EXHIBIT 10.138

 

EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (this “Agreement”) is entered
into as of the 1st day of January, 2016 by and between Louis Sheinker
(“Executive”), an individual residing at ***, ***, and GTJ REIT, Inc., a
Maryland corporation (the “Company”) with principal offices at 60 Hempstead
Avenue, Suite 718, West Hempstead, New York 11552.  Executive and Company may be
referred to collectively as the “Parties.”  

WHEREAS, the Company currently employs Executive as the Chief Operating Officer
and President of the Company pursuant to an Employment Agreement dated as of
January 1, 2013 (the “Prior Agreement”); and

WHEREAS, the Company and Executive desire to amend and restate the Prior
Agreement as herein set forth to reflect certain mutually agreed upon changes to
the terms and conditions of Executive’s employment with the Company.

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 continues to employ Executive, and Executive
hereby accepts such continued employment, upon the terms and conditions
hereinafter set forth, from January 1, 2016 through and including December 31,
2020 (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” and is subject to
earlier termination as described herein.

Section 2.Executive’s Duties.

(a)Executive shall continue as the Chief Operating Officer and President 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.

 

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(c)Subject to Section 4(f)(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.

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.  Effective as of January 1, 2016, Executive shall earn salary (the
“Salary”) at the annual rate of Six Hundred Thousand Dollars ($600,000), 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.  

(b)Cash Bonus.  For the fiscal year of the Company ended December 31, 2016, and
for each fiscal year thereafter during the Term (each, a “Fiscal Year”),
Executive shall receive a cash bonus (“Cash Bonus”) from the Company in the
amount of Four Hundred Fifty Thousand Dollars ($450,000), 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 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 to Executive following the
completion of the Company’s annual audit but not later than June 30 following
the end of such Fiscal Year, but only if Executive remains employed through the
end of such Fiscal Year.  “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.  The Cash Bonus
to be paid for any Fiscal Year will be recommended by the Compensation Committee
to the Board for its approval.

(c)Equity Bonus.  For each Fiscal Year Executive shall receive an annual equity
incentive award in the form of Restricted Stock under the 2007 Incentive Award
Plan or a successor plan (the “Equity Bonus”) in the amount of Two Hundred
Thousand Dollars ($200,000), based on the grant date value of any such award,
provided that the Company achieves the Adjusted Funds From Operations benchmark
(as described in (b) above) for such Fiscal Year as set forth in 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 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 that Fiscal Year.  Any
Equity Bonus earned for each Fiscal Year shall be granted following the
completion of the Company’s annual audit but not later than June 30 following
the end of such Fiscal Year, but only if Executive remains employed through the
end of such Fiscal Year.  The Equity Bonus to be paid

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for any Fiscal Year will be recommended by the Compensation Committee to the
Board for its approval.

Executive shall vest in the Equity Bonus at a rate equal to ten percent (10%) on
each of the first ten anniversaries of the date of grant while Executive is
still employed by the Company.  All other terms and conditions applicable to
such Equity Bonus shall be determined by the Compensation Committee and, if any
such Equity Bonus is 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 or any successor plan.  The
aggregate of the Equity Bonus and the Cash Bonus shall be referred to herein as
the “Bonus”.

(d)Stock Options.  As soon as practicable after the date this Agreement is
executed by the Parties, the Company shall grant Executive a Stock Option under
the 2007 Incentive Award Plan to acquire 100,000 shares of the Company’s common
stock.  The Stock Option shall have an exercise price equal to the fair market
value of the common stock as defined under the 2007 Incentive Award Plan based
on the most recent valuation report (the “Fair Market Value”) and shall vest in
its entirety on the third anniversary of the date of grant, provided that
Executive remains employed with the Company through such date.  All other terms
and conditions applicable to the Stock Option grant shall be determined by the
Compensation Committee.  

