Exhibit 10(r)
AMENDED AND RESTATED
SEVERANCE AND CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT, effective as of the __ day of March, 2002, is by and
between REGENCY CENTERS CORPORATION, a Florida corporation (the "Company") and
XXXXXX X. XXXXX (the "Employee").
WHEREAS, the Company, formerly known as Regency Realty Corporation, and
the Employee previously entered into a change of control agreement, dated the
1st day of June, 2000 (the "Prior Agreement"); and
WHEREAS, to further induce the Employee to remain as an executive
officer of the Company and a key employee of the Company and/or one or more of
the Regency Entities (as defined below), the Company and the Employee desire to
enter into an amended and restated severance and change of control agreement
(the "Agreement"), which Agreement will replace and supersede the Prior
Agreement; and
WHEREAS, the parties agree that the restrictive covenants underlying
certain of the Employee's obligations under this Agreement are necessary to
protect the goodwill or other business interests of the Regency Entities and
that such restrictive covenants do not impose a greater restraint than is
necessary to protect such goodwill or other business interests.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, including the Employee's agreement to continue as an
executive officer of the Company and as an employee of one or more of the
Regency Entities, the Employee's agreement to provide consulting services
following certain terminations of employment pursuant to the terms hereof, and
the restrictive covenants contained herein, the Employee and the Company agree
as follows:
1. Definitions. The following words, when capitalized in this
Agreement, shall have the meanings ascribed below:
(a) "Affiliate" shall have the meaning given to such term in
Rule 12b-2 of the General Rules and Regulations of the Exchange Act.
(b) "Board" means the Board of Directors of the Company.
(c) "Cause" means:
(i) the willful and substantial failure or refusal
of the Employee to perform duties assigned to the Employee
(unless the Employee shall be ill or disabled) under
circumstances where the Employee would not have Good Reason to
terminate employment hereunder, which failure or refusal is not
remedied by the Employee within 30 days after written notice
from the
Company's Chief Executive Officer or Chief Operating Officer or
the Board of such failure or refusal (for purposes of clarity,
the Employee's poor performance shall not constitute willful and
substantial failure or refusal to perform duties assigned to the
Employee, but the failure to report to work shall);
(ii) a material breach of the Employee's fiduciary
duties to any Regency Entity (such as obtaining secret profits
from the Regency Entity) or a violation by the Employee in the
course of performing the Employee's duties to any Regency Entity
of any law, rule or regulation (other than traffic violations or
other minor offenses) where such violation has resulted or is
likely to result in material harm to any Regency Entity, and
in either case where such breach or violation constituted an act
or omission performed or made willfully, in bad faith and
without a reasonable belief that such act or omission was within
the scope of the Employee's employment hereunder; or
(iii) the Employee's engaging in illegal conduct
(other than traffic violations or other minor offenses) which
results in a conviction (or a nolo contendere plea thereto)
which is not subject to further appeal and which is injurious to
the business or public image of any Regency Entity.
(d) "Change of Control" shall mean the occurrence of any one
or more of the following events:
(i) an acquisition, in any one transaction or series
of transactions, after which any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act), has beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 25% or more
(or an acquisition of an additional 5% or more if such
individual, entity or group already has beneficial ownership of
25% or more) of either the then outstanding shares of Company
common stock or the combined voting power of the then outstand-
ing voting securities of the Company, but excluding, for this
purpose, any such acquisition (A) from the Company, (B) by the
Company or any employee benefit plan (or related trust) of the
Company, (C) by any Security Capital Entity (other than General
Electric Capital Corporation and EB Acquisition Corp.) made
while the standstill provisions of the Shareholders Agreement
are in effect and made in compliance with such provisions, (D)
pursuant to the merger described in the Agreement and Plan of
Merger, dated as of December 14, 2001, by and among Security
Capital Group Incorporated, General Electric Capital Corporation
and EB Acquisition Corp., or (E) by any corporation with respect
to which, following such acquisition, all of the then outstand-
ing shares of common stock and voting securities of such
corporation are then beneficially owned, directly or indirectly,
in substantially the same proportions, by the beneficial owners
of the common stock and voting securities of the Company
immediately prior to such acquisition;
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(ii) 50% or more of the members of the Board (A) are
not Continuing Directors, or (B) whether or not they are
Continuing Directors, are nominated by or elected by the same
Beneficial Owner (for this purpose, a director of the Company
shall be deemed to be nominated or elected, respectively, by
the Security Capital Entities, General Electric Capital
Corporation or EB Acquisition Corp. if the director also is an
employee or director of Security Capital Group, Inc., General
Electric Capital Corporation or EB Acquisition Corp., including
any successors) or are elected or appointed in connection with
an acquisition by the Company (whether through purchase, merger
or otherwise) of all or substantially all of the operating
assets or capital stock of another entity;
(iii) the (A) consummation of a reorganization,
merger, share exchange, consolidation or similar transaction,
in each case, with respect to which the individuals and entities
who were the respective beneficial owners of the common stock
and voting securities of the Company immediately prior to such
transaction do not, following such transaction, beneficially
own, directly or indirectly, more than 50% of, respectively,
the then outstanding shares of common stock and voting
securities of the corporation resulting from such reorganiza-
tion, merger or consolidation, (B) consummation of the sale or
other disposition of all or substantially all of the assets of
the Company or (C) approval by the shareholders of the Company
of a complete liquidation or dissolution of the Company, in each
case, other than pursuant to the merger described in the
Agreement and Plan of Merger, dated as of December 14, 2001, by
and among Security Capital Group Incorporated, General Electric
Capital Corporation and EB Acquisition Corp.; or
(iv) termination of the standstill provisions in the
Stockholders Agreement.
For clarity, the termination of the standstill provisions
described in Section 1(d)(iv) shall occur on the effective
date of such termination, and not on the date notice of intent
not to extend the provisions is given. More than one Change of
Control may occur during the term of this Agreement. For
purposes of determining the term of this Agreement pursuant to
Section 2 and the two-year period following a Change of
Control pursuant to Section 4, a Change of Control shall be
deemed to have occurred (and, accordingly, a new period shall
begin) each time one of the events described in this Section
1(d) occurs.
(e) "Code" means the Internal Revenue Code of 1986, as
amended.
(f) "Compete" means to directly or indirectly own (other
than a 5% or less interest in a public company), manage, operate or control, or
provide services as an employee, officer, director, consultant or otherwise for,
any nationally-based, publicly-traded REIT whose primary business is related to
the ownership of grocery-anchored shopping centers and that is comparable to the
Company in terms of total assets.
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(g) "Continuing Director" means:
(i) any member of the Board who was a member of the
Board on January 1, 2002, and any successor of a Continuing
Director who is recommended to succeed a Continuing Director (or
whose election or nomination for election is approved) by at
least a majority of the Continuing Directors then on the Board;
and
(ii) any individual who becomes a director pursuant
to Article 2 of the Stockholders Agreement.
