Document:

ck1368757-ex104_23.htm

 

EXHIBIT 10.4

GTJ REIT, INC.

LONG-TERM EQUITY PLAN

WHEREAS, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of GTJ REIT, Inc., a Maryland corporation (the “Company”), has the power and authority to assist the Board in discharging its responsibility with respect to the compensation and material employment terms of the executive officers of the Company;

WHEREAS, on November 1 and 2, 2021, respectively, the Committee and the Board approved the Company entering into second amended and restated employment agreements (the “Employment Agreements”) with certain executive officers of the Company;

WHEREAS, the Employment Agreements provide for long term equity incentive awards if certain financial metrics are met;

WHEREAS, the Committee and the Board desire to memorialize the terms and conditions of such long term equity incentive awards by adopting this Long-Term Equity Plan (the “LTEP”).

NOW, THEREFORE, the LTEP set forth below is hereby adopted effective January 1, 2022:

1.Purpose. The GTJ REIT, Inc. 2017 Incentive Award Plan (the “Plan”) was adopted to provide an additional incentive for certain eligible individuals to further the growth, development and financial success of the Company, and to enable the Company to attract and retain the services of certain eligible individuals considered essential to the long range success of the Company, in each case by offering them an opportunity to own Common Stock in the Company through the receipt of Awards.

This LTEP is being adopted to be utilized in conjunction with the Plan and is intended to further the purposes of the Plan by providing incentives to certain of the Company’s executive officers that are designed to reward individual performance and the achievement of specific Company-level financial goals.

2.Definitions. Whenever the following capitalized terms are used in this LTEP, they shall have the meanings specified below:

“Adjusted Funds From Operations” or “AFFO” 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-lined rent, amortization of other intangible assets, mark to market debt adjustments, financing costs, the Company’s realized gain from an investment in a limited partnership, and stock compensation expense.

“Fiscal Year” means the Company’s fiscal year ending December 31, 2021, and each fiscal year thereafter while this LTEP is in effect.

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Other capitalized terms used herein, but not defined, shall have the meanings attributed to such terms in the Plan.

3.Participation. The Participants in this LTEP are the executive officers of the Company who have been identified by the Committee to participate in this LTEP (each, an “Executive”).

4.Awards. While this LTEP is in effect, an Executive shall receive a long term equity incentive award in the form of restricted shares of Common Stock (“Restricted Stock”) under the Plan or any successor plan for each Fiscal Year in which the Company attains each of the following Adjusted Funds From Operations targets, 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 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.

Once an Adjusted Funds from Operations target is met for a Fiscal Year, attainment of the same target in subsequent Fiscal Years shall not result in an additional Award under this LTEP.  As an example, if the Company’s Adjusted Funds from Operations were $1.50 per share in both 2022 and 2023, then each Executive would receive a Restricted Stock Award under this LTEP valued at $2 million for 2022, but would not receive a Restricted Stock Award under this LTEP for 2023.  Instead, under this example, the Company’s Adjusted Funds from Operations would have to be at least $2.00 per share in 2023 in order for each Executive to receive a Restricted Stock Award under this LTEP.

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 the Executive remains employed through the end of such Fiscal Year.  Each Restricted Stock award shall vest according to the following schedule: ten percent (10%) shall vest on the date of grant, ten percent (10%) shall vest on the first anniversary of the date of grant, ten percent (10%) shall vest on the second anniversary of the date of grant, ten percent (10%) shall vest on the third anniversary of the date of grant, ten percent (10%) shall vest on the fourth anniversary of the date of grant, ten percent (10%) shall vest on the fifth anniversary of the date of grant, ten percent (10%) shall vest on the sixth anniversary of the date of grant, ten percent (10%) shall vest on the seventh anniversary of the date of grant, ten percent (10%) shall vest on the eighth anniversary of the date of grant, and ten percent (10%) shall vest on the ninth anniversary of the date of grant, in each case provided that the Executive is still employed by the Company. All other terms and conditions applicable to the Restricted Stock Award shall be determined by the Committee in its sole discretion.  

 

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5.Amendments. The Committee may from time to time amend or modify this LTEP, provided that no such action shall adversely affect Awards previously granted hereunder.

6.Survival. This LTEP shall continue in effect as long as the Plan is in effect or until terminated by the Committee.

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Appendix 1

 

Special Distribution Adjustments

 

Special Distributions – Special distributions are approved by the Board and arise from:

 

	
 
	
•
	
The sale of an asset, where the Board and management agree that the reinvestment opportunities are limited; or

 

	
 
	
•
	
A refinancing of an asset, where significant value has been created by management, and the Board and management agree that reinvestment opportunities are limited, and the proceeds should be distributed to stockholders.
	
