment
Commencement Date”) through and including December 31, 2015 (the “Initial
Term”).  This Agreement shall renew automatically for two (2) successive one (1)
year periods (each, a “Renewal Term”) unless either party gives notice to the
other party, in writing, at least sixty (60) days prior to the expiration of the
Initial Term (or any Renewal Term) of its desire to terminate the Agreement at
the end of such Initial Term or Renewal Term, as the case may be.  The term of
this Agreement, including the Initial Term and any Renewal Term, shall be
referred to hereinafter as the “Term.”

 

Section 2.                                          Executive’s Duties.

 

(a)                                 Executive shall be the Chief Executive
Officer of the Company and shall report directly to the Board of Directors of
the Company (the “Board”) or its designee.  Executive shall faithfully and
diligently perform his duties at the direction of the Board, or its designee, to
the best of Executive’s ability.  Subject to Section 8(a) of this Agreement,
Executive shall (i) devote his full-time business efforts, skill, ability and
attention to the performance of the services customarily incident to such
office, subject to vacations and sick leave as provided herein and in accordance
with the Company policy, (ii) carry out his duties in a competent and
professional manner; and (iii) generally promote the interests of the Company.

 

(b)                                 Executive agrees to abide by all policies of
the Company promulgated from time to time by the Company, which policies are
generally enforced uniformly and applicable to all similar executives of the
Company.

 

(c)                                  Subject to Section 4(e)(4), and except for
such business travel as may be incident to his duties hereunder, Executive shall
perform his duties at the Company’s offices at the address set forth in the
preamble to this Agreement or at such other location as may be approved by the
Company.

 

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Section 3.                                          Compensation for Executive’s
Services.   In consideration of the duties and services to be performed by
Executive pursuant to Sections 1 and 2 hereof, Executive shall receive:

 

(a)                                 Salary.  Executive shall earn salary (the
“Salary”) at the annual rate of Five Hundred Fifty Thousand ($550,000) Dollars,
less all applicable federal, state, and local tax withholdings.  Such Salary
shall be earned and shall be payable in periodic installments in accordance with
the Company’s normal payroll practices.  During the Term, the Company shall
review the Salary annually and may in its discretion increase the Salary, but
may not reduce it during the Term.

 

(b)                                 Cash Bonus.  For each fiscal year of the
Company ended December 31 (each, a “Fiscal Year”), Executive shall receive a
cash bonus (“Cash Bonus”) from the Company in the amount of Two Hundred Fifty
Thousand ($250,000) Dollars, provided that the Company achieves the Adjusted
Funds From Operations (as defined below) benchmarks for such Fiscal Year as set
forth in an annual budget approved by the Board and agreed to by Executive for
each such Fiscal Year (the “Bonus Criteria”).  Solely in the event that the
Company either (i) exceeds the Bonus Criteria for a particular Fiscal Year, or
(ii) does not achieve the Bonus Criteria for a particular Fiscal Year, the Board
or the Compensation Committee of the Board (the “Compensation Committee”) may,
in its discretion, increase (in the case of (b)(i) of this paragraph) or
decrease to as low as zero (in the case of (b)(ii) of this paragraph) the Cash
Bonus for that Fiscal Year.  Any Cash Bonus earned and payable for each Fiscal
year shall be paid within thirty (30) days following the completion of the
Company’s annual audit.  “Adjusted Funds From Operations” means, the Company’s
funds from operations calculated in accordance with the guidelines published by
the National Association of Real Estate Investment Trusts, as adjusted for
straight-lining of rent and purchase accounting under ASC 805.

 

(c)                                  Equity Bonus.                   For each
Fiscal Year, Executive shall receive an annual equity incentive award in the
form of shares of the Company’s restricted common stock (“Equity Bonus,” and
together with the Cash Bonus, the “Bonus”) from the Company in the amount of One
Hundred Fifty Thousand ($150,000) Dollars, based on the grant date value of any
such award, provided that Executive achieves the Adjusted Funds From Operations
benchmark or such Fiscal Year as set forth in the Bonus Criteria.  Solely in the
event that Executive either (i) exceeds the Bonus Criteria for a particular
Fiscal Year, or (ii) does not achieve the Bonus Criteria for a particular Fiscal
Year,  the Compensation Committee may review the discretionary Equity Bonus on
an annual basis and, in its discretion, increase (in the case of (c)(i) of this
paragraph) or decrease to as low as zero (in the case of (c)(ii) of this
paragraph) the Equity Bonus for any Fiscal Year.  All other terms and conditions
applicable to such equity awards shall be determined by the Board and, if any
such equity awards are granted, such terms and conditions shall be no less
favorable than those that apply to similarly situated executive officers of the
Company under the 2007 Incentive Award Plan.  The Equity Bonus earned and
payable for each Fiscal year shall be paid within thirty (30) days following the
completion of the Company’s annual audit.

 

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(d)                                 Benefits.  The Company shall provide
Executive with the right to participate in and receive benefits from all life,
accident, disability, medical and pension plans, and all similar benefits as are
from time to time in effect and are generally made available to similar senior
executive officers of the Company pursuant to the policies of the Company
(collectively, the “Benefits”).  Throughout the Term, and notwithstanding the
Company’s rights to determine which specific benefit plan will be offered by the
Company, Executive shall be entitled to, at a minimum: (i) medical insurance,
including healthcare coverage for his immediate family, with the Company to pay
such portion of Executive’s contribution as it pays for similarly situated
senior executive officers of the Company; (ii) disability insurance of a type
provided to other executives of the Company; (iii) premiums paid on a five
million ($5,000,000) dollar term life insurance policy, assuming satisfactory
insurability, for a ten (10) year term; and (iv) participation in a 401(k) plan
and/or other retirement plan to the extent available to the Company’s employees.