(h) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(i) "Good Reason" means (unless consented to in writing by
the Employee):
(i) a material diminution or adverse change in the
nature of the Employee's title, position, reporting relation-
ships, authority, duties or responsibilities (including as a
type of diminution, the Employee's occupation of the same title
and/or position, but with a privately-held company);
(ii) a diminution that is more than de minimis in
either the Employee's annual base salary or total compensation
opportunity (which, for this purpose, means the aggregate of the
annual base salary, annual bonus and long-term incentive
compensation that the Employee has an opportunity to earn
pursuant to awards made in any one calendar year) or in the
formula used to determine the Employee's annual bonus or
long-term incentive compensation, or a material diminution in
the Employee's overall employee and fringe benefits (it being
understood by the parties that if the Employee has the same
total compensation opportunity or compensation formula, but the
compensation actually received by the Employee is diminished due
to the Company's or the Employee's performance, such diminution
shall not constitute Good Reason);
(iii) the Employee's principle place of business is
relocated to a location that is both more than 50 miles from its
current location and further from the Employee's residence than
the location of the Employee's principle place of business prior
to the relocation;
(iv) a successor fails to assume this Agreement, or
amends or modifies this Agreement;
(v) a material breach of this Agreement by the
Company or a successor thereto;
(vi) if the Employee is also a director of the
Company, the failure of the Employee to be re-elected to the
Board, if the Company becomes a subsidiary of a publicly-traded
company, to be elected to the board of directors of such
publicly-traded company;
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(vii) the Company or its successor giving notice that
this Agreement will not be automatically extended; or
(viii) if, and only if, the Employee has been employed
on a full-time basis for at least one full calendar year, both
of the following conditions are met: (A) the Employee travels at
least 50 days during a calendar year, and (B) the total number
of days the Employee travels in such calendar year exceeds by
25 days or more the average number of days the Employee
traveled per year on Company business during the two calendar
years immediately preceding such calendar year or, if the
Employee has not been employed on a full-time basis for two
full calendar years, during the one calendar year immediately
preceding such calendar year.
For purposes of subsection 1(i)(viii) above, any day in which
the Employee is required to stay overnight shall constitute a
day of travel.
No event described above shall constitute Good Reason unless
the Employee has given written notice to the Company
specifying the event relied upon for such termination within
six months after the Employee becomes aware, or reasonably
should have become aware, of the occurrence of such event and,
if the event can be remedied, the Company has not remedied
such within 30 days of receipt of the notice.
(j) "Person" means a "person" as used in Sections 3(a)(9)
and 13(d) of the Exchange Act.
(k) "Regency Entity or Regency Entities" means the Company,
its Affiliates, and any other entities the ownership of which is attributable to
the Company pursuant to Section 318 (including any successor provision) of the
Code.
(l) "Retirement" means the Employee's voluntary termination
of employment after (i) attaining age 65, (ii) attaining age 55 with 10 Years of
Service, or (iii) attaining an age which, when added to the Employee's Years of
Service, equals at least 75.
(m) "Security Capital Entities" means Security Capital
Holdings S.A. and Security Capital U.S. Realty and any Affiliates of either who
are bound by the Stockholders Agreement.
(n) "Stockholders Agreement" means the Stockholders Agree-
ment dated July 10, 1996, as amended, among the Security Capital Entities and
the Company.
(o) "Years of Service" means the Employee's total years of
employment with a Regency Entity or an entity or division that is acquired by or
merged with a Regency Entity.
2. Term. The term of this Agreement shall begin on the date hereof
and end at 11:59 p.m. on December 31, 2007, and thereafter shall automatically
renew for successive five-year terms unless either party delivers written notice
of non-renewal to the other party within 90
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days prior to the end of the then current term; provided, however, that if a
Change of Control has occurred during the original or any extended term
(including any extension resulting from a prior Change of Control), the term of
the Agreement shall end no earlier than 24 calendar months after the end of the
calendar month in which the Change of Control occurs.
3. Severance. Except in circumstances in which the Employee would
be entitled to payments and benefits in connection with a Change of Control as
provided in Section 4 below, in the event that during the term of this Agreement
the Company terminates the Employee's employment without Cause or the Employee
terminates the Employee's employment for Good Reason:
(a) The Employee shall be entitled to receive a lump sum
cash payment within 15 days after the date of termination (or at the Company's
election, such lump sum divided into equal monthly installments at the end of
each month for 18 months, commencing no later than the month following the month
in which the termination occurred) equal to the sum of (i) one and one-half
times the Employee's annual base salary in effect on the date of termination,
and (ii) one and one-half times the Employee's most recent annual cash bonus, if
any, or, if greater, one and one-half times the Employee's target annual cash
bonus for the year in which the termination occurs.
(b) For an 18 month period following termination of employ-
ment, the Employee and, as applicable, the Employee's covered dependants, shall
be entitled to medical, dental and hospitalization coverage, in each case at the
same level of benefits and at the same dollar cost to the Employee as is being
provided by the Company to employees at the same or equivalent level or title as
was the Employee, whether maintained pursuant to a plan, policy or other
arrangement (written or unwritten), as if the Employee were still employed
during such period; provided, however, that any such continued coverage shall be
offset by comparable coverage provided to the Employee in connection with
subsequent employment or other service. If such benefits cannot be provided
under the Company's existing benefit plan, policy or other arrangement without
violating any non-discrimination rules or regulations, individual coverage will
be provided at no additional charge to the Employee or, as determined by the
Company, the cash equivalent thereof will be paid to the Employee (net of
taxes).
4. Change of Control. In the event that during the term of this
Agreement the Company terminates the Employee's employment without Cause or the
Employee terminates the Employee's employment for Good Reason, in each case
within two years following a Change of Control, the following provisions shall
apply:
(a) The Employee shall be entitled to receive a lump sum
cash payment within 15 days after the date of termination (or at the Company's
election, such lump sum divided into equal monthly installments at the end of
each month for 36 months, commencing no later than the month following the month
in which the termination occurred) equal to the sum of (i) three times the
Employee's annual base salary in effect on the date of termination or, if
greater, immediately prior to the Change of Control, and (ii) three times the
Employee's most recent annual cash bonus, if any, or, if greater, three times
the Employee's target annual cash bonus for the year in which the termination
occurs.
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(b) For a 36 month period following termination of employ-
ment, the Employee and, as applicable, the Employee's covered dependants, shall
be entitled to medical, dental and hospitalization coverage, in each case at the
same level of benefits and at the same dollar cost to the Employee as is being
provided by the Company to employees at the same or equivalent level or title as
was the Employee, whether maintained pursuant to a plan, policy or other
arrangement (written or unwritten), as if the Employee were still employed
during such period; provided, however, that any such continued coverage shall be
offset by comparable coverage provided to the Employee in connection with
subsequent employment or other service; provided, however, that if such benefits
cannot be provided under the Company's existing benefit plan without violating
any non-discrimination rules or regulations, policy or other arrangement,
individual coverage will be provided at no additional charge to the Employee or,
as determined by the Company, the cash equivalent thereof will be paid to the
Employee (net of taxes).
(c) All unvested stock options and unvested dividend
equivalent units (DEUs) held by Employee, or by the Company on the Employee's
behalf, will fully vest on the date of termination of the Employee. The Employee
shall be entitled to exercise all unexercised stock options within the earlier
of (i) 90 days following termination of employment or (ii) the expiration date
of such options as provided in each option agreement pertaining thereto. All
DEUs held by the Company on the Employee's behalf will be immediately
distributed to the Employee and, in addition, to the extent (after taking into
account all DEUs received pursuant to this Section 4(c) and any prior DEUs
received by the Employee) the Employee has received less than five years of DEUs
on the unexercised portion of any outstanding stock option grant that qualifies
for DEUs, an additional payment will be made to the Employee pursuant to and in
accordance with Appendix A, which is attached hereto and made a part hereof, so
that at least five years' of DEUs have been received by the Employee on the
unexercised portion of all of such outstanding options.
(d) All unvested restricted stock held by the Company on the
Employee's behalf will fully vest on the date of the Employee's termination of
employment and will be immediately distributed to Employee (together with any
accrued dividends).
