Document:

Unassociated Document

Exhibit 10.4

 

EXECUTIVE EMPLOYMENT AGREEMENT

AGREEMENT made as of November 8, 2011, by and between PRESIDENTIAL REALTY CORPORATION, a Delaware corporation (the "Corporation"), and NICKOLAS W. JEKOGIAN, III ("Executive").

 

WITNESSETH:

WHEREAS, the Corporation desires to employ Executive and Executive is willing to undertake such employment on the terms and subject to the conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants hereinafter contained, the parties hereto agree as follows:

 

1.           Employment; Duties.  The Corporation hereby employs Executive as an executive of the Corporation to perform duties as a Director, Chairman of the Board of Directors and Chief Executive Officer of the Corporation and such other duties on behalf of the Corporation and its affiliates, commensurate with his office, as the Board of Directors of the Corporation may from time to time determine.

 

2.           Acceptance and Loyalty.  Executive hereby accepts such employment and agrees that throughout the period of his employment hereunder he will devote his knowledge and skills, faithfully, diligently and to the best of his ability, in furtherance of the business of the Corporation and will perform the duties assigned to him pursuant to Section 1 hereof.  Executive will not be exclusive to the Corporation but he will devote such amount of time and attention as is necessary to the performance of the duties assigned to him pursuant to Section 1 hereof.  Executive shall perform all duties and responsibilities in a professional manner consistent with the skill, competence and efficiency expected of an executive employee performing the duties assigned to Executive, subject to the direction and control of the Board of Directors of the Corporation.  Executive will do such traveling as may be reasonably required of him in the performance of his obligations hereunder.  Executive shall at all times be subject to, observe and carry out such rules, regulations, policies, directions and restrictions as the Corporation shall from time to time establish; provided, however, that nothing contained herein or in any of the Corporation’s rules, regulations, policies, directions and restrictions shall be deemed to prohibit or restrict Executive from  directly or indirectly, continuing to own, operate, manage and control Signature Community Group, LLC and its affiliates.  During Executive's employment hereunder, Executive shall not be entitled to additional compensation for serving in any office, including as a director, of the Corporation or any of its subsidiaries or affiliates to which he may be elected.

 

3.           Term.  The term of Executive's employment hereunder shall commence on the date hereof and terminate on the eighteen (18) month anniversary thereof (the "Term").

 

  

  

  

 

4.           Compensation and Benefits.

 

4.1           Base Salary.  Subject to Section 4.4, the Corporation shall pay to Executive as compensation for his services and agreements hereunder an initial base salary at the rate of $ 200,000 per annum, for the first twelve (12) months of the Term and at the rate of $225,000 per annum for the last six (6) months of the Term, or such greater amount as the Board of Directors of the Corporation shall from time to time determine.  Base salary shall be payable in equal installments in accordance with the Corporation's normal payroll policy, subject to payroll taxes and withholding requirements.

 

4.2           Stock Options.  The Corporation shall grant to Executive an option (the “Option”) to purchase 370,000 shares of Class B Common Stock, par value $0.10 per share, of the Corporation as further described in the Stock Option Agreement in the form of Exhibit A annexed hereto. The grant of the Option is pursuant to the approval of the Corporation’s Compensation Committee.

 

4.3           Annual Bonus. Commencing with the fiscal year of the Corporation beginning January 1, 2012, and for each fiscal year thereafter during the Term, Executive shall have the opportunity to earn a bonus ("Annual Bonus") in such amount as the Corporation’s Compensation Committee shall determine in its absolute discretion, such bonus not to exceed $200,000.

 

4.4           Payment of Bonus and Base Salary to be Deferred.  Notwithstanding the foregoing, Executive hereby agrees to defer receipt of the payment of base salary and any Annual Bonus, and the Corporation shall have no obligation to pay Executive his base salary and Annual Bonus unless and until a Capital Event shall have occurred.  Any deferred base salary and Annual Bonus shall be paid concurrently with or within three business days following a Capital Event.  For purposes of this Agreement and the Option, “Capital Event” means the receipt by the Corporation of at least $20,000,000 in cash or property from a capital raising activity including the following:  (a) the sale for cash of shares of the Corporation’s Class A or Class B Common Stock or securities convertible into shares of the Corporation’s Class A or Class B Common Stock; (b) the exchange of shares of Class A or Class B Common Stock for real estate assets consistent with the Corporation’s status as a REIT; (c) the sale of unsecured subordinated debt instruments of the Corporation, the proceeds of which may be used to acquire real estate assets which are consistent with the Corporation’s status as a REIT.  For the avoidance of doubt, the proceeds of any refinancing of any of the Corporation’s properties or any working capital line of credit shall not be included in a Capital Event.  The valuation of any property shall be supported by independent appraisals of such property.

