exv10w2






Exhibit 10.2




EMPLOYMENT AGREEMENT



This Employment Agreement (this “Agreement”), is dated as of January 28, 2011 (the “Execution
Date”) and effective as of February 1, 2011 (the “Effective Date”), by and between Equity One, Inc.
(the “Company”), a Maryland corporation, and Arthur L. Gallagher (“Executive”).




RECITALS



The Company believes that Executive’s services will continue to be integral to the success of the
Company. The Company wishes to retain the services of Executive and expects that Executive’s
contribution to the growth of the Company will be substantial. The Company desires to provide for
the employment of Executive on terms that will reinforce and encourage Executive’s attention and
dedication to the Company. Executive is willing to commit himself to serve the Company, on the
terms and conditions provided below.



Executive is currently employed by the Company pursuant to a certain Employment Agreement (as
heretofore amended, supplemented or otherwise modified, the “Current Employment Agreement”),
effective as of January 2, 2007, which agreement, by its terms, was renewed for an additional year
and as so renewed, unless extended or renewed, will expire on December 31, 2010 unless earlier
terminated. Subject to the earlier termination of the Current Employment Agreement pursuant to the
terms thereof, the Company desires to continue to employ Executive from and after the Effective
Date on the terms and conditions set forth in this Agreement, and subject to the earlier
termination of the Current Employment Agreement pursuant to the terms thereof, Executive desires to
be so employed.



IN CONSIDERATION of the premises and the mutual covenants set forth below, the parties hereby agree
as follows:




AGREEMENT




     1. Employment. Subject to the earlier termination of the Current Employment
Agreement pursuant to the terms thereof, the Company hereby agrees to employ Executive from and
after the Effective Date, and subject to the earlier termination of the Current Employment
Agreement pursuant to the terms thereof, Executive hereby agrees to such employment, on the terms
and conditions hereinafter set forth.



     2. Term. The period of employment of Executive by the Company hereunder (the
"Employment Period”) shall commence on the Effective Date and shall continue through December 31,
2014 (or, in the event of any renewal and extension as contemplated hereby, the last day of the
relevant successive one-year renewal and extension period) or such earlier date on or as of which
this Agreement or Executive’s employment hereunder is terminated in accordance with the terms
hereof. Subject to this Agreement or Executive’s employment hereunder being terminated in
accordance with the terms hereof on or prior to December 31, 2014 (or, in the event of any renewal
and extension as contemplated hereby, the last day of the current successive one-year renewal and
extension period), this Agreement and the Employment Period automatically shall be renewed and
extended for successive one-year periods thereafter unless either party gives the other party prior
written notice at least six months before the expiration of



 









 




the Employment Period of that party’s intent to allow the Employment Period and this Agreement to
expire. As used herein, “End of Term Date” means December 31, 2014; provided, however, that, if
this Agreement and the Employment Period shall (as provided above) have been automatically renewed
and extended for any successive one-year period, “End of Term Date” means the last day of such
one-year period.




     3. Position and Duties. From the Effective Date and thereafter during the
Employment Period, Executive shall serve as the Executive Vice President, President, South Florida,
General Counsel and Corporate Secretary of the Company and shall report to the Chief Executive
Officer of the Company and, as appropriate, to the Board of Directors of the Company (the “Board”)
or any committee thereof; provided, however, that, in his capacity as President, South Florida, he
shall report to the President of the Company. Executive shall have those powers and duties
normally associated with such positions and such other powers and duties as the Chief Executive
Officer or the Board properly may prescribe, provided that such other powers and duties are not
inconsistent with Executive’s position as Executive Vice President, President, South Florida,
General Counsel and Corporate Secretary of the Company. Executive shall devote his full business
time, attention and energies to the Company’s affairs as are necessary to fully perform his duties
for the Company (other than absences due to illness or vacation).



     4. Place of Performance. The principal place of employment of Executive shall be
at the Company’s corporate offices in North Miami Beach, Florida.



     5. Compensation and Related Matters.



          (a) Salary. During the Employment Period, the Company shall pay Executive an annual
base salary of not less than $362,000 (“Base Salary”), which, for the purposes of this Section
5(a), shall be retroactively adjusted to January 1, 2011. Executive’s Base Salary shall be paid in
approximately equal installments in accordance with the Company’s customary payroll practices. If
the Company increases Executive’s Base Salary, such increased Base Salary shall then constitute the
Base Salary for all purposes of this Agreement.



          (b) Annual Bonus.




          (i) The Compensation Committee of the Board (the “Compensation Committee”) shall review
Executive’s performance with the Chief Executive Officer at least annually following each
calendar year of the Employment Period and cause the Company to award Executive an annual bonus
(“Bonus”) in such amount as the Compensation Committee shall reasonably determine as fairly
compensating and rewarding Executive for services rendered to the Company and/or as an incentive
for continued service to the Company. Subject to the immediately following sentence of this
Section 5(b)(i), the amount of Executive’s Bonus shall be determined in the sole and absolute
discretion of the Compensation Committee and shall depend on, among other things, the Company’s
achievement of certain performance levels established from time to time by the Compensation
Committee (such performance levels, as from time to time established by the Compensation
Committee, the “Performance Levels”), which may (in the sole and absolute discretion of the
Compensation Committee) include, without limitation, growth of earnings, funds from operations
per share of Company stock, earnings per share of Company stock and



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Executive’s performance and contribution to increasing the funds from operations, as well
as such individual goals for Executive as the Compensation Committee may deem appropriate. It
is anticipated that the Performance Levels will be set for each calendar year of the Employment
Period so that Executive can reasonably be expected to earn a Bonus for such calendar year in an
amount equal to one hundred percent (100%) of the Base Salary of Executive for such calendar
year. Any Bonus payable to Executive as contemplated by this Section 5(b) shall be payable 50%
in cash and 50% in shares of the Company’s restricted stock, with such shares to be valued for
such purposes at a price per share equal to the Market Value (as hereinafter defined) of a share
of the Company’s common stock determined as of the date on which the amount of such Bonus is
determined by the Compensation Committee (such date, the “Grant Date”) and which shares shall
vest in equal portions on the first, second and third year anniversaries of the Grant Date,
subject to Executive then being employment by the Company hereunder or to such other conditions
as may apply hereunder. Notwithstanding anything to the contrary set forth above, any resulting
fractional share shall be paid in cash. The Company shall pay any Bonus to Executive on or
before March 15th of the calendar year following the calendar year to which such
Bonus relates.