 

(e)                                  Expenses.  The Company shall promptly
reimburse Executive for reasonable expenses for cellular telephone usage,
entertainment, travel, meals, lodging and similar items incurred in the conduct
of the Company’s business.  Such expenses shall be reimbursed in accordance with
the Company’s normal expense reimbursement policies and guidelines.  The Company
shall provide a corporate credit card to Executive to enable Executive to charge
such reasonable Company expenses.

 

(f)                                   Vacation; Sick Leave.  During the Term,
Executive shall be entitled to reasonable paid vacation commensurate with his
position and within the industry; paid holidays; paid sick leave; and similar
benefits, to be earned and used in accordance with the Company’s policy and
procedure for other similarly situated senior executive officers of the Company.

 

(g)                                  Vehicle.  During the Term, the Executive
shall receive a reasonable automobile allowance commensurate with his position
within the industry, which shall be paid monthly.

 

(h)                                 Modification.  Subject to the minimum
coverages and/or benefit amounts set forth in Section 3(d) and elsewhere in this
Agreement, the Company reserves the right to modify, suspend or discontinue any
and all of the above plans, practices, policies and programs referenced in
Sections 3(d) and (e) at any time in its discretion without recourse by
Executive so long as such action is taken generally with respect to other
similarly situated senior executive officers, and the minimum coverages and/or
benefit amounts set forth in Section 3(d) and elsewhere in this Agreement are
maintained.  Any such modification, suspension or discontinuance of the plans,
practices and policies referenced in Section 3(e) will not apply to otherwise
reimbursable expenses incurred by Executive prior to any such modification,
suspension or discontinuance.

 

Section 4.                                          Termination of Employment. 
This Agreement may only be terminated by a method permitted under Section 4(a),
(b), (c), (d), or (e) as follows:

 

(a)                                 Resignation by Executive.  Executive may
voluntarily terminate his employment with the Company, at any time, with or
without Good Reason (as defined below), upon written notice to the Company;
provided, however, that any termination of Executive’s employment without Good
Reason shall be upon not less than thirty (30)  days prior written notice to the
Company.

 

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(b)                                       Non-Renewal by Company or Executive.
The Company or Executive may terminate Executive’s employment effective at the
end of the Initial Term, or any Renewal Term, in accordance with Section 1.

 

(c)                                        Executive’s Death or Disability. 
Executive’s employment shall terminate immediately upon Executive’s death.  In
the event the Company, in good faith, determines that Executive is unable to
perform the functions of his position due to a Disability (as defined below), it
may notify Executive in writing of its intention to terminate Executive’s
employment and Executive’s employment with the Company shall terminate effective
on the thirtieth (30th) day after receipt of such notice by Executive.  For the
purposes of this Agreement, “Disability” shall mean a physical or mental
impairment that renders Executive unable to perform the essential functions of
his position (i) for a continuous period of ninety (90) days, not including any
vacation days, holidays or sick days, (ii) for a cumulative period of ninety
(90) in any twelve-month period, not including any vacation days, holidays or
sick days, or (iii) at such earlier time as Executive submits medical evidence
satisfactory to the Company that the Executive has a physical or mental
disability or infirmity that will likely prevent Executive from substantially
performing his duties and responsibilities for ninety (90) days or longer.  In
the event of any disagreement between the Executive and the Company as to
whether the Executive is physically or mentally incapacitated so as to
constitute a Disability under this Agreement, the question of such incapacity
shall be submitted to an impartial and reputable physician selected by mutual
agreement of the Company and the Executive, or, failing such agreement, a
physician selected by two physicians, one of whom shall have been selected by
the Company, and the other by the Executive, and the determination of the
question of such incapacity by such physician shall be final and binding upon
the Company and the Executive.  The Company shall pay the fees and expenses of
such physicians, and the Executive shall submit to any medical examinations
reasonably necessary to enable such physicians to make a determination as to
whether the Executive’s incapacity constitutes a Disability under this
Agreement.

 

(d)                                       Cause by the Company.  The Company may
immediately terminate Executive’s employment for “Cause” by giving written
notice to Executive.  For purposes of this Agreement, “Cause” shall mean:

 

(1)                       Executive’s commission of an act of fraud,
misappropriation or embezzlement, whether or not related to the Executive’s
employment with the Company;

 

(2)                       Executive’s commission of any act of gross negligence
or willful misconduct act which injures the reputation, business, or any
material business relationship of the Company;

 

(3)                       Executive’s conviction of or plea of guilty or nolo
contendere to a crime that constitutes a felony (or state law equivalent), or a
crime that constitutes a misdemeanor involving dishonesty or moral turpitude;

 

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(4)                       Executive’s refusal or failure of Executive to perform
Executive’s duties with the Company in a competent and professional manner that
is not cured by Executive within fifteen (15) business days after a written
demand therefor is delivered to Executive by the Board which identifies with
reasonable specificity the manner in which the Board believes that Executive has
not substantially performed Executive’s duties; provided, further, however, that
if the refusal or failure by Executive is not susceptible of cure, then no cure
period shall be required hereunder; or

 

(5)                       Executive’s refusal or failure of Executive to comply
with any of his material obligations under this Agreement (including any Exhibit
hereto) that is not cured by Executive within fifteen (15) business days after a
written demand therefor is delivered to Executive by the Board which identifies
with reasonable specificity the manner in which the Board believes Executive has
materially breached this Agreement; provided, further, however, that if the
refusal or failure by Executive is not susceptible of cure, then no cure period
shall be required hereunder.