 

4.5           Long Term Incentive Program. Commencing with the fiscal year of the Corporation beginning January 1, 2013, and for each fiscal year thereafter during the Term, Executive shall have the opportunity to participate in a long-term performance based incentive program that may be established by the Compensation Committee. The determination as to the amounts of long-term incentive compensation available to Executive under this program and the performance criteria shall be reviewed periodically by the Compensation Committee with a view to adjusting the amounts and criteria in accordance with such factors as the Compensation Committee may deem appropriate, including the competitive marketplace for comparable executives.

 

4.6           Other Benefits.  Executive shall be entitled to participate, to the extent he is eligible under the terms and conditions thereof, in any bonus, pension, retirement, disability, hospitalization, insurance, medical service, or other employee benefit plan which is generally available to executive employees of the Corporation and which may be in effect from time to time during the period of his employment hereunder.  The Corporation shall be under no obligation to institute or continue the existence of any such employee benefit plan.

 

  

2

  

 

5.           Business Expenses.  The Corporation shall reimburse Executive for all authorized expenses reasonably incurred by him in accordance with the Corporation's "Travel and Entertainment Policy and Procedure," and any amendments thereof and any other business expenses reasonably incurred by Executive in his service to the Corporation in accordance with policies that the Corporation may adopt during the Term hereof.

 

6.           Vacation.  Executive shall be entitled to four weeks paid vacation during the first twelve (12) months of the Term and two (2) weeks paid vacation during the last six (6) months of the Term.  Any such vacations are to be taken at times mutually agreeable to Executive and the Board of the Corporation.

 

7.           Key-Man Life Insurance.  The Corporation may purchase and maintain life insurance covering the life of Executive ("Key-man Insurance") in an amount determined by the Corporation.   The Corporation shall be the sole owner and beneficiary of the Key-man Insurance and may apply to the payment of premiums thereunder any dividends declared and paid thereon.  Executive shall submit himself to such physical examinations as the Corporation may deem necessary or desirable in connection with the purchase and maintenance of the Key-man Insurance.

 

8.           Indemnification.  Concurrently herewith, Executive and the Corporation are entering into an indemnification agreement in the form of Exhibit B annexed hereto.

 

9.           Confidentiality Agreement.

 

9.1           As used herein, the term "Confidential Information" shall mean any and all information of the Corporation and of its affiliates (for purposes of this paragraph, the Corporation's affiliates shall be deemed included within the meaning of  "Corporation"), including, but not limited to, all data, compilations, programs, devices, strategies, or methods concerning or related to (i) the Corporation's finances, financial condition, results of operations, employee relations, amounts of compensation paid to officers and employees and any other data or information relating to the internal affairs of the Corporation and its operations; (ii) the terms and conditions (including prices) of sales and offers of sales of the Corporation's assets; (iii) the terms, conditions and current status of the Corporation's agreements and relationship with any customer or supplier or lender or tenant; (iv) the customer and supplier lists and the identities and business preferences of the Corporation's actual and prospective customers and suppliers or any employee or agent thereof with whom the Corporation communicates; (v) the trade secrets, and operating techniques, price data, costs, methods, systems, plans, procedures, hardware, software, machines, inventions, designs, drawings, artwork, blueprints, specifications, tools, skills, ideas, and strategic plans possessed, developed, accumulated or acquired by the Corporation; (vi) any communications between the Corporation, its officers, directors, stockholders, or employees, and any attorney retained by the Corporation for any purpose, or any person retained or employed by such attorney for the purpose of assisting such attorney in his or  his representation of the Corporation; (vii) any other information and knowledge with respect to all products developed or in any stage of development by the Corporation; (viii) the abilities and specialized training or experience of others who as employees or consultants of the Corporation during the Term hereof have engaged in the design or development of any such products; and (ix) any other matter or thing, whether or not recorded on any medium, (a) by which the Corporation derives actual or potential economic value from such matter or thing being not generally known to other persons or entities who might obtain economic value from its disclosure or use, or (b) which gives the Corporation an opportunity to obtain an advantage over its competitors who do not know or use the same.

