Exhibit 10(a)
SEVERANCE AND CHANGE IN CONTROL AGREEMENT
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Amendment and Restatement of Agreement dated as of _______________
AGREEMENT by and between EASTGROUP PROPERTIES, INC. a Maryland corporation
(the "Company"), with offices at 300 One Xxxxxxx Place, 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000-0000, and ____________________ (the "Executive"), an
individual residing at ____________________, dated as of the ____ day of
__________, 200_.
WHEREAS, the Company entered into an agreement designated the Change in
Control Agreement with the Executive, dated as of the ____ day of __________,
____, and has since amended that Agreement (as amended, the "Prior Agreement");
and
WHEREAS, the intent of the Prior Agreement was to provide the Executive
with compensation arrangements upon a Change in Control (as defined in the Prior
Agreement) that provided the Executive with financial security upon a Change in
Control and were competitive with those of other corporations, and that would
not be subject to distortion, when considered on a net after-tax basis, by the
excise tax imposed by section 4999 of the Internal Revenue Code of 1986, as
amended; and
WHEREAS, the Board of Directors of the Company (the "Board") confirms the
intent and purposes of the Prior Agreement and believes that the interests of
the Company and its stockholders would be further served by establishing certain
severance and death benefits for the Executive; and in order to accomplish these
objectives, the Board has caused the Company to enter into this Agreement as an
amendment to and restatement of the Prior Agreement.
NOW THEREFORE, the parties, for good and valuable consideration and
intending to be legally bound, agree as follows:
1. Operation and Term of Agreement. This Agreement shall amend and restate
the Prior Agreement effective immediately upon its execution. This Agreement may
be terminated by the Company upon 24 months' advance written notice to the
Executive; provided, however, that after a Change in Control of the Company
during the term of this Agreement, this Agreement shall remain in effect until
all of the obligations of the parties under the Agreement are satisfied and the
Protection Period (as defined below) has expired. Prior to a Change in Control
this Agreement shall immediately terminate upon termination of the Executive's
employment or upon the Executive's ceasing to be an elected officer of the
Company, except in the case of such termination under circumstances set forth in
Section 2(g), 3, 4, or 5 below.
2. Certain Definitions. The following words and phrases shall have the
meanings given for the purposes of this Agreement:
(a) "Average Annual Compensation" shall mean an amount equal to the annual
average of the sums of (i) the Executive's annual base salary from the Company
plus (ii) the amount of cash bonus paid by the Company to the Executive, in each
case for the three calendar years that ended immediately before (or, if
applicable, coincident with) a specified date.
(b) "Breach of Duty" shall mean (i) the Executive's willful misconduct in
the performance of his duties toward the Company; or (ii) the commission or
omission of any act by the Executive that constitutes on the part of the
Executive fraud or dishonesty toward the Company; provided, however, that
"Breach of Duty" shall not include the Executive's lack of professional
qualifications. For purposes of this Agreement, an act, or failure to act, on
the Executive's part shall be considered "willful" only if done, or omitted, by
him not in good faith and without reasonable belief that his action or omission
was in the best interest of the Company. The Executive's employment shall not be
deemed to have been terminated for "Breach of Duty" unless the Company shall
have given or delivered to the Executive (A) reasonable notice setting forth the
reasons for the Company's intention to terminate the Executive's employment for
"Breach of Duty"; (B) a reasonable opportunity, at any time during the 30-day
period after the Executive's receipt of such notice, for the Executive, together
with his counsel, to be heard before the Board; and (C) a Notice of Termination
(as defined in Section 13 below) stating that, in the good faith opinion of not
less than a majority of the entire membership of the Board, the Executive was
guilty of the conduct set forth in clauses (i) or (ii) of the first sentence of
this Section 2(b).
