CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT is made as of this 1st day of June, 2000, by and between
REGENCY REALTY CORPORATION, a Florida corporation (the "Company") and
__________________ ("Employee").
WHEREAS, the Company wishes to provide inducement to Employee to remain
as an executive officer of the Company and a key employee of the Company and/or
one or more of its Affiliates (as defined below) or other entities the ownership
of which is attributable to the Company pursuant to Section 318 (including any
successor provision) of the Internal Revenue Code of 1986, as amended (the
"Code") (the Company, its Affiliates and such entities are referred to
collectively as the "Regency Entities");
WHEREAS, the parties agree that the restrictive covenants underlying
certain of 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.
In consideration of Employee's agreement to continue as an executive
officer of the Company and as an employee of one or more of the Regency
Entities, Employee and the Company agree as follows:
1. Definitions. The following definitions shall apply:
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(a) "Beneficial Owner" of securities means any securities:
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(i) which such Person or any of such Person's "Affiliates" and "Associates,
as such terms are defined in Rule 12b-2 of the General Rules and
Regulations of the Securities Exchange Act of 1934 (the "Exchange
Act"), has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase;
or
(ii) which such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Exchange Act or any
successor provision), including pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any
security under this subsection (ii) as a result of an agreement,
arrangement or understanding to vote security if the agreement,
arrangement or understanding arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act and is not
also then reportable on a Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in subsection (ii) above) or disposing
of any voting securities of the Company);
(b) "Cause" means:
(i) The willful and substantial failure or refusal of Employee to
perform duties assigned to Employee (unless Employee shall be
ill or disabled) under circumstances where Employee would not
have Good Reason to terminate Employee's employment hereunder,
which failure or refusal is not remedied by Employee within
thirty (30) days after written notice from the Chief Executive
Officer of the Company or the Board of Directors of such
failure or refusal;
(ii) A material breach of Employee's fiduciary duties to any
Regency Entity (such as obtaining secret profits from the
Regency Entity) or a violation by Employee in the course of
performing 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 Employee's employment hereunder; or
(iii) Employee's engaging in illegal conduct (other than traffic
violations or other minor offenses) which results in a
conviction (or a no contest or nolo contendere plea thereto)
which is not subject to further appeal and which is materially
injurious to the business or public image of any Regency
Entity.
(c) "Change of Control" means:
(i) Fifty percent (50%) or more of the members of the Board of
Directors of the Company:
(1) are not Continuing Directors, or
(2) 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 by the Security
Capital Entities if the director also is a director
of Security Capital Group, Inc., including any
successor);
(ii) Any individual, firm, partnership, corporation or other
entity, including any successor (by merger or otherwise) of
such entity, or a group of any of the foregoing acting in
concert (a "Person") (other than any employee benefit plan
maintained by the Company or any entity controlled by the
Company or any entity holding securities of the Company for or
pursuant to the terms of any such plan or any trustee,
administrator or fiduciary of such a plan) becomes the
Beneficial Owner of securities of the Company representing at
least twenty-five percent (25%) of the combined voting power
of the Company's then outstanding securities except:
(1) any acquisition by any Security Capital Entity or any
of its Affiliates (including the pledge to any bona
fide pledgee of securities of the Company by such
investor or its Affiliates to secure bona fide
indebtedness of such Person but excluding any
transfer to or for the benefit of the pledgee
pursuant to its rights as pledgee) which is made
while the standstill provisions of the Stockholders
Agreement are in effect and which is made in
compliance with such provisions;
(2) any acquisition by the Company;
(3) transfers between and among the Security Capital Entities and their
respective Affiliates; or
(4) any transaction or series of related transactions
directly with the Company which have been authorized
by a majority of the Continuing Directors then
serving on the Company's Board of Directors;
(iii) There shall be consummated or the shareholders shall have
approved (and the Board shall not have abandoned):
(1) any reorganization, consolidation, share exchange, or merger
(a "Business Combination") of the Company in which the Company is not
the continuing or surviving corporation or pursuant to which the
Company's common stock would be converted into cash, securities or
other property, other than a Business Combination in which the
holders of the Company's voting common stock immediately prior to
such Business Combination Beneficially Own, directly or indirectly,
more than 50% of the combined voting power of the then-
outstanding voting securities entitled to vote generally in the
election of directors of the corporation resulting from such
initial Business Combination in substantially the same proportions
as their ownership, immediately prior to such Business Combination,
of the outstanding Company voting stock, or
(2) except as provided in clause (1), any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions)
of all, or substantially all, of the assets of the Company;
(iv) The Company acquires, whether through purchase, merger or
otherwise, all or substantially all of the operating assets or