(e)Long Term Equity.  For each Fiscal Year, Executive shall receive a long term
equity incentive award in the form of Restricted Stock under the Company’s 2007
Incentive Award Plan or any successor plan when the Company attains each of the
following Adjusted Funds From Operations targets as described in (b) above, and
as further adjusted in accordance with the procedures set forth in Appendix 1;
provided that each award of Restricted Stock shall be conditioned on the
determination by the Compensation Committee in its sole discretion that the
attainment of the particular Adjusted Funds From Operations target is
sustainable:

Adjusted Funds From Operations

Value of Restricted Stock Award*

 

 

$1.50/share

$2 million

$2.00/share

$2 million

$2.50/share

$2 million

$3.00/share

$2 million

$3.50/share

$2 million

 

 

      *Based on Fair Market Value at the time of grant.

 

The Restricted Stock award earned for a Fiscal Year shall be granted following
the completion of the Company’s annual audit but not later than June 30
following the end of such Fiscal Year, but only if Executive remains employed
through the end of such Fiscal Year.  Each Restricted Stock award shall vest at
a rate equal to ten percent (10%) on each of the first ten anniversaries of the
date of grant while Executive is still employed by the Company.  All other terms
and conditions applicable to the Restricted Stock grant shall be determined by
the Compensation Committee.  

(f)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

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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 spouse and dependents, with the Company to
pay a percentage of Executive’s contributions that is equal to or greater than
the percentage the Company was paying under the Prior Agreement; (ii) disability
insurance of a type provided to other executives of the Company; (iii) continued
payment of premiums on a Five Million Dollar ($5,000,000) term life insurance
policy, assuming satisfactory insurability, for a ten (10) year term ending in
2023; and (iv) participation in a 401(k) plan and/or other retirement plan to
the extent available to the Company’s employees.

(g)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.

(h)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.

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

(j)Modification.  Subject to the minimum coverages and/or benefit amounts set
forth in Section 3(f) 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(f) and 3(g) at any
time in its discretion without recourse by Executive so long as such action is
consistent with the plans, practices, policies and programs generally available
to senior executives of other similarly situated REITs, and the minimum
coverages and/or benefit amounts set forth in Sections 3(f) and 3(g) and
elsewhere in this Agreement are maintained.  Any such modification, suspension
or discontinuance of the plans, practices and policies referenced in Section
3(g) 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), (e) or (f) 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 the 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) days 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)For 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 a crime that constitutes a misdemeanor involving
dishonesty or moral turpitude;

 

(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

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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)Following a Change in Control.  The Executive may terminate his employment
for any reason within the 90-day period following a Change in Control.

(f)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 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(f)(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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The Company’s decision not to renew the Agreement after the expiration of the
Initial Term or a Renewal Term shall not constitute Good Reason.

(g)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 (other
than as described in Section 4(e)), 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 within thirty (30)
days of the date of termination.

(b)For Cause by the 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)By Executive for Good Reason; Following a Change in Control; Non-Renewal by
the Company.  If (x) Executive terminates his employment during the Term for
Good Reason, (y) Executive terminates his employment with the Company for any
reason during the 90-day period following a Change in Control, or (z) the
Company elects not to renew this Agreement after the expiration of the Initial
Term or a Renewal Term, and in connection therewith Executive’s employment is
terminated by the Company (or any successor entity) without Cause, then in each
case the Company shall have no further obligations to Executive other than for:

(1)the payment of Accrued Obligations;

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

 

(i)

if Executive terminates his employment pursuant to clause (x) or (y) above,
then:

 

(A)

the lesser of the Salary that Executive would have earned during the remainder
of the Term of this Agreement, or three years of Executive’s then current
Salary, plus

 

(B)

the lesser of Executive’s Bonus that the Executive could have earned during the
remainder of the Term (assuming that Executive achieved the Bonus Criteria at
target for each remaining Fiscal Year), or three years of the Bonus (assuming
that Executive achieved the Bonus Criteria at target);  

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(ii)

(A)  if Executive’s employment terminates pursuant to clause (z) above at the
end of the Initial Term, and provided that the Company achieves the Bonus
Criteria, on an aggregate basis for each specified criteria during the Initial
Term, as of the end of the 2020 Fiscal Year, then:

 

(I)

one times Executive’s then current Salary, plus

 

(II)

one times Executive’s Bonus (assuming that Executive achieved the Bonus Criteria
at target), such payment to be in addition to the payment described in Sections
3(b) and (c) for the 2020 Fiscal Year;

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 the 2020 Fiscal Year, then no payments described in clause (ii)(A)(I)
or (ii)(A)(II) above shall be payable to Executive.

