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Exhibit 10(b)
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 Jackson Place, 188 East
Capitol Street,
Jackson, Mississippi 39201-2195, 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
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
assuring that the
Change in Control compensation arrangements 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, and 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.
<PAGE>
(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
<PAGE>
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;
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(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 18-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.
<PAGE>
(b) A lump sum severance payment in an amount equal to the product
of 1.5
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 the product
of 1.5
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")
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