 

(e)                                        Good Reason by the Executive. 
Executive may immediately terminate his employment for “Good Reason,” by giving
written notice to the Company.  For purposes of this Agreement, “Good Reason”
shall mean:

 

(1)              the Company’s material breach, or any successor entity in the
event of a Change in Control (as defined in Section 5(c)(2)), of any provision
of this Agreement that is not cured by the Company within fifteen (15) business
days after a written demand therefor is delivered to the Board by Executive
which identifies with reasonable specificity the manner in which Executive
believes that the Company, or successor entity, has breached this Agreement,
provided, further, however, that if the material breach by the Company, or
successor entity, is not susceptible of cure, then no cure period shall be
required hereunder;

 

(2)              a material reduction of Executive’s title, status, authority,
responsibility or duties as Chief Executive Officer of the Company or the
assignment to Executive of any duties materially inconsistent with the position
of Chief Executive Officer;

 

(3)              any reduction in Executive’s Salary or material reduction in
Executive’s benefits; or

 

(4)              the relocation of Executive to a facility or location outside
the radius of more than fifty (50) miles from the Company’s principal offices at
the address set forth in the preamble to this Agreement.  However, in the event
that Executive does not terminate this Agreement for Good Reason under this
Section 4(e)(4) within fifteen (15) business days of such relocation, and
instead agrees to such relocation, then in that case the Company shall promptly
pay all of Executive’s reasonable relocation expenses.

 

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(f)                                         Continuing Obligations.  Executive
acknowledges and agrees that any termination under this Section 4 is not
intended, and shall not be deemed or construed, to affect in any way any of
Executive’s covenants and obligations contained in Sections 6, 7, and 8 hereof,
which shall continue in full force and effect beyond such termination for any
reason.

 

Section 5.                                          Termination Obligations.

 

(a)                                       Resignation By Executive Without Good
Reason.  If Executive’s employment is terminated voluntarily by Executive during
the Term without Good Reason, Executive’s employment shall terminate without
further obligations to Executive other than for payment of the sum of any unpaid
Salary and reimbursable expenses accrued and owing to Executive prior to the
termination.  The sum of such amounts shall hereinafter be referred to as the
“Accrued Obligations,” which shall be paid to Executive or Executive’s estate or
beneficiary within thirty (30) days of the date of termination.

 

(b)                                       Cause by Company.  If Executive’s
employment is terminated by the Company during the Term for Cause, this
Agreement shall terminate without further obligations to Executive other than
for the payment of Accrued Obligations within thirty (30) days of Executive’s
termination.

 

(c)                                        Non-Renewal by Company; By Executive
for Good Reason; Change in Control.

 

(1)                                      If (x) the Company elects (pursuant to
Section 1) not to renew this Agreement after expiration of the Initial Term, or
any Renewal Term, as the case may be; (y) Executive terminates his employment
for Good Reason; or (z) following a Change in Control (as defined below): (I)
the Company, or any successor entity, terminates the Executive without Cause, or
(II) Executive terminates his employment for Good Reason, then the Company shall
have no further obligations to Executive other than for:

 

(i)                               the payment of Accrued Obligations;

 

(ii)                            severance pay in an amount equal to the
following:

 

(A) if Executive is terminated pursuant to clauses (y) or (z) above during the
Initial Term, then:

 

(I)                                   the greater of the Salary that the
Executive would have earned during the remainder of the Initial Term of this
Agreement, or one year of Executive’s Salary, plus

 

(II)                              the greater of Executive’s Bonus that the
Executive could have earned during the remainder of the Initial Term of this
Agreement (assuming that Executive achieved the performance benchmarks for each
remaining Fiscal Year), or one year of the Bonus (assuming that Executive
achieved the performance benchmarks for such Fiscal Year);

 

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(B) if the Company elects not to extend this Agreement at the end of the Initial
Term, and provided that the Company achieved the Bonus Criteria, on an aggregate
basis for each specified criteria during the Initial Term, as of the end of
“Year 3” on Exhibit A; then:

 

(I)                                   one times Executive’s Salary, plus

 

(II)                              one times Executive’s Bonus;

 

and provided further that, if the Company fails to achieve the Bonus Criteria,
on an aggregate basis for each specified criteria during the Initial Term, as of
the end of “Year 3” on Exhibit A, then no payments described in clauses (B)(I)
or (B)(II) above shall be payable to Executive.

 

(C) if during a Renewal Term, then:

 

(I)                                   the Salary that the Executive would have
earned during the remainder of the Renewal Term of this Agreement, plus

 

(II)                              the Bonus that the Executive could have earned
during the remainder of the Renewal Term of this Agreement (assuming that
Executive achieved the performance benchmarks for such Fiscal Year).

