Exhibit 10.3

 

NEW YORK CITY REIT, INC.

 

2020 ADVISOR MULTI-YEAR OUTPERFORMANCE AWARD AGREEMENT

 

This ADVISOR MULTI-YEAR OUTPERFORMANCE AWARD AGREEMENT (this “Agreement”)
entered into on August 18, 2020, effective as of the Trading Commencement Time,
by and between NEW YORK CITY REIT, INC., a Maryland corporation (the “Company”),
its subsidiary NEW YORK CITY OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership and the entity through which the Company conducts substantially all
of its operations (the “Partnership”), and NEW YORK CITY ADVISORS, LLC, a
Delaware limited liability company, the Company’s advisor (the “Advisor”).

 

RECITALS

 

WHEREAS, the Advisor provides services to the Company pursuant to the Second
Amended and Restated Advisory Agreement by and among the Company, the
Partnership and the Advisor, dated as of November 16, 2018, as amended from time
to time (the “Advisory Agreement”).

 

WHEREAS, the Independent Directors, acting pursuant to authority delegated by
the Board, have approved this Agreement and the incentive compensation grant
described in this Agreement (the “Award”), which is subject to the terms and
conditions set forth herein and in the Partnership Agreement (as defined
herein).

 

NOW, THEREFORE, the Company, the Partnership and the Advisor agree as follows:

 

1.            Administration. The Award granted under this Agreement shall be
administered by the Compensation Committee of the Board, or such other committee
as may be delegated the power to administer the Award by the Board from time to
time (as applicable, the “Committee”); provided that all powers of the Committee
hereunder can be exercised by the full Board if the Board so elects. The Board
may also elect to administer this Agreement, in which case all the functions of
the Committee shall be exercised by the Board, and the Board shall be considered
the “Committee” hereunder. The Committee shall have the discretionary authority
to make all determinations regarding the Award, including, without limitation,
the interpretation and construction of the Award and the determination of
relevant facts; provided such determinations are made in good faith and are
consistent with the purpose and intent of the Award. Except as expressly
provided herein, no such action by the Committee shall adversely affect the
rights of the Advisor to any earned and outstanding Award LTIP Units (as defined
below). Subject to the terms hereof, all decisions made by the Committee shall
be final, binding and conclusive on all persons, including the Company, the
Partnership, the Advisor and any Transferee. No member of the Committee, nor any
other member of the Board or any officer or employee of the Company acting on
behalf of the Committee, shall be personally liable for any action,
determination or interpretation taken or made in good faith with respect to the
Award, and all members of the Committee and each other member of the Board and
any officer or employee of the Company acting on their behalf shall, to the
extent permitted by law, be fully indemnified and held harmless by the Company
in respect of any such action, determination or interpretation.

 

 

 

 

2.            Definitions. Capitalized terms used herein but not otherwise
defined are set forth in Exhibit A.

 

3.            Outperformance Award.

 

a.            Grant; Performance Period; Valuation Date. On the date of this
Agreement (the “Grant Date”), the Advisor was granted the Award, consisting of
the issuance to the Advisor at the Trading Commencement Time of the Master LTIP
Unit, which will, in accordance the terms of the Partnership Agreement,
automatically convert into a number of LTIP Units equal to the LTIP Award Number
effective on the Effective Date (such LTIP Units as so converted, together with
the Master LTIP Unit to the extent applicable, the “Award LTIP Units”), with
such Award LTIP Units being subject to vesting and forfeiture as provided in
this Section 3 based on performance during the period (the “Performance Period”)
commencing on the Grant Date and ending on the earlier of (i) the third
anniversary of the Grant Date, (ii) the effective date of any Change of Control
and (iii) the effective date of any termination of the Advisor’s service as
advisor of the Company (such end date, as applicable, the “Valuation Date”). The
Absolute TSR Award LTIPs may be earned based on Absolute TSR during the
Performance Period and the Relative TSR Award LTIPs may be earned based on
Relative TSR during the Performance Period.

 

b.            Determination Date; Outperformance Amounts.

 

(i)            Determination Date. On a date as soon as practicable following
the Valuation Date (the “Determination Date”), but as of the Valuation Date, the
Committee shall determine the number of Award LTIP Units that have been earned
as of the Valuation Date based on the Absolute TSR Amount, the Relative TSR
Amount and the Total Outperformance Amount, in each case, as calculated in
accordance with this Section 3(b) by an independent consultant engaged by the
Committee and as approved by the Committee in its reasonable and good faith
discretion. The Determination Date shall be the Determination Date with respect
to the Award LTIP Units for purposes of the Partnership Agreement.