     (ii) Notwithstanding anything contained herein to the contrary, (A) no Bonus shall be
payable hereunder to Executive with respect to any calendar year unless Executive is employed
hereunder by the Company as of the last day of such calendar year and (B) if Executive is
employed hereunder by the Company as of the last day of any calendar year but this Agreement or
Executive’s employment hereunder is terminated or expires in accordance with the terms hereof on
the last day of such calendar year on account of any notice given by Executive, as contemplated
by Section 2 above, of Executive’s intent to allow the Employment Period and this Agreement to
expire, then no Bonus shall be payable hereunder to Executive with respect to such calendar
year. If Executive is employed hereunder by the Company as of the last day of any calendar year
but this Agreement or Executive’s employment hereunder is terminated or expires in accordance
with the terms hereof on the last day of such calendar year on account of any notice given by
the Company, as contemplated by Section 2, of the Company’s intent to allow the Employment
Period and this Agreement to expire, then Employee shall be entitled to a Bonus for such
calendar year, and all unvested Post-Term-Grant Shares (as such term is hereinafter defined)
that are subsequently granted to Executive as part of such Bonus shall vest as provided in
Section 8(d) below.




     (iii) Any shares of restricted stock granted as part of any Bonus are hereinafter
referred to collectively as “Bonus-Grant Shares,” and the portion, if any, of any Bonus-Grant
Shares that are granted or issued after the Employment Period or this Agreement is terminated or
expires are hereinafter referred to collectively as “Post-Term-Grant Shares.”



          (c) Restricted Stock.



               (i) Effective on the Execution Date, the Company shall grant to Executive, under an equity
compensation plan of the Company, one hundred and sixty thousand (160,000) shares of the Company’s
restricted stock. All of such shares of the Company’s restricted stock shall vest on December 31,
2014, if both (A) Executive is then employed hereunder by the Company and (B) the Primary Benchmark
(as hereinafter determined) has been



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achieved for the period from the Effective Date through December 31, 2014; and one-half (1/2) of
such shares of the Company’s restricted stock shall vest on December 31, 2014, if both (Y)
Executive is then employed hereunder and (Z) the Secondary Benchmark (as hereinafter determined)
has been achieved for the period from the Effective Date through December 31, 2014. Alternatively,
some or all of such shares of the Company’s restricted stock may vest as otherwise provided in this
Agreement. Executive shall not be entitled to exercise any vote or right of consent associated with
or attendant to any shares of the Company’s restricted stock granted and issued pursuant to this
Section 5(c)(i) unless and until such shares of the Company’s restricted stock have become vested,
and except as and to the extent provided in Section 5(c)(ii), Executive shall not be entitled to
receive on or with respect to any shares of the Company’s restricted stock granted and issued
pursuant to this Section 5(c)(i) any regular quarterly cash dividends or any other dividend or
distribution (whether or not special or extraordinary and whether or not consisting of any
securities issued or distributed to the Company’s stockholders of record in connection with any
stock split, recapitalization, stock exchange, merger, combination or other reorganization or
similar transaction) unless and until such shares of the Company’s restricted stock have become
vested. The grant of shares of the Company’s restricted stock made by the Company pursuant to this
Section 5(c)(i) is hereinafter referred to as the “Contingent Grant,” and the shares of the
Company’s restricted stock granted to Executive pursuant to this Section 5(c)(i) are hereinafter
referred to collectively as the “Contingent Grant Shares.”




               (ii) Notwithstanding anything to the contrary contained herein, (A) if, as the consequence of
any stock split, stock dividend, reverse stock split, combination or similar event occurring after
the Execution Date and prior to the date any Contingent Grant Shares vest as provided above (such
date, the “Vesting Date”), the number of outstanding shares of the Company’s common stock has been
increased or decreased, then the shares of the Company’s common stock that shall then vest shall be
appropriately increased or decreased, respectively, and (B) upon the vesting of any Contingent
Grant Shares, Executive shall also be entitled to receive with respect to such Contingent Grant
Shares all such dividends and distributions (whether or not consisting of any securities issued or
distributed to the Company’s stockholders of record in connection with any stock split,
recapitalization, stock exchange, merger, combination or other reorganization or similar
transaction, exclusive, however, of any stock split or other issuance that has been taken into
account pursuant to the foregoing clause (A)), exclusive, however, of any regular quarterly
cash dividends, that would have been payable on and with respect to such Contingent Grant
Shares if Executive had been the holder of record of such Contingent Grant Shares on or after the
Effective Date and prior to the Vesting Date.



               (iii) For purposes of the foregoing and the other provisions of this Agreement, the
following terms shall have the following respective meanings:




          “Basket of Comparables” means an investment that is comprised of $10,000 invested in
the shares of common stock or other equity interests of each of the Peer Companies (as
hereinafter defined) (assuming such investment were made on the Effective Date based upon
the Market Value of such shares of common stock or other equity interests as of the
Effective Date).




          “Company Investment” means an investment that is comprised of $10,000 invested in
shares of the Company’s common stock (assuming such investment were



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made on the Effective Date based upon the Market Value of such shares of common stock
as of the Effective Date).




          “Peer Companies” means Federal Realty Investment Trust, Developers Diversified Realty
Corp., Kimco Realty Corporation, Weingarten Realty Investors and Regency Centers Corporation
(provided, however, that, if prior to the end of any period for which the IRR of a Peer
Investment is to be determined, any such entity (or any other entity directly or indirectly
substituted therefor as contemplated hereby) should merge, cease doing business or
otherwise, in the reasonable discretion of the Compensation Committee, no longer represent a
peer or comparable company to the Company, the Compensation Committee may remove such entity
from the Peer Companies and may (in the reasonable discretion of the Compensation
Committee), but shall not be obligated to, substitute for such entity a company that in its
reasonable discretion is a peer or comparable company to the Company or to such removed
entity).




          “IRR of a Company Investment” means, for any specified period, the annual internal rate
of return, on a compounded basis, of an investment in a Company Investment during such
specified period, inclusive of any dividends (if any) declared and paid during such
specified period on shares of the Company’s common stock comprising such Company Investment
and with the value of the shares of common stock comprising such Company Investment as of
the end of such specified period being determined on the basis of the Market Value thereof
as of the last day of such specified period.