 

  

3

  

 

9.2           Executive acknowledges and agrees that the Corporation is engaged in highly competitive businesses and has expended, or will expend, significant sums of money and has invested, or will invest, a substantial amount of time to develop and maintain the secrecy of the Confidential Information. The Corporation has thus obtained, or will obtain, a valuable economic asset which has enabled, or will enable, it to develop an extensive reputation and to establish long-term business relationships with its suppliers and customers.  If such Confidential Information were disclosed to another person or entity or used for the benefit of anyone other than the Corporation, the Corporation would suffer irreparable harm, loss and damage.  Accordingly, Executive acknowledges and agrees that, unless the Confidential Information becomes publicly known through legitimate origins not involving an act or omission by Executive:

 

	
  

	
(i)

	
the Confidential Information is, and at all times hereafter shall remain, the sole property of the Corporation;

 

	
  

	
(ii)

	
Executive shall use his reasonable best efforts and diligence to guard and protect the Confidential Information from disclosure to any competitor, customer or supplier of the Corporation or any other person, firm, corporation or other entity;

 

	
  

	
(iii)

	
unless the Corporation gives Executive prior express written permission, during his employment and thereafter, Executive shall not use for his own benefit, or divulge to any competitor or customer or any other person, firm, corporation, or other entity, any of the Confidential Information which Executive may obtain, learn about, develop or be entrusted with as a result of Executive's employment by the Corporation; and

 

	
  

	
(iv)

	
except in the ordinary course of the Corporation's business, Executive shall not seek or accept any Confidential Information from any former, present or future employee of the Corporation.

 

9.3           Executive also acknowledges and agrees that all documentary and tangible Confidential Information including, without limitation, such Confidential Information as Executive has committed to memory, is supplied or made available by the Corporation to Executive solely to assist his in performing his services under this Agreement.  Executive further agrees that after his employment with the Corporation is terminated for any reason:

 

	
  

	
(i)

	
Executive shall not remove from the property of the Corporation and shall immediately return to the Corporation, all documentary or tangible Confidential Information in his possession, custody, or control and not make or keep any copies, notes, abstracts, summaries, tapes or other record of any type of Confidential Information; and

 

	
  

	
(ii)

	
Executive shall immediately return to the Corporation any and all other property of the Corporation in his possession, custody or control, including, without limitation, any and all keys, security cards, passes, credit cards and marketing literature.

 

  

4

  

 

10.           Remedies.  Executive acknowledges and agrees that the business of the Corporation is highly competitive and that violation of any of the covenants provided for in Section 9 of this Agreement would cause immediate, immeasurable and irreparable harm, loss and damage to the Corporation not adequately compensable by a monetary award.  Accordingly, Executive agrees, without limiting any of the other remedies available to the Corporation, that any violation of said covenants, or any one of them, may be enjoined or restrained by any court of competent jurisdiction, and that any temporary restraining order or emergency, preliminary or final injunctions may be issued by any court of competent jurisdiction, without notice and without bond.

 

11.          Change of Control.

 

11.1           If at any time during the Term, (a) individuals who presently constitute the Board of Directors of the Corporation, or who have been recommended for election to the Board by a majority of the Board consisting of individuals who are either presently on the Board or such recommended successors cease for any reason to constitute at least a majority of such Board or (b) a sale of all or substantially all of the Corporation’s assets (such events in clauses (a) and (b) being hereafter referred to as a "Change of Control") and Executive gives written notice to the Corporation within 30 days after such Change of Control of his election to terminate his employment hereunder, the Corporation shall pay to Executive within 15 days after Executive's delivery of such notice, as severance pay and liquidated damages, in lieu of any other rights or remedies which might otherwise be available to him under this Agreement, and without mitigation of any kind or amount, whether or not Executive shall seek or accept other employment, a lump sum payment equal in amount to three (3) months base salary.

 

11.2           If it shall be determined that any amount payable under Section 11.1 by the Corporation to or for the benefit of Executive (a "Base Payment") would be subject to the excise tax (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), then Executive shall only be entitled to receive such amounts that would not be subject to the Excise Tax.

 

12.          Termination for Cause and for Good Reason.

 

12.1           Executive’s employment and the Term may be terminated at any time by the Board for “cause” as defined below.  If Executive’s employment is terminated by the Board for “cause”, as defined below, he shall only be entitled to payment of his base salary and fringe benefits through the date of termination.  For purposes of this Agreement, “cause” means (a) the conviction of Executive of any crime constituting a felony or any other crime involving moral turpitude, (b) Executive’s repeated refusal to follow a reasonable directions of the Board of Directors of the Corporation after written notice that such continued refusal shall result in termination of his employment for cause and Executive is given an opportunity to defend his refusal to the Board; or (c) Executive’s failure to fulfill his employment duties hereunder after written notice that such continued failure shall result in termination of his employment for cause and Executive is given an opportunity to defend his actions to the Board.