capital stock of another entity and in connection with such
acquisition persons are elected or appointed to the Board of
Directors of the Company who are not directors immediately
prior to the acquisition and such persons, even though they
may be Continuing Directors, constitute at least fifty percent
(50%) of the Board of Directors after such acquisition; or
(v) The shareholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company;
(d) "Continuing Director" means:
(i) any member of the Board of Directors of the Company who was a
member of such Board on January 1, 2000, and any successor of
a Continuing Director who is recommended to succeed a
Continuing Director by at least a majority of the Continuing
Directors then on such Board;
(ii) any individual who becomes a director subsequent to January 1,
2000, whose election or nomination for election by the
Company's shareholders was approved by a vote of at least a
majority of the directors then comprising the Continuing
Directors; and
(iii) any individual who becomes a director pursuant to Article 2 of the
Stockholders Agreement;
(e) "Good Reason" means (unless consented to in writing by the Employee):
(i) a diminution or adverse change, in the nature of Employee's
title, position, reporting relationships, 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); or
(ii) a diminution in Employee's total compensation and benefits or
the formula for Employee's incentive compensation, in either
case for reasons not reasonably related to Employee's
performance; or
(iii) a diminution, without Employee's consent, in the nature of
Employee's working conditions, or
(iv) Employee shall be required to perform duties which would
necessitate relocating Employee's residence beyond a
reasonable commuting distance from the Company's offices where
Employee was based immediately prior to the Change of Control;
or
(v) a successor fails to assume this Agreement, or amends or modifies this
Agreement; or
(vi) a material breach of this Agreement by the Company or a successor
thereto; or
(vii) in the case of an Employee who is also a director, the failure of
the Employee to be nominated for re-election to the board; or
(viii) the Company or its successor giving notice that this Agreement will not
be automatically extended;
(f) "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; and
(g) "Stockholders Agreement" means the Stockholders Agreement dated
July 10, 1996, as amended, among the Security Capital Entities and the
Company.
2. Term. The term of this Agreement shall begin on the date hereof and
end at 11:59 p.m. on December 31, 2005, and thereafter shall
automatically renew for successive additional five-year terms unless
either party delivers written notice of non-renewal within 90 days
of the end of the then current term; provided, however, that if a
Change of Control has occurred during the original or any extended term
the term of this Agreement shall extend for 24 calendar months after
the end of the calendar month in which the Change of Control
occurs.
3. Change of Control. In the event that during the term of this Agreement
the Company terminates Employee's employment without Cause or Employee
terminates Employee's employment for Good Reason, in each case within
two years following a Change of Control:
(a) Employee shall be entitled to receive a lump sum cash payment within
fifteen (15) days after the date of termination (or at Employee's
election, equal monthly installments at the end of each month for
twenty-four months, the "Termination Payment Period") equal to the
sum of (i) two times Employee's annual base salary in effect on the
date of termination or, if greater, immediately prior to the Change
of Control, and (ii) an amount in cash equal to two times Employee's
most recent annual bonus, if any, paid pursuant to the Company's
Annual Incentive for Management Plan or any successor plan ("Annual
Incentive Plan"), or if greater, two times Employee's targeted Annual
Incentive Plan bonus for the current year in which the termination
occurs.
(b) Employee shall receive fringe benefits and other employee benefits
during the Termination Payment Period (other than vacations, stock
options and profit sharing contributions but including the life,
health, and disability insurance) comparable to those that Employee was
receiving on the date of termination or immediately prior to the Change
of Control, if greater. If such benefits cannot be provided under the
Company's existing benefit plans or programs, individual coverage
will be provided at no additional charge to the Employee or the cash
equivalent thereof will be paid to the Employee.
(c) All unvested stock options and unvested dividend equivalent units
(DEU's) held by Employee, or by the Company on the Employee's behalf,
will fully vest on the date of termination of Employee. Employee shall
be entitled to exercise all unexercised stock options within the
later of ninety (90) days following termination or the expiration
date of such options as provided in each option agreement pertaining
thereto. All DEU's held by the Company on Employee's behalf will be
immediately distributed to the Employee.
(d) All unvested restricted stock held by the Company on the Employee's
behalf will fully vest on the date of termination of Employee and
be immediately distributed to Employee.
(e) All amounts held by the Company on account for Employee in the
Regency Realty Deferre Compensation Plan will be distributed to
Employee in accordance with the Employee's election under the Plan.
(f) The following provisions shall apply to any stock purchase loans owed
by Employee to the Company (the "Stock Purchase Loans"):
(i) Stock Purchase Loans will become non-recourse obligations on the date
of termination of Employee.
(ii) Stock Purchase Loans that contain forgiveness provisions based
on Employee remaining employed by any Regency Entity and/or
the satisfaction by the Company of certain performance
criteria (A) will not be due and payable upon termination of
employment, anything in the loan documents to the contrary
notwithstanding, (B) shall remain outstanding, and (C) shall
be subject to forgiveness as if Employee's employment had not
been terminated.