          “IRR of a Peer Investment” means, for any specified period, the annual internal rate of
return, on a compounded basis, of an investment in the Basket of Comparables during such
specified period, inclusive of any dividends (if any) declared and paid during such
specified period on shares of common stock or other equity interests comprising the Basket
of Comparables and with the value of the shares of common stock or other equity interests
comprising the Basket of Comparables as of the end of such specified period being determined
on the basis of the Market Value thereof as of the last day of such specified period.




          “Market Value” of a share of common stock or any other equity interest as of any date
means the average closing price of such share of common stock or other equity interest on
the principal stock exchange on which such share of common stock or other equity interest is
listed and traded during the ten (10) trading days immediately preceding such date.




          “Primary Benchmark” shall be deemed to have been achieved for any specified period if
both (I) the IRR of a Company Investment for such specified period equals or exceeds nine
percent (9%) and (II) the IRR of a Company Investment for such specified period is at least
300 basis points in excess of the IRR of a Peer Investment for such specified period.




          “Secondary Benchmark” shall be deemed to have been achieved for any specified period if
both (I) the IRR of a Company Investment for such specified period equals or exceeds six
percent (6%) and (II) the IRR of a Company Investment for such specified period is at least
150 basis points in excess of the IRR of a Peer Investment for



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such specified period; provided, however, that, if both the Primary Benchmark and the
Secondary Benchmark have been achieved for any specified period, the Secondary Benchmark
shall be deemed not to have been achieved for such specified period.



          (d) Expenses. The Company shall reimburse Executive for all reasonable expenses
incurred by him in the discharge of his duties hereunder, including travel expenses, upon the
presentation of reasonably itemized statements of such expenses in accordance with the Company’s
policies and procedures now in force or as such policies and procedures may be modified with
respect to all senior executive officers of the Company. Any frequent flyer miles or points and
similar benefits provided by hotels, credit card companies and others received by Executive in
connection with his business travel shall be retained by Executive for his personal use. The
Company shall provide Executive with credit cards for the payment of business expenses issued
either in the name of the Company with Executive as authorized user or in the name of Executive for
the account of the Company, and balances thereon (to the extent they include charges for business
expenses for which Executive is entitled to reimbursement under the first sentence of this Section
5(d)) shall be payable by the Company. Executive shall maintain detailed records of such expenses
in such form as the Company may reasonably request and shall provide such records to the Company no
less frequently than monthly.



          (e) Vacation; Illness. Executive shall be entitled to the number of weeks of
vacation per year provided to the Company’s other senior executive officers (exclusive of its Chief
Executive Officer and its Chairman), but in no event less than three (3) weeks annually. Executive
shall be entitled to take up to 30 days of sick leave per year; provided, however, that any
prolonged illness resulting in absenteeism greater than the sick leave permitted herein or
disability shall not constitute “Cause” for termination under the terms of this Agreement.



          (f) Welfare, Pension and Incentive Benefit Plans. During the Employment Period,
Executive (and his wife and dependents to the extent provided therein and subject to their
qualifying therefor) shall be entitled to participate in and be covered under all the welfare
benefit plans or programs maintained by the Company from time to time on terms no less favorable
than generally provided for its other senior executive officers (exclusive of its Chief Executive
Officer and its Chairman), including, without limitation, all medical, hospitalization, dental,
disability, accidental death and dismemberment and travel accident insurance plans and programs.
In addition, during the Employment Period, Executive shall be eligible to participate in and be
covered under all pension, retirement, savings and other employee benefit, perquisite, change in
control and executive compensation plans and any annual incentive or long-term performance plans
and programs generally maintained from time to time by the Company on terms no less favorable than
generally provided for its other senior executive officers (exclusive of its Chief Executive
Officer and its Chairman). For purposes of clarification, plans or programs or other benefits that
are provided to any senior executive officer pursuant to the provisions of any negotiated contract
(including, without limitation, any provision similar to Section 5(g) or (h) or Section 13(b) of
this Agreement) shall not be deemed to be generally provided for its other senior executive
officers.



          (g) Maintenance of License to Practice Law. During the Employment Period and for so
long as Executive retains the title of General Counsel or similar legal position, Executive shall
be required to take all actions necessary to, and shall, maintain his license to practice law in
the State of Florida. The Company shall reimburse Executive for all expenses he



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incurs in connection with maintaining his license to practice law, including, without
limitation, appropriate license fees and expenses for continuing education courses.




          (h) Home Office. The parties understand that Executive may from time to time be
called upon to provide services to the Company from his home or while on the road. In order to
enable Executive to so perform such services, the Company shall, at its cost, provide Executive
with such equipment and services at his home, and such cellular telephone services and equipment,
as may be necessary and appropriate to enable him to so perform such services.



          (i) No Hedging. Without the prior written consent of the Chief Executive Officer and
the approval of the Board, Executive agrees that neither he nor any of his designees shall be
permitted to (I) purchase financial instruments (including prepaid variable forward contracts,
equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the
market value of equity securities that (a) have been granted to Executive by the Company as part of
the compensation of Executive or (b) are held, directly or indirectly, by Executive or (II) engage
in any Disclosable Activity. As used herein, “Disclosable Activity” means, as of any time, any
conduct or activity (exclusive, however, of (a) the purchase or other acquisition of any of the
Company’s securities or the sale or other disposition of any of the Company’s securities and (b)
any bone fide pledge of any of the Company’s securities to secure any loan made by an independent
third party to Executive) with respect to which the Company at or as of such time would be
required, pursuant to the Securities Exchange Act of 1933, as amended, the Securities and Exchange
Act of 1934, as amended, or any rule or regulation adopted or promulgated under either such Act, to
make disclosure if Executive (or any designee of Executive) were to engage in such conduct or
activity or if Executive (or any designee of Executive) were permitted to engage in such conduct or
activity.