(c) "Cause" shall mean (i) the continued failure by the Executive to
perform his material responsibilities and duties toward the Company (other than
any such failure resulting from the Executive's incapacity due to physical or
mental illness); (ii) the engaging by the Executive in willful or reckless
conduct that is demonstrably injurious to the Company monetarily or otherwise;
(iii) the Executive's conviction, entry of a plea of nolo contendere, or
admission of guilt, for any felony or any lesser crime if such lesser crime
involves fraud or dishonesty, moral turpitude, or any conduct that adversely
affects the business or reputation of the Company, (iv) the commission or
omission of any act by the Executive that constitutes on the part of the
Executive fraud, dishonesty, or malfeasance, misfeasance, or nonfeasance of duty
toward the Company; or (v) any other action or conduct by the Executive that is
injurious to the Company, its business, or its reputation; provided, however,
that "Cause" shall not include the Executive's lack of professional
qualifications. For purposes of this Agreement, an act, or failure to act, on
the Executive's part shall be considered "willful" or "reckless" only if done,
or omitted, by him not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company.
(d) "Change in Control" shall mean a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not the Company is then subject to such
reporting requirements; provided that, without limitation, a Change in Control
shall be deemed to have occurred if (i) any person (as such term is used in
section 13(d) and 14(d) of the Exchange Act) is or becomes beneficial owner (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30 percent or more of the combined voting
power of the Company's then outstanding securities; or (ii) during any period of
two consecutive years, the following persons (the "Continuing Directors") cease
for any reason to constitute a majority of the Board: individuals who at the
beginning of such period constitute the Board and new directors each of whose
election to the Board or nomination for election to the Board by the Company's
security holders was approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the beginning of the period or
whose election or nomination for election
was previously so approved; or (iii) the security holders of the Company approve
a merger or consolidation of the Company with any other corporation, other than
(A) a merger or consolidation that would result in the voting securities of the
Company outstanding immediately before the merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of such surviving entity) a majority of the voting securities of the
Company or of such surviving entity outstanding immediately after such merger or
consolidation or (B) a merger of consolidation that is approved by a Board
having a majority of its members persons who are Continuing Directors, of which
Continuing Directors not less than two-thirds have approved the merger or
consolidation; or (iv) the security holders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Disability," for purposes of this Agreement, shall mean total
disability as defined in any long-term disability plan sponsored by the Company
in which the Executive participates, or, if there is no such plan or it does not
define such term, then Disability shall mean the physical or mental incapacity
of the Executive that prevents the Executive from substantially performing the
duties of the office or position to which the Executive was elected or appointed
by the Board for a period of at least 180 days, which incapacity is expected to
be permanent and continuous through the Executive's 65th birthday.
(g) The "Change in Control Date" shall be any date during the term of this
Agreement on which a Change in Control occurs. Notwithstanding any contrary
provision in this Agreement, if the Executive's employment or status as an
elected officer with the Company is terminated by the Company within six months
before the date on which a Change in Control occurs, and it is reasonably
demonstrated that such termination (i) was at the request of a third party who
has taken steps reasonably calculated or intended to effect a Change in Control
or (ii) otherwise arose in connection with or anticipation of a Change in
Control, then for the purposes of this Agreement the "Change in Control Date"
shall mean the date immediately before the date of such termination.