 

(ii)           Absolute TSR Amount. Subject to the provisions of Sections
3(c) and 3(d) below and the paragraph immediately below the following table, the
following table sets forth the percentages that shall be used to calculate the
number of Absolute TSR Award LTIPs that shall be earned based on the Absolute
TSR as of the Valuation Date (such number of earned Absolute TSR Award LTIPs,
the “Absolute TSR Amount”):

 

Performance Level Absolute TSR Absolute TSR Amount
(% of Absolute TSR Award
LTIPs Earned) Below Threshold Less than 12.0% 0 Threshold 12.0% 25% Target 18.0%
50% Maximum 24.0% or higher 100%

 

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No Absolute TSR Award LTIPs will be earned if the Absolute TSR is less than 12
percent. If the Absolute TSR is more than 12 percent but less than 18 percent,
or more than 18 percent but less than 24 percent, the percentage of the Absolute
TSR Award LTIPs earned will be determined using linear interpolation as between
those tiers, respectively.

 

(iii)          Relative TSR Amount. Subject to the provisions of
Section 3(c) and 3(d) below and the paragraph immediately below the following
table, the following table sets forth the percentages that shall be used to
calculate the number of Relative TSR Award LTIPs that shall be earned based on
Relative TSR as of the Valuation Date (such number of earned Relative TSR Award
LTIPs, the “Relative TSR Amount”):

 

Performance Level Relative TSR Excess Relative TSR Amount
(% of Relative TSR Award
LTIPs Earned) Below Threshold Less than -600 bps 0 Threshold -600 bps 25% Target
0 bps 50% Maximum +600 bps or more 100%

 

No Relative TSR Award LTIPs will be earned if the Relative TSR Excess is below
-600 bps. If the Relative TSR Excess is more than -600 bps but less than 0 bps,
or more than 0 bps but less than +600 bps, the percentage of the Relative TSR
Award LTIPs earned will be determined using linear interpolation as between
those tiers, respectively.

 

(iv)          Total Outperformance Amount. The “Total Outperformance Amount” as
of the Valuation Date shall be the algebraic sum of: (A) the Absolute TSR
Amount, and (B) the Relative TSR Amount.

 

c.            Change of Control. If the Valuation Date is the effective date of
a Change of Control, then the calculations contemplated by Section 3(b) shall be
made based on actual performance as of (and including) the effective date of
such Change of Control; provided, however, that (i) the Absolute TSR Amount
shall be determined (without pro-ration) based on performance as of (and
including) the last Trading Day prior to such date, as measured against the
Absolute TSR hurdles set forth in Section 3(b)(ii) above, and as such Absolute
TSR hurdles are reduced on a pro-rata basis based on the number of full days
elapsed in the Performance Period through such effective date of a Change of
Control, and (ii) the Relative TSR Amount shall be determined (without
pro-ration) based on the performance as of (and including) the last Trading Day
prior to such date.

 

d.            Termination of Advisor.

 

(i)            Termination of Advisor for Cause. If the Valuation Date is the
effective date of any termination of the Advisor’s service as advisor of the
Company for Cause pursuant to and in accordance with the Advisory Agreement,
then the calculations contemplated by Section 3(b) shall be made based on actual
performance as of (and including) such date of termination; provided, however,
that (A) the Absolute TSR Amount shall be (1) determined based on performance as
of (and including) the last Trading Day prior to such date, as measured against
the Absolute TSR hurdles set forth in Section 3(b)(ii) above reduced on a
pro-rata basis based on the number of full days elapsed in the Performance
Period through the effective date of such termination for Cause, and
(2) pro-rated based on the number of full days elapsed in the Performance Period
through the effective date of such termination for Cause; and (B) the Relative
TSR Amount shall be (1) determined based on the performance as of (and
including) the last Trading Day prior to such date, and (2) pro-rated based on
the number of full days elapsed in the Performance Period through the effective
date of such termination for Cause.

 

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(ii)           Termination of Advisor other than for Cause. If the Valuation
Date is the effective date of the termination of the Advisor’s service as
advisor of the Company for any reason other than for Cause pursuant to and in
accordance with the Advisory Agreement, the calculations contemplated by
Section 3(b) shall be made based on actual performance as of (and including)
such date; provided, however, that (A) the Absolute TSR Amount shall be
determined (without pro-ration) based on performance as of (and including) the
last Trading Day prior to such date, as measured against the Absolute TSR
hurdles set forth in Section 3(b)(ii) above, and as such Absolute TSR hurdles
are reduced on a pro-rata basis based on the number of full days elapsed in the
Performance Period through the effective date of such termination without Cause,
and (B) the Relative TSR Amount shall be determined (without pro-ration) based
on the performance as of (and including) the last Trading Day prior to such
date.