          (j) Continuation of Entitlement to certain Benefits under Current Employment
Agreement. As long as the Current Employment Agreement is not, pursuant to the terms thereof,
terminated prior to the expiration of the term thereof, then, notwithstanding its expiration,
Executive shall be entitled to receive, for and with respect to the 2010 calendar year, (i) such
bonus as Executive would have been entitled to receive under Section 5(b) of the Current Employment
Agreement if the Current Employment Agreement had been renewed and extended for the entire 2011
calendar year and Executive had continued to be employed thereunder and (ii) such grant of stock
options and/or shares of restricted stock as Executive would have been entitled to receive under
Section 5(c)(iii) of the Current Employment Agreement if the Current Employment Agreement had been
renewed and extended for the entire 2011 calendar year and Executive had continued to be employed
thereunder. Any stock options that are granted to Executive by the Company as contemplated by this
Section 5(k) are, together with all stock options granted to Executive by the Company prior to the
Effective Date, sometimes referred to herein collectively as the “Pre-Effective Stock Options,” and
any shares of the Company’s restricted stock that are granted to Executive by the Company as
contemplated by this Section 5(k) are, together with all shares of the Company’s restricted stock
granted to Executive by the Company prior to the Effective Date (exclusive, however, of any
Contingent Grant Shares), sometimes referred to herein collectively as the “Pre-Effective Grant
Shares.”



     6. Termination. Executive’s employment hereunder may be terminated during the
Employment Period under the following circumstances:



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          (a) Death. Executive’s employment hereunder shall terminate upon his death.



          (b) Disability. If, as a result of Executive’s incapacity due to physical or mental
illness, Executive shall have been substantially unable to perform his duties hereunder for an
entire period in excess of one hundred twenty (120) days in any 12-month period despite any
reasonable accommodation available from the Company, the Company shall have the right to terminate
Executive’s employment hereunder for “Disability”, and such termination in and of itself shall not
be, nor shall it be deemed to be, a breach of this Agreement.



          (c) Without Cause. The Company shall have the right to terminate Executive’s
employment for any reason or for no reason, which termination shall be deemed to be without Cause
unless made for any of the reasons specified in Section 6(d) below, and such termination in and of
itself shall not be, nor shall it be deemed to be, a breach of this Agreement.



          (d) Cause. The Company shall have the right to terminate Executive’s employment for
Cause, and such termination in and of itself shall not be, nor shall it be deemed to be, a breach
of this Agreement. For purposes of this Agreement, the Company shall have “Cause” to terminate
Executive’s employment upon Executive’s:



               (i) Breach of any material provisions of this Agreement;



               (ii) Conviction of a felony, capital crime or any crime involving moral turpitude,
including, but not limited to, crimes involving illegal drugs; or



               (iii) Willful misconduct that is materially economically injurious to the Company or to
any Company Affiliate (as defined below).


For purposes of this Section 6(d), no act, or failure to act, by Executive shall be considered
“willful” unless committed in bad faith or without a reasonable belief that the act or omission was
in the best interests of the Company or any Company Affiliate; provided, however, that the willful
requirement outlined in clause (iii) above shall be deemed to have occurred if Executive’s action
or non-action continues for more than ten (10) days after Executive has received written notice of
the inappropriate action or non-action. Failure to achieve performance goals, in and of itself,
shall not be grounds for a termination for Cause. For purposes of this Agreement, “Company
Affiliate” means as any entity in control of, controlled by or under common control with the
Company or in which the Company owns a material amount of common or preferred stock or interest or
any entity in control of, controlled by or under common control with such entity in which the
Company owns any common or preferred stock or interest.



Cause shall not exist under clause (i) or (iii) above unless and until the Company has delivered to
Executive a copy of a resolution duly adopted by a majority of the Board (excluding Executive and
any other officer or employee of the Company for purposes of determining such majority) at a
meeting of the Board called and held for such purpose, finding that, in the good faith opinion of
the Board, Executive was guilty of the conduct set forth in clause (i) or (iii) above and
specifying the particulars thereof in reasonable detail. However, in the case of conduct described
in clause (i) above, Cause will not be considered to exist unless (a) Executive is given notice of
such breach and (b) if such breach can reasonably be cured within thirty (30) days, such breach
has,






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within thirty (30) days after the date of such notice, been cured to the satisfaction of the Board
or, if such breach cannot reasonably be cured within such 30-day period, Executive has promptly
commenced to cure such breach, has thereafter diligently taken all appropriate steps to cure such
breach as quickly as reasonably practical and has cured such breach within sixty (60) days after
the date of such notice, all to the satisfaction of the Board. In the event a final determination
is made by a court of competent jurisdiction that the Company’s termination of Executive under this
Section 6(d) does not meet the definition of Cause, Executive will be deemed to have been
terminated by the Company without Cause.




          (e) Change in Control. For purposes of this Agreement, a “Change in Control” means:



               (i) Consummation by the Company of (A) a reorganization, merger, consolidation or other
form of corporate transaction or series of transactions, in each case, other than a reorganization,
merger or consolidation or other transaction that would result in the holders of the voting
securities of the Company outstanding immediately prior thereto holding securities that represent
immediately after such transaction more than 50% of the combined voting power of the voting
securities of the Company or the surviving company or the parent of the surviving company, (B) a
liquidation or dissolution of the Company or (C) the sale of all or substantially all of the assets
of the Company;



               (ii) Individuals who, as of the Effective Date, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board, provided (A) that any
person becoming a director subsequent to the Effective Date whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the Company, as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended)
or (B) any individual appointed to the Board by the Incumbent Board shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent Board; or



               (iii) The acquisition (other than from the Company) by any person, entity or “group,”
within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended, of more than 26% of either the then outstanding shares of the Company’s common stock or
the combined voting power of the Company’s then outstanding voting securities entitled to vote
generally in the election of directors (hereinafter referred to as the ownership of a “Controlling
Interest”) excluding, for this purpose, any acquisitions by (A) the Company or its subsidiaries, or
(B) any person, entity or “group” that as of the Effective Date beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) a
Controlling Interest of the Company or any affiliate of such person, entity or “group.”


Executive acknowledges and agrees that, notwithstanding anything in this Agreement to the contrary,
a Change in Control shall not be deemed to have occurred for purposes of this Agreement if, after
the consummation of any of the events described in the definition of a Change in Control, Chaim
Katzman remains Chairman of the Board of the Successor Employer






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(as hereinafter defined) and if Gazit, Inc. and its affiliates own in the aggregate 33% or more of
the outstanding voting securities of the Successor Employer. For purposes of this Agreement, the
term “Successor Employer” shall mean the Company, the reorganized, merged or consolidated Company
(or the successor thereto), or the acquiror (through merger or otherwise) of all or substantially
all of the assets of the Company, as the case may be.