 

 

Credit in AFFO – Upon completion of a transaction resulting in a special distribution, subsequent AFFO for the LTEP will include an upward adjustment, calculated as an amount equal to 6.0% of the total amount distributed as a special distribution.

 

Example – if the property at JFK airport generates net operating income (“NOI”) of $3.3 million, is appraised at $83 million, and has a mortgage balance of $32.5 million, then the following examples describe the adjustment to subsequent AFFO upon a sale and refinancing, accompanied by a special distribution of the proceeds:

 

	
 
	
•
	
If the property were to be sold for $150 million and the net proceeds of $117.5 million (after repaying the mortgage) are distributed to stockholders, the AFFO credit would be $7.05 million (i.e., 6.0% of $117.5 million).
	
 

 

	
 
	
•
	
Assuming the property could be refinanced to 50% of the value of $150 million, or $75 million, the proceeds would be $42.5 million (i.e., $75 million new balance less $32.5 million current mortgage). If the $42.5 million in proceeds were distributed as a special dividend to stockholders, the upward adjustment to AFFO would be $2.55 million (i.e., 6.0% of $42.5 million). In this case, the Company still owns the property and income from the property would also be included in actual AFFO.
	
 

 

In all cases, the adjustments are subject to the following provisions:

 

	
 
	
•
	
For the first year, the amount will be pro-rated for the period from date of the transaction through the end of the year (e.g., for a sale on June 30, only NOI attributable to the second half of the year would be added); and
	
 

 

	
 
	
•
	
For years after the first year, the adjustment is increased by 1.5% to account for the lost opportunity to reinvest each year’s projected NOI (after dividend payout of 75%). For example, if a property is sold on December 31 for $50 million with proceeds distributed, the AFFO adjustment for the next year would be $3.0 million (i.e., 6.0% of the $50 million distributed). For the next year, the AFFO adjustment would be $3.045 million, or the original $3.0 million plus 1.5% ([100% - 75%] x 6.0%) of $3.0 million.
	
 

 

 

 

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5EX-10.1

   

  Exhibit 10.1

  IGM BIOSCIENCES, INC.

  OUTSIDE DIRECTOR COMPENSATION POLICY

  (as Amended and Restated Effective September 24, 2021)

   

  IGM Biosciences, Inc. (the “Company”) believes that providing cash and equity compensation to members of the Company’s Board of Directors (the “Board,” and members of the Board, the “Directors”) represents an effective tool to attract, retain and reward Directors who are not employees of the Company (the “Outside Directors”). This Outside Director Compensation Policy (the “Policy”) is intended to formalize the Company’s policy regarding cash compensation and grants of equity to its Outside Directors. Unless otherwise defined herein, capitalized terms used in this Policy will have the meaning given such terms in the Company’s Amended and Restated 2018 Omnibus Incentive Plan (the “Plan”). Each Outside Director will be solely responsible for any tax obligations incurred by such Outside Director as a result of compensation such Outside Director receives under this Policy.

  This Policy was originally adopted and approved August 7, 2019 and was effective as of the effective date of the registration statement in connection with the initial public offering of the Company’s securities (the “Effective Date”).  This Policy, as amended and restated, is effective as of September 24, 2021.

  1.Cash Compensation

  Annual Cash Retainer

  Each Outside Director will be paid an annual cash retainer of $40,000. There are no per-meeting attendance fees for attending Board meetings. This cash compensation will be paid quarterly in arrears on a prorated basis.

  Committee Annual Cash Retainer

  		
	Each Outside Director who serves as the Board chair or the chair or a member of a committee of the Board will be eligible to earn additional annual fees (paid quarterly in arrears on a prorated basis) as follows:

	Board Chair:
	$30,000

	Audit Committee Chair:
	$15,000

	Audit Committee Member:
	$7,500

	Compensation Committee Chair:
	$10,000

	Compensation Committee Member:
	$5,000

	Corporate Governance and Nominating Committee Chair:
	$10,000

	Corporate Governance and Nominating Committee Member:
	$5,000

	Research and Clinical Development Committee Chair:
	$10,000

	Research and Clinical Development Committee Member:
	$5,000

   

   

  

   

  For clarity, each Outside Director who serves as a committee chair will only receive the additional annual fee as the committee chair and not the additional annual fee as a committee member.

  Subsidiary Boards

   

  Each Outside Director who serves on the board of directors of a majority owned subsidiary of the Company will be eligible to earn an additional $40,000 in annual fees for each subsidiary board on which he or she serves (paid quarterly in arrears on a prorated basis, provided that the fees for the first quarter during which the Outside Director serves on a subsidiary board will not be prorated).