(h) "Good Reason" means:
(i) the assignment to the Executive within the Protection Period of any
duties inconsistent in any respect with the Executive's position (including
status, offices, titles and reporting requirements, authority, duties, or
responsibilities), or any other action that results in a diminution in such
position, authority, duties or responsibilities, or any action by the Company
that has a materially adverse effect on the conditions under which the Executive
performs the Executive's day-to-day responsibilities and duties toward the
Company, as compared to such conditions before the Change in Control, excluding
for this purpose an isolated, insubstantial, and inadvertent action that is not
taken in bad faith and is remedied by the Company promptly after receipt of
notice given by the Executive;
(ii) a reduction by the Company in the Executive's base salary in effect
immediately before the beginning of the Protection Period or as increased from
time to time after the beginning of the Protection Period;
(iii) a failure by the Company to maintain plans providing benefits at
least as beneficial as those provided by any benefit or compensation plan
(including, without limitation, any incentive compensation plan, bonus plan, or
program, retirement, pension or savings plan, life insurance plan, health and
dental plan, or disability plan) in which the Executive is participating
immediately before the beginning of the Protection Period or any action taken by
the Company that would adversely affect the Executive's participation in, or
reduce the Executive's opportunity to benefit under, any of such plans or
deprive the Executive of any material fringe benefit enjoyed by him immediately
before the beginning of the Protection Period; provided, however, that a
reduction in benefits under the Company's tax-qualified retirement, pension, or
savings plans or its life insurance plan, health and dental plan, disability
plans, or other insurance plans, which reduction applies generally to
participants in the plans shall not constitute "Good Reason" for termination by
the Executive;
(iv) the Company's requiring the Executive, without the Executive's written
consent, to be based at any office or location in excess of 50 miles from his
office location immediately before the beginning of the Protection Period,
except for travel reasonably required in the performance of the Executive's
responsibilities;
(v) any purported termination by the Company of the Executive's employment
for Breach of Duty otherwise than as referred to in Section 2(b) of this
Agreement; or
(vi) any failure by the Company to obtain the assumption of the obligations
contained in this Agreement by any successor as contemplated in Section 12 of
this Agreement.
(i) "Parent" means any entity that directly or indirectly through one or
more other entities owns or controls more than 50 percent of the voting
securities or shares of beneficial interest of the Company.
(j) "Protection Period" means the period beginning on the Change in Control
Date and ending on the last day of the 24 calendar month following the Change in
Control Date.
(k) "Subsidiary" means a company 50 percent or more of the voting
securities of which are owned, directly or indirectly, by the Company.
3. Termination Without Cause, not During the Protection Period. Should the
Company terminate the Executive's employment without Cause (as defined in
Section 2(c)), other than during the Protection Period described in Section
2(j), the Company shall pay the amount described in Section 3(a) to the
Executive and, provided the Executive signs and does not revoke a waiver and
release agreement as described in Section 3(c), the Company shall also pay the
amount described in Section 3(b):
(a) The Executive's base salary and vacation pay (for vacation not taken)
accrued but unpaid through the date of termination of employment, to be paid in
cash upon the customary pay date.
(b) A lump sum severance payment in an amount equal to the product of 2
times the Executive's Average Annual Compensation as of the date of termination,
to be paid in cash within 30 days of the date of termination, except as required
in Section 7.
(c) As a condition of the receipt of the amount described in Section 3(b),
the Executive shall execute a waiver and release agreement, in a form
satisfactory to the Company and by the time specified by the Company, that
releases the Company and all affiliates from any and all claims of any nature
whatsoever, including, without limit, any and all statutory claims, and shall
not revoke the waiver and release within any revocation period required by law
or permitted by the Company.
4. Death During Employment. Should the Executive die while employed by the
Company, the Company shall pay the following amounts to the Executive's estate:
(a) The Executive's base salary and vacation pay (for vacation not taken)
accrued but unpaid through the date of the Executive's death.
(b) A lump sum death benefit in an amount equal to the Executive's Average
Annual Compensation as of the date of death, to be paid in cash within 60 days
of death.
5. Disability. During the first 90 days of a Disability, the Company shall
continue to pay the Executive's salary.