(e) The following provisions shall apply to any stock
purchase loans owed by the Employee to the Company (the "Stock Purchase Loans"):
(i) Stock Purchase Loans will become non-recourse
obligations on the date of termination of the Employee's
employment;
(ii) with respect to all Stock Purchase Loans that
contain forgiveness provisions based on the Employee remaining
employed by any Regency Entity and/or the satisfaction of
performance criteria, the principal and interest related to
the portion of the loans subject to such forgiveness
provisions shall be forgiven on the date of termination of the
Employee's employment;
(iii) if, after forgiveness pursuant to Section
4(e)(ii), the outstanding principle and interest on a Stock
Purchase Loan exceeds the value of the remaining stock
collateral related to such Stock Purchase Loan (after releasing
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from collateral the shares that were related to the portion of
the loan forgiven pursuant to Section 4(e)(ii)), such excess
amount (and only such excess amount) of principal and interest
shall be forgiven;
(iv) if making the Stock Purchase Loans non-recourse
obligations pursuant to Section 4(e)(i), or forgiveness of a
portion of any Stock Purchase Loans pursuant to Section
4(e)(iii), results in ordinary income to the Employee for
federal, state or local income tax purposes ("Loan Income"), the
Company shall pay to the Employee at the same time that it pays
the other amounts due hereunder an amount with respect to such
Loan Income sufficient to cover the federal, state or local
taxes due on such Loan Income and on the cash payment made
under this subsection (iv); and
(v) For purposes of Section 4(e)(iv), the Employee
shall be deemed to pay federal income taxes at the highest
marginal federal tax rates in the calendar year in which such
payment is made and any state or local income taxes at the
highest marginal rates applicable in the state and locality of
the Employee's domicile for income tax purposes in the calendar
year in which such payment is made hereunder and assuming the
maximum available deduction from income for federal income taxes
purposes of any such state or local income taxes.
5. Excise Tax.
(a) If any payment or benefit (including, but not by way of
limitation, benefits such as accelerated vesting and/or distributions of stock
options, dividend equivalents and restricted stock, loan forgiveness, and the
continuation of fringe and other benefits) to the Employee hereunder or any
other payments received or to be received by the Employee from any Regency
Entity or any successor thereto (collectively, "Payments") (whether payable upon
termination of employment or otherwise and whether payable pursuant to the terms
hereof or any other plan, agreement or arrangement with any Regency Entity)
would, in the opinion of Tax Counsel (as defined in Section 5(c)) constitute a
"parachute payment" under Section 280G of the Code, or if it is ultimately
determined by a court or pursuant to a final determination by the Internal
Revenue Service that any portion of the Payments is subject to the tax (the
"Excise Tax") imposed by Section 4999 of the Code, then, except as provided in
the last sentence of this Section 5(a), the Company shall pay to the Employee
within fifteen days after such determination an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Employee after deduction of
(i) any Excise Tax; (ii) any federal, state or local tax arising in respect of
imposition of such Excise Tax; (iii) any federal, state or local tax or Excise
Tax imposed upon the payment provided for by this Section 5(a); and (iv) any
interest charges or penalties arising as a result of filing federal, state or
local tax returns in accordance with the opinion of Tax Counsel described in
Section 5(c), shall be equal to the Payments. Notwithstanding the foregoing, if
the amount of the Payments does not exceed by more than $25,000.00 the amount
that would be payable to the Employee if the Payments were reduced to one dollar
less than what would constitute a "parachute payment" under Section 280G of the
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Code (the "Scaled Back Amount"), then the Payments shall be reduced to the
Scaled Back Amount, and the Employee shall not be entitled to any Gross-Up
Payment.
(b) For purposes of this Section 5, the Employee shall be
deemed to pay federal income taxes at the highest marginal federal tax rates in
the calendar year in which such payment is made and any state or local income
taxes at the highest marginal rates applicable in the state and locality of the
Employee's domicile for income tax purposes in the calendar year in which such
payment is made hereunder and assuming the maximum available deduction from
income for federal income taxes purposes of any such state or local income
taxes.
(c) For purposes of Section 5(a), within 60 days after
delivery of a written notice of termination by the Employee or by the Company
pursuant to this Agreement (or, if an event other than termination of employment
results in payment of parachute payments under Section 280G and it is reasonably
possible that such parachute payments could result in an Excise Tax, with 60
days after such other event), the Company shall obtain, at its expense, the
opinion (which need not be unqualified) of nationally recognized tax counsel
("Tax Counsel") selected by the Company's independent auditors, which sets forth
(i) the "base amount" within the meaning of Section 280G; (ii) the aggregate
present value of the payments in the nature of compensation to the Employee as
prescribed in Section 280G(b)(2)(A)(ii); and (iii) the amount and present value
of any "excess parachute payment" within the meaning of Section 280G(b)(1). For
purposes of such opinion, the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Company's independent auditors in
accordance with the principles of Section 280G and regulations thereunder, which
determination shall be evidenced in a certificate of such auditors addressed to
the Company and the Employee. Such opinion shall be addressed to the Company and
the Employee and shall be binding upon the Company and the Employee.
6. Retirement. If the Employee's termination of employment
constitutes Retirement, in addition to any payments and benefits to which the
Employee may become entitled under Section 3 hereof, the Employee shall also
receive the benefits provided in Sections 4(c), 4(d), and 4(e) and, in addition,
the Employee shall be entitled to exercise all unexercised stock options within
the earlier of (a) three years following termination of employment or (b) the
expiration date of such options as provided in each option agreement pertaining
thereto.
7. Death and Disability. In no event shall a termination of the
Employee's employment due to death or Disability constitute a termination by the
Company without Cause or a termination by the Employee for Good Reason; however,
upon termination of employment due to the Employee's death or Disability, the
Employee shall receive the benefits provided in Sections 4(c), 4(d), and 4(e).
For purposes of this Agreement, the Employee shall be deemed terminated for
Disability if the Employee is (or would be if a participant) entitled to
long-term disability benefits under the Company's disability plan or policy or,
if no such plan or policy is in place, if the Employee has been unable to
substantially perform his duties, due to physical or mental incapacity, for 180
consecutive days.
8. Stock Options, Restricted Stock and Stock Purchase Loans. If a
Change of Control results in the stock underlying the Employee's stock option
and restricted stock awards being no longer publicly traded (after taking into
consideration the conversion or replacement of the
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Employee's stock option and restricted stock awards in connection with such
Change of Control, if applicable), upon such Change of Control, notwithstanding
anything to the contrary contained in the related plan or award agreement, all
of the Employee's outstanding stock options and/or restricted stock awards shall
be cancelled and, in consideration for the cancellation of such awards, the
Employee shall receive a cash payment equal to the amount the Employee would
have received in the Change of Control had the Employee been a shareholder of
the Company with respect to all of the shares subject to such stock option and
restricted stock awards, plus any dividends that had accumulated on the
Employee's restricted stock as of the date of the Change of Control, less the
aggregate exercise price on such stock options and any required tax withholding.
Additionally, the Employee shall receive the DEU benefits described in Section
4(c) and Appendix A that would have been provided if the Employee's employment
had been terminated by the Company without Cause as of the date of the Change of
Control, and the Stock Purchase Loan provisions contained in Section 4(e) shall
apply as if the Employee's employment had been terminated by the Company without
Cause as of the date of the Change of Control.
9. Reductions in Base Salary and Annual Bonus. For purposes of this
Agreement, in the event there is a reduction in the Employee's base salary and/
or annual bonus that would constitute the basis for a termination for Good
Reason, the base salary and/or annual bonus used for purposes of calculating the
severance payable pursuant to Sections 3(a) or 4(a), as the case may be, shall
be the amounts in effect immediately prior to such reduction.
10. Other Payments and Benefits. On any termination of employment,
including, without limitation, termination due to the Employee's death or
Disability (as defined in Section 7), the Employee shall receive any accrued but
unpaid salary, reimbursement of any business or other expenses incurred prior to
termination of employment but for which the Employee had not received reimburse-
ment, and any other rights, compensation and/or benefits as may be due the
Employee in accordance with the terms and provisions of any agreements, plans or
programs of the Company (but in no event shall the Employee be entitled to
duplicative rights, compensation and/or benefits).