 

  

5

  

 

12.2           Executive’s employment and the Term may be terminated at any time by Executive for “good reason” as defined below upon at least thirty (30) days prior written notice given by Executive to the Corporation.  If Executive’s employment is terminated by Executive for “good reason”, as defined below, he shall be entitled to payment of his base salary and fringe benefits through the end of the Term.  For purposes of this Agreement, “good reason” means (i) the assignment to Executive by the Corporation of any duties inconsistent in any material respect with his position (including offices, titles and reporting requirement), authority, duties or responsibilities or any other action which results in a significant and material diminution in such position, authority, duties or responsibilities (ii) any failure by the Corporation to pay Executive the compensation set forth in this Agreement; (iii) a reduction in Executive's base salary as in effect immediately prior to such reduction or any material reduction in any other material benefit provided Executive hereunder; (iv) requiring Executive to relocate outside the New York metropolitan area; or (v) failure by the Corporation to maintain directors and officers liability insurance providing for coverage of equal to or greater coverage than provided as of the date hereof.

 

13.           Entire Agreement.  This Agreement constitutes the entire agreement of the parties hereto with respect to Executive's employment with the Corporation and no amendment or modification hereof shall be valid or binding unless made in writing and signed by the party against whom enforcement thereof is sought.

 

14.           Notices.  Any notice required, permitted or desired to be given pursuant to any of the provisions of this Agreement shall be deemed to have been sufficiently given or served for all purposes if delivered in person or sent by telephone facsimile or sent by certified mail, return receipt requested, or sent by responsible overnight delivery service, postage and fees prepaid, to the parties hereto at their respective addresses set forth below.  Either of the parties hereto may at any time and from time to time change the address to which notice shall be sent hereunder by notice to the other party given under this Section 14.  The date of the giving of any notice sent by mail shall be three business days following the date of the posting of the mail, if delivered in person, the date delivered in person, if sent by overnight delivery service, the next business day following delivery to an overnight delivery service or if sent by telephone facsimile, the date sent by telephone facsimile.

 

	
If to Corporation:

	
180 South Broadway

White Plains, New York 10605

Email: jjoseph@presrealty.com

Fax: 914-948-1327

	 	 
	
If to Executive::

	
c/o Signature Community Investment Group LLC

9 West 40th Street

New York, New York 10016

Email: njekogian@scig.co

	  	  
	
With a copy to Pamela E. Flaherty

	
Blank Rome LLP

405 Lexington Avenue

New York, New York 10174

	  	
Email: pflaherty@blankrome.com

	  	
Fax:  917-332-3733

 

  

6

  

 

15.           No Assignment.  Neither this Agreement nor the right to receive any payments hereunder may be assigned by Executive.  This Agreement shall be binding upon Executive, his heirs, executors and administrators and upon the Corporation, its successors and assigns.

 

16.           No Waiver.  No course of dealing or any delay on the part of the Corporation in exercising any rights hereunder shall operate as a waiver of any such rights.  No waiver of any default or breach of this Agreement shall be deemed a continuing waiver or a waiver of any other breach or default.

 

17.           Governing Law.  This Agreement shall be governed, interpreted and construed in accordance with the substantive laws of the State of New York applicable to agreements entered into and to be performed entirely therein.

 

18.           Severability.  If any clause, paragraph, section or part of this Agreement shall be held or declared to be void, invalid or illegal, for any reason, by any arbitrator or court of competent jurisdiction, such provision shall be ineffective but shall not in any way invalidate or affect any other clause, paragraph, section or part of this Agreement.  The parties intend that all clauses, paragraphs, sections or parts of this Agreement shall be enforceable to the fullest extent permitted by law.

 

19.           Affiliate. As used in this Agreement, "affiliate" means any person or entity controlled by or under common control with the Corporation.

 

20.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which counterparts, when taken together, shall constitute but one and the same agreement.

 

21.           Attorney’s Fees. The Corporation will reimburse Executive for Executive’s actual documented out-of-pocket expenses reasonably incurred in connection with the drafting, negotiation and execution of this Agreement, including the fees of Executive’s attorney; provided, however, that the Corporation will not be required to pay more than $2,500 pursuant to this Section.