          (f) Resignation Other Than For Good Reason. Executive shall have the right to resign
his employment hereunder by providing the Company with a Notice of Termination, as provided in
Section 7 below. Any termination pursuant to this Section 6(f) shall not in and of itself be, nor
shall it be deemed to be, a breach of this Agreement.



          (g) Resignation For Good Reason. Executive shall have the right to resign his
employment hereunder for Good Reason. For purposes of this Agreement, Executive shall have “Good
Reason” to resign his employment hereunder upon:



               (i) the material breach by the Company of any of its agreements set forth herein and the
failure of the Company to correct such breach within thirty (30) days after the receipt by the
Company of written notice from Executive specifying in reasonable detail the nature of such breach;



               (ii) except as consented to by Executive, any substantial or material diminution of
Executive’s responsibilities, including, without limitation, reporting responsibilities and/or
title; or



               (iii) a change in the principal place of employment under Section 4 hereof to a location
other than in Miami-Dade, Broward or Palm Beach County, Florida.


The Company and Executive agree that it is their mutual plan, intent and expectation that Executive
shall assume a larger role with respect to, and devote an increasing amount of his time to, the
business side of the Company’s business and less of his time with respect to the legal aspects of
the Company’s business and that one or more individuals may be hired or employed by the Company to
handle the legal aspects of the Company’s business so as to allow Executive to transition fully to
the business side of the Company’s business. Accordingly, implementation of such a plan,
including, without limitation, the hiring or employment of another individual or individuals to
handle the legal aspects of the Company’s business, including having any such individual assume the
title, position and responsibilities of General Counsel and/or Corporate Secretary of the Company,
shall not in and of itself provide Executive with Good Reason to resign his employment hereunder.




     7. Termination Procedure.



          (a) Notice of Termination. Any termination of Executive’s employment by the Company
or by Executive (whether by resignation or otherwise) during the Employment Period, except
termination due to Executive’s death pursuant to Section 6(a) above, shall be communicated by
written Notice of Termination to the other party hereto in accordance with Section 15 below. For
purposes of this Agreement, a “Notice of Termination” shall mean a notice that states the specific
termination provision in this Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination



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of Executive’s employment under the provision so stated. Any Notice of Termination given by
Executive shall be deemed a resignation by Executive as an officer and employee of the Company and
any subsidiary thereof and, if Executive is a member of the Board (or any board of directors of any
subsidiary) or any committee thereof (or of any such board of directors), as such member; provided,
however, that the Board may, in its sole and absolute discretion, waive such resignation.




          (b) Date of Termination. The effective date of any termination of Executive’s
employment by the Company or by Executive (whether by resignation or otherwise) (the “Date of
Termination”) shall be (i) if Executive’s employment is terminated by his death, the date of his
death, and (ii) if Executive’s employment is terminated for any other reason by the Company or by
Executive (whether by resignation or otherwise), the date on which a Notice of Termination is given
or any later date (within thirty (30) days after the giving of such Notice of Termination) set
forth in such Notice of Termination.



     8. Compensation Upon Termination or During Disability. If Executive experiences a
Disability or his employment terminates during the Employment Period, the Company shall provide
Executive with the payments and other benefits (which, for the purposes of this Agreement, shall
include, without limitation, any accelerated or automatic vesting of any unvested shares of
restricted stock or of any unvested stock options) set forth below; provided, however, as a
specific condition to being entitled to any payments or other benefits under this Section 8 (other
than pursuant to clause (i) of Section 8(a)(i) and Sections 8(a)(viii) and (ix), 8(b)(i), (x) and
(ix) and 8(c)(i), (ii) and (iii) hereof), Executive must, within fifty-five (55) days after the
Date of Termination, (a) have resigned as a director, trustee, officer and employee of the Company
and all of its subsidiaries and, if Executive is a member of the Board (or any board of directors
of any subsidiary) or any committee thereof (or of any such board of directors), as such member and
(b) have executed and delivered to the Company a release of both the Company and Company Affiliates
in the form attached hereto as Exhibit A (and have not revoked such release for a period of
seven (7) days following its execution by Executive and its delivery to the Company) (the
conditions set forth in this proviso are hereafter sometimes referred to collectively as the
“Qualifying Conditions”). Executive acknowledges and agrees that the payments and other benefits
set forth in this Section 8 constitute liquidated damages for termination of his employment during
the Employment Period, which the parties hereto have agreed to as being reasonable, and Executive
acknowledges and agrees that he shall have no other remedies in connection with or as a result of
any such termination and, except as expressly set forth in this Agreement, shall not be entitled to
any other payments or benefits on account of or with respect to any such termination. As used
herein, “Entitlement Commencement Date” means the sixtieth (60th) day following the
Termination Date.



          (a) Disability; Death. During any period that Executive fails to perform his duties
hereunder as a result of a Disability, Executive shall continue to be entitled to receive his full
Base Salary as set forth (and subject to the conditions) in Section 5(a) above and his full Bonus
as set forth (and subject to the conditions) in Section 5(b) above until his employment is
terminated pursuant to Section 6(b) above or otherwise as provided herein. In addition, if on or
after the Effective Date Executive’s employment is terminated for Disability pursuant to Section
6(b) above or due to Executive’s death pursuant to Section 6(a) above, then the following shall
apply.



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               (i) The Company shall (A) as soon as practicable following the Date of Termination pay to
Executive or his estate, as the case may be, a lump sum payment equal to his unpaid Base Salary and
accrued vacation pay through the Date of Termination and (B) subject to the Qualifying Conditions,
from and after the Entitlement Commencement Date continue to pay (retroactively from the Date of
Termination) to Executive or his estate, as the case may be, his Base Salary through the earlier to
occur of (I) the one hundred and twentieth (120th) day following the Date of Termination
or (II) the End of Term Date.



               (ii) Subject to the Qualifying Conditions, on the Entitlement Commencement Date (A) all
unvested Pre-Effective Stock Options shall fully vest and (B) all unvested stock options granted to
Executive on or after the Effective Date and prior to the Date of Termination that would have
vested during the 90-day period following the Date of Termination and in any event on or prior to
the End of Term Date shall fully vest.