11. Mitigation. Except as provided in Sections 3(b) and 4(b) with
respect to offsetting benefits provided thereunder, and Section 5(a) with
respect to the Scaled Back Amount, the Employee shall not be required to
mitigate the amount of any payments or benefits provided to the Employee here-
under by securing other employment or otherwise, nor will such payments and/or
benefits be reduced by reason of the Employee securing other employment or for
any other reason.
12. Release. Notwithstanding any provision herein to the contrary,
the Company shall not have any obligation to pay any amount or provide any
benefit, as the case may be, under this Agreement, unless and until (a) the
Employee executes (i) a release of the Regency Entities, in such form as the
Company may reasonably request, of all claims against the Regency Entities
relating to the Employee's employment and termination thereof and (ii) an
agreement to continue to comply with, and be bound by, the provisions of Section
13 hereof, and (b) the expiration of any applicable waiting or revocation
periods related to such release and agreement.
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13. Restrictive Covenants and Consulting Arrangement.
(a) The Employee will not use or disclose any confidential
information of any Regency Entity without the Company's prior written consent,
except in furtherance of the business of the Regency Entities or except as may
be required by law. Additionally, and without limiting the foregoing, the
Employee agrees not to participate in or facilitate the dissemination to the
media or any other third party (i) of any confidential information concerning
any Regency Entity or any employee of any Regency Entity, or (ii) of any
damaging or defamatory information concerning the Employee's experiences as an
employee of any Regency Entity, without the Company's prior written consent
except as may be required by law. Notwithstanding the foregoing, this paragraph
does not apply to information which is already in the public domain through no
fault of the Employee.
(b) During the Employee's employment and during the one-year
period after the Employee ceases to be employed by any of the Regency Entities,
the Employee agrees that:
(i) the Employee shall not directly or knowingly and
intentionally through another party recruit, induce, solicit or
assist any other Person in recruiting, inducing or soliciting
any other employee of any Regency Entity to leave such
employment;
(ii) the Employee shall not Compete or personally
solicit, induce or assist any other Person in soliciting or
inducing (A) any tenant in a shopping center of any Regency
Entity that was a tenant on the date of termination of the
Employee's employment (the "Termination Date") to terminate a
lease, or (B) any tenant, property owner or build-to-suit
customer with whom any Regency Entity entered into a lease,
acquisition contract, business combination contract, or
development contract on the Termination Date to terminate such
lease or other contract, or (C) any prospective tenant, property
owner or prospective build-to-suit customer with which any
Regency Entity was actively conducting negotiations on the
Termination Date with respect to a lease, acquisition, business
combination or development project to cease such negotiations,
unless the Employee was not aware that such negotiations were
being conducted.
(c) For a six month period following any termination of
employment described in Section 4 hereof, the Employee agrees to make himself
available and, as requested by the Company from time to time, to provide
consulting services with respect to any projects the Employee was involved in
prior to such termination and/or to provide such other consulting services as
the Company may reasonably request. The Employee will be reimbursed for travel
and miscellaneous expenses incurred in connection with the provision of
consulting services hereunder. The Company will provide the Employee reasonable
advance notice of any request to provide consulting services, and will make all
reasonable accommodations necessary to prevent the Employee's commitment
hereunder from materially interfering with the Employee's employment
obligations, if any. In no event will the Employee be required to provide more
than 20 hours of consulting services in any one month to the Company pursuant to
this provision.
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(d) The parties agree that any breach of this Section 13
will result in irreparable harm to the non-breaching party which cannot be fully
compensated by monetary damages and accordingly, in the event of any breach or
threatened breach of this Section 13, the non-breaching party shall be entitled
to injunctive relief. Should any provision of this Section 13 be determined by a
court of law or equity to be unreasonable or unenforceable, the parties agree
that to the extent it is valid and enforceable, they shall be bound by the same,
the intention of the parties being that the parties be given the broadest
protection allowed by law or equity with respect to such provision.
(e) The provisions of this Section 13 shall survive the
termination of this Agreement.
14. Withholding. The Company shall withhold from all payments to
the Employee hereunder all amounts required to be withheld under applicable
local, state or federal income tax law.
15. Dispute Resolution. Any dispute, controversy or claim between
the Company and the Employee or other person arising out of or relating to this
Agreement shall be settled by arbitration conducted in the City of Jacksonville
in accordance with the Commercial Rules of the American Arbitration Association
then in force and Florida law within 30 days after written notice from one party
to the other requesting that the matter be submitted to arbitration. The
arbitration decision or award shall be binding and final upon the parties. The
arbitration award shall be in writing and shall set forth the basis thereof. The
parties hereto shall abide by all awards rendered in such arbitration
proceedings, and all such awards may be enforced and executed upon in any court
having jurisdiction over the party against whom enforcement of such award is
sought. The Company agrees to reimburse the Employee for all costs and expenses
(including, without limitation, reasonable attorneys' fees, arbitration and
court costs and other related costs and expenses) the Employee reasonably incurs
as a result of any dispute or contest regarding this Agreement and the parties'
rights and obligations hereunder if, and when, the Employee prevails on at least
one material claim; otherwise, each party shall be responsible for its own costs
and expenses.
16. Miscellaneous. This Agreement shall be construed and enforced in
accordance with the laws of the State of Florida (exclusive of conflict of law
principles). In the event that any provision of this Agreement shall be invalid,
illegal or unenforceable, the remainder shall not be affected thereby. This
Agreement supersedes and terminates any prior employment agreement, severance
agreement, change of control agreement or non-competition agreement between the
Company or Pacific Retail Trust (to which the Company is successor by merger)
and the Employee. It is intended that the payments and benefits provided under
this Agreement are in lieu of, and not in addition to, termination, severance or
change of control payments and benefits provided under the Company's other
termination or severance plans, policies or agreements, if any. This Agreement
shall be binding upon and inure to the benefit of the Employee and the
Employee's heirs and personal representatives and the Company and its
successors, assigns and legal representatives. Headings herein are inserted for
convenience and shall not affect the interpretation of any provision of the
Agreement. References to sections of the Exchange Act or the Code, or rules or
regulations related thereto, shall be deemed to refer to any successor
provisions, as applicable. The Company will require any
12
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to expressly assume and agree to perform under this Agreement in the
same manner and to the same extent that the Company would be required to perform
if no such succession had taken place. This Agreement may not be terminated,
amended, or modified except by a written agreement executed by the parties
hereto or their respective successors and legal representatives. The parties
hereby acknowledge that the Employee and his family own the furnishings
(including, but not by way of limitation, all furniture, rugs, pictures,
sculptures and other artwork) in the Employee's office, Xxxx Xxxxxx'x office,
the office entryway and the boardroom (other than the board table), and that the
Employee may remove such furnishings at any time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
REGENCY CENTERS CORPORATION
/s/ Xxxx X. Xxxxxxxxxx
----------------------------------------
By: Xxxx X. Xxxxxxxxxx
Its: Chairman of the Compensation
Committee of the Board of Directors
XXXXXX X. XXXXX
/s/ Xxxxxx X. Xxxxx
-----------------------------------------
13
Appendix A
5 Year Dividend Equivalent Acceleration Example
Option Grant Assumptions:
Grant Date 29-Jul-99
No. of Options Granted 6,872
Xxxxx Xxxxx at Xxxxx Date $21.06
Avg S&P Dividend Yield 1.18%
FMV Regency Stock Price $28.50
Dividend Equivalent Per Share:
Current Annual Dividend $2.04
Dividend Yield on Xxxxx Xxxxx 9.69% $2.04 divided by $21.06
Less S&P Avg Dividend Yield -1.18%
------
DEU Yield on Xxxxx Xxxxx 8.51%
=====
DEU Per Option $1.79 8.51% times $21.06
Accelerated Dividend Equivalent:
Annual DEU Amount $12,311 $1.79 times 6,872
5 Year DEU Acceleration $61,556 5 times $12,311
Annual compounding of Qtrly Dividend $20,370 Apply current dividend yield of 9.69% for 5 years
-------
Total Accelerated DEU Amount $81,926
=======
Accelerated DEU in Shares 2,875 $ divided by current price $28.500
Less Actual Shares Distributed to date -605
----
Net Accelerated DEU in Shares 2,270
=====
Net Value of Accelerated DE $64,684 2,270 times $28.500
14
AMENDED AND RESTATED
SEVERANCE AND CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT, effective as of the __ day of March, 2002, is by and
between REGENCY CENTERS CORPORATION, a Florida corporation (the "Company") and
XXXX XXX XXXXX (the "Employee").