 

e.            Vesting. Any Award LTIP Units that are earned pursuant to
Section 3(b) shall be deemed to be fully vested as of the Valuation Date.
Thereafter, subject to and in accordance with the terms of the Partnership
Agreement, the Advisor, in its sole discretion, shall be entitled to convert any
earned and vested Award LTIP Units into Class A Units (as so converted, the
“Award Class A Units”).

 

f.            Forfeiture. Any Award LTIP Units that do not become earned and
vested pursuant to, and in accordance with, this Section 3 shall automatically
and without notice be forfeited on the Determination Date, effective as of the
Valuation Date, without payment of any consideration by the Partnership or the
Company, and neither the Advisor nor any of its successors, heirs, assigns,
members or their respective assigns or personal representatives will thereafter
have any further rights or interests in such forfeited Award LTIP Units.

 

4.            Rights of Advisor. The Advisor shall have no rights with respect
to this Agreement (and the Award evidenced hereby) unless the Advisor shall have
accepted this Agreement prior to the Trading Commencement Time by signing and
delivering to the Partnership a copy of this Agreement. Upon acceptance of this
Agreement by the Advisor, effective at the Trading Commencement Time, the
Partnership Agreement shall be amended to reflect the issuance to the Advisor of
the Award LTIP Units so accepted. Thereupon, the Advisor shall have all the
rights of a Limited Partner of the Partnership with respect to the Award LTIP
Units, as set forth in the Partnership Agreement, subject, however, to the
restrictions and conditions specified herein. Award LTIP Units constitute and
shall be treated for all purposes as the property of the Advisor, subject to the
terms of this Agreement and the Partnership Agreement.

 

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5.            Distributions. The holder of Award LTIP Units shall be entitled to
receive distributions with respect to the Award LTIP Units as described below
and in accordance with the Partnership Agreement. The day following the
Valuation Date shall be the LTIP Unit Distribution Participation Date with
respect to the Award LTIP Units for purposes of the Partnership Agreement.
Pursuant to the Partnership Agreement, and subject in all respects to the terms
and conditions set forth therein, a holder of the Award LTIP Units shall be
entitled to distributions per Award LTIP Unit as follows: (a) during the
Performance Period, as and when distributions are made with respect to Class A
Units, distributions in an amount equal to ten percent (10%) of the amount
distributable with respect to a Class A Unit; (b) following the Valuation Date,
only with respect to each Award LTIP Unit that has been earned in accordance
with Section 3, distributions in the same amount and at the same time as
distributions on a Class A Unit; and (c) promptly after the Determination Date,
only with respect to each Award LTIP Unit earned in accordance with Section 3, a
priority catch-up distribution in an amount in cash equal to the aggregate
amount of cash distributed with respect to a Class A Unit during the Performance
Period less the aggregate amount distributed with respect to such Award LTIP
Unit during the Performance Period. All distributions paid with respect to Award
LTIP Units, both before and after the LTIP Unit Distribution Participation Date,
shall be fully vested and non-forfeitable when paid, whether or not the
underlying Award LTIP Units are earned in accordance with Section 3.

 

6.            Restrictions on Transfer. Except as otherwise approved by the
Committee in its sole discretion, none of the Award LTIP Units granted hereunder
nor any of the Award Class A Units shall be sold, assigned, transferred,
pledged, hypothecated, given away or in any other manner disposed of,
encumbered, whether voluntarily or by operation of law (each such action a
“Transfer”). Any Transferee approved by the Committee must agree in writing with
the Company and the Partnership to be bound by all the terms and conditions of
this Agreement and that subsequent transfers shall be prohibited except those in
accordance with this Section 6. Additionally, all Transfers of Award LTIP Units
or Award Class A Units must be in compliance with all applicable securities laws
(including, without limitation, the Securities Act), and the applicable terms
and conditions of the Partnership Agreement. In connection with any Transfer of
Award LTIP Units or Award Class A Units, the Partnership may require the Advisor
to provide an opinion of counsel, satisfactory to the Partnership, that such
Transfer is in compliance with all federal and state securities laws (including,
without limitation, the Securities Act). Any attempted Transfer of Award LTIP
Units or Award Class A Units not approved by the Committee or otherwise in
accordance with the terms and conditions of this Section 6 shall be null and
void, and the Partnership shall not reflect on its records any change in record
ownership of any Award LTIP Units or Award Class A Units as a result of any such
Transfer, shall otherwise refuse to recognize any such Transfer and shall not in
any way give effect to any such Transfer of any Award LTIP Units or Award
Class A Units. Except as provided in this Section 6, this Agreement is personal
to the Advisor, is non-assignable and is not transferable in any manner, by
operation of law or otherwise.