               (iii) Subject to the Qualifying Conditions, on the Entitlement Commencement Date all
unvested Pre-Effective Grant Shares shall fully vest.



               (iv) Subject to the Qualifying Conditions, on the Entitlement Commencement Date all
unvested Bonus-Grant Shares that have been granted to Executive as part of any Bonus paid under
Section 5(b) above prior to the Date of Termination that would have vested during the 90-day period
following the Date of Termination and in any event on or prior to the End of Term Date shall fully
vest.



               (v) Subject to the Qualifying Conditions, on the Entitlement Commencement Date a portion,
equal to the product of the Applicable Contingent Fraction (as hereinafter defined) times the
Benchmark Fraction (as hereinafter defined), of any Contingent Grant Shares that are unvested as of
the Date of Termination shall vest. As used in this Section 8(a),




“Applicable Contingent Fraction” means, with respect to any Contingent Grant
Shares, a fraction (which shall not be greater than one (1)), the numerator
of which is the number of days that have elapsed from January 1, 2011
through the Date of Termination and the denominator of which is one thousand
four hundred and sixty-one (1,461), and




“Benchmark Fraction” means: (i) if the Primary Benchmark has been achieved
for the period from the Effective Date through the Date of Termination, one
(1); (ii) if the Secondary Benchmark has been achieved for the period from
the Effective Date through the Date of Termination, one-half (1/2); or (iii)
if neither the Primary Benchmark nor the Secondary Benchmark has been
achieved for the period from the Effective Date through the Date of
Termination, zero (0).



               (vi) All other unvested stock options and unvested shares of the Company’s restricted
stock granted to Executive prior to the Date of Termination will not vest and will be forfeited,
returned to the Company and, at the Company’s election, may be cancelled by the Company (with it
being agreed and understood, for avoidance of doubt, that, if the Current Employment Agreement is
terminated pursuant to the terms thereof prior to the Effective



- 12 -









 




Date, none of the shares of the Company’s restricted stock that are granted and issued under
this Agreement as part of the Contingent Grant will be or become vested and all of such shares of
the Company’s restricted stock will be forfeited, returned to the Company and, at the Company’s
election, may be cancelled by the Company).




               (vii) Subject to the Qualifying Conditions, during the 90-day period following the Date of
Termination or, if earlier, through the End of Term Date, the Company shall maintain in full force
and effect, for the continued benefit of Executive (if his employment is terminated for Disability)
and Executive’s spouse and dependents (subject to their qualifying therefor) the medical,
hospitalization, dental and life insurance programs in which Executive, his spouse and his
dependents were participating immediately prior to the Date of Termination at the level in effect
and upon substantially the same terms and conditions (including, without limitation, contributions
required by Executive for such benefits) as existed immediately prior to the Date of Termination;
provided, that, if Executive, his spouse or his dependents (subject to their qualifying therefor)
cannot continue to participate in the Company programs providing such benefits, the Company shall
(subject to the next following sentence) arrange to provide Executive (if his employment is
terminated for Disability) and Executive’s spouse and dependents (subject to their qualifying
therefor) with the economic equivalent of such benefits that they otherwise would have been
entitled to receive under such plans and programs. The Company shall only be obligated to pay or
incur an aggregate amount up to $30,000 per annum (pro rated for any period less that a year) in so
arranging to provide Executive (if his employment is terminated for Disability) and Executive’s
spouse and dependents (subject to their qualifying therefor) with the economic equivalent of such
benefits that they otherwise would have been entitled to receive under such plans and programs.



               (viii) The Company shall reimburse Executive or his estate, as the case may be, pursuant
to Section 5(d) above, for reasonable expenses incurred by Executive, but not reimbursed, prior to
the Date of Termination.



               (ix) Executive or his estate or named beneficiaries shall be entitled to such other
rights, compensation and/or benefits as may be due to Executive or his estate or named
beneficiaries in accordance with the terms and provisions of any other agreements, plans or
programs of the Company (provided, however, that, to the extent that any such agreement, plan or
program makes provision with respect to any of the matters referred to in the foregoing clauses (i)
through (viii), the provisions of such clauses shall supersede and govern).



          (b) Termination By Company Without Cause, Termination by Executive for Good Reason.
If Executive’s employment is terminated by the Company without Cause or Executive terminates his
employment with the Company for Good Reason, then the following shall apply.



               (i) The Company shall pay to Executive his unpaid Base Salary and accrued vacation pay
through the Date of Termination, as soon as practicable following the Date of Termination.



               (ii) Subject to the Qualifying Conditions, on the Entitlement Commencement Date the Company
shall pay to Executive a lump-sum payment equal to the lesser of (A) an amount equal to Executive’s
then current Base Salary for the balance of the



- 13 -









 




Employment Period without giving effect to an earlier termination of the Employment Period or
this Agreement based on the termination of Executive’s employment or (B) an amount equal to
Executive’s average annual Bonus, if any, for the three most recently completed calendar years plus
two (2) times Executive’s then current Base Salary (provided, however, that, if a Change in Control
shall have occurred within twelve (12) months prior to the Date of Termination, the amount provided
for in this clause (B) shall be increased to an amount equal to Executive’s average annual Bonus,
if any, for the three most recently completed calendar years plus two and nine-tenths (2.9) times
Executive’s then current Base Salary).




               (iii) Subject to the Qualifying Conditions, on the Entitlement Commencement Date all unvested
stock options granted to Executive prior to the Date of Termination that would have vested on or
prior to the End of Term Date shall fully vest.



               (iv) Subject to the Qualifying Conditions, on the Entitlement Commencement Date all
unvested Pre-Effective Grant Shares and all unvested Bonus-Grant Shares that have been granted to
Executive as part of any Bonus paid under Section 5(b) above prior to the Date of Termination shall
fully vest.