(iii) In the event that (A) a Stock Purchase Loan becomes due and payable
as a result of termination of employment and the settlement of the
Stock Purchase Loan results in ordinary income to Employee for federal
income tax purposes ("Loan Income"), or (B) the change in the
obligation to non-recourse results in Loan Income, the Company
shall also pay to Employee at the same time that it pays the other
amounts due hereunder (or in the case of subsequent forgiveness, at
the time of such forgiveness) an amount with respect to such Loan
Income sufficient to cover the federal income tax and any state or
local income taxes due on such Loan Income and on the cash
payment made under this subsection (iii).
(g) 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 Employee
hereunder or any other payments received or to be received by
Employee from the Company or any successor thereto (collectively,
"Severance Benefits") (whether payable pursuant to the terms hereof
or any other plan, agreement or arrangement with the Company or any
corporation affiliated with the Company within the meaning of Section
1504 of the Code) would, in the opinion of Tax Counsel (as hereafter
defined) 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 Severance Benefits 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 3(g), the Company shall pay to Employee
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 income tax arising in respect of imposition of such Excise Tax;
(iii) any federal, state or local income tax or Excise Tax imposed
upon the payment provided for by this Section 3(g); and (iv) any
interest charges or penalties arising as a result of filing federal,
state or local income tax returns in accordance with the opinion of Tax
Counsel described in Section 4(a), shall be equal to the Severance
Benefits. Notwithstanding the foregoing, if the amount of the Severance
Benefits does not exceed by more than ten percent (10%) the amount
that would be payable to Employee if the Severance Benefits 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 Severance Benefits shall be reduced to the Scaled Back
Amount, and Employee shall not be entitled to any Gross-Up Payment.
(h) For purposes of determining the amount of the payments made pursuant
to Sections 3(f)(iii) and 3(g) hereof, 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 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.
4. Procedure.
(a) For purposes of Section 3(g), within sixty (60) days after delivery
of a written notice of termination by the Employee or by the Company
pursuant to this Agreement, 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, which determination shall be evidenced in a certificate
of such auditors addressed to the Company and Employee. Such opinion
shall be dated as of the date of termination of Employee's
employment and addressed to the Company and the Employee and shall be
binding upon the Company and the Employee.
(b) The provisions of Section 3, including the calculations, notices
and opinions provided for herei shall be based upon the conclusive
presumption that
(i) the compensation and benefits provided for in Section 3 hereof, and
(ii) any other compensation earned prior to the Change in Control
by the Employee pursuant to the Company's compensation programs if such
payments would have been made in the future in any event, even
though the timing of such payment is triggered by the Change
of Control, is reasonable, provided, however, that in the event
such Tax Counsel so equests in connection with the opinion required
by Section 4(a), the Company shall obtain at its expense, and Tax
Counsel may rely on in providing the opinion, the advice of a firm of
recognized executive compensation consultants as to the
reasonableness of any item ofcompensation to be received by the
Employee.
5. Compensation Upon Termination. Except as provided in Section 3(g)
with respect to the Scaled Back Amount, Employee shall not be
required to mitigate the amount of any compensation or other amounts
payable to Employee hereunder pursuant to Section 3 ("Change of
Control") following the early termination of Employee's employment,
by securing other employment or otherwise, nor will such compensation
be reduced by reason of Employee securing other employment or for any
other reason.
6. Confidentiality and Non-Competition.
(a) 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, 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 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) The Company agrees not to disclose to any third party any
information concerning the terms of Employee's employment or Employee's
work-related performance or, in the event that Employee ceases to be
employed hereunder, the reasons or basis for Employee's termination of
employment, without Employee's prior written consent or except as may
be required by law.
(c) During Employee's employment and during the one-year period after
Employee ceases to be employed by any of the Regency Entities, Employee
agrees that:
(i) unless Employee's employment is terminated following a Change
of Control without Cause or for Good Reason, 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) whether or not a Change of Control has occurred, Employee shall not
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 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
Employee was not aware that such negotiations were being conducted.
(d) The parties agree that any breach of this Section 6 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 6, the non-breaching
party shall be entitled to injunctive relief. Should any provision
of this Section 6 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 Sections 6(a) and 6(b) shall survive the termination
of this Agreement.
7. Withholding. The Company shall withhold from all payments to Employee
hereunder all amounts required to be withheld under applicable local,
state or federal income tax law.
8. Dispute Resolution. Any dispute, controversy or claim between the
Company and 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 shall bear the cost with respect
to such arbitration (including reasonable attorney's fees and expenses
incurred by Employee), provided, however, that in the event that no
award is made to Employee, the Employee will be responsible to
reimburse the Company for one-half of such costs.
9. 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, change of control agreement or non-
competition agreement between the Company or Pacific Retail Trust
(to which the Company is successor by merger) and Employee. This
Agreement shall be binding upon and inure to the benefit of the
Employee and Employee's heirs and personal representatives and the
Company and its successors, assigns and legal representatives. 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 REALTY CORPORATION
By:
Its:
"Company"
"Employee"