 

[Signature Page Follows]

 

  

7

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written.

 

	 	 
PRESIDENTIAL REALTY CORPORATION

	 
	 	 	 	 
	
 

	
By:   

	/s/ Jeffery F. Joseph	 
	 	 	 
Name: Jeffery F. Joseph

	 
	 	 	 
Title:  President

	 
	 	 	 	 
	 	 	 	 
	 	 	 
/s/ Nickolas W. Jekogian, III

	 
	 	 	 
Nickolas W. Jekogian, III

	 
	 	 	 	 

 

  

8Unassociated Document

Exhibit 10.5

STOCK OPTION AGREEMENT

 

AGREEMENT made as of November 8, 2011 (the “Grant Date”), between Presidential Realty Corporation, a Delaware corporation (the “Corporation”), and Nickolas W. Jekogian, III (the “Grantee”).

 

WHEREAS, the Corporation has entered into an Employment Agreement (the “Employment Agreement”) of even date herewith with the Grantee; and

 

WHEREAS, pursuant to the terms of the Employment Agreement, the Corporation has undertaken to grant to the Grantee the option granted hereunder and the Grantee has agreed to accept such grant.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

 

1.           Grant of Option.  The Corporation hereby grants to the Grantee the right and option (the “Option”) to purchase 370,000 shares of the Corporation’s Class B Common Stock, par value $.10 per share (the “Class B Shares”), on the terms and conditions and subject to all the limitations set forth herein. The Option is intended to qualify as a non-qualified stock option and not as an Incentive Stock Option as defined in Section 422 of the Internal Revenue Code.  Notwithstanding any other provision of this Agreement, the Corporation shall make or provide for such adjustments to the number and class of shares issuable hereunder as shall be appropriate to prevent dilution or enlargement of rights, including adjustments in the event of changes in the outstanding capital stock of the Corporation by reason of stock dividends, split-ups, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations, liquidations and the like.  In the event of any offer to holders of the capital stock of the Corporation generally relating to the acquisition of their shares, the Corporation shall make such adjustment as shall be equitable in respect of the outstanding Option and rights hereunder, including revision of the outstanding Option and rights so that the holder of the Option may exercise the Option and participate in the acquisition transaction on the same terms as other stockholders.

 

2.           Purchase Price.  The purchase price of the Shares covered by the Option shall be $1.25 per Class B Share (the “Purchase Price”), which exceeds the closing price of a Class B Share on the date hereof.

 

3.           Exercise of Option.  The Option granted hereby shall vest and become immediately exercisable based on the following vesting schedule:

 

(a)           74,000 of the Class B Shares covered by the Option may be purchased at any time after the expiration of six months from the Grant Date;

 

  

1

  

 

(b)           148,000 of the Class B Shares covered by the Option may be purchased from and after the occurrence of a Capital Event.  For purposes of this Agreement, a Capital Event means the receipt by the Corporation of at least $20,000,000 in cash or property from a capital raising activity including the following:  (a) the sale for cash of shares of the Corporation’s Class A or Class B Common Stock or securities convertible into shares of the Corporation’s Class A or Class B Common Stock; (b) the exchange of shares of Class A or Class B Common Stock for real estate assets consistent with the Corporation’s status as a REIT; (c) the sale of unsecured subordinated debt instruments of the Corporation, the proceeds of which may be used to acquire real estate assets which are consistent with the Corporation’s status as a REIT.  For the avoidance of doubt, the proceeds of any refinancing of any of the Corporation’s properties or any working capital line of credit shall not be included in a Capital Event.  The valuation of any property shall be supported by independent appraisals of such property.

 

(c)           148,000 of the Class B Shares covered by the Option may be purchased from and after the consummation of an underwritten registered public offering of equity securities of the Corporation with gross proceeds of not less than $40,000,000.

 

(d)           Notwithstanding the foregoing the Option shall automatically become fully vested and exercisable upon a Change of Control (as such term is defined in the Employment Agreement).

 

The date on which any of the events set forth in sub clauses (a), (b), (c) or (d) above occurs is hereinafter referred to as a “Vesting Date”.

 

 

4.           Term of Option.  The Option shall terminate at 11:59 P.M. on the day before the tenth anniversary of the Grant Date.