 

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7.            Changes in Capital Structure. If (a) the Company shall at any time
be involved in a merger, consolidation, dissolution, liquidation,
reorganization, exchange of shares, sale of all or substantially all of the
assets or stock of the Company or other transaction similar thereto, (b) any
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split, significant repurchases of stock, or other similar change
in the capital stock of the Company or the Partnership, (c) any cash dividend or
other distribution to holders of shares of Common Stock or Partnership Units
shall be declared and paid other than in the ordinary course, or (d) any other
extraordinary corporate event shall occur that in each case in the good faith
judgment of the Committee necessitates action by way of equitable or
proportionate adjustment in the terms of this Agreement or the Award LTIP Units
to avoid distortion in the value of this Award, the Committee shall, taking into
account, among other factors, the provisions of the Partnership Agreement, make
equitable or proportionate adjustment and take such other action as it deems
necessary to maintain the Advisor’s rights hereunder so that they are
substantially proportionate to the rights existing under this Award and the
terms of the Award LTIP Units prior to such event, including, without
limitation: (x) interpretations of or modifications to any defined term in this
Agreement; (y) adjustments in any calculations provided for in this Agreement,
and (z) substitution of other awards; provided, however any such adjustment
shall be subject in all respects to, shall be consistent with and shall not
conflict with the operation of the Conversion Factor, any adjustment pursuant to
Section 13.01(a) of the Partnership Agreement in connection with an Adjustment
Event and other provisions of the Partnership Agreement, as it may be amended
from time to time in accordance with its terms, solely in connection with any
adjustment or action by the Committee pursuant to this Section 7. All
adjustments pursuant to this Section 7 made by the Committee shall be final,
binding and conclusive.

 

8.Miscellaneous.

 

a.            Amendments. This Agreement may be amended or modified only with
the consent of the Company and the Partnership acting through the Committee;
provided that any such amendment or modification that adversely affects the
rights of the Advisor hereunder must be consented to by the Advisor to be
effective as against it. Notwithstanding the foregoing, this Agreement may be
amended in writing signed only by the Company and the Partnership to correct any
errors or ambiguities in this Agreement or to make such changes that do not
adversely affect the Advisor’s rights hereunder.

 

b.            Legend. The records of the Partnership evidencing the Award LTIP
Units and Award Class A Units shall bear an appropriate legend, as determined by
the Partnership in its sole discretion, to the effect that such Award LTIP Units
and Award Class A Units are subject to restrictions as set forth herein and in
the Partnership Agreement.

 

c.            Compliance with Law. Notwithstanding any provision of this
Agreement to the contrary, no Award LTIP Units will become vested, earned or
payable, and no dividends or distributions will be paid, at a time that any such
vesting, earning or payment would result in a violation of any applicable
securities law.

 

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d.            Advisor Representations; Registration.

 

(i)            The Advisor hereby represents and warrants that: (A) it
understands that it is responsible for consulting its own tax advisor with
respect to the application of the U.S. federal income tax laws, and the tax laws
of any state, local or other taxing jurisdiction to which the Advisor is or by
reason of this Award may become subject, to its particular situation; (B) the
Advisor has not received or relied upon business or tax advice from the Company,
the Partnership or any of their respective Affiliates, employees, agents,
consultants or advisors, in their capacity as such; (C) the Advisor provides
services to the Partnership on a regular basis and in such capacity has access
to such information, and has such experience of and involvement in the business
and operations of the Partnership, as the Advisor believes to be necessary and
appropriate to make an informed decision to accept this Award; (D) Award LTIP
Units are subject to substantial risks; (E) the Advisor has been furnished with,
and has reviewed and understands, information relating to this Award; (F) the
Advisor has been afforded the opportunity to obtain such additional information
as it deemed necessary before accepting this Award; and (G) the Advisor has had
an opportunity to ask questions of representatives of the Partnership and the
Company, or persons acting on their behalf, concerning this Award.

 

(ii)           The Advisor hereby acknowledges that: (A) there is no public
market for Award LTIP Units or Award Class A Units and neither the Partnership
nor the Company has any obligation or intention to create such a market;
(B) sales and other Transfers of Award LTIP Units and Award Class A Units are
subject to restrictions under the Securities Act and applicable state securities
laws; and (C) because of the restrictions on Transfer of Award LTIP Units and
Award Class A Units set forth in the Partnership Agreement and in this
Agreement, the Advisor may have to bear the economic risk of its ownership of
the Award LTIP Units covered by this Award for an indefinite period of time.