6. Benefits upon Termination under Certain Circumstances During the
Protection Period. If the Executive's employment is terminated by the Company
during the Protection Period other than for Breach of Duty or Disability and
other than as a result of the Executive's death, or if the Executive terminates
his employment during the Protection Period for Good Reason, the Company shall,
subject to Section 7, pay to the Executive in a lump sum in cash within ten days
after the date of termination the aggregate of the following amounts and shall
provide the following benefits:
(a) The Executive's base salary and vacation pay (for vacation not taken)
accrued but unpaid through the date of termination of employment; and
(b) A lump sum severance payment in an amount equal to 3 times the
Executive's Average Annual Compensation as of the Change in Control; and
(c) Within 30 days of the date of termination of employment, upon surrender
by the Executive of the outstanding options to purchase shares of beneficial
interest of the Company ("Shares of Beneficial Interest") granted to the
Executive by the Company (the "Outstanding Options") and any stock appreciation
rights granted to the Executive by the Company ("SARs"), an amount with respect
to each Outstanding Option and SAR (whether vested or not) equal to the
difference between the exercise price of such Outstanding Options and SARs and
the higher of (x) the fair market value of the Shares of Beneficial Interest on
the date of such termination (but not less than the closing price for the Shares
of Beneficial Interest on the New York Stock Exchange, or such other national
stock exchange on which such shares may be listed, on the last trading day such
shares traded prior to the date of termination); and (y) the
highest price paid for Shares of Beneficial Interest or, in the cases of
securities convertible into Shares of Beneficial Interest or carrying a right to
acquire Shares of Beneficial Interest, the highest effective price (based on the
prices paid for such securities) at which such securities are convertible into
Shares of Beneficial Interest or at which Shares of Beneficial Interest may be
acquired, by any person or group whose acquisition of voting securities has
resulted in a Change in Control of the Company; provided, however, that this
Section 6(c) shall not apply to the surrender of any Outstanding Option that is
an incentive stock option (within the meaning of section 422 of the Code); and
(d) The Company shall provide the Executive with life insurance coverage
and health plan coverage substantially comparable to the coverage the Executive
was receiving from the Company immediately before termination of employment; the
provision of such coverage will continue until the expiration of the 24-calendar
month period following the date of the termination of the Executive's
employment, if the Executive terminates his employment during the Protection
Period for Good Reason, or until the expiration of the 24-calendar month period
following the date of termination of employment if the Executive's employment is
terminated during the Protection Period by the Company other than for Breach of
Duty or Disability and other than as a result of Executive's death, or, in
either case, if earlier, until the date on which the Executive becomes eligible
for comparable coverage in connection with subsequent employment, provided,
however, that if such coverage is not available under the plans covering the
Company's employees, the Company may, at its option, substitute for the
provision of such coverage monthly payments to the Executive for the same period
in an amount equal to the reasonable monthly cost of securing comparable
coverage for an individual of the Executive's age on a standard risk basis; and
(e) All of the Executive's benefits accrued under any supplemental
retirement plans, excess retirement plans, and deferred compensation plans
maintained by the Company or any of its Subsidiaries shall become immediately
vested in full; and
(f) All of the Executive's Outstanding Options shall become immediately
vested and exercisable in full.
7. Conformance to Section 409A. Notwithstanding any other provision of this
Agreement, if the Executive is a "specified employee" within the meaning of
section 409A of the Internal Revenue Code upon the termination of his employment
with the Company, any payment otherwise due the Executive under this Agreement
during the six-month period following the Executive's separation from service
with the Company (within the meaning of section 409A of the Code) shall be
accumulated and paid to the Executive with interest at the rate payable on
three-month Treasury bills on the first day of the seventh full calendar month
following such separation from service.
8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit, bonus,
incentive, or other plans, practices, policies, or programs provided by the
Company or any of its Subsidiaries and for which the Executive may qualify, nor
shall anything in this Agreement limit or otherwise affect such rights as the
Executive may have under any stock option or other agreements with the Company
or any of its Subsidiaries. Any amount of vested benefit or any amount to which
the Executive is otherwise entitled under any plan, practice, policy, or program
of the Company or
any of its Subsidiaries shall be payable in accordance with the plan, practice,
policy, or program; provided, however, that if the Executive is entitled to
benefits under Section 3 or 6, the Executive shall not be entitled to severance
pay, or benefits similar to severance pay, under any plan, practice, policy, or
program generally applicable to employees of the Company or any of its
Subsidiaries. The provision of severance pay or other benefits pursuant to
Section 3 or 6 shall not be deemed to be a continuance of the Executive's
employment for any purposes.