 

(iii)                              the accelerated vesting of any issued and
unvested Equity Bonus granted to the Executive during the Term; and

 

(iv)                             the payment of COBRA premiums, if Executive
elects COBRA, for the period equal to the greater of the remainder of the
Initial Term, or one year.  Notwithstanding the foregoing, if no severance shall
be payable pursuant to Section 5(c)(1)(ii)(B), then the Company shall not be
obligated to pay such COBRA premiums.

 

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The payments described in Sections 5(c)(1)(i) and 5(c)(1)(ii)(A)(I)-(II), if
any, shall be made in a lump sum within thirty (30) days of the date of
termination.  The payments described in Sections 5(c)(1)(ii)(A)(II) and
5(c)(1)(ii)(B)(II), if any, shall be made payable within thirty (30) days
following the completion of the Company’s annual audit.

 

(2)                       For purposes of this Agreement, “Change in Control”
shall mean the occurrence of any of the following:

 

(i)            one person (or more than one person acting as a group) acquires
(or has acquired during the twelve-month period ending on the date of the most
recent acquisition) ownership of the Company’s stock possessing fifty percent
(50%) or more of the total voting power of the stock of such corporation;

 

(ii)           a majority of the members of the Board are replaced during any
twelve-month period with directors whose appointment or election is not endorsed
by a majority of the Board before the date of appointment or election;

 

(iii)          any consolidation or merger of the Company or any subsidiary that
would result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation representing (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) less than fifty (50%) percent of the total voting power of the voting
securities of the surviving entity outstanding immediately after such merger or
consolidation or ceasing to have the power to elect at least a majority of the
board of directors or other governing body of such surviving entity; or

 

(iv)          the sale, lease, exchange or transfer of all or substantially all
of the Company’s assets to an unaffiliated entity.

 

(d)                                                    Release.  Notwithstanding
anything to the contrary contained herein, no severance payments required
hereunder shall be made by the Company until such time as Executive shall
execute a general release for the benefit of the Company in the form annexed to
this Agreement as Exhibit B.

 

(e)                                                     Exclusive Remedy. 
Executive agrees that the payments set forth in Section 5 of this Agreement
shall constitute the exclusive and sole remedy for any termination of
Executive’s employment permitted under Section 4 of this Agreement, and
Executive covenants not to assert or pursue any other remedies, at law or in
equity, with respect to such termination provisions under this Agreement.

 

(f)                                                      Termination of
Executive’s Office.  Following the termination of Executive’s employment for any
reason, Executive shall hold no further office or position with the Company.

 

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Section 6.                                          Restrictions Respecting
Confidential Information.  Executive hereby covenants and agrees that, during
his employment and thereafter, Executive will not, under any circumstance,
disclose in any way any Confidential Information (as defined below) to any other
person other than at the direction of or for the benefit of the Company.  For
the purposes of the foregoing, “Confidential Information” means information
pertaining to the assets, business, rental information, tenant names, creditors,
vendors, customers, data, employees, financial condition or affairs, formulae,
licenses, methods, operations, procedures, reports, suppliers, systems and
technologies of the Company, including (without limitation) the contracts,
patents, trade secrets and customer lists developed or otherwise acquired by the
Company; provided, however, that the term Confidential Information shall exclude
any information that was, is, or becomes publicly available other than through
disclosure by Executive or any other person known to Executive to be subject to
confidentiality obligations to the Company.  All Confidential Information is and
will remain the sole and exclusive property of the Company.  Following the
termination of his employment, Executive shall return all documents and other
tangible items containing Confidential Information to the Company, without
retaining any copies, notes or excerpts thereof.

 

Section 7.                                          Proprietary Matters. 
Executive expressly understands and agrees that any and all improvements,
inventions, discoveries, processes, or know-how that are generated or conceived
by Executive during the Term (collectively, the “Inventions”) will be the sole
and exclusive property of the Company, and Executive will, whenever requested to
do so by the Company (either during the Term or thereafter), execute and assign
any and all applications, assignments and/or other instruments and do all things
which the Company may deem necessary or appropriate in order to apply for,
obtain, maintain, enforce and defend patents, copyrights, trade names or
trademarks of the United States or of foreign countries for said Inventions, or
in order to assign and convey or otherwise make available to the Company the
sole and exclusive right, title, and interest in and to said Inventions,
applications, patents, copyrights, trade names or trademarks; provided, however,
that the provisions of this Section 7 shall not apply to an Invention that
Executive developed entirely on his own time without using the Company’s
Confidential Information except for those Inventions that either (i) directly
and materially relate, at the time of conception or reduction to practice of the
invention, to the Company’s business, or actual or demonstrably anticipated
research or development of the Company, or (ii) directly and materially result
from any work performed by Executive for the Company.  Executive shall promptly
communicate and disclose to the Company all Inventions conceived, developed or
made by him during his employment by the Company, whether solely or jointly with
others, and whether or not patentable or copyrightable, (a) which relate to any
matters or business of the type carried on or being developed by the Company, or
(b) which result from or are suggested by any work done by him in the course of
his employment by the Company.  Executive shall also promptly communicate and
disclose to the Company all material other data obtained by him concerning the
business or affairs of the Company in the course of his employment by the
Company.

 

Section 8.                                          Nonsolicitation/Non-Compete.

