Exhibit 10.1
AGREEMENT
This Agreement (the "Agreement") is entered into this 9th day of
September, 2005, by and between Sizeler Property Investors, Inc., a Maryland
corporation ("Sizeler" or the "Company"), on the one hand, and First Union Real
Estate Equity and Mortgage Investments, an Ohio business trust, (the
"Proponent"), on the other hand.
In consideration for the covenants and other agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
1. Covenants of Sizeler. Sizeler represents, warrants, covenants and
agrees that, in reliance on the covenants and agreements of Proponent set forth
in Section 2 below and the mutual covenants and agreements of the parties set
forth in Section 3 below:
(a) the Board of Directors of Sizeler (the "Board") has elected one
designee of Proponent reasonably acceptable to the Board to fill a vacancy on
the Board that has been created by the resignation of one Sizeler director (who
was originally elected to serve until the 2006 annual meeting of stockholders)
concurrently with the execution hereof, which election shall be effective upon
the execution and delivery of this Agreement; such designee shall serve until
the 2006 annual meeting of stockholders and until his successor is elected and
qualifies;
(b) in the event that the size of the Board is increased to eight or
more persons, whether by action of the Board or Sizeler's stockholders, the
Board will take all steps necessary to provide that two designees of Proponent
are members of the Board; without the consent of the Proponent or unless the
holders of at least a majority of the voting power of Sizeler's outstanding
stock shall have approved such increase, the size of the Board shall not be
increased to greater than eight persons;
(c) provided that Proponent has not nominated its own slate of
directors or made a stockholder proposal, the Board (including its nominating
committee) will renominate Proponent's designee or designees (if there are two
designees as a result of paragraph 1(b)) for reelection at the 2006 and 2007
annual meetings of stockholders;
(d) the Board (including its nominating committee) will nominate,
present and recommend for election to the Sizeler stockholders at Sizeler's 2005
annual meeting of stockholders (the "2005 Annual Meeting") a slate of two
director candidates consisting of Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx (the
"Board Nominees"), subject to any decision one or more of such Board Nominees
may make not to stand for election;
(e) the Board has elected (and will reelect consistent with
paragraph 1(c)) a minimum of one designee of Proponent to serve on its
Compensation Committee and its Real Estate Acquisition Committee, effective upon
execution and delivery of this Agreement. The Board will not alter the current
practice that all independent directors of the Board (determined with reference
to the provisions of the New York Stock Exchange Listed Company Manual (the
"Listed Company Manual")) are the only members of the Board to serve on the
Nominating and Corporate Governance Committee. The Board has renamed the Real
Estate Acquisition Committee the "Strategic Direction and Acquisition
Committee." The Board has adopted a charter for the Strategic Direction and
Acquisition Committee, a copy of which is attached hereto as Exhibit A;
(f) the Board has adopted, declared advisable and recommended for
stockholder approval at the 2005 Annual Meeting an amendment of the Company's
Articles of Incorporation (the "Charter"), attached hereto as Exhibit B, to
effect the elimination of the Company's staggered board of directors by the time
of the 2007 annual meeting of stockholders. This will be accomplished by
providing that the two nominees elected at the 2005 Annual Meeting will be
elected to a one-year term; that at Sizeler's 2006 annual meeting of
stockholders all nominees (whether elected at the 2005 Annual Meeting or serving
for a three year term ending at the 2006 annual meeting) will be elected to a
one year term, and that at Sizeler's 2007 annual meeting of stockholders and
thereafter, all nominees will be elected to a one year term. If the foregoing
amendment to the Charter is adopted by the requisite vote of the stockholders,
the Company shall cause an amendment to the Charter to be promptly filed with
the Maryland State Department of Assessments and Taxation and shall cause its
Bylaws to be amended to the extent necessary to reflect such amendment;
(g) Sizeler's 2006 annual meeting of stockholders will be held
within the 31 days commencing September 27, 2006. The Company will give a
minimum of 30 days' advance public notice of its nominees for election or
reelection to the Board;
(h) through October 31, 2006, the Company will not issue any equity
securities (or securities convertible into or redeemable for equity securities)
for cash (except for issuances to employees and to officers and directors under
stockholder-approved plans), unless such issuance has been approved by a
majority of the Board which majority shall include at least one designee of
Proponent;
(i) the Board has adopted an amendment to the Bylaws of the Company
in the form set forth in Exhibit C hereto;
2
(j) the Company shall cause to be filed with the Securities and
Exchange Commission within two business days of the date hereof a Current Report
on Form 8-K disclosing the agreements provided for herein and an amendment to
its Proxy Statement for the 2005 Annual Meeting providing for the proposal
contemplated by Section 1(f) hereof and such other changes as may be required or
advisable; and
(k) The Company will reimburse the Proponent for up to $375,000 of
documented legal and proxy-related expenses within 10 business days of receipt
of acceptable supporting documentation.