               (v) If the Termination Date is before December 31, 2014, then, subject to the Qualifying
Conditions, on the Entitlement Commencement Date a portion, equal to the product of the Applicable
Contingent Fraction (as hereinafter defined) times the Benchmark Fraction (as hereinafter defined),
of any Contingent Grant Shares that are unvested as of the Date of Termination shall vest. As used
in this Section 8(b),




“Applicable Contingent Fraction” means, with respect to any Contingent Grant
Shares, a fraction (which shall not be greater than one (1)), the numerator
of which is the number of days that have elapsed from January 1, 2011
through the end of the Fraction Measurement Period (as hereinafter defined)
and the denominator of which is one thousand four hundred and sixty-one
(1,461), and




“Benchmark Fraction” means: (i) if the Primary Benchmark has been achieved
for the period from the Effective Date through the Date of Termination, one
(1); (ii) if the Secondary Benchmark has been achieved for the period from
the Effective Date through the Date of Termination, one-half (1/2); or (iii)
if neither the Primary Benchmark nor the Secondary Benchmark has been
achieved for the period from the Effective Date through the Date of
Termination, zero (0).



               (vi) All other unvested stock options and unvested shares of the Company’s restricted
stock granted to Executive prior to the Date of Termination will not vest and will be forfeited,
returned to the Company and, at the Company’s election, may be cancelled by the Company (with it
being agreed and understood, for avoidance of doubt, that, if the Current Employment Agreement is
terminated pursuant to the terms thereof prior to the Effective Date, none of the shares of the
Company’s restricted stock that are granted and issued under this Agreement as part of the
Contingent Grant will be or become vested and all of such shares of the Company’s restricted stock
will be forfeited, returned to the Company and, at the Company’s



- 14 -









 




election, may be cancelled by the Company). In addition and for the avoidance of doubt, if
the Date of Termination shall occur prior to the last day of a calendar year, no Bonus shall be
payable to Executive with respect to such calendar year.




               (vii) Subject to the Qualifying Conditions, during the Continuation Period (as hereinafter
defined), the Company shall maintain in full force and effect, for the continued benefit of
Executive, his spouse and his dependents (subject to their qualifying therefor) the medical,
hospitalization, dental and life insurance programs in which Executive, his spouse and his
dependents were participating immediately prior to the Date of Termination at the level in effect
and upon substantially the same terms and conditions (including, without limitation, contributions
required by Executive for such benefits) as existed immediately prior to the Date of Termination;
provided, that, if Executive, his spouse or his dependents (subject to their qualifying therefor)
cannot continue to participate in the Company programs providing such benefits, the Company shall
(subject to the next following sentence) arrange to provide Executive, his spouse and his
dependents (subject to their qualifying therefor) with the economic equivalent of such benefits
that they otherwise would have been entitled to receive under such plans and programs. The Company
shall only be obligated to pay or incur an aggregate amount up to $30,000 per annum (pro rated for
any period less that a year) in so arranging to provide Executive, his spouse and his dependents
with the economic equivalent of such benefits that they otherwise would have been entitled (subject
to their qualifying therefor) to receive under such plans and programs.



               (viii) The Company shall reimburse Executive, pursuant to Section 5(d) above, for
reasonable expenses incurred by Executive, but not reimbursed, prior to the Date of Termination.



               (ix) Executive shall be entitled to such other rights, compensation and/or benefits as may
be due to Executive in accordance with the terms and provisions of any other agreements, plans or
programs of the Company (provided, however, that, to the extent that any such agreement, plan or
program makes provision with respect to any of the matters referred to in the foregoing clauses (i)
through (viii), the provisions of such clauses shall supersede and govern).


For the purposes of this Section 8(b), “Fraction Measurement Period” means the period beginning on
the Date of Termination and ending on the second (2nd) anniversary of the Date of
Termination or, if earlier, the End of Term Date; provided, however, that, if a Change in Control
shall have occurred within twelve (12) months prior to the Date of Termination, the “Fraction
Measurement Period” means the period beginning on the Date of Termination and ending on the third
(3rd) anniversary of the Date of Termination or, if earlier, the End of Term Date, and
“Continuation Period” means the period beginning on the Date of Termination and ending on the last
day of the 18th month following the Date of Termination or, if earlier, the End of Term
Date.




          (c) Termination by the Company for Cause or By Executive Other Than For Good Reason.
If Executive’s employment is terminated by the Company for Cause or on account of Executive’s
resignation other than for Good Reason, then the following shall apply:




- 15 -












 





               (i) The Company shall pay Executive his unpaid Base Salary and, to the extent required
by law or the Company’s vacation policy, his accrued vacation pay through the Date of Termination,
as soon as practicable following the Date of Termination.



               (ii) The Company shall reimburse Executive, pursuant to Section 5(d) above, for reasonable
expenses incurred by Executive, but not reimbursed, prior to the Date of Termination, unless such
termination resulted from a misappropriation of Company funds.



               (iii) Executive shall be entitled to such other rights, compensation and/or benefits as may be
due to Executive in accordance with the terms and provisions of any other agreements, plans or
programs of the Company (provided, however, that, to the extent that any such agreement, plan or
program makes provision with respect to any of the matters referred to in the foregoing clauses (i)
and (ii) and clause (iv) below, the provisions of such clauses shall supersede and govern).



               (iv) All unvested stock options and unvested shares of the Company’s restricted stock granted
to Executive prior to the Date of Termination will not vest and will be forfeited, returned to the
Company and, at the Company’s election, may be cancelled by the Company (with it being agreed and
understood, for avoidance of doubt, that, if the Current Employment Agreement is terminated
pursuant to the terms thereof prior to the Effective Date, none of the shares of the Company’s
restricted stock that are granted and issued under this Agreement as part of the Contingent Grant
will be or become vested and all of such shares of the Company’s restricted stock will be
forfeited, returned to the Company and, at the Company’s election, may be cancelled by the
Company). In addition and for the avoidance of doubt, if the Date of Termination shall occur
prior to the last day of a calendar year, no Bonus shall be payable to Executive with respect to
such calendar year.


Notwithstanding anything to the contrary contained in this Section 8 or elsewhere in this
Agreement, to the extent the Company has any obligation hereunder to maintain, for the continued
benefit of Executive, his spouse and/or his dependents, any medical, hospitalization, dental and/or
life insurance programs or to arrange to provide Executive, his spouse and/or his dependents with
the economic equivalent of such benefits, such obligation shall (except to the extent prohibited
under applicable law) immediately cease and terminate with respect to any such programs or benefits
that are provided or are offered or made available by an employer or other third party to
Executive, his spouse and/or his dependents; and Executive (or, in the event of his death, his
estate or legal representative) shall forthwith advise the Company in writing as soon as any such
programs or benefits are so provided, or are to offered or made available, to Executive, his spouse
and/or his dependents.