9. Full Settlement; No Obligation to Seek Other Employment; Legal Expenses.
The Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations under this Agreement shall not be affected
by any set-off, counterclaim, recoupment, defense, or other claim, right, or
action the Company may have against the Executive or others. The Executive shall
not be obligated to seek other employment or take any action by way of
mitigation of the amounts payable to the Executive under any of the provisions
of this Agreement. In the event the Executive obtains a recovery or other relief
against the Company, the Company agrees to pay, upon written demand by the
Executive, all legal fees and expenses the Executive may reasonably incur as a
result of any dispute or contest by or with the Company or others regarding the
validity or enforceability of, or liability under, any provision of this
Agreement; if the Executive does not obtain such recovery or relief against the
Company, the Company shall pay one-half of such fees and expenses. In any such
action brought by the Executive for damages or to enforce any provisions of this
Agreement, the Executive shall be entitled to seek both legal and equitable
relief and remedies, including, without limitation, specific performance of the
Company's obligations under this Agreement, in the Executive's sole discretion.
10. Certain Additional Payments by the Company.
(a) Payment Subject to Excise Tax. If it shall be determined that any
payment or distribution made, or benefit provided, by the Company to or for the
benefit of Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 10) (a "Payment")
would be subject to the excise tax imposed by section 4999 of the Code (or any
similar excise tax) or any interest or penalties are incurred by Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are referred to collectively as the "Excise Tax"), then Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by Executive of all taxes (including any Excise
Tax, income tax, or payroll tax) imposed upon the Gross-Up Payment and any
interest or penalties imposed with respect to the taxes imposed upon the Gross
Up Payment, Executive retains from the Gross-Up Payment an amount equal to the
Excise Tax imposed upon the Payments.
(b) Determination of Gross-Up Payment. Subject to the provisions of Section
10(c), all determinations required to be made under this Section 10, including
the determination of whether a Gross-Up Payment is required and of the amount of
any such Gross-Up Payment, shall be made by tax counsel selected by the
independent public accounting firm then retained by the Company to audit its
financial statements and acceptable to the Company ("Tax Counsel"), which shall
provide detailed supporting calculations to both the Company and Executive
within 15 business days of the date of termination, if applicable, or such
earlier time as is requested by the Company, provided that any determination
that an Excise Tax is payable by
Executive shall be made on the basis of substantial authority. The Company shall
pay the initial Gross-Up Payment, if any, as determined pursuant to this Section
10(b), to Executive within five business days of the receipt of Tax Counsel's
determination, provided, however, that, if any Payment to which an Excise Tax
relates was not payable or distributable before that date, then the part of the
Gross Up Payment attributable to such Payment shall be paid to Executive at the
time such Payment is due. In either case, the Gross Up Payment shall be subject
to any withholding tax obligation determined by Tax Counsel to be applicable. If
Tax Counsel determines that no Excise Tax is payable by Executive, it shall
furnish Executive with a written opinion that he has substantial authority not
to report any Excise Tax on his Federal income tax return. Any determination by
Tax Counsel meeting the requirements of this Section 10(b) shall be binding upon
the Company and Executive; subject only to payments pursuant to the following
sentence based on a determination that additional Gross-Up Payments should have
been made, consistent with the calculations required to be made under this
Section 10 (the amount of such additional payments, including any interest and
penalties, are referred as the "Gross-Up Underpayment"). If the Company exhausts
its remedies pursuant to Section 10(c), and Executive is required to make a
payment of any Excise Tax, Tax Counsel shall determine the amount of the
Gross-Up Underpayment that has occurred and the Company shall promptly pay any
such Gross-Up Underpayment to or for the benefit of Executive, subject to any
withholding tax obligation determined by Tax Counsel to be applicable. The
Company shall pay the fees and disbursements of Tax Counsel.
(c) Company Remedies with Respect to IRS Claim. Executive shall notify the
Company in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of a Gross-Up Underpayment.