 

5.           Transferability.  Any attempted transfer, assignment, pledge, hypothecation or other disposition of the Option or of any rights granted hereunder contrary to the provisions of this Section 5, or the levy of any attachment or similar process upon the Option or any such right, shall be null and void.  The Grantee shall comply with any policies adopted by the Corporation’s Board of Directors with respect to timing of sales of its capital stock.

 

6.           Exercise of Option and Issuance of Shares.  The Option may be exercised in whole or in part (to the extent that it is exercisable in accordance with its terms) by giving written Notice of Exercise (in the form of Exhibit A annexed hereto) to the Corporation, together with the tender of the purchase price of the Class B Shares with respect to which the Option is being exercised, payable by certified or bank check.  Such written notice shall be signed by the Grantee, shall state the number of Class B Shares with respect to which the Option is being exercised, shall contain any warranty required by Section 8 below and shall otherwise comply with the terms and conditions of this Agreement.  The Grantee shall pay all original issue taxes, if any, with respect to the issue of the Shares purchased pursuant hereto and the Corporation shall pay all other fees and expenses necessarily incurred by the Corporation in connection herewith.  The issuance of the Class B Shares is conditional upon the submission by the Grantee to the Board of Directors of the Corporation a duly executed and acknowledged counterpart of this Agreement, together with such other instrument or instruments reasonably requested by the Corporation.

 

  

2

  

 

7.           Representations and Warranties of the Corporation.  The Corporation represents, warrants and agrees as follows:

 

(a)           The Corporation has the authority to enter into this Agreement.  All action on the part of the Corporation necessary for the authorization, execution and delivery of this Agreement and the performance of all obligations of the Corporation hereunder and thereunder has been taken on or prior to the date hereof.  This Agreement has been duly executed and delivered by the Corporation and constitutes the valid and binding agreement of the Corporation, enforceable against the Corporation in accordance with their terms, except that (i) such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

 

(b)           The Class B Shares, when issued upon exercise of the Option and payment of the Purchase Price will be duly authorized and validly issued, fully paid and nonassessable and, subject to the representations and warranties of the Grantee in Section 8 herein being true and correct, will have been issued in compliance with federal and state securities Laws.

 

8.           Representations and Warranties of the Grantee. The Grantee represents, warrants and agrees as follows:

 

(a)           The Grantee (i) has such knowledge and experience in business and financial matters as to be capable of evaluating the merits and risks of the investment in the Class B Shares; (ii) is capable of bearing the economic risks associated with the investment in the Class B Shares; (ii) has been provided  the opportunity to ask questions and receive answers concerning the Corporation and to obtain any additional information which the Corporation possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished to it; and (iv)  will acquire the Class B Stock for its own account and not with a view toward, or for resale in connection with, the sale or distribution thereof.

 

(b)           The Grantee understands that the Option and the Class B Shares issuable upon exercise thereof are being offered and sold to it in reliance on specific exemptions from the registration requirements of the U.S. federal and state securities laws and that the Corporation is relying in part upon the truth and accuracy of, and the Grantee’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Grantee set forth herein in order to determine the availability of such exemptions and the eligibility of the Grantee to be granted the Options and acquire the Class B Shares.

 

(c)           The Grantee understands that neither the Option nor the Class B Shares have been or are being registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless subsequently registered thereunder or sold, assigned or transferred pursuant to an exemption from registration under the Securities Act. Except as provided in Section 13 herein, the Corporation is under no obligation to register the Shares or to comply with any exemption available for sale of the Shares without registration.

 

  

3

  

 

(d)           The certificate or certificates representing the Class B Shares to be acquired upon exercise of the Option shall contain the following legend in addition to any other legends required by the Corporation’s Certificate of Incorporation:

 

“THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE OFFERED OR TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE UNLESS (I) A REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933 IS IN EFFECT OR (II) THE CORPORATION HAS RECEIVED AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

THE ACCUMULATION OF SHARES OF COMMON STOCK BY ANY PERSON, AS DEFINED IN THE COMPANY’S CERTIFICATE OF INCORPORATION, IS RESTRICTED TO 9.2% OF THE NUMBER OF OUTSTANDING SHARES OF COMMON STOCK WITHOUT REGARD TO CLASS.  ANY TRANSFER WHICH CREATES AN ACCUMULATION IN EXCESS OF THAT AMOUNT VIOLATES THE CERTIFICATE OF INCORPORATION AND IS VOID.  IF, NOTWITHSTANDING THE ABOVE, SUCH ACCUMULATION RESULTS, THE SHARES IN EXCESS OF 9.2% ARE SUBJECT TO CERTAIN RESTRICTIONS ON VOTING POWER AND RECEIPT OF DIVIDENDS, AND MAY BE MADE SUBJECT TO PURCHASE BY THE COMPANY.  FURTHER, SUCH PERSON MAY BE REQUIRED TO INDEMNIFY THE COMPANY AGAINST TAXES INCURRED AND OTHER LOSSES RESULTING FROM (1) LOSS OF ITS TAX QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST OR (2) BECOMING A PERSONAL HOLDING COMPANY”

 

(e)           The Grantee has reviewed with his own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement and is relying solely on such advisors and not on any statements or representations of the Corporation or any of its employees or agents.