 

e.            Interpretation by Committee. The Committee may make such rules and
regulations and establish such procedures for the administration of this
Agreement, which are consistent with the terms of this Agreement, as it deems
appropriate.

 

f.             Section 83(b) Election. In connection with the issuance of LTIP
Units pursuant to this Agreement, the Advisor may elect to include in gross
income for the year in which the Grant Date occurs the applicable Award LTIP
Units pursuant to an election under Section 83(b) of the Code in substantially
the form attached hereto as Exhibit B. The Advisor agrees to file such election
(or to permit the Partnership to file such election on the Advisor’s behalf)
within thirty (30) days after the Grant Date with the IRS Service Center where
the Advisor files its personal income tax returns, provide a copy of such
election to the Partnership and the Company.

 

g.            Severability. If, for any reason, any provision of this Agreement
is held invalid, such invalidity shall not affect any other provision of this
Agreement not so held invalid, and each such other provision shall to the full
extent consistent with law continue in full force and effect. If any provision
of this Agreement shall be held invalid in part, such invalidity shall in no way
affect the rest of such provision not held so invalid, and the rest of such
provision, together with all other provisions of this Agreement, shall to the
full extent consistent with law continue in full force and effect.

 

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h.            Governing Law. This Agreement is made under, and will be construed
in accordance with, the laws of State of Delaware, without giving effect to the
principles of conflict of laws of such state.

 

i.             No Obligation to Continue Service as a Consultant or Advisor.
Neither the Company nor any Affiliate is obligated solely by, or solely as a
result of, this Agreement to continue to have the Advisor as a consultant,
advisor or other service provider and this Agreement shall not interfere in any
way with the right of the Company or any Affiliate to terminate the Advisor’s
service relationship in accordance with the Advisory Agreement.

 

j.             Notices. Any notice to be given to the Company shall be addressed
to the Secretary of the Company at 650 Fifth Avenue, 30th Floor, New York, New
York, 10019, and any notice to be given the Advisor shall be addressed to the
Advisor at the Advisor’s address as it appears on the records of the Company, or
at such other address as the Company or the Advisor may hereafter designate in
writing to the other.

 

k.            Withholding and Taxes. The Advisor shall be solely responsible for
all federal, state, local, foreign, or other taxes or any taxes under the
Federal Insurance Contributions Act with respect to this Award. Notwithstanding
the foregoing, if at any time the Company or Partnership are required to
withhold any such taxes, the Advisor shall make arrangements satisfactory to the
Committee regarding the payment of any United States federal, state, local,
foreign or other taxes required by law to be withheld with respect to such
amount. The obligations of the Company under this Agreement will be conditional
on such payment or arrangements, and the Company and its affiliates shall, to
the extent permitted by law, have the right to deduct any such taxes from any
payment otherwise due to the Advisor with respect to this Award (including, with
respect to distributions in respect of the Award LTIP Units). So long as the
Advisor holds any Award LTIP Units, the Advisor shall disclose to the
Partnership in writing such information as may be reasonably requested with
respect to ownership of LTIP Units as the Partnership may deem reasonably
necessary to ascertain and to establish compliance with provisions of the Code
applicable to the Partnership or to comply with requirements of any other
appropriate taxing authority.

 

l.             Headings. The headings of paragraphs hereof are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.

 

m.           Counterparts. This Agreement may be executed in multiple
counterparts with the same effect as if each of the signing parties had signed
the same document. All counterparts shall be construed together and constitute
the same instrument.

 

n.            Successors and Transferees. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and any successors to or
Transferees the Company and the Partnership, on the one hand, and any successors
to or Transferees of the Advisor, on the other hand, by will or the laws of
descent and distribution, but this Agreement shall not otherwise be assignable
or otherwise subject to Transfer by the Advisor.

 

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o.            Section 409A. This Agreement shall be construed, administered and
interpreted in accordance with a good faith interpretation of Section 409A of
the Code. The Award and all Award LTIP Units under this Agreement are intended
to be exempt from, or comply with, Section 409A of the Code and shall be
interpreted in accordance with such intent. Any provision of this Agreement that
is inconsistent with Section 409A of the Code, or that may result in penalties
under Section 409A of the Code, shall be amended, with the reasonable
cooperation of the Advisor and the Company and the Partnership, to the extent
necessary to exempt it from, or bring it into compliance with, Section 409A of
the Code. Notwithstanding anything contained herein, the Company and the
Partnership make no representations that the payments and benefits provided
under this Agreement comply with or are exempt from Section 409A and in no event
shall the Company or the Partnership be liable for all or any portion of any
taxes, penalties, interest or other expenses that may be incurred by or imposed
upon the Advisor or any transferee thereof for failure to comply with, or
satisfy an exemption from, Section 409A of the Code.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as
of the date first written above.