Such notification shall be given as soon as practicable but not later than ten
business days after Executive receives written notice of such claim and shall
apprise the Company of the nature of such claim and the date on which such claim
is requested to be paid. Executive shall not pay such claim before the last day
of the 30-day period following the date on which he gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies Executive in writing
before the last day of such period that it desires to contest such claim and
that it will bear the costs and provide the indemnification as required by this
sentence, Executive shall:
(i) give the Company any information reasonably requested by the Company
relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
counsel reasonably selected by the Company and reasonably satisfactory to
Executive,
(iii) cooperate with the Company in good faith in order effectively to
contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such
claim; provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold Executive harmless, on
an after-tax basis, for any Excise
Tax, income tax, or payroll tax, including interest and penalties, imposed as a
result of such representation and payment of costs and expenses. Without
limitation of the foregoing provisions of this Section 10(c), the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings,
hearings, and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct Executive to pay the tax claimed and xxx
for a refund or contest the claim in any permissible manner, and Executive
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction, and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs Executive to pay such claim and xxx for a refund, the Company shall
advance the amount of such payment to Executive, on an interest-free basis, and
shall indemnify and hold Executive harmless, on an after-tax basis, from any
Excise Tax, income tax, or payroll tax, including interest or penalties, imposed
with respect to such advance or with respect to any imputed income with respect
to such advance; and further provided that any extension of the statute of
limitations relating to the payment of taxes for the taxable year of Executive
with respect to which such contested amount is claimed to be due shall be
limited solely to such contested amount, unless Executive agrees otherwise.
Furthermore, the Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority. If the Company has
notified Executive that it desires to contest such an IRS claim but fails to
pursue the contest in good faith, or fails to pay the costs and expenses of the
contest, or, in the case the Company has directed Executive to pay the tax
claimed and xxx for a refund, fails to advance the amount of such payment to
Executive, then the Company shall forfeit its right to control the proceedings
taken in connection with such contest and Executive may, in his discretion,
assume control of such proceedings, provided, however, that Executive's
assumption or failure to assume control of such proceedings shall not negate the
Company's obligation to make a Gross-Up Underpayment; to bear and pay all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest; and to indemnify Executive, on an after-tax basis,
for any Excise Tax, income tax, or payroll tax, including interest and
penalties, imposed as a result of such payment of costs and expenses.
(d) Repayment of Advance from Refund. If, after the receipt by Executive of
an amount advanced by the Company pursuant to Section 10(c), Executive becomes
entitled to receive any refund with respect to such claim, Executive shall
(subject to the Company's complying with the requirements of Section 10(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited on the amount of the refund after taxes applicable to
such interest). If, after the receipt by Executive of an amount advanced by the
Company pursuant to Section 10(c) a determination is made that Executive shall
not be entitled to any refund with respect to such claim and the Company does
not notify Executive in writing within 30 days after such determination of its
intent to contest such denial of refund, then any obligation of Executive to
repay such advance shall be forgiven and the amount of such advance shall offset
the amount of Gross-Up Underpayment required to be paid.
(e) Treatment of Certain Interest and Penalties. Notwithstanding any
contrary provision of this Section 10, the amounts referred to in this Section
10 as "Excise Tax," "Gross Up Payment," and "Gross Up Underpayment" shall not
include, and the Company shall
not be obliged to pay or reimburse Executive for, any interest or penalties
incurred by Executive to the extent the Executive would not have incurred the
interest or penalties had the Executive, upon the Company's payment of a Gross
Up Payment or Gross Up Underpayment, promptly filed tax returns or amended
returns, or reported a tax liability, or made a payment of taxes, interest, and
penalties, that would, in any case, have been consistent with the premise of the
Gross Up Payment or Gross Up Underpayment.
11. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge, or data relating to the Company or any of its Subsidiaries, and their
respective businesses, obtained by the Executive during the Executive's
employment by the Company or any of its Subsidiaries and that has not become
public knowledge (other than by acts of the Executive or his representatives in
violation of this Agreement). After the date of termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company, communicate or divulge any such information, knowledge,
or data to anyone other than the Company and those designated by it. In no event
shall an asserted violation of the provisions of this Section 11 constitute a
basis for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.