2. Covenants of Proponent. Proponent, on behalf of itself and its
executive officers, and affiliates (i.e. persons controlling, controlled by, or
under common control with the Proponent), represents, warrants, covenants and
agrees that, in reliance on the covenants and agreements of Sizeler set forth in
Section 1 above and the mutual covenants set forth in Section 3:
(a) Proponent will support the election of the Board Nominees,
agrees to vote all shares beneficially owned by it in favor of the Board
Nominees, and agrees to refrain from taking any action inconsistent with the
foregoing; Proponent has executed an irrevocable proxy in the form attached
hereto as Exhibit D;
(b) Proponent will cause certain of its executive officers to
deliver the undertaking set forth in Exhibit E;
(c) Proponent will not: (i) solicit authority, directly or
indirectly, from any Sizeler stockholder, or directly or indirectly encourage or
assist any other party to solicit authority from any Sizeler stockholder, to
elect or vote for any candidate or candidates for election to the Board at the
2005 Annual Meeting other than the Board Nominees or otherwise present for
consideration to any Sizeler stockholder in connection with the 2005 Annual
Meeting any candidates other than the Board Nominees, (ii) engage in any
campaign or efforts to have votes withheld from or otherwise discredit any of
the Board Nominees in connection with the 2005 Annual Meeting or cause any other
party to do so, (iii) solicit authority, directly or indirectly, from any
Sizeler stockholder, or directly or indirectly encourage or assist any other
party to solicit authority from any Sizeler stockholder, to make or vote for any
proposal regarding any possible liquidation of the Company; or (iv) assist any
other party in doing any of the foregoing;
(d) within two business days hereof, Proponent will amend or cause
to be amended its Schedule 13D to indicate that: (i) Proponent will not solicit
authority to elect candidates to the Board at the 2005 Annual Meeting other than
the Board Nominees, in light of reaching an agreement with the Company set forth
herein; (ii) Proponent will not take any action in furtherance of any
non-binding shareholder proposal for the liquidation of the Company; (iii)
Proponent has abandoned all demands related to: (a) the liquidation of the
Company; (b) cancellation of the Company's shareholder rights plan and the
3
non-transferable rights issued thereunder and currently outstanding; (c) the
sale of the Company's enclosed regional malls; (d) removal of the Company's
executive officers; (e) declaration of a special dividend; and (f) any other
matter described in Proponent's preliminary proxy statement filed with the
Securities and Exchange Commission on August 12, 2005 ; and (iv) Proponent will
not take any action in furtherance of the items described in the foregoing
clause (iii), except to the extent that any such actions have been approved by a
majority of the Board;
(e) the Proponent hereby withdraws the notices of its intention to
nominate Xxxxxxx X. Xxxxxx and Xxxxx Xxxxxxxxx to the Board and the notice of
its intention to make a shareholder proposal favoring a liquidation of the
Company, and, promptly following the joint public announcement of this
Agreement, shall advise the Securities and Exchange Commission in writing of the
same; for purposes of clarity, any demand to inspect certain records and lists
of Sizeler stockholders (including any list of non-objecting beneficial owners)
and certain other documents, to the extent remaining outstanding, is hereby
rescinded; and
(f) Proponent shall not, prior to the Company's public announcement
contemplated by Section 1(g) hereof, directly or indirectly (i) engage in any
"solicitation" of "proxies" (as such terms are used in the proxy rules
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act")), or
form, join in or in any way participate in a "group" (as defined in Regulation
13D under the Exchange Act) with respect to the voting securities of the
Company, (ii) grant any proxies with respect to any voting stock of the Company,
other than in connection with a solicitation of proxies by the Board, (iii) take
any action to call a special meeting of stockholders of the Company, (iv) make
any stockholder proposals in respect of the Company, including but not limited
to proposals (a) to nominate directors to be elected at any annual or special
meeting of the stockholders of the Company, (b) relating to any liquidation of
the Company, (c) relating to cancellation of the Company's shareholder rights
plan and the non-transferable rights issued thereunder and currently
outstanding; (d) providing for the sale of the Company's enclosed regional
malls; (e) providing for the removal of the Company's executive officers; and
(f) relating to any declaration of any special dividend; (v) take any action
that would result in Proponent, whether acting alone or together with one or
more other persons or as participants in a group, becoming the Beneficial Owner
or the Constructive Owner (as defined in the Charter) of a percentage of the
Company's common stock in excess of the Ownership Limit (as defined in the
Charter), provided that the Proponent shall not be restricted by this clause (v)
from making an offer to acquire any or all of the Company's outstanding common
stock in response to or following a similar offer by a person who is not
affiliated with the Proponent (other than an affiliation arising solely from
Proponent being a significant stockholder of Sizeler and having one or more
designees on the Board) and whom the Proponent has not encouraged or assisted in
making such an offer; or (vi) take any action in furtherance of any of the
foregoing.
4
3. Mutual Covenants.
(a) The Company and the Proponent will issue or cause to be issued,
on or about 8:30 a.m. on September 12, 2005, a press release in the form
attached hereto as Exhibit F.