 

  

4

  

 

(f)           The Grantee understands that the Grantee (and not the Corporation) shall be responsible for his own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

 

9.           Liquidation; Change in Control. In the event of a liquidation or proposed liquidation of the Corporation, including (but not limited to) a transfer of assets followed by a liquidation of the Corporation, or in the event of a Change in Control or proposed Change in Control, the Corporation shall have the right to require the Grantee to exercise the Option upon 30 days prior written notice to the Grantee to the extent it is then exercisable.  In the event the Option is not exercised by the Grantee within the 30-day period set forth in such written notice, the Option shall terminate on the last day of such 30-day period, notwithstanding anything to the contrary contained in the Option.

 

10.           Notices.  Any notices required or permitted by the terms of this Agreement shall be given by personal delivery, registered or certified mail, postage prepaid, return receipt requested, overnight courier of national reputation, facsimile or other electronic means as follows:

 

	To the Corporation: 	 	 
180 South Broadway

	
 

	 	 
White Plains, New York 10605

	
 

	 	 
Facsimile No.: 914-948-1327

	 	 	 
	 	 	 
	 
To the Grantee:

	 	 
Nickolas W. Jekogian, III

	 	 	 
c/o Signature Community Investment Group

	 	 	 
9 West 42nd Street

	 	 	 
New York, New York 10016

	 	 	 
njekogian@scig.co

	 	 	 

 

or to such other address or addresses of which notice in the same manner has previously been given.  Any such notice shall be deemed to have been duly given or made as of the date delivered if delivered personally, or on the next business day if sent by overnight courier or when received if mailed by registered or certified mail, postage prepaid, return receipt requested, or on confirmation if by facsimile or other electronic means, in accordance with the foregoing provisions.  Either party hereto may change the address to which notices hereunder may be given by providing the other party hereto with written notice of such change.

11.           Section 409A.  To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of the Internal Revenue Code (the “Code”) and Department of Treasury regulations and other interpretive guidance issued thereunder.  Notwithstanding any provision of this Agreement to the contrary, in the event that the Corporation determines that this Option may be subject to Section 409A of the Code, the Corporation may adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions that the Corporation determines are necessary or appropriate to (a) exempt the Option from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Option, or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance and thereby avoid the application of penalty taxes under such Section 409A.

 

  

5

  

 

12.           No Effect on Employment. Nothing herein shall modify the Grantee’s status as an employee, officer and/or director of the Corporation or any of its affiliates.  This Option shall terminate automatically if the Corporation terminates the Grantee's employment for cause, as defined in the Employment Agreement or Grantee terminates his employment without good reason as defined in the Employment Agreement.  If Grantee terminates his employment for good reason, as defined in the Employment Agreement, this Option shall be exercisable for a period equal to the lesser of two years from the date of termination or the expiration date.  Further, nothing herein guarantees the Grantee’s employment for any specified period of time.  In no event may this Option be exercised after the expiration date set in Section 4.

 

13.           Registration. The Corporation shall use reasonable efforts at its expense to register the resale by the Grantee of the Class B Shares purchased upon the exercise of the Option.  The timing of such registration shall be coordinated with the Corporation’s certified financial statements so as not to create an undo financial hardship on the Corporation and the Corporation shall only be required to register such shares on a short form registration statement such as a Form S-3 or S-8.  The Corporation shall not be required to register the resale of such Class B Shares on a Form S-1.

 

14.           Governing Law; Arbitration.

 

(a)           This Agreement shall be construed in accordance with and governed by the Laws of the State of Delaware, without regard to the conflicts of Laws and rules thereof.