WHEREAS, the Company, formerly known as Regency Realty Corporation, and
the Employee previously entered into a change of control agreement, dated the
1st day of June, 2000 (the "Prior Agreement"); and
WHEREAS, to further induce the Employee to remain as an executive
officer of the Company and a key employee of the Company and/or one or more of
the Regency Entities (as defined below), the Company and the Employee desire to
enter into an amended and restated severance and change of control agreement
(the "Agreement"), which Agreement will replace and supersede the Prior
Agreement; and
WHEREAS, the parties agree that the restrictive covenants underlying
certain of the Employee's obligations under this Agreement are necessary to
protect the goodwill or other business interests of the Regency Entities and
that such restrictive covenants do not impose a greater restraint than is
necessary to protect such goodwill or other business interests.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, including the Employee's agreement to continue as an
executive officer of the Company and as an employee of one or more of the
Regency Entities, the Employee's agreement to provide consulting services
following certain terminations of employment pursuant to the terms hereof, and
the restrictive covenants contained herein, the Employee and the Company agree
as follows:
1. Definitions. The following words, when capitalized in this
Agreement, shall have the meanings ascribed below:
(a) "Affiliate" shall have the meaning given to such term in
Rule 12b-2 of the General Rules and Regulations of the Exchange Act.
(b) "Board" means the Board of Directors of the Company.
(c) "Cause" means:
(i) the willful and substantial failure or refusal
of the Employee to perform duties assigned to the Employee
(unless the Employee shall be ill or disabled) under
circumstances where the Employee would not have Good
Reason to terminate employment hereunder, which failure or
refusal is not remedied by the Employee within 30 days after
written notice from the Company's Chief Executive Officer or
Chief Operating Officer or the Board of such failure or refusal
(for purposes of clarity, the Employee's poor performance shall
not constitute willful and substantial failure or refusal to
perform duties assigned to the Employee, but the failure to
report to work shall);
(ii) a material breach of the Employee's fiduciary
duties to any Regency Entity (such as obtaining secret profits
from the Regency Entity) or a violation by the Employee in the
course of performing the Employee's duties to any Regency Entity
of any law, rule or regulation (other than traffic violations or
other minor offenses) where such violation has resulted or is
likely to result in material harm to any Regency Entity, and in
either case where such breach or violation constituted an act or
omission performed or made willfully, in bad faith and without a
reasonable belief that such act or omission was within the scope
of the Employee's employment hereunder; or
(iii) the Employee's engaging in illegal conduct
(other than traffic violations or other minor offenses) which
results in a conviction (or a nolo contendere plea thereto)
which is not subject to further appeal and which is injurious to
the business or public image of any Regency Entity.
(d) "Change of Control" shall mean the occurrence of any one
or more of the following events:
(i) an acquisition, in any one transaction or series
of transactions, after which any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act), has beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 25% or more
(or an acquisition of an additional 5% or more if such
individual, entity or group already has beneficial ownership of
25% or more) of either the then outstanding shares of Company
common stock or the combined voting power of the then
outstanding voting securities of the Company, but excluding, for
this purpose, any such acquisition (A) from the Company, (B) by
the Company or any employee benefit plan (or related trust) of
the Company, (C) by any Security Capital Entity (other than
General Electric Capital Corporation and EB Acquisition Corp.)
made while the standstill provisions of the Shareholders
Agreement are in effect and made in compliance with such
provisions, (D) pursuant to the merger described in the
Agreement and Plan of Merger, dated as of December 14, 2001, by
and among Security Capital Group Incorporated, General Electric
Capital Corporation and EB Acquisition Corp., or (E) by any
corporation with respect to which, following such acquisition,
all of the then outstanding shares of common stock and voting
securities of such corporation are then beneficially owned,
directly or indirectly, in substantially the same
2
proportions, by the beneficial owners of the common stock and
voting securities of the Company immediately prior to such
acquisition;
(ii) 50% or more of the members of the Board (A) are
not Continuing Directors, or (B) whether or not they are
Continuing Directors, are nominated by or elected by the same
Beneficial Owner (for this purpose, a director of the Company
shall be deemed to be nominated or elected, respectively, by
the Security Capital Entities, General Electric Capital
Corporation or EB Acquisition Corp. if the director also is an
employee or director of Security Capital Group, Inc., General
Electric Capital Corporation or EB Acquisition Corp., including
any successors) or are elected or appointed in connection with
an acquisition by the Company (whether through purchase, merger
or otherwise) of all or substantially all of the operating
assets or capital stock of another entity;
(iii) the (A) consummation of a reorganization,
merger, share exchange, consolidation or similar transaction,
in each case, with respect to which the individuals and entities
who were the respective beneficial owners of the common stock
and voting securities of the Company immediately prior to such
transaction do not, following such transaction, beneficially
own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and voting securities of
the corporation resulting from such reorganization, merger or
consolidation, (B) consummation of the sale or other disposition
of all or substantially all of the assets of the Company or (C)
approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company, in each case, other
than pursuant to the merger described in the Agreement and Plan
of Merger, dated as of December 14, 2001, by and among Security
Capital Group Incorporated, General Electric Capital Corporation
and EB Acquisition Corp.; or
(iv) termination of the standstill provisions in the
Stockholders Agreement.
For clarity, the termination of the standstill provisions
described in Section 1(d)(iv) shall occur on the effective
date of such termination, and not on the date notice of intent
not to extend the provisions is given. More than one Change of
Control may occur during the term of this Agreement. For
purposes of determining the term of this Agreement pursuant to
Section 2 and the two-year period following a Change of
Control pursuant to Section 4, a Change of Control shall be
deemed to have occurred (and, accordingly, a new period shall
begin) each time one of the events described in this Section
1(d) occurs.
(e) "Code" means the Internal Revenue Code of 1986, as
amended.
3
(f) "Compete" means to directly or indirectly own (other
than a 5% or less interest in a public company), manage, operate or control, or
provide services as an employee, officer, director, consultant or otherwise for,
any nationally-based, publicly-traded REIT whose primary business is related to
the ownership of grocery-anchored shopping centers and that is comparable to the
Company in terms of total assets.
(g) "Continuing Director" means:
(i) any member of the Board who was a member of the
Board on January 1, 2002, and any successor of a Continuing
Director who is recommended to succeed a Continuing Director (or
whose election or nomination for election is approved) by at
least a majority of the Continuing Directors then on the Board;
and
(ii) any individual who becomes a director pursuant
to Article 2 of the Stockholders Agreement.