 

 

  NEW YORK CITY REIT, INC.:         By:   /s/ Christopher J. Masterson     Name:
Christopher J. Masterson     Title: Chief Financial Officer               NEW
YORK CITY OPERATING PARTNERSHIP, L.P.:   NEW YORK CITY REIT, INC., its general
partner         By:   /s/ Christopher J. Masterson     Name: Christopher J.
Masterson     Title: Chief Financial Officer               NEW YORK CITY
ADVISORS, LLC:         By:   /s/ Michael Anderson     Name: Michael Anderson    
Title: Authorized Signatory

 

[Signature Page to 2020 Advisor Multi-Year Outperformance Award Agreement]

 

 

 

 

EXHIBIT A

 

DEFINITIONS

 

“Absolute TSR” means the Company’s Total Shareholder Return.

 

“Absolute TSR Award LTIPs” means a number of LTIP Units equal to the quotient,
rounded down to the nearest whole number, of (a) the LTIP Award Number, divided
by (b) two.

 

“Adjustment Event” has the meaning set forth in the Partnership Agreement.

 

“Affiliate” means (A) with respect to any individual Person, any member of the
immediate family of such Person or a trust established for the benefit of such
member, (B) any Person that, directly or indirectly, controls or is controlled
by or is under common control with such Person, (C) any other Person that owns,
beneficially, directly or indirectly, 10% or more of the outstanding capital
stock, shares or equity interests of such Person, or (D) any officer, director,
employee, partner, member, manager or trustee of such Person or any Person
controlling, controlled by or under common control with such Person (excluding
trustees and Persons serving in similar capacities who are not otherwise an
Affiliate of such Person).  For the purposes of this definition, “control”
(including the correlative meanings of the terms “controlled by” and “under
common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities or partnership interests or otherwise.

 

“Beneficial Owner” has the meaning set forth in Rule 13d-3 under the Exchange
Act.

 

“Board” means the Board of Directors of the Company.

 

“bps” means basis points.

 

“Cause” has the meaning set forth in the Advisory Agreement.

 

“Change of Control” means and includes any of the following events:

 

(i)            any Person is or becomes Beneficial Owner, directly or
indirectly, of securities of the Company representing thirty percent (30%) or
more of the combined voting power of the then outstanding securities of the
Company, excluding (A) any Person who becomes such a Beneficial Owner in
connection with a transaction described in clause (x) of subsection (ii) below
and (B) any Person who becomes such a Beneficial Owner through the issuance of
such securities with respect to purchases made directly from the Company; or

 

(ii)           the consummation of a merger or consolidation of the Company with
any other Person or the issuance of voting securities of the Company in
connection with a merger or consolidation of the Company (or any direct or
indirect subsidiary of the Company) pursuant to applicable stock exchange
requirements, other than (x) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof) seventy percent (70%) or more of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (y) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing thirty percent
(30%) or more of the combined voting power of the then outstanding securities of
the Company; or

 

Exhibit A-1

 

 

(iii)          the consummation of a sale or disposition by the Company of all
or substantially all of the assets of the Company; or

 

(iv)          persons who, as of the Grant Date, constitute the Board (the
“Incumbent Directors”) cease for any reason, including, without limitation, as a
result of a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority of the Board; provided that any person becoming a
director of the Company subsequent to such date shall be considered an Incumbent
Director if such person’s election was approved by, or such person was nominated
for election by, a vote of at least a majority of the Incumbent Directors.

 

Notwithstanding the foregoing, with respect to any payment in respect of an
Award LTIP Units that is triggered or accelerated upon a Change of Control, then
to the extent that the payment is subject to Code Section 409A, then such
payment shall not occur until the earliest of (i) the Change of Control if such
Change of Control constitutes a “change in the ownership of the corporation,” a
“change in the effective control of the corporation” or a “change in the
ownership of a substantial portion of the assets of the corporation,” within the
meaning of Code Section 409A(2)(A)(v), (ii) the date such payment would
otherwise be made pursuant to the terms of the Award, and (iii) the Advisor’s
“separation of service” within the meaning of Code Section 409A.

 

“Class A Units” has the meaning set forth in the Partnership Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Common Stock” means the class of common stock of the Company, $0.01 par value
per share, designated as “Class A Common Stock,” individually, or, to the extent
applicable, collectively with the class of common stock of the Company, $0.01
par value per share, designated as “Class B Common Stock.”