  Payment

  Except as specified above with respect to subsidiary boards or in Section 2, each annual cash retainer under this Policy will be paid quarterly in arrears on a prorated basis to each Outside Director who has served in the relevant capacity at any point during the fiscal quarter, and such payment shall be made on the last business day of such fiscal quarter (or as soon thereafter as practical, but in no event later than 30 days following the end of such  fiscal quarter).  For purposes of clarification, and except as specified above with respect to subsidiary boards or in Section 2, an Outside Director who has served in a relevant capacity during only a portion of the relevant Company fiscal quarter will receive a pro-rated payment of the quarterly payment of the applicable annual cash retainer(s), calculated based on the number of days during such fiscal quarter such Outside Director has served in such capacity.  In any event, an Outside Director who serves in a relevant capacity through the last business day of a quarter shall be deemed to have served in such capacity through to the end of such quarter for purposes of determining the fees or equity payable to him or her under this Policy. 

  2.Elections to Receive Restricted Stock Units in Lieu of Cash Compensation

  Following the Effective Date, subject to complying with the Retainer Award Election Mechanics below, each Outside Director may elect to convert 0%, 50% or 100% of his or her cash compensation with respect to services performed in a future quarter and otherwise scheduled to be paid under Section 1 of this Policy (the “Retainer Cash Payments”) into a number of Restricted Stock Units (“Retainer Award”) having a Grant Value equal to the aggregate amount of the elected percentage of the Retainer Cash Payments payable to such Outside Director under this Policy for the applicable quarter (as determined on the applicable date of grant  of such Retainer Award), provided that the number of Shares covered by such Retainer Award shall be rounded to the nearest whole Share (such election, a “Retainer Award Election”).  Quarterly Retainer Awards will be automatic and nondiscretionary and will be granted on the last business day of each quarter with respect to Retainer Cash Payments that would have been paid  for such quarter.  All Restricted Stock Units underlying such quarterly Retainer Awards will be fully vested upon grant and will be settled in Shares as soon as administratively practicable following each date of grant.  For purposes of this Policy, “Grant Value” is calculated based on the volume weighted average price of one Share over the Company’s fourth quarter of the year immediately preceding the year of the date of grant. For purposes of clarity, the amount of Retainer Cash Payments considered with respect to each quarterly Retainer Award will reflect any changes in committee assignments and any appointment or removal as the chair of committee based on the applicable fees earned during the prior quarter pursuant to Section 1 of this Policy.

  Retainer Award Election Mechanics

  Each Retainer Award Election must be submitted in the form and manner specified by the Board or Compensation Committee.  An individual who fails to make a timely Retainer Award Election shall not receive a Retainer Award for the next calendar year, and instead shall receive the applicable Retainer Cash Payments for such calendar year.  Once a Retainer Award Election is validly submitted and becomes effective, it will remain in effect with respect to all subsequent Retainer Cash Payments related to future calendar years unless the applicable Outside Director revokes such election as provided in (ii) below.  

   

  

   

  Retainer Award Elections must comply with the following timing requirements:

  i.Annual Election.  Each Outside Director may make a Retainer Award Election with respect to Annual Retainer Cash Payments payable to such Outside Director in the following calendar year (the “Annual Election”).  The Annual Election must be submitted to the Company’s Chief Financial Officer within the Company’s fourth quarter open trading window (the “Fourth Quarter Trading Window”) of the calendar year immediately preceding the calendar year to which the Retainer Cash Payments relate (the last day of such trading window, the “Annual Election Deadline”), and, except as provided in (ii) below, the Annual Election shall become irrevocable effective as of the Annual Election Deadline, provided that if such calendar year does not contain a Fourth Quarter Trading Window, Outside Directors will not be eligible to make an Annual Election in such calendar year. 

  ii.Revocation/Revision.  An Outside Director may revoke or revise his or her existing Retainer Award Election during a Fourth Quarter Trading Window by such calendar year’s Annual Election Deadline with respect to Retainer Cash Payments related to future calendar years.  If a calendar year does not contain a Fourth Quarter Trading Window, Outside Directors will not be eligible to revoke or revise a Retainer Award Election in such calendar year.  

  3.Equity Compensation

  Outside Directors will be eligible to receive all types of Awards (except Incentive Stock Options) under the Plan (or the applicable equity plan in place at the time of grant), including discretionary Awards not covered under this Policy. All grants of Awards to Outside Directors pursuant to Section 3 of this Policy will be automatic and nondiscretionary, except as otherwise provided herein, and will be made in accordance with the following provisions:

  (a)No Discretion. No person will have any discretion to select which Outside Directors will be granted any Awards under this Policy or to determine the number of Shares to be covered by such Awards.