(b) The parties have executed the Mutual General Release in the form
of Exhibit G.
(c) The Company and the Proponent will, concurrently with the
execution hereof, execute a stipulation of voluntary dismissal pursuant to Rule
41(a) of the Federal Rules of Civil Procedure, in the case of Sizeler Property
Investors, Inc., J. Xxxxxxx Xxxxx, Xxxxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxxx X.
Xxxxxx, Xxxxxx X. Xxxxxxx, Xx., Xxxxx XxXxxxxxx, Xxxxxxx Xxxxxxxxxx, Xxxxx X.
Xxxxxxx and Xxxxxxxx X. Xxxxxxx v. First Union Real Estate Equity & Mortgage
Investments, Civil Action No. 1:05-cv-718-RDB in the form of Exhibit H hereto.
The Company will cause the stipulation to be filed within 2 business days of the
execution hereof.
4. No Assurances. No party to this Agreement provides any guarantees or
assurances that each of the Board Nominees will be elected by the stockholders,
will agree to serve, or will actually serve, a full term if elected and no party
makes any representation or warranty as to the fitness of any Board Nominee to
serve on the Board.
5. General.
(a) Each of the parties hereto represents and warrants to the other
that:
(i) Such party is duly organized, validly existing and in good
standing under the laws of the State of its formation.
(ii) The execution, delivery of, and performance of such
party's obligations and responsibilities under, this Agreement has
been duly and validly authorized by all necessary action on the part
of such party, including, without limitation approval by such
party's Board of Directors, and this Agreement is a valid and
binding obligation of such party and enforceable against such party
in accordance with its terms.
(iii) Neither the execution and delivery of this Agreement by
such party, nor the performance by such party of its obligations
hereunder, will result in a breach, violation or default by such
party of any provision of law or of its organizational documents or
5
of any other agreement or arrangement to which such party is a party
or by which it is bound or to which it or its assets is subject.
(iv) The individual set forth below as signatory to this
Agreement for such party has the authority to execute this Agreement
on behalf of such party and to bind such party to the terms hereof.
(b) This Agreement shall be governed by the laws of the State of
Maryland, without regard to the conflicts of law provisions thereof. Any
controversy arising out of this Agreement shall be litigated exclusively in the
U.S. District Court for the District of Maryland, Northern Division or in the
Circuit Court for Baltimore City, Maryland.
(c) (i) The covenants contained in this Agreement shall expire
immediately following conclusion of the Company's 2006 annual stockholders'
meeting; provided that the covenants in Sections 1(b), 1(c) and 1(e) shall
expire immediately following conclusion of the Company's 2007 annual
stockholders' meeting.
(ii) Notwithstanding any other provision of this Agreement,
the covenants of Sizeler contained in this Agreement shall expire immediately
upon the Proponent being the beneficial owner of less than 2.0% of the issued
and outstanding common stock of Sizeler, determined by reference to (a) the
actual number of shares of the common stock of Sizeler issued and outstanding at
the close of business on a given day as certified by Sizeler's transfer agent
and (b) either (i) the most recently available information filed with the
Securities and Exchange Commission by the Proponent regarding the Proponent's
holdings of the common stock of Sizeler, or (ii) the actual number of shares of
common stock of Sizeler held by the Proponent on any given business day, which
number the Proponent hereby covenants to certify and provide to Sizeler within
two business days of a request therefor by Sizeler.
(d) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute
one instrument.
(e) The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties hereto. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or liabilities under or
by reason of this Agreement, except as expressly provided in this Agreement.
(f) If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties hereto agree to renegotiate such
provision(s) in good faith so as to become enforceable while hewing as closely
as possible to the original intent. In the event that the parties hereto cannot
reach a mutually agreeable and enforceable replacement for such provision(s),
6
then (i) such provision shall be excluded from this Agreement, (ii) the balance
of this Agreement shall be interpreted as if such provision were so excluded and
(iii) the balance of this Agreement shall remain enforceable in accordance with
its terms.
(g) Each party hereto acknowledges that its breach of this Agreement
would cause irreparable injury to the other for which monetary damages would not
be an adequate remedy. Accordingly, a party hereto will be entitled to
injunctions and other equitable remedies in the event of such a breach by the
other party hereto. (h) This Agreement constitutes the entire agreement between
the parties hereto pertaining to the subject matter hereof, and any and all
other written or oral agreements existing between the parties with respect to
the subject matter hereof are expressly canceled.
[Signature page follows]
7
In Witness Whereof, the parties hereto have caused this Agreement to be
executed and delivered by themselves or their duly authorized officer or
attorney-in-fact as of the date first set forth above.
SIZELER PROPERTY INVESTORS, INC.
By:
------------------------------------
Print Name:
----------------------------
Title:
---------------------------------
FIRST UNION REAL ESTATE
EQUITY AND MORTGAGE
INVESTMENTS
By:
------------------------------------
Print Name:
----------------------------
Title:
---------------------------------
8