 

“Common Stock Price” means as of any date, the average of the Fair Market Value
of one share of Common Stock (or, as applicable, one share of common stock of a
Peer Group Company) over the fifteen (15) consecutive Trading Days ending on,
and including, such date (or, if such date is not a Trading Day, the most recent
Trading Day immediately preceding such date); provided, however, that if such
date is the date upon which a Transactional Change of Control occurs, the Common
Stock Price as of such date shall be equal to the fair value, as determined by
the Committee, of the total consideration paid or payable in the transaction
resulting in the Transactional Change of Control for one share of Common Stock.

 

“Conversion Factor” has the meaning set forth in the Partnership Agreement.

 

Exhibit A-2

 

 

“Effective Date” means September 30, 2020, the thirtieth (30th) Trading Day
following the Grant Date.

 

“Entity” means any general partnership, limited partnership, corporation, joint
venture, trust, business trust, real estate investment trust, limited liability
company, limited liability partnership, cooperative or association.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair Market Value” means, with respect to any security, the average of the
daily market price of such security for the ten consecutive Trading Days
immediately preceding the date of such valuation.  The market price for each
such Trading Day shall be: (A) if the security is listed or admitted to trading
on the NYSE or any national securities exchange, the last reported sale price,
regular way, on such day, or if no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, on such day; (B) if
the security is not listed or admitted to trading on the NYSE or any national
securities exchange, the last reported sale price on such day or, if no sale
takes place on such day, the average of the closing bid and asked prices on such
day, as reported by a reliable quotation source designated by the Company; or
(C) if the security is not listed or admitted to trading on the NYSE or any
national securities exchange and no such last reported sale price or closing bid
and asked prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source designated
by the Company, or if there shall be no bid and asked prices on such day, the
average of the high bid and low asked prices, as so reported, on the most recent
day (not more than ten days prior to the date in question) for which prices have
been so reported; provided, that if there are no bid and asked prices reported
during the ten days prior to the date in question, the value of the security
shall be determined by the Company acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate.  In the event the security includes any additional rights, then the
value of such rights shall be determined by the Company acting in good faith on
the basis of such quotations and other information as it considers, in its
reasonable judgment, appropriate.

 

“Initial Share Price” means the average of the Fair Market Value of one share of
Common Stock over the ten (10) consecutive Trading Days immediately prior to the
Effective Date.

 

“Independent Directors” means the independent directors on the Board.

 

“Listing” means the listing of the Common Stock on the NYSE.

 

“LTIP Award Number” means the quotient, rounded down to the nearest whole
number, of (a) 50,000,000, divided by (b) the Initial Share Price.

 

“LTIP Units” means LTIP Units, as such term is defined in the Partnership
Agreement.

 

“LTIP Unit Distribution Participation Date” has the meaning set forth in the
Partnership Agreement.

 

Exhibit A-3

 

 

“NYSE” means The New York Stock Exchange.

 

“Master LTIP Unit” means Master LTIP Unit, as such term is defined in the
Partnership Agreement.

 

“Partnership Agreement” means the Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of August 18, 2020 and effective as the
Trading Commencement Time, among the Company, as general partner, the Advisor,
as a limited partner, and any limited partners that are admitted from time to
time to the Partnership and listed on Schedule A thereto, as amended, restated
or supplemented from time to time in accordance with its terms.

 

“Partnership Record Date” has the meaning set forth in the Partnership
Agreement.

 

“Partnership Units” has the meaning set forth in the Partnership Agreement.

 

“Peer Group Companies” means Empire State Realty Trust, Inc., Franklin Street
Properties Corp., Paramount Group, Inc. and Clipper Realty Inc.; provided that
if the common stock of any of entities included in the definition of Peer Group
Companies ceases to be listed on a national securities exchange at any time
during the Performance Period for any reason, then the entity shall be excluded
from the Peer Group.

 

“Peer Group TSR” means the average unweighted cumulative Total Shareholder
Return of the Peer Group Companies for the Performance Period.

 

“Person” means an individual, Entity, corporation, unincorporated organization,
or other entity or “group” (as defined in the Exchange Act).

 

“Relative TSR” means the Company’s Total Shareholder Return relative to the
average unweighted cumulative Total Shareholder Return of the Peer Group
Companies.

 

“Relative TSR Award LTIPs” means a number of LTIP Units equal to the quotient,
rounded down to the nearest whole number, of (a) the LTIP Award Number, divided
by (b) two.