 

(a)                                 Executive agrees that during the Term, he
will not directly or indirectly, own (other than a passive investment), manage,
operate, control, or participate in the ownership (other than a passive
investment), management, operation, or control of, or be connected with, or have
any financial interest in, any competitor; provided, however, that the Company
acknowledges and agrees that Executive shall be permitted to continue to own and
manage throughout the Term of this Agreement and thereafter: (i) 60 Hempstead
Avenue, West Hempstead, New York; (ii) 444 Merrick Road, Lynbrook, New York;
(iii) Woodlands, 700, 750 and 800 Veterans Memorial Highway, Hauppauge, New York
and (iv) 1581 Franklin Avenue/220 Old Country Road, Garden City, New York
(collectively, the “Excluded Properties”).

 

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Executive may, for a reasonable and mutually agreeable fee, manage the Excluded
Properties out of the Company’s office space and utilize the Company’s
employees, equipment and supplies in connection therewith.  The Parties further
agree and acknowledge that (i) Executive may own, manage, operate, control or
participate in the ownership, management, operation or control of, or be
connected with or have a financial interest in, the acquisition of
assets/buildings during the Term and thereafter with the principals of Orlin &
Cohen (although the Company shall have the opportunity to invest with Executive
and Orlin & Cohen in its discretion); and (ii) Executive (alone or as part of a
group) may own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected with or have a financial
interest in, the acquisition of a New York sports team or real estate related
thereto in which Executive was in negotiation prior to signing this Agreement
(the “Team” or “Site”).  In the event Executive does in fact become involved
with the Team and/or the Site in any such capacity, Executive and Company shall
meet to discuss whether or not any of the terms and/or conditions of this
Agreement should be modified and/or amended, as the case may be.  Other than as
expressly permitted under this Section 8(a), the Parties further agree that
during and after the Term, Executive shall not, directly or indirectly, own,
manage, operate, control, or participate in the ownership, management,
operation, or control of, or be connected with, or have any financial interest
in, any business opportunity in which such opportunity or information pertaining
thereto was obtained while he was employed by the Company.  In the event that
Executive seeks to own, manage, operate, control or participate in the purchase
of a real estate or other business activity during the Term that would otherwise
constitute a violation of this Section 8(a), Executive shall first obtain the
prior written consent of the Board, which consent shall be in the discretion of
the Board.  The Parties acknowledge and agree that nothing in Section 8 of this
Agreement shall prevent Executive from using Green Holland Management and/or
Green Holland Ventures to engage in any activity that is not otherwise in
violation of this Agreement.

 

(b)                                 Executive agrees that during the Term and
for a period of twelve (12) months following the termination of his employment
for any reason, he will not actively solicit or hire for employment, consulting
or any other arrangement any employee of the Company, any of its subsidiaries or
any of its other affiliates, present or future (while an affiliate).

 

(c)                                  Executive agrees that during the Term and
for a period of twelve (12) months following the termination of his employment
for any reason, he will not do business with, influence or attempt to influence
customers of the Company or any of its present or future subsidiaries or
affiliates, either directly or indirectly, to divert their business to any
competitor.

 

(d)                                 The restrictions contained in this Section 8
are necessary for the protection of the business and goodwill of the Company and
are considered by Executive to be reasonable for such purpose.  Further,
Executive represents that these restrictions will not prevent him from earning a
livelihood during the restricted period.

 

Section 9.                                          Equitable Relief.  Executive
acknowledges and agrees that the Company will suffer irreparable damage which
cannot be adequately compensated by money damages in the event of a breach, or
threatened breach, of any of the terms and provisions of Sections 6, 7 and 8 of
this Agreement, and that, in the event of any such breach, or threatened breach,
the Company will not have an adequate remedy at law.

 

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It is therefore agreed that the Company, in addition to all other such rights,
powers, privileges and remedies that it may have, shall be entitled to seek
injunctive relief, specific performance or such other equitable relief as the
Company may request to enforce any of those terms and provisions and seek to
enjoin or otherwise restrain any act prohibited thereby.  Executive agrees that
the Company shall be entitled to seek such injunctive relief, without bond, in a
court of competent jurisdiction and Executive hereby consents to the
jurisdiction of the state and federal courts of New York for purposes of such an
action.  The foregoing shall not constitute a waiver of any of the Company’s
rights, powers, privileges and remedies against or in respect of a breaching
party or any other person or thing under this Agreement, or applicable law.

 

Section 10.                                   Section 409A.                   
This Agreement is intended to comply with Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), or an exemption thereunder and shall be
construed and administered in accordance with Section 409A. Notwithstanding any
other provision of this Agreement, payments provided under this Agreement may
only be made upon an event and in a manner that complies with Section 409A or an
applicable exemption. Any payments under this Agreement that may be excluded
from Section 409A either as separation pay due to an involuntary separation from
service or as a short-term deferral shall be excluded from Section 409A to the
maximum extent possible. For purposes of Section 409A, each installment payment
provided under this Agreement shall be treated as a separate payment. Any
payments to be made under this Agreement upon a termination of employment shall
only be made upon a “separation from service” under Section 409A.
Notwithstanding the foregoing, the Company makes no representations that the
payments and benefits provided under this Agreement comply with Section 409A and
in no event shall the Company be liable for all or any portion of any taxes,
penalties, interest or other expenses that may be incurred by the Executive on
account of non-compliance with Section 409A.