(h) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(i) "Good Reason" means (unless consented to in writing by
the Employee):
(i) a material diminution or adverse change in the
nature of the Employee's title, position, reporting relation-
ships, authority, duties or responsibilities (including as a
type of diminution, the Employee's occupation of the same title
and/or position, but with a privately-held company);
(ii) a diminution that is more than de minimis in
either the Employee's annual base salary or total compensation
opportunity (which, for this purpose, means the aggregate of the
annual base salary, annual bonus and long-term incentive
compensation that the Employee has an opportunity to earn
pursuant to awards made in any one calendar year) or in the
formula used to determine the Employee's annual bonus or long-
term incentive compensation, or a material diminution in the
Employee's overall employee and fringe benefits (it being
understood by the parties that if the Employee has the same
total compensation opportunity or compensation formula, but the
compensation actually received by the Employee is diminished due
to the Company's or the Employee's performance, such diminution
shall not constitute Good Reason);
(iii) the Employee's principle place of business is
relocated to a location that is both more than 50 miles from its
current location and further from the Employee's residence than
the location of the Employee's principle place of business prior
to the relocation;
(iv) a successor fails to assume this Agreement, or
amends or modifies this Agreement;
4
(v) a material breach of this Agreement by the
Company or a successor thereto;
(vi) if the Employee is also a director of the
Company, the failure of the Employee to be re-elected to the
Board, if the Company becomes a subsidiary of a publicly-traded
company, to be elected to the board of directors of such
publicly-traded company;
(vii) the Company or its successor giving notice that
this Agreement will not be automatically extended; or
(viii) if, and only if, the Employee has been employed
on a full-time basis for at least one full calendar year, both
of the following conditions are met: (A) the Employee travels at
least 50 days during a calendar year, and (B) the total number
of days the Employee travels in such calendar year exceeds by
25 days or more the average number of days the Employee
traveled per year on Company business during the two calendar
years immediately preceding such calendar year or, if the
Employee has not been employed on a full-time basis for two
full calendar years, during the one calendar year immediately
preceding such calendar year.
For purposes of subsection 1(i)(viii) above, any day in which
the Employee is required to stay overnight shall constitute a
day of travel.
No event described above shall constitute Good Reason unless
the Employee has given written notice to the Company
specifying the event relied upon for such termination within
six months after the Employee becomes aware, or reasonably
should have become aware, of the occurrence of such event and,
if the event can be remedied, the Company has not remedied
such within 30 days of receipt of the notice.
(j) "Person" means a "person" as used in Sections 3(a)(9)
and 13(d) of the Exchange Act.
(k) "Regency Entity or Regency Entities" means the Company,
its Affiliates, and any other entities the ownership of which is attributable to
the Company pursuant to Section 318 (including any successor provision) of the
Code.
(l) "Retirement" means the Employee's voluntary termination
of employment after (i) attaining age 65, (ii) attaining age 55 with 10 Years of
Service, or (iii) attaining an age which, when added to the Employee's Years of
Service, equals at least 75.
(m) "Security Capital Entities" means Security Capital
Holdings S.A. and Security Capital U.S. Realty and any Affiliates of either who
are bound by the Stockholders Agreement.
5
(n) "Stockholders Agreement" means the Stockholders
Agreement dated July 10, 1996, as amended, among the Security Capital Entities
and the Company.
(o) "Years of Service" means the Employee's total years of
employment with a Regency Entity or an entity or division that is acquired by or
merged with a Regency Entity.
2. Term. The term of this Agreement shall begin on the date hereof
and end at 11:59 p.m. on December 31, 2007, and thereafter shall automatically
renew for successive five-year terms unless either party delivers written notice
of non-renewal to the other party within 90 days prior to the end of the then
current term; provided, however, that if a Change of Control has occurred during
the original or any extended term (including any extension resulting from a
prior Change of Control), the term of the Agreement shall end no earlier than 24
calendar months after the end of the calendar month in which the Change of
Control occurs.
3. Severance. Except in circumstances in which the Employee would
be entitled to payments and benefits in connection with a Change of Control as
provided in Section 4 below, in the event that during the term of this Agreement
the Company terminates the Employee's employment without Cause or the Employee
terminates the Employee's employment for Good Reason:
(a) The Employee shall be entitled to receive a lump sum
cash payment within 15 days after the date of termination (or at the Company's
election, such lump sum divided into equal monthly installments at the end of
each month for 18 months, commencing no later than the month following the month
in which the termination occurred) equal to the sum of (i) one and one-half
times the Employee's annual base salary in effect on the date of termination,
and (ii) one and one-half times the Employee's most recent annual cash bonus, if
any, or, if greater, one and one-half times the Employee's target annual cash
bonus for the year in which the termination occurs.
(b) For an 18 month period following termination of employ-
ment, the Employee and, as applicable, the Employee's covered dependants, shall
be entitled to medical, dental and hospitalization coverage, in each case at the
same level of benefits and at the same dollar cost to the Employee as is being
provided by the Company to employees at the same or equivalent level or title as
was the Employee, whether maintained pursuant to a plan, policy or other
arrangement (written or unwritten), as if the Employee were still employed
during such period; provided, however, that any such continued coverage shall be
offset by comparable coverage provided to the Employee in connection with
subsequent employment or other service. If such benefits cannot be provided
under the Company's existing benefit plan, policy or other arrangement without
violating any non-discrimination rules or regulations, individual coverage will
be provided at no additional charge to the Employee or, as determined by the
Company, the cash equivalent thereof will be paid to the Employee (net of
taxes).
4. Change of Control. In the event that during the term of this
Agreement the Company terminates the Employee's employment without Cause or the
Employee terminates
6
the Employee's employment for Good Reason, in each case within two years
following a Change of Control, the following provisions shall apply:
(a) The Employee shall be entitled to receive a lump sum
cash payment within 15 days after the date of termination (or at the Company's
election, such lump sum divided into equal monthly installments at the end of
each month for 36 months, commencing no later than the month following the month
in which the termination occurred) equal to the sum of (i) three times the
Employee's annual base salary in effect on the date of termination or, if
greater, immediately prior to the Change of Control, and (ii) three times the
Employee's most recent annual cash bonus, if any, or, if greater, three times
the Employee's target annual cash bonus for the year in which the termination
occurs.
(b) For a 36 month period following termination of employ-
ment, the Employee and, as applicable, the Employee's covered dependants, shall
be entitled to medical, dental and hospitalization coverage, in each case at the
same level of benefits and at the same dollar cost to the Employee as is being
provided by the Company to employees at the same or equivalent level or title as
was the Employee, whether maintained pursuant to a plan, policy or other
arrangement (written or unwritten), as if the Employee were still employed
during such period; provided, however, that any such continued coverage shall be
offset by comparable coverage provided to the Employee in connection with
subsequent employment or other service; provided, however, that if such benefits
cannot be provided under the Company's existing benefit plan without violating
any non-discrimination rules or regulations, policy or other arrangement,
individual coverage will be provided at no additional charge to the Employee or,
as determined by the Company, the cash equivalent thereof will be paid to the
Employee (net of taxes).
(c) All unvested stock options and unvested dividend
equivalent units (DEUs) held by Employee, or by the Company on the Employee's
behalf, will fully vest on the date of termination of the Employee. The Employee
shall be entitled to exercise all unexercised stock options within the earlier
of (i) 90 days following termination of employment or (ii) the expiration date
of such options as provided in each option agreement pertaining thereto. All
DEUs held by the Company on the Employee's behalf will be immediately
distributed to the Employee and, in addition, to the extent (after taking into
account all DEUs received pursuant to this Section 4(c) and any prior DEUs
received by the Employee) the Employee has received less than five years of DEUs
on the unexercised portion of any outstanding stock option grant that qualifies
for DEUs, an additional payment will be made to the Employee pursuant to and in
accordance with Appendix A, which is attached hereto and made a part hereof, so
that at least five years' of DEUs have been received by the Employee on the
unexercised portion of all of such outstanding options.
(d) All unvested restricted stock held by the Company on the
Employee's behalf will fully vest on the date of the Employee's termination of
employment and will be immediately distributed to Employee (together with any
accrued dividends).
