Exhibit 10.40


 


RESTRICTED SHARES AGREEMENT


 


RESTRICTED SHARES AGREEMENT, dated as of
January 4, 2017, by and between BRT Realty Trust, a Massachusetts business trust, having its principal place of business at 60
Cutter Mill Road, Great Neck, New York 11021 (the “Trust”) and the person named on the signature page of this
Agreement (“Holder”).


 


W I T
N E S S E T H


 


A.The Board of Trustees of the Trust
adopted, and the shareholders of the Trust approved, the BRT Realty Trust Amended and Restated 2016 Incentive Plan (the “Plan”),
a copy of which is made a part hereof;


 


B.The Holder acknowledges receipt of
a copy of the Plan;


 


C.The Compensation Committee of the
Board of Trustees (“Committee”) has approved an award of restricted shares of the Trust’s common shares
of beneficial interest, $3.00 par value per share (the “Restricted Shares”) to the Holder, all in accordance
with the terms and conditions of the Plan and this Agreement; and


 


D.Unless otherwise defined herein, the
defined terms used in this Agreement shall have the meanings set forth in the Plan.


 


NOW THEREFORE, in consideration of the foregoing
and the mutual promises herein contained, the Trust and the Holder hereby agree as follows:


 


1.                 
Participant. Holder (a) performs services on behalf of the Trust, either directly or pursuant to a Shared Services
Agreement among the Trust, One Liberty Properties, Inc., Gould Investors L.P. and other entities and is deemed an employee of the
Trust for all purposes of the Plan and this Agreement, or (b) is a member of the Board of Trustees of the Trust.


 


2.                 
Award. Holder is hereby awarded the number of Restricted Shares set forth opposite Holder’s name on the signature
page hereof. At the sole discretion of the Trust, the Restricted Shares will be issued in either (i) uncertificated form, with
such shares recorded in the name of the Holder on the books and records of the Trust’s transfer agent (the “Transfer
Agent”) with appropriate notations to reflect the restrictions imposed by the Plan and this Agreement; or (ii) certificated
form.


 


3.                 
Stock Power; Legend. The Restricted Shares registered in the name of the Holder shall remain, either directly, or
indirectly through the Transfer Agent, in the custody of the Trust. The Holder shall execute, deliver to and deposit with the Trust
a stock power, duly endorsed in blank, so as to permit the retransfer to the Trust of the Restricted Shares if the Restricted Shares
shall be forfeited or otherwise do not vest in accordance with the Plan and this Agreement. The certificate representing the Restricted
Shares shall bear (or if the Restricted Shares are issued in uncertificated form, the books and records of the Transfer Agent shall
reflect) the following (or other similar) restrictive legend:


 


“The transferability of these shares is subject
to the terms and conditions of the BRT Realty Trust Amended and Restated 2016 Incentive Plan and to the terms and conditions of
an Agreement entered into between the owner of these shares and BRT Realty Trust. Copies of the Plan and the Agreement are on file
at the offices of the Trust.”


 






    	 



    	 



    

4.                 
Vesting of Restricted Shares. Unless the Restricted Shares are forfeited pursuant to this Agreement or the Plan,
the Period of Restriction for the Restricted Shares shall terminate upon the earlier of (such date, the “Vesting Date,”)
(a) the death, Disability or Retirement of the Holder, (b) January 3, 2022 and (c) a Change in Control; provided, however, that
notwithstanding anything to the contrary in the Plan, the conversion of the Trust into a Maryland corporation shall not constitute
a Change in Control. On the Vesting Date, (i) the Period of Restriction shall terminate, (ii) the Restricted Shares shall vest
and be delivered to Holder and (iii) Retained Distributions (as defined in Section 5), if any, with respect to the Restricted Shares
shall vest and be delivered (and in the case of subparagraphs (ii) or (iii), if the Restricted Shares or Retained Distributions
are in uncertificated form, made available by the Transfer Agent) to Holder.


 


5.                 
Rights During Restriction Period.
During the Period of Restriction, if the Restricted Shares have not been forfeited, Holder will have the right to vote the Restricted
Shares, to receive and retain dividends and distributions paid or distributed on the Restricted Shares by the Trust in the ordinary
course of its business as a real estate investment trust and to exercise all other rights, powers and privileges of a holder of
the Trust’s Beneficial Shares with respect to the Restricted Shares; except that (a) the Holder will not be entitled to delivery
of a stock certificate representing the Restricted Shares until the Vesting Date, (b) the Trust (either directly, or indirectly
through the Transfer Agent) will retain custody of the Restricted Shares until the Vesting Date, (c) other than regular and special
distributions paid by the Trust in the ordinary course of its business as a real estate investment trust, the Trust will retain
custody of all distributions made or declared with respect to the Restricted Shares (the “Retained Distributions”)
until the Vesting Date, and such Retained Distributions shall not vest or bear interest or be segregated in a separate account,
(d) the Holder may not sell, assign, transfer, pledge, encumber or dispose of the Restricted Shares or any Retained Distributions
or his or her interest in any of them until the Vesting Date, and (e) a breach of any restrictions, terms or conditions provided
herein or in the Plan will cause a forfeiture of the Restricted Shares and any Retained Distributions with respect thereto.