 

Notwithstanding any other provision of this Agreement, if any payment or benefit
provided to the Executive in connection with his termination of employment is
determined to constitute “nonqualified deferred compensation” within the meaning
of Section 409A and the Executive is determined to be a “specified employee” as
defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not be
paid until the first payroll date to occur following the six-month anniversary
of the Termination Date (the “Specified Employee Payment Date”). The aggregate
of any payments that would otherwise have been paid before the Specified
Employee Payment Date shall be paid to the Executive in a lump sum, with
interest at the New York statutory rate, on the Specified Employee Payment Date
and thereafter, any remaining payments shall be paid without delay in accordance
with their original schedule.  To the extent that any reimbursements pursuant to
Section 3(e) are taxable to Executive, any such reimbursement payment due to the
Executive shall be paid to the Executive as promptly as practicable consistent
with Company practice following the Executive’s appropriate itemization and
substantiation of expenses incurred, and in all events on or before the last day
of the Executive’s taxable year following the taxable year in which the related
expense was incurred.  The reimbursements pursuant to Section 3(e) are not
subject to liquidation or exchange for another benefit and the amount of such
benefits and reimbursements that the Executive receives in one taxable year
shall not affect the amount of such benefits or reimbursements that the
Executive receives in any other taxable year.

 

11

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Section 11.                                   Parachute Payments.

 

(a)                                 Notwithstanding any other provision of this
Agreement, if all or any portion of the payments and benefits provided under
this Agreement (including without limitation any accelerated vesting and any
other payment or benefit received in connection with a Change in Control or the
termination of Executive’s employment), or any other payments and benefits which
Executive receives or is entitled to receive under any plan, program,
arrangement or other agreement, whether from the Company or an affiliate of the
Company, or any combination of the foregoing, would constitute an excess
“parachute payment” within the meaning of Section 280G of the Code (whether or
not under an existing plan, arrangement or other agreement) (each such parachute
payment, a “Parachute Payment”), and would result in the imposition on Executive
of an excise tax under Section 4999 of the Code or any successor thereto, then
the following provisions shall apply:

 

(1)              If the Parachute Payment, reduced by the sum of (i) the Excise
Tax (as defined below) and (ii) the total of the federal, state, and local
income and employment taxes payable by Executive on the amount of the Parachute
Payment which are in excess of the Threshold Amount (as defined below), are
greater than or equal to the Threshold Amount, Executive shall be entitled to
the full benefits payable under this Agreement.

 

(2)              If the Threshold Amount (as defined below) is less than (x) the
Parachute Payment, but greater than (y) the Parachute Payment reduced by the sum
of (1) the Excise Tax and (2) the total of the federal, state, and local income
and employment taxes on the amount of the Parachute Payment which are in excess
of the Threshold Amount, then the Parachute Payment shall be reduced (but not
below zero) to the extent necessary so that the sum of all Parachute Payments
shall not exceed the Threshold Amount.  In such event, the Parachute Payment
shall be reduced in the following order:  (1) cash payments not subject to
Section 409A of the Code; (2) cash payments subject to Section 409A of the Code;
(3) equity-based payments and acceleration; and (4) non-cash forms of benefits. 
To the extent any payment is to be made over time (e.g., in installments, etc.),
then the payments shall be reduced in reverse chronological order.

 

(b)                                 For the purposes of this Section 11,
“Threshold Amount” shall mean three times Executive’s “base amount” within the
meaning of Section 280G(b)(3) of the Code and the regulations promulgated
thereunder less one dollar ($1.00); and “Excise Tax” shall mean the excise tax
imposed by Section 4999 of the Code, and any interest or penalties incurred by
Executive with respect to such excise tax.

 

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(c)                                  The determination as to which of the
alternative provisions of Section 11(a) shall apply to Executive shall be made
by a certified public accounting firm of national reputation reasonably selected
by the Employer.  Executive and the Employer shall provide the accounting firm
with all information which any accounting firm reasonably deems necessary in
computing the Threshold Amount. For purposes of determining which of the
alternative provisions of Section 11(a) shall apply, Executive shall be deemed
to pay federal income taxes at the highest marginal rate of federal income
taxation applicable to individuals for the calendar year in which the
determination is to be made, and state and local income taxes at the highest
marginal rates of individual taxation in the state and locality of Executive’s
residence on the Termination Date, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes.  Any determination by the accounting firm shall be binding upon the
Employer and the Executive.

 

Section 12.                                   Notice.  Any notice, request,
demand or other communication hereunder shall be in writing, shall be delivered
by nationally recognized overnight delivery service, postage prepaid, to the
addressee at the address set forth below (or at such other address as shall be
designated hereunder by written notice to the other party hereto).  Notice shall
be deemed received one day after dispatch by such overnight service.

 

All notices and other communications hereunder shall be addressed as follows:

 

If to Executive:

 

Paul Cooper

46 Rose Lane

East Rockaway, New York 11518

 

With a copy to:

 

Cozen O’Connor

277 Park Avenue

New York, New York 10172

Attn: Michael C. Schmidt, Esq.

 

If to the Company:

 

GTJ REIT, Inc.

444 Merrick Road, Suite 370

Lynbrook, New York 11563

 

13

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With a copy to:

 

Ruskin Moscou Faltischek, P.C.

East Tower, 15th Floor

1425 RXR Plaza

Uniondale, New York 11556

Attention: Adam P. Silvers, Esq.

 

Section 13.                                   Legal Counsel.  In entering into
this Agreement, the parties represent that they have relied upon the advice of
their attorneys, who are attorneys of their own choice, and that the terms of
this Agreement have been completely read and explained to them by their
attorneys, and that those terms are fully understood and voluntarily accepted by
them.