  (b)Initial Options. Each individual who first becomes an Outside Director following the Effective Date will be granted a nonstatutory stock option (an “Initial Option”) having a Fair Value of $650,000. The Initial Option will be automatically granted on the first trading date on or after the date on which such individual first becomes an Outside Director, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy. If an individual was a member of the Board and also an employee, becoming an Outside Director due to termination of employment will not entitle the Outside Director to an Initial Option.  Each Initial Option will vest as to 1/3rd of the Shares subject to the Initial Option on the one-year anniversary of the date the applicable Outside Director’s service as an Outside Director commenced and as to 1/36th of the Shares subject to the Initial Option each month thereafter, in each case subject to the Outside Director continuing to be a Service Provider through the applicable vesting date. Each Initial Option will become fully vested and exercisable immediately prior to a Change in Control, subject to the Outside Director continuing to be a Service Provider at the time of the Change in Control.

  (c)Annual Options. Following the Effective Date, each Outside Director will be automatically granted a nonstatutory stock option on the same date as annual equity award grants are made to the Company’s executive officers (an “Annual Option”) having a Fair Value of $400,000. Each Annual Option will vest as to 1/12th of the Shares subject to the Annual Option each month that is completed after the date of the first annual meeting of the Company’s stockholders following the date of grant (each, an “Annual Meeting”) after the date the Annual Option is granted, provided that the Annual Option will vest in full on the earlier of (i) the 12-month anniversary of the first Annual Meeting following the date of grant, or (ii) the date of the second regularly scheduled Annual Meeting after the date of grant, in each case subject to the Outside Director continuing to be a Service Provider through the applicable vesting date. 

  (d)Additional Terms of Initial Options and Annual Options.  The terms and conditions of each Initial Option and Annual Option will be as follows:

   

  

   

  i.The term of each Initial Option and Annual Option will be ten years, subject to earlier termination as provided in the Plan.

  ii.Each Initial Option and Annual Option will have an exercise price per Share equal to 100% of the Fair Market Value per Share on the grant date.

  (c)For purposes of this Policy, “Fair Value” means the grant date fair value of an Award determined in accordance with U.S. generally accepted accounting principles.

  4.Change In Control

  In the event of a Change in Control, each Outside Director will fully vest in his or her outstanding Company equity awards immediately prior to a Change in Control, including any Initial Option or Annual Option, provided that the Outside Director continues to be an Outside Director through the date of the Change in Control.

  5.Annual Compensation Limit

  No Outside Director may be paid, issued or granted, in any fiscal year, any cash compensation and Awards with an aggregate value greater than $1,000,000 for an Outside Director’s first year of service or $750,000 in any subsequent year. The value of any Award will be based on its Fair Value. Any cash compensation paid or Awards granted to an individual for his or her services as an Employee, or for his or her services as a Consultant (other than as an Outside Director), will not count for purposes of the limitation under this Section 5.

  6.Travel Expenses

  Each Outside Director’s reasonable, customary and documented out-of-pocket travel expenses to Board and committee meetings will be reimbursed by the Company.

  7.Additional Provisions

  All provisions of the Plan not inconsistent with this Policy will apply to Awards granted to Outside Directors thereunder.

  8.Adjustments

  In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under this Policy, will adjust the number of Shares issuable pursuant to Awards granted under this Policy.

  9.Section 409A

  In no event will cash compensation or expense reimbursement payments under this Policy be paid after the later of (i) 15th day of the 3rd month following the end of the Company’s fiscal year in which the compensation is earned or expenses are incurred, as applicable, or (ii) 15th day of the 3rd month following the end of the calendar year in which the compensation is earned or expenses are incurred, as applicable, in compliance with the “short-term deferral” exception under Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and guidance thereunder, as may be amended from time to time (together, “Section 409A”). It is the intent of this Policy that this Policy and all payments hereunder be exempt from or otherwise comply with the requirements of 

   

  

   

  Section 409A so that none of the compensation to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be so exempt or comply. In no event will the Company or any of its Parent or Subsidiaries have any liability or obligation to reimburse, indemnify, or hold harmless an Outside Director for any taxes imposed or other costs incurred as a result of Section 409A.

  10.Stockholder Approval

  The initial adoption of the Policy will be subject to approval by the Company’s stockholders prior to the Effective Date. Unless otherwise required by applicable law, following such approval, the Policy shall not be subject to approval by the Company’s stockholders, including, for the avoidance of doubt, as a result of or in connection with an action taken with respect to this Policy as contemplated in Section 11 hereof.

  11.Revisions

  The Board may amend, alter, suspend or terminate this Policy at any time and for any reason. No amendment, alteration, suspension or termination of this Policy will materially impair the rights of an Outside Director with respect to compensation that already has been paid or awarded, unless otherwise mutually agreed in writing between the Outside Director and the Company. Termination of this Policy will not affect the Board’s or the Compensation Committee’s ability to exercise the powers granted to it under the Plan with respect to Awards granted under the Plan pursuant to this Policy prior to the date of such termination.

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