 


6.                 
Forfeiture. In the event that
the Holder’s relationship with the Trust as a Trustee, officer, employee or consultant (including the relationship of any
employee who is employed by an affiliate of the Trust) shall terminate during the Period of Restriction for any reason other than
Holder’s death, Disability, Retirement or a Change in Control, then the Holder’s rights to the Restricted Shares and
to any Retained Distributions shall be forfeited immediately, the Trust shall transfer the certificate representing (or if the
Restricted Shares are issued in uncertificated form, shall instruct the Transfer Agent to transfer) the Restricted Shares to the
Trust and the Holder shall not have any rights whatsoever (including the right to receive any dividends and voting rights) with
respect to the Restricted Shares and the Retained Distributions.


 


7.                 
Changes in Employment. If Holder
is deemed an employee of the Trust pursuant to Section 1(a) above, the Restricted Shares shall not be affected by any change of
Holder’s employment if Holder continues to be an employee of the Trust, its subsidiaries or affiliates. Nothing contained
in the Plan or in this Agreement, and no action of the Trust or the Committee, shall confer or be construed to confer on the Holder
any right to continue in the employ of the Trust, its subsidiaries or affiliates. Nothing contained in the Plan or in this Agreement,
and no action of the Trust or Committee, shall interfere in any way with the right of the Trust, its subsidiaries or affiliates
to terminate the employment of the Holder at any time, with or without cause, or terminate the relationship of the Trust (or any
affiliate) with the Holder at any time, with or without cause.


 






    	2



    	 



    

8.                 
Pledge, Sale Assignment, Etc.
Holder shall not permit the Restricted Shares to be subject to anticipation, alienation, sale, assignment, hypothecation, pledge,
exchange, transfer, encumbrance or charge and any attempt to anticipate, alienate, sell, assign, hypothecate, pledge, exchange,
transfer, encumber or charge shall be deemed void by the Trust, and the Committee may, at its sole discretion cause the Restricted
Shares to be forfeited upon such event. No right or benefit hereunder shall in any manner be liable for or subject to the debts,
contracts, liabilities or torts of the Holder.


 


9.                 
Share Registration. The Holder
acknowledges that the Restricted Shares have been registered under the Securities Act of 1933, as amended, pursuant to a Registration
Statement on Form S-8, and that at such time as the Restriction Period has been satisfied or accelerated, the Restricted Shares
may not be sold, assigned, transferred, pledged, exchanged, encumbered or disposed of, except pursuant to the Securities Act of
1933 and the rules and regulations thereunder and the rules and regulations of any securities exchange or association on which
the Restricted Shares may be listed or quoted.


 


10.                 
Board’s Authority. The
adoption of the Plan by the Trust shall not be construed as creating any limitations on the power of its Board of Trustees to adopt
such other incentive arrangements as it may deem desirable, including without limitation the granting of stock options and the
awarding of stock and cash otherwise then under the Plan and such arrangements may be either generally applicable or applicable
only in specific cases.


 


11.                 
Incentive Compensation. By
acceptance of the Restricted Shares and the execution of this Agreement, the Holder agrees that the Restricted Shares are special
incentive compensation that will not be taken into account, in any manner, as salary, compensation or bonus in determining the
amount of any payment under any pension, retirement or other employee benefit plan, program or policy of the Trust or any subsidiary
of the Trust. In addition, each beneficiary of a deceased Holder shall be deemed to have agreed that the Restricted Shares will
not effect the amount of any life insurance, if any, provided by the Trust on the life of the Holder which is payable to such beneficiary
under any life insurance plan covering employees of the Trust or any subsidiary of the Trust.


 


12.                 
No Segregation. Neither the
Trust nor any subsidiary of the Trust shall be required to segregate any cash or Restricted Shares which may at any time be represented
by awards under the Plan and the Plan shall constitute an “unfunded” plan of the Trust. Neither the Trust nor any subsidiary
of the Trust shall by any provisions of the Plan be deemed a trustee of any Restricted Shares or any other property, and the liabilities
of the Trust and any subsidiary of the Trust to the Holder pursuant to the Plan shall be those of a debtor pursuant to such contract
obligations as are created by or pursuant to the Plan and this Agreement and the rights of the Holder or his/her beneficiary under
the Plan shall be limited to those of a general creditor of the Trust or the applicable subsidiary of the Trust, as the case may
be.


 






    	3



    	 



    

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement the day and year first above written.


 





	BRT REALTY TRUST	 
	 	 	 
	By:	 	 
	 	David W. Kalish,	 
	 	Senior Vice President - Finance	 






 


	
        Name of Holder
	
        Number of Restricted Shares 

        Awarded to Holder

	 	 


  





	 	 
	Signature of Holder	 
	 	 
	 	 
	Holder’s Address	 
	 	 
	 	 
	Holder’s Social Security Number	 






 


(17/BRT RESTRICTED STOCK AWARD/FINAL 2017 MASTER RSA)


 




 






    	4