7
(e) The following provisions shall apply to any stock
purchase loans owed by the Employee to the Company (the "Stock Purchase Loans"):
(i) Stock Purchase Loans will become non-recourse
obligations on the date of termination of the Employee's
employment;
(ii) with respect to all Stock Purchase Loans that
contain forgiveness provisions based on the Employee remaining
employed by any Regency Entity and/or the satisfaction of
performance criteria, the principal and interest related to
the portion of the loans subject to such forgiveness
provisions shall be forgiven on the date of termination of the
Employee's employment;
(iii) if, after forgiveness pursuant to Section
4(e)(ii), the outstanding principle and interest on a Stock
Purchase Loan exceeds the value of the remaining stock
collateral related to such Stock Purchase Loan (after releasing
from collateral the shares that were related to the portion of
the loan forgiven pursuant to Section 4(e)(ii)), such excess
amount (and only such excess amount) of principal and interest
shall be forgiven;
(iv) if making the Stock Purchase Loans non-recourse
obligations pursuant to Section 4(e)(i), or forgiveness of a
portion of any Stock Purchase Loans pursuant to Section
4(e)(iii), results in ordinary income to the Employee for
federal, state or local income tax purposes ("Loan Income"), the
Company shall pay to the Employee at the same time that it pays
the other amounts due hereunder an amount with respect to such
Loan Income sufficient to cover the federal, state or local
taxes due on such Loan Income and on the cash payment made
under this subsection (iv); and
(v) For purposes of Section 4(e)(iv), the Employee
shall be deemed to pay federal income taxes at the highest
marginal federal tax rates in the calendar year in which such
payment is made and any state or local income taxes at the
highest marginal rates applicable in the state and locality of
the Employee's domicile for income tax purposes in the calendar
year in which such payment is made hereunder and assuming the
maximum available deduction from income for federal income taxes
purposes of any such state or local income taxes.
5. Excise Tax.
(a) If any payment or benefit (including, but not by way of
limitation, benefits such as accelerated vesting and/or distributions of stock
options, dividend equivalents and restricted stock, loan forgiveness, and the
continuation of fringe and other benefits) to the Employee hereunder or any
other payments received or to be received by the Employee from any Regency
Entity or any successor thereto (collectively, "Payments") (whether payable upon
termination of employment or otherwise and whether payable pursuant to the terms
hereof or
8
any other plan, agreement or arrangement with any Regency Entity) would, in the
opinion of Tax Counsel (as defined in Section 5(c)) constitute a "parachute
payment" under Section 280G of the Code, or if it is ultimately determined by a
court or pursuant to a final determination by the Internal Revenue Service that
any portion of the Payments is subject to the tax (the "Excise Tax") imposed by
Section 4999 of the Code, then, except as provided in the last sentence of this
Section 5(a), the Company shall pay to the Employee within fifteen days after
such determination an additional amount (the "Gross-Up Payment") such that the
net amount retained by the Employee after deduction of (i) any Excise Tax; (ii)
any federal, state or local tax arising in respect of imposition of such Excise
Tax; (iii) any federal, state or local tax or Excise Tax imposed upon the
payment provided for by this Section 5(a); and (iv) any interest charges or
penalties arising as a result of filing federal, state or local tax returns in
accordance with the opinion of Tax Counsel described in Section 5(c), shall be
equal to the Payments. Notwithstanding the foregoing, if the amount of the
Payments does not exceed by more than $25,000.00 the amount that would be
payable to the Employee if the Payments were reduced to one dollar less than
what would constitute a "parachute payment" under Section 280G of the Code (the
"Scaled Back Amount"), then the Payments shall be reduced to the Scaled Back
Amount, and the Employee shall not be entitled to any Gross-Up Payment.
(b) For purposes of this Section 5, the Employee shall be
deemed to pay federal income taxes at the highest marginal federal tax rates in
the calendar year in which such payment is made and any state or local income
taxes at the highest marginal rates applicable in the state and locality of the
Employee's domicile for income tax purposes in the calendar year in which such
payment is made hereunder and assuming the maximum available deduction from
income for federal income taxes purposes of any such state or local income
taxes.
(c) For purposes of Section 5(a), within 60 days after
delivery of a written notice of termination by the Employee or by the Company
pursuant to this Agreement (or, if an event other than termination of employment
results in payment of parachute payments under Section 280G and it is reasonably
possible that such parachute payments could result in an Excise Tax, with 60
days after such other event), the Company shall obtain, at its expense, the
opinion (which need not be unqualified) of nationally recognized tax counsel
("Tax Counsel") selected by the Company's independent auditors, which sets forth
(i) the "base amount" within the meaning of Section 280G; (ii) the aggregate
present value of the payments in the nature of compensation to the Employee as
prescribed in Section 280G(b)(2)(A)(ii); and (iii) the amount and present value
of any "excess parachute payment" within the meaning of Section 280G(b)(1). For
purposes of such opinion, the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Company's independent auditors in
accordance with the principles of Section 280G and regulations thereunder, which
determination shall be evidenced in a certificate of such auditors addressed to
the Company and the Employee. Such opinion shall be addressed to the Company and
the Employee and shall be binding upon the Company and the Employee.
6. Retirement. If the Employee's termination of employment
constitutes Retirement, in addition to any payments and benefits to which the
Employee may become entitled under Section 3 hereof, the Employee shall also
receive the benefits provided in Sections 4(c), 4(d),
9
and 4(e) and, in addition, the Employee shall be entitled to exercise all
unexercised stock options within the earlier of (a) three years following
termination of employment or (b) the expiration date of such options as provided
in each option agreement pertaining thereto.
7. Death and Disability. In no event shall a termination of the
Employee's employment due to death or Disability constitute a termination by the
Company without Cause or a termination by the Employee for Good Reason; however,
upon termination of employment due to the Employee's death or Disability, the
Employee shall receive the benefits provided in Sections 4(c), 4(d), and 4(e).
For purposes of this Agreement, the Employee shall be deemed terminated for
Disability if the Employee is (or would be if a participant) entitled to
long-term disability benefits under the Company's disability plan or policy or,
if no such plan or policy is in place, if the Employee has been unable to
substantially perform his duties, due to physical or mental incapacity, for 180
consecutive days.
8. Stock Options, Restricted Stock and Stock Purchase Loans. If a
Change of Control results in the stock underlying the Employee's stock option
and restricted stock awards being no longer publicly traded (after taking into
consideration the conversion or replacement of the Employee's stock option and
restricted stock awards in connection with such Change of Control, if
applicable), upon such Change of Control, notwithstanding anything to the
contrary contained in the related plan or award agreement, all of the Employee's
outstanding stock options and/or restricted stock awards shall be cancelled and,
in consideration for the cancellation of such awards, the Employee shall receive
a cash payment equal to the amount the Employee would have received in the
Change of Control had the Employee been a shareholder of the Company with
respect to all of the shares subject to such stock option and restricted stock
awards, plus any dividends that had accumulated on the Employee's restricted
stock as of the date of the Change of Control, less the aggregate exercise price
on such stock options and any required tax withholding. Additionally, the
Employee shall receive the DEU benefits described in Section 4(c) and Appendix A
that would have been provided if the Employee's employment had been terminated
by the Company without Cause as of the date of the Change of Control, and the
Stock Purchase Loan provisions contained in Section 4(e) shall apply as if the
Employee's employment had been terminated by the Company without Cause as of the
date of the Change of Control.
9. Reductions in Base Salary and Annual Bonus. For purposes of this
Agreement, in the event there is a reduction in the Employee's base salary and/
or annual bonus that would constitute the basis for a termination for Good
Reason, the base salary and/or annual bonus used for purposes of calculating the
severance payable pursuant to Sections 3(a) or 4(a), as the case may be, shall
be the amounts in effect immediately prior to such reduction.
10. Other Payments and Benefits. On any termination of employment,
including, without limitation, termination due to the Employee's death or
Disability (as defined in Section 7), the Employee shall receive any accrued but
unpaid salary, reimbursement of any business or other expenses incurred prior to
termination of employment but for which the Employee had not received reimburse-
ment, and any other rights, compensation and/or benefits as may be due the
Employee in accordance with the terms and provisions of any agreements, plans or
10
programs of the Company (but in no event shall the Employee be entitled to
duplicative rights, compensation and/or benefits).