 

Section 14.                                   Section and Other Headings.  The
section and other headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.

 

Section 15.            Applicable Law; Jurisdiction.  This Agreement shall be
construed in accordance with, and governed by, the laws of the State of New
York, without resort to principles of conflicts of laws.  Each of the Parties
hereby (i) agrees to submit to the exclusive jurisdiction of the Supreme Court
of the State of New York, County of Nassau, and the United States District Court
for the Eastern District of New York in any action, suit or other proceeding
arising out of or related to the subject matter of this Agreement, and (ii) to
the extent permitted by applicable law, waives and agrees not to assert by way
of motion, as a defense or otherwise in any such action, suit or proceeding, any
claim that such party is not personally subject to the jurisdiction of such
courts, that the suit, action or proceeding is brought in an inconvenient forum,
that the venue of the suit, action or proceeding is improper or that this
Agreement or subject matter hereof may not be litigated in or by such courts.

 

Section 16.                                   Severability.  In the event that
any term or provision of this Agreement shall be finally determined to be
superseded, invalid, illegal or otherwise unenforceable pursuant to applicable
law by a governmental authority having jurisdiction and venue, that
determination shall not impair or otherwise affect the validity, legality or
enforceability, to the maximum extent permissible by law, (i) by or before that
authority of the remaining terms and provisions of this Agreement, which shall
be enforced as if the unenforceable term or provision were deleted, or (ii) by
or before any other authority of any of the terms and provisions of this
Agreement.

 

Section 17.                                   Counterparts.  This Agreement may
be executed in two counterpart copies of the entire document or of signature
pages to the document, each of which may be executed by one of the parties
hereto, but all of which, when taken together, shall constitute a single
agreement binding upon both of the parties hereto.

 

Section 18.                                   Benefit.  This Agreement shall be
binding upon and inure to the benefit of the respective parties hereto and their
legal representatives, successors and assigns.  Insofar as Executive is
concerned, this Agreement, being personal, cannot be assigned; provided,
however, that should Executive become entitled to payment pursuant to Section 5
hereof, he may assign his rights to such payment to his legal representatives,
successors, and assigns.

 

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Without limiting the generality of the foregoing, all representations,
warranties, covenants and other agreements made by or on behalf of Executive in
this Agreement shall inure to the benefit of the successors and assigns of the
Company.

 

Section 19.            Modification.  This Agreement may not be amended or
modified other than by a written agreement executed by all parties hereto.

 

Section 20.                                   Entire Agreement.  Except as
provided in Section 5(e) hereof, this Agreement contains the entire agreement of
the parties and supersedes all other representations, warranties, agreements and
understandings, oral or otherwise, among the parties with respect to the matters
contained herein.

 

Section 21.                                   Waiver of Jury Trial.  Each party
acknowledges and agrees that any controversy which may arise under this
Agreement is likely to involve complicated and difficult issues and, therefore,
each such party irrevocably and unconditionally waives any right it may have to
a trial by jury in respect of any legal action arising out of or relating to
this Agreement or the transactions contemplated hereby. Each party to this
Agreement certifies and acknowledges that (a) no representative of any other
party has represented, expressly or otherwise, that such other party would not
seek to enforce the foregoing waiver in the event of a legal action, (b) such
party has considered the implications of this waiver, (c) such party makes this
waiver voluntarily, and (d) such party has been induced to enter into this
Agreement by, among other things, the mutual waivers and certifications in this
Section 21.

 

Section 22.                                   Representations and Warranties of
Executive.  In order to induce the Company to enter into this Agreement,
Executive represents and warrants to the Company, to the best of his knowledge
after the review of his personnel files, that:  (a) the execution and delivery
of this Agreement by Executive and the performance of his obligations hereunder
will not violate or be in conflict with any fiduciary or other duty, instrument,
agreement, document, arrangement or other understanding to which Executive is a
party or by which he is or may be bound or subject; and (b) Executive is not a
party to any instrument, agreement, document, arrangement or other understanding
with any person (other than the Company) requiring or restricting the use or
disclosure of any confidential information or the provision of any employment,
consulting or other services.

 

Section 23.                                   Waiver of Breach.  Except as may
specifically provided herein, the failure of a party to insist on strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement.  Any waiver hereto must be
in writing.

 

Section 24.                                   Conflict Between Agreement and
Company Policy.  In the event of any inconsistency or conflict between any
provision of this Agreement, on the one hand, and any Company policy or
practice, on the other hand, such inconsistency or conflict shall be resolved in
favor of the applicable provision(s) of this Agreement, which should in all
cases prevail.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.

 

 

 

EXECUTIVE:

 

 

 

 

 

/s/ Paul Cooper

 

PAUL COOPER

 

 

 

 

 

GTJ REIT, INC.:

 

 

 

 

 

By:

/s/ David J. Oplanich

 

Name:

David J. Oplanich

 

Title:

Chief Financial Officer

 

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Exhibit A

 

Bonus Criteria

 

Intentionally Omitted

 

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Exhibit B

 

Form of General Release

 

Attached hereto

 

[Signature Page to Employment Agreement]

 

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EXHIBIT B

 

GENERAL RELEASE

 

This General Release (the “Agreement”) is between GTJ REIT, Inc. (the “Company”
or “we”) and Paul Cooper (“Employee” or “you”).  The term “Company” includes
parents, subsidiaries, divisions, and/or related companies, their directors,
officers, shareholders, employees, agents, attorneys, and successors of the
Company.

 

IT IS AGREED THAT:

 

1.                                      Your last date of employment with the
Company is                     .

 

2.                                      The Company shall pay you severance
payments as set forth in the Employment Agreement between you and the Company
dated as of January 13, 2013 (which payments you would not otherwise be entitled
to but for your execution of this Agreement) (the “Severance Payments”).

 

3.                                      In consideration of the Severance
Payments, and for other good and valuable consideration described herein,
receipt of which is hereby acknowledged, you understand that you voluntarily
release and forever discharge the Company from any and all actions or causes of
action, suits, claims, charges, complaints, contracts, agreements and promises,
whatsoever, whether known or unknown, including but not limited to any claim
under contract and/or equity and/or any law, relating in any way to your
employment with the Company or the termination of that employment.  This waiver
of claims includes any claims of discrimination on any grounds, whether or not
you have previously filed such a claim.  You understand that you are giving up
any rights or claims which you may have under the numerous laws and regulations
regulating employment, whether on the federal, state, or local level, including,
but not limited to, the Age Discrimination in Employment Act of 1967, as
amended, Title VII of the Civil Rights Act of 1964, as amended, the Americans
with Disabilities Act, the Fair Labor Standards Act, the Equal Pay Act, the
Family and Medical Leave Act, the New York State Human Rights Laws, the New York
State Labor Law, and any other federal, state or local civil or human rights or
employment law alleging discrimination or retaliation, or any other alleged
violation of any local, state or federal law, regulation or ordinance, and/or
public policy or tort law, or claim of breach of contract or for personal injury
that you ever had through the date of this Agreement.

 

4.                                      You agree that you will return to the
Company any and all files, books, records, materials, equipment or documents in
your possession that were provided to or obtained by you in connection with your
employment.  Such documents and materials include all computer software, data
base or customer information, publications, correspondence, notes and notebooks,
drawings, prints, photographs, tape recordings, and other written, typed,
printed or recorded materials to which the Employee had access or which the
Employee developed during the course of Employee’s employment with the Company.

 

5.                                      It is understood and agreed that you
will not talk about, discuss or communicate with anyone, orally or in writing,
concerning the matter which is the subject of this Agreement except you may (i)
discuss this Agreement with your spouse and children, (ii) permit your
accountant to review this Agreement in connection with the filing of tax
returns, (iii) permit attorney(s) of your choice to review this Agreement, and
(iv) testify truthfully under oath pursuant to a subpoena (in which event you
will provide the Company with prompt notice of the subpoena in advance of
providing such testimony).

 

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6.                                      You represent and agree that you have
neither filed nor authorized the filing on your behalf of any claims against the
Company with any state, federal, or local agency or court or in any other forum
or tribunal with respect to anything that has happened up through the date of
this Agreement.  Should any government agency or other third party pursue any
actions or other claims on Employee’s behalf, Employee hereby agrees to waive
any right to recovery or monetary award from such actions or proceedings.

 

7.                                      This Agreement is deemed to be made in
the State of New York.  This Agreement is to be interpreted under the laws of
the State of New York without regard to conflict of law principles.

 

8.                                      No waiver of any breach of any term or
provision of this Agreement shall be construed to be, or shall be, a waiver of
any other breach of this Agreement.  No waiver shall be binding unless in
writing and signed by the party waiving the breach.

 

9.                                      This Agreement shall be binding upon and
inure to the benefit of the parties and their respective heirs, successors and
permitted assigns.  The Company may assign this Agreement without notice in its
sole discretion.

 

10.                               Employee acknowledges that Employee has
received a copy of this Agreement and that the Company has informed Employee
that Employee should consult with an attorney in connection with it.  Employee
acknowledges that Employee’s decision to consult with an attorney or not to
consult with any attorney was made without influence by the Company.  Employee
further acknowledges that Employee has had at least 21 days in which to
consider, execute, and return this Agreement.  Notwithstanding Employee’s right
to consider this Agreement for 21 days, if Employee signs this Agreement before
the expiration of the 21-day period, Employee will have done so knowingly and
voluntarily, and will have expressly waived employee’s right to consider this
Agreement for the balance of the 21 day period.  In addition, should Employee
fail to return an executed copy of this Agreement within 21 days, the Company
shall have no obligations under this Agreement.

 

11.                               This Agreement shall not become effective
until seven (7) days after the date Employee executes the Agreement, and
Employee may cancel this Agreement within seven (7) days of the date Employee
executes it, except that any cancellation must be in writing, signed by
Employee, and delivered to the Company prior to the expiration of the seven-day
period.

 

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12.                               This Agreement may be executed by facsimile,
and in counterparts, and shall be fully binding and enforceable upon the parties
when so executed.

 

GTJ REIT, INC.

 

 

 

 

 

By:

 

 

Dated:

 

 

 

 

 

 

 

 

 

 

 

Dated:

 

PAUL COOPER

 

 

 

 

 

STATE OF

)

 

:ss.:

COUNTY OF

)

 

On the          day of                          before me personally appeared
Paul Cooper personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that s/he executed the same in his/her capacity, and that
by his/her signature on the instrument, the individual, or the person on behalf
of which the individual acted, executed the instrument and that such individual
made such appearance before the undersigned.

 

 

 

 

 

NOTARY PUBLIC

 

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