          (d) Vesting upon Non-Renewal. If the Employment Period and this Agreement shall
expire as a consequence of the Company giving written notice to Executive of its election, as
contemplated by Section 2, to allow the Employment Period and this Agreement to expire or as a
consequence of Executive giving written notice to the Company of his election, as contemplated by
Section 2, to allow the Employment Period and this Agreement to expire, then, upon such expiration
of the Employment Period and this Agreement, (i) all unvested Bonus-Grant Shares that have been
granted to Executive as part of any Bonus paid under Section 5(b) prior to the expiration of the
Employment Period and this Agreement shall thereafter vest as if Executive had continued to be
employed hereunder through the last date such Post-Term-Grant





- 16 -









 







Shares would have otherwise vested pursuant to this Agreement as if it had been renewed and
extended through such last date and (iii) all unvested Post-Term-Grant Shares that are subsequently
granted to Executive as part of any Bonus paid under Section 5(b) with respect to the calendar year
ending on the date of such expiration shall thereafter vest as if Executive had continued to be
employed hereunder through the last date such Post-Term-Grant Shares would have otherwise vested
pursuant to this Agreement as if it had been renewed and extended through such last date. For
avoidance of doubt, (Y) the expiration of the Employment Period and this Agreement as described in
the preceding sentence shall not result in the vesting of any of the Contingent Grant Shares and
(Z) the vesting of unvested Bonus-Grant Shares and unvested Post-Term-Grant Shares as described in
the preceding sentence shall not apply in the event (notwithstanding any such written notice from
the Company of its election to allow the Employment Period and this Agreement to expire or any such
written notice from Executive of his election to allow the Employment Period and this Agreement to
expire) Executive’s employment hereunder is terminated for any reason prior to the date the
Employment Period or this Agreement would have otherwise expired.




          (e) Bonus. If the termination of Executive’s employment hereunder occurs as of or
after the end of any calendar year of the Company for which a Bonus is payable to Executive
pursuant to Section 5(b) above and Executive’s termination occurs prior to the date such Bonus is
paid for such calendar year, Executive (or his estate, as the case may be) shall be entitled to
payment of such Bonus that is earned for such calendar year without regard to whether Executive’s
termination of employment precedes the date such Bonus is payable pursuant to the terms of this
Agreement. The vesting of any Bonus-Grant Shares, the acceleration of such vesting and the
forfeiture of such Bonus-Grant Shares shall be subject to the other applicable provisions of this
Agreement.




          (f) Tax Compliance Delay in Payment. If the Company reasonably determines that any
payment or benefit due under this Section 8, or any other amount that may become due to Executive
after termination of employment, would result in an excise tax to Executive under Section 409A of
the Internal Revenue Code of 1986 (“Code”), as amended, because Executive is a “specified
employee,” as defined in Code Section 409A, upon termination of Executive’s employment for any
reason other than death (whether by resignation or otherwise), no amount may be paid to Executive
earlier than six months after the date of termination of Executive’s employment and payment shall
be made, or commence to be made, as the case may be, on the date that is six months and one day
after the termination of Executive’s employment, together with interest at the rate of five percent
(5%) per annum beginning with the date one day after the Date of Termination until the date of
payment.




          (g) Expiration of this Agreement. For the avoidance of doubt, the parties confirm
that, upon the expiration of the Employment Period, the non-renewal of this Agreement or the
termination of Executive’s employment hereunder for any reason or for no reason shall not be
considered a termination by Company without Cause or termination by Executive for Good Reason, and
except as herein otherwise expressly provided, Executive shall not be entitled to any termination
payments or other benefits as a consequence thereof.




          (h) Options. Executive shall have the right to exercise all stock vested options
within the six (6) month period immediately following Executive’s termination of employment;
provided, however, that, in the event Executive voluntarily terminates his employment for other






- 17 -









 







than Good Reason or the Company terminates Executive’s employment for Cause, Executive shall
only have ninety (90) days following termination of his employment to exercise such stock options.
Notwithstanding anything in the foregoing to the contrary, neither the six-month period nor 90-day
period referred to in the immediately preceding sentence shall be deemed to extend the expiration
date of any stock option beyond the date stated in such stock option, and such stock option shall
no longer be exercisable upon the lapse of such six-month period or the 90-day period, as may be
applicable, or (if sooner) upon the date specified in such stock option.




     9. Repayment By Executive. Executive acknowledges and agrees that the bonuses and
other incentive-based or equity-based compensation received by him from the Company, and any
profits realized from the sale of securities of the Company, are subject to the forfeiture and
clawback requirements set forth in the Sarbanes-Oxley Act of 2002 and other applicable laws, rules
and regulations, under the circumstances set forth therein. If any such forfeiture or clawback is
required pursuant to the Sarbanes-Oxley Act of 2002 or other applicable law, rule or regulation,
then within thirty (30) days after notice thereof from the Company, Executive shall pay to the
Company the amount required to be repaid or forfeited.



     10. Confidential Information; Ownership of Documents and Other Property.



          (a) Confidential Information. Without the prior written consent of the Company,
except as may be required by law, Executive will not, at any time, either during or after his
employment by the Company, directly or indirectly divulge or disclose to any person, entity, firm
or association, including, without limitation, any future employer, or use for his own or others’
benefit or gain, any financial information, prospects, customers, tenants, suppliers, clients,
sources of leads, methods of doing business, intellectual property, plans, products, data, results
of tests or any other trade secrets or confidential materials or like information of the Company,
including (but not by way of limitation) any and all information and instructions, technical or
otherwise, prepared or issued for the use of the Company (collectively, the “Confidential
Information”), it being the intent of the Company, with which intent Executive hereby agrees, to
restrict him from dissemination or using any like information that is not readily available to the
general public.




          (b) Information is Property of Company. All books, records, accounts, tenant,
customer, client and other lists, tenant, customer and client street and e-mail addresses and
information (whether in written form or stored in any computer medium) relating in any manner to
the business, operations or prospects of the Company and any of its subsidiaries, whether prepared
by Executive or otherwise coming into Executive’s possession, (all of the foregoing are hereinafter
referred to collectively as the “Company Records”) shall be the