11. Mitigation. Except as provided in Sections 3(b) and 4(b) with
respect to offsetting benefits provided thereunder, and Section 5(a) with
respect to the Scaled Back Amount, the Employee shall not be required to
mitigate the amount of any payments or benefits provided to the Employee here-
under by securing other employment or otherwise, nor will such payments and/or
benefits be reduced by reason of the Employee securing other employment or for
any other reason.
12. Release. Notwithstanding any provision herein to the contrary,
the Company shall not have any obligation to pay any amount or provide any
benefit, as the case may be, under this Agreement, unless and until (a) the
Employee executes (i) a release of the Regency Entities, in such form as the
Company may reasonably request, of all claims against the Regency Entities
relating to the Employee's employment and termination thereof and (ii) an
agreement to continue to comply with, and be bound by, the provisions of Section
13 hereof, and (b) the expiration of any applicable waiting or revocation
periods related to such release and agreement.
13. Restrictive Covenants and Consulting Arrangement.
(a) The Employee will not use or disclose any confidential
information of any Regency Entity without the Company's prior written consent,
except in furtherance of the business of the Regency Entities or except as may
be required by law. Additionally, and without limiting the foregoing, the
Employee agrees not to participate in or facilitate the dissemination to the
media or any other third party (i) of any confidential information concerning
any Regency Entity or any employee of any Regency Entity, or (ii) of any
damaging or defamatory information concerning the Employee's experiences as an
employee of any Regency Entity, without the Company's prior written consent
except as may be required by law. Notwithstanding the foregoing, this paragraph
does not apply to information which is already in the public domain through no
fault of the Employee.
(b) During the Employee's employment and during the one-year
period after the Employee ceases to be employed by any of the Regency Entities,
the Employee agrees that:
(i) the Employee shall not directly or knowingly and
intentionally through another party recruit, induce, solicit or
assist any other Person in recruiting, inducing or soliciting
any other employee of any Regency Entity to leave such
employment;
(ii) the Employee shall not Compete or personally
solicit, induce or assist any other Person in soliciting or
inducing (A) any tenant in a shopping center of any Regency
Entity that was a tenant on the date of termination of the
Employee's employment (the "Termination Date") to terminate a
lease, or (B) any tenant, property owner or build-to-suit
customer with whom any
11
Regency Entity entered into a lease, acquisition contract,
business combination contract, or development contract on the
Termination Date to terminate such lease or other contract, or
(C) any prospective tenant, property owner or prospective
build-to-suit customer with which any Regency Entity was
actively conducting negotiations on the Termination Date with
respect to a lease, acquisition, business combination or
development project to cease such negotiations, unless the
Employee was not aware that such negotiations were being
conducted.
(c) For a six month period following any termination of
employment described in Section 4 hereof, the Employee agrees to make herself
available and, as requested by the Company from time to time, to provide
consulting services with respect to any projects the Employee was involved in
prior to such termination and/or to provide such other consulting services as
the Company may reasonably request. The Employee will be reimbursed for travel
and miscellaneous expenses incurred in connection with the provision of
consulting services hereunder. The Company will provide the Employee reasonable
advance notice of any request to provide consulting services, and will make all
reasonable accommodations necessary to prevent the Employee's commitment here-
under from materially interfering with the Employee's employment obligations, if
any. In no event will the Employee be required to provide more than 20 hours of
consulting services in any one month to the Company pursuant to this provision.
(d) The parties agree that any breach of this Section 13
will result in irreparable harm to the non-breaching party which cannot be fully
compensated by monetary damages and accordingly, in the event of any breach or
threatened breach of this Section 13, the non-breaching party shall be entitled
to injunctive relief. Should any provision of this Section 13 be determined by a
court of law or equity to be unreasonable or unenforceable, the parties agree
that to the extent it is valid and enforceable, they shall be bound by the same,
the intention of the parties being that the parties be given the broadest
protection allowed by law or equity with respect to such provision.
(e) The provisions of this Section 13 shall survive the
termination of this Agreement.
14. Withholding. The Company shall withhold from all payments to
the Employee hereunder all amounts required to be withheld under applicable
local, state or federal income tax law.
15. Dispute Resolution. Any dispute, controversy or claim between
the Company and the Employee or other person arising out of or relating to this
Agreement shall be settled by arbitration conducted in the City of Jacksonville
in accordance with the Commercial Rules of the American Arbitration Association
then in force and Florida law within 30 days after written notice from one party
to the other requesting that the matter be submitted to arbitration. The
arbitration decision or award shall be binding and final upon the parties. The
arbitration award shall be in writing and shall set forth the basis thereof. The
parties hereto shall abide by all
12
awards rendered in such arbitration proceedings, and all such awards may be
enforced and executed upon in any court having jurisdiction over the party
against whom enforcement of such award is sought. The Company agrees to
reimburse the Employee for all costs and expenses (including, without
limitation, reasonable attorneys' fees, arbitration and court costs and other
related costs and expenses) the Employee reasonably incurs as a result of any
dispute or contest regarding this Agreement and the parties' rights and
obligations hereunder if, and when, the Employee prevails on at least one
material claim; otherwise, each party shall be responsible for its own costs
and expenses.
16. Miscellaneous. This Agreement shall be construed and enforced in
accordance with the laws of the State of Florida (exclusive of conflict of law
principles). In the event that any provision of this Agreement shall be invalid,
illegal or unenforceable, the remainder shall not be affected thereby. This
Agreement supersedes and terminates any prior employment agreement, severance
agreement, change of control agreement or non-competition agreement between the
Company or Pacific Retail Trust (to which the Company is successor by merger)
and the Employee. It is intended that the payments and benefits provided under
this Agreement are in lieu of, and not in addition to, termination, severance or
change of control payments and benefits provided under the Company's other
termination or severance plans, policies or agreements, if any. This Agreement
shall be binding upon and inure to the benefit of the Employee and the
Employee's heirs and personal representatives and the Company and its
successors, assigns and legal representatives. Headings herein are inserted for
convenience and shall not affect the interpretation of any provision of the
Agreement. References to sections of the Exchange Act or the Code, or rules or
regulations related thereto, shall be deemed to refer to any successor
provisions, as applicable. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) to
expressly assume and agree to perform under this Agreement in the same manner
and to the same extent that the Company would be required to perform if no such
succession had taken place. This Agreement may not be terminated, amended, or
modified except by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
REGENCY CENTERS CORPORATION
By: /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------------
Its: Chairman of the Board and
Chief Executive Officer
XXXX XXX XXXXX
/s/ Xxxx Xxx Xxxxx
-----------------------------------------
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Appendix A
5 Year Dividend Equivalent Acceleration Example
Option Grant Assumptions:
Grant Date 29-Jul-99
No. of Options Granted 6,872
Xxxxx Xxxxx at Xxxxx Date $21.06
Avg S&P Dividend Yield 1.18%
FMV Regency Stock Price $28.50
Dividend Equivalent Per Share:
Current Annual Dividend $2.04
Dividend Yield on Xxxxx Xxxxx 9.69% $2.04 divided by $21.06
Less S&P Avg Dividend Yield -1.18%
------
DEU Yield on Xxxxx Xxxxx 8.51%
=====
DEU Per Option $1.79 8.51% times $21.06
Accelerated Dividend Equivalent:
Annual DEU Amount $12,311 $1.79 times 6,872
5 Year DEU Acceleration $61,556 5 times $12,311
Annual compounding of Qtrly Dividend $20,370 Apply current dividend yield of 9.69% for 5 years
-------
Total Accelerated DEU Amount $81,926
=======
Accelerated DEU in Shares 2,875 $ divided by current price $28.500
Less Actual Shares Distributed to date -605
----
Net Accelerated DEU in Shares 2,270
=====
Net Value of Accelerated DE $64,684 2,270 times $28.500
14