 

“Relative TSR Excess” means an amount, expressed in terms of bps, whether
positive or negative, by which the Company’s Absolute TSR as of the Valuation
Date exceeds the Peer Group TSR as of the Valuation Date.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Subsidiary” means any corporation or other entity (other than the Company) in
which the Company has more than a fifty percent (50%) interest, either directly
or indirectly.

 

“Total Shareholder Return” means, for each of the Company and the Peer Group
Companies, with respect to the Performance Period, the total return (expressed
as a percentage) that would have been realized by a holder who (a) bought one
share of common stock of such company at the Initial Share Price (or the closing
price, with respect to any Peer Group Company) on the Effective Date,
(b) reinvested each dividend and other distribution declared during the
Performance Period with respect to such share (and any other shares, or
fractions thereof, previously received upon reinvestment of dividends or other
distributions or on account of stock dividends), without deduction for any taxes
with respect to such dividends or other distributions or any charges in
connection with such reinvestment, in additional shares of common stock at a
price per share equal to (i) the Fair Market Value on the Trading Day
immediately preceding the ex-dividend date for such dividend or other
distribution less (ii) the amount of such dividend or other distribution, and
(c) sold such shares on the Valuation Date at the Common Stock Price on the
Valuation Date, without deduction for any taxes with respect to any gain on such
sale or any charges in connection with such sale.

 

Exhibit A-4

 

 

“Trading Commencement Time” means the date and time when the trading of shares
of Common Stock on the NYSE commences pursuant to the Listing.

 

“Trading Day” means a day on which the principal national securities exchange on
which a security is listed or admitted to trading is open for the transaction of
business or, if a security is not listed or admitted to trading on any national
securities exchange, shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.

 

“Transactional Change of Control” means (A) a Change of Control described in
clause (i) of the definition thereof where the Person makes a tender offer for
Common Stock, (B) a Change of Control described in clause (ii) of the definition
thereof where the Company is not the surviving entity, or (C) a Change of
Control described in clause (iii) of the definition thereof.

 

“Transferee” shall mean the transferee in any Transfers of Award LTIP Units or
Award Class A Units approved by the Committee pursuant to Section 6 hereof.

 

Exhibit A-5

 

 

EXHIBIT B

 

ELECTION TO INCLUDE IN GROSS INCOME IN YEAR OF TRANSFER OF
PROPERTY PURSUANT TO SECTION 83(b) OF THE INTERN REVENUE CODE

 

The undersigned Taxpayer hereby makes an election pursuant to Section 83(b) of
the Internal Revenue Code with respect to the property described below and
supplies the following information in accordance with the regulations
promulgated thereunder:

 

1.The name, address and taxpayer identification number of the undersigned are:

 

Name: New York City Advisors, LLC (the “Taxpayer”)

 

Address:

 

___________________

 

Taxpayer Identification No.: ____-____-____

 

2.Description of property with respect to which the election is being made: one
Master LTIP Unit in New York City Operating Partnership, L.P. (the
“Partnership”), that will, pursuant to its terms and the terms contained in the
Partnership’s Agreement of Limited Partnership, convert into a number of LTIP
Units in the Partnership (such LTIP Units as so converted, together with the
Master LTIP Unit to the extent applicable, the “Award LTIP Units”) based on the
average closing price of the common stock of New York City REIT, Inc. on the
NYSE over the 10 consecutive trading days immediately prior to the 30th trading
day following the first trading day on which shares of such stock were so listed
or admitted to trading.

 

3.The date on which the property was transferred is August 18, 2020. The taxable
year to which this election relates is calendar year 2020.

 

4.Nature of restrictions to which the property is subject: With limited
exceptions, until the Award LTIP Units vest, the Taxpayer may not transfer in
any manner any portion of the Award LTIP Units without the consent of the
Partnership. The Award LTIP Units are subject to performance-based vesting
conditions related to the performance of New York City REIT, Inc. (including the
distributions made by it to its stockholders). The unvested Award LTIP Units are
subject to forfeiture if such conditions are not met.

 

5.The fair market value at time of transfer (determined without regard to any
restrictions other than restrictions which by their terms will never lapse) of
the property with respect to which this election is being made was $0 per Award
LTIP Unit.

 

6.The amount paid by the Taxpayer for the property was $0 per Award LTIP Unit.
The amount to be included in Taxpayer’s income as a result of this election is
$0.00.

 

7.A copy of this statement has been furnished to the Partnership and New York
City REIT, Inc.

 

Exhibit B-6

 

 

      NEW YORK CITY ADVISORS, LLC           Dated:     Signed:                 
    By:            Name:          Title:   

 

Exhibit B-7