 

(b)           Any dispute or disagreement between the Grantee and the Corporation with respect to any portion of this Agreement (excluding Exhibit A hereto) or its validity, construction, meaning, and the performance of the Grantee’s rights hereunder shall, unless the Corporation in its sole discretion determines otherwise, be settled by arbitration, at a location designated by the Corporation, in accordance with the Commercial Arbitration Rules of the American Arbitration Association or its successor, as amended from time to time.  However, prior to submission to arbitration the parties will attempt to resolve any disputes or disagreements with the Corporation over this Agreement amicably and informally, in good faith, for a period not to exceed two weeks.  Thereafter, the dispute or disagreement will be submitted to arbitration.  At any time prior to a decision from the arbitrator(s) being rendered, the Grantee and the Corporation may resolve the dispute by settlement.  The Grantee and the Corporation shall equally share the costs charged by the American Arbitration Association or its successor, but the Grantee and the Corporation shall otherwise be solely responsible for their own respective counsel fees and expenses.  The decision of the arbitrator(s) shall be made in writing, setting forth the award, the reasons for the decision and award and shall be binding and conclusive on the Grantee and the Corporation.  Further, neither the Grantee nor the Corporation shall appeal any such award.  Judgment of a court of competent jurisdiction may be entered upon the award and may be enforced as such in accordance with the provisions of the award.

 

  

6

  

 

15.           Integration and Severability.  This Agreement embodies the entire agreement and understanding among the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof.  In case any one or more of the provisions contained in this Agreement or in any instrument contemplated hereby, or any application thereof, shall be invalid, illegal or unenforceable in any respect, under the laws of any jurisdiction, the validity, legality and enforceability of the remaining provisions contained herein and therein, and any other application thereof, shall not in any way be affected or impaired thereby or under the Laws of any other jurisdiction.

 

16.           Headings.  The headings of the articles, sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part of this Agreement.

 

17.            Benefit of Agreement.  This Agreement shall be for the benefit of and shall be binding upon the heirs, executors, administrators and successors and permitted assigns of the parties hereto.

 

  

7

  

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first above written.

 

	 	

PRESIDENTIAL REALTY CORPORATION

	 
	 	 	 	 
	 	 
By: 

	 
/s/ Jeffery F. Joseph

	 
	 	 	

Name: Jeffery F. Joseph

	 
	 	 	

Title:  President

	 
	 	 	 	 
	 	 	 	 
	 	 	 
/s/ Nickolas W. Jekogian, III

	 
	 	 	 
Nickolas W. Jekogian, III

	 

 

  

8

  

 

EXHIBIT A

NOTICE OF EXERCISE OF STOCK OPTION

TO PURCHASE SHARES OF CLASS B COMMON STOCK OF

PRESIDENTIAL REALTY CORPORATION

 

	Name                                                               	 	 	 
	Address                                                          	
 

	 	 
	 
Attn:                                                               

	 	 	 
	 
Date                                                               

	 	 	 
	 	 	 	 
	 	 	 	 
	 
Presidential Realty Corporation

	 	 	 
	 
180 South Broadway

	 	 	 
	 
White Plains, New York 10605

	 	 	 
	 	 	 	 
	 
Attention:  Chairman of the Board

	 	 	 
	 	 	 	 
	 
Re:           Exercise of Stock Option

	 	 	 

 

Gentlemen:

Pursuant to the provisions of the Stock Option Agreement (“Option Agreement”) dated as of ____________, 2011, between Presidential Realty Corporation (“Corporation”) and the Undersigned, the Undersigned hereby elects to exercise options granted to the Undersigned to purchase ________ shares of Class B Common Stock, par value $0.10 per shares of the Corporation (the “Class B Stock”).

 

Enclosed is a certified check (or bank cashier's check) for $________________ for the full purchase price, payable to the order of the Corporation.

 

As soon as the Stock Certificate is registered in the name of the Undersigned, please deliver it to the Undersigned at the above address.

 

 

	 
 

	 	 
Very truly yours,

	 
	 	 	 
__________________________

	 

 

  

 

  

 

	 	 	 	 
	 
AGREED TO AND ACCEPTED BY:

	 	 	 
	 	 	 	 
	 
PRESIDENTIAL REALTY CORPORATION

	 	 	 
	 	 	 	 
	 
By:____________________________

	 	 	 
	 	 	 	 
	 
Name: _________________________

	 	 	 
	 	 	 	 
	 
Title:___________________________

	 	 	 
	 	 	 	 
	 
Number of Shares

	 	 	 
	 
Exercised:____________

	 	 	 
	 	 	 	 
	 
Number of Shares

	 	 	 
	 
Remaining: ___________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00196-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00196-of-00352.parquet"}]]