12. Successors.
(a) This Agreement is personal to the Executive and shall not be assignable
by the Executive other than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives or successors in interest. The Executive may
designate a successor or successors in interest to receive any and all amounts
due the Executive under this Agreement after the Executive's death. A
designation of a successor in interest shall be made in writing, signed by the
Executive, and delivered to the Company pursuant to Section 16(b). This Section
12(a) shall not supersede any designation of beneficiary or successor in
interest made by the Executive or provided for under any other plan, practice,
policy, or program of the Company.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business or assets of the Company and any Parent of the Company or any
successor and without regard to the form of transaction utilized to acquire the
business or assets of the Company, to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or parentage had taken place. As
used in this Agreement, "Company" shall mean the Company as defined above and
any successor to its business or assets as aforesaid (and any Parent of the
Company or any successor) that is required by this clause to assume and agree to
perform this Agreement or that otherwise assumes and agrees to perform this
Agreement.
13. Notice of Termination. Any termination of the Executive's employment by
the Company for Cause or by the Executive for Good Reason shall be communicated
by Notice of Termination to the other party given in accordance with Section
16(b) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a written notice
that (i) indicates the specific termination provision in this Agreement relied
upon, (ii) sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's employment under the
provision so indicated, and (iii) if the date of termination is other than the
date of receipt of such notice, specifies the termination date (which date shall
be not more than fifteen days after the giving of such notice). The failure by
the Executive to set forth in the Notice of Termination any fact or circumstance
that contributes to a showing of Good Reason shall not waive any right of the
Executive under this Agreement or preclude the Executive from asserting such
fact or circumstance in enforcing his rights.
14. Requirements and Benefits if Executive Is Employee of Subsidiary of
Company. If the Executive is an employee of any Subsidiary of the Company, he
shall be entitled to all of the rights and benefits of this Agreement as though
he were an employee of the Company and the term "Company" shall be construed to
include the Subsidiary by which the Executive is employed. The Company
guarantees the performance of its Subsidiary under this Agreement.
15. Dispute Resolution. The Company and the Executive shall attempt to
resolve between them any dispute that arises under this Agreement. If they
cannot agree within ten days after either party submits a demand for arbitration
to the other party, then the issue shall be submitted to arbitration with each
party having the right to appoint one arbitrator and those two arbitrators
mutually selecting a third arbitrator. The rules of the American Arbitration
Association for the arbitration of commercial disputes shall apply and the
decision of two of the three arbitrators shall be final. The arbitrators must
reach a decision within 60 days after the selection of the third arbitrator. The
arbitration shall take place in Jackson, Mississippi. The arbitrators shall
apply Mississippi law. The costs of such arbitration shall be shared equally by
the Executive and the Company.
16. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Mississippi, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the Agreement
and shall have no force or effect. This Agreement may be amended or modified
only by a written agreement executed by the parties or their respective
successors and legal representatives.
(b) All notices and other communications under this Agreement shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, to the addresses
for each party as first written above or to such other address as either party
shall have furnished to the other in writing in accordance with this Section 16.
Notices and communications to the Company shall be addressed to the attention of
the Company's Corporate Secretary. Notice and communications shall be effective
when actually received by the addressee.
(c) Whenever reference is made in this Agreement to any specific plan or
program of the Company, to the extent that the Executive is not a participant in
the plan or program or has no benefit accrued under it, whether vested or
contingent, as of the Change in
Control Date, then such reference shall be null and void and the Executive shall
acquire no additional benefit as a result of such reference.
(d) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(e) The Company may withhold from any amounts payable under this Agreement
such federal, state, or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
(f) The Company's or the Executive's failure to insist upon strict
compliance with any provision of this Agreement shall not be construed to be a
waiver of such provision or any other provision.
(g) Except in the case of termination of employment or elected officer
status under the circumstances set forth in Section 2(g), 3, 4, or 5 above, upon
a termination of the Executive's employment or upon the Executive's ceasing to
be an elected officer of the Company, in each case, prior to the Change in
Control Date, there shall be no further rights under this Agreement.
IN WITNESS WHEREOF, the Executive has set his hand to this Agreement and,
pursuant to the authorization from the Board, the Company has caused this
Agreement to be executed as of the day and year first above written.
EASTGROUP PROPERTIES, INC.
By:
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EXECUTIVE
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