 

(B)

If Executive’s employment terminates pursuant to clause (z) above at the end of
a Renewal Term, then:

 

(I)

the Salary that Executive would have earned during the remainder of the Renewal
Term, plus

 

(II)

the Bonus that the Executive could have earned for the Renewal Term (assuming
that Executive achieved the Bonus Criteria at target for such Fiscal Year,),
such payment to be in addition to the payment described in Sections 3(b) and (c)
for the Fiscal Year.

 

(iii)

the accelerated vesting of any issued and unvested Equity Bonus, Stock Options
and Long Term Equity granted to Executive during the Term pursuant to Sections
3(c), (d) and (e) or granted to Executive pursuant to Section 5(c)(2)(i)(B) or
5(c)(2)(ii)(B); and

 

(iv)

the payment of COBRA premiums, if Executive elects COBRA (for himself and/or his
spouse or eligible dependents), for the period equal to the lesser of the
remainder of the Term, or three (3) years.  Notwithstanding the foregoing, if no
severance shall be payable pursuant to Section 5(c)(2)(ii), then the Company
shall not be obligated to pay such COBRA premiums.  The Company shall take all

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steps necessary to cause COBRA coverage to extend past the otherwise applicable
eighteen (18) month duration, if necessary.

The payment of Accrued Obligations, Salary and Bonus described in this Section
5(c), if any, shall be made a lump sum within fifty-five (55) days of the date
of termination.  

(d)Executive’s Death or Disability.  In the event of Executive’s termination of
employment during the Term due to his death or Disability, then the Company
shall have no further obligations to Executive other than for:

(1)the payment of Accrued Obligations; and

 

(2)

the accelerated vesting of any issued and unvested Equity Bonus and Long Term
Equity granted pursuant to Sections 3(c) and (e).

(e)Release.  Notwithstanding anything to the contrary contained herein, no
severance payments required hereunder shall be made by the Company until such
time as Executive (or the estate or beneficiary, if applicable) shall execute a
general release for the benefit of the Company in a form that is mutually
acceptable to the Company and Executive, which acceptance shall not be
unreasonably withheld.  Such release shall be provided to Executive (or the
estate or beneficiary, if applicable) within five days of Executive’s
termination of employment or the end of the Term, as applicable.

(f)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.

(g)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.

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

 

(1)

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;

 

(2)

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;

 

(3)

any consolidation or merger of the Company or any subsidiary that would result
in the voting securities of the Company outstanding

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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 a governing body of such surviving
entity; or

 

(4)

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

Section 6.Restrictions Respecting Confidential Information.

(a)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.

(b)Nothing herein shall prohibit Executive from reporting a suspected violation
of law to any governmental or regulatory agency and cooperating with such
agency, or from receiving a monetary recovery for information provided to such
agency; from testifying truthfully under oath pursuant to subpoena or other
legal process; or from making disclosures that are otherwise protected under
applicable law or regulation.  However, if Executive is required by subpoena or
other legal process to disclose Confidential Information, Executive first shall
notify the Company promptly upon receipt of the subpoena or other notice, unless
otherwise required by law.  

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

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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) 1101 Stewart Avenue, Garden City, New York and (iii) 2000 Goshen
Road, Gaithersburg, Maryland (collectively, the “Excluded
Properties”).  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 any/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.  

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(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.  It is therefore agrees 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

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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.

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 1ocal 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-

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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.

(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 m 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:

Louis Sheinker

***
***

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.

60 Hempstead Avenue

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Suite 718
West Hempstead, New York 11552

With a copy to:

Christine McGuinness

Schiff Hardin LLP
666 Fifth Avenue, 17th Fl.
New York, New York 10103

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

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assign his rights to such payment to his legal representatives, successors, and
assigns.  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 be 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.

 

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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/ Louis SheinkerDate:11/08/16

LOUIS SHEINKER

 

 

 

GTJ REIT, INC.:

 

 

By:  /s/ Donald M. SchaefferDate:11/08/16

Name:  Donald M. Schaeffer

Title:  Member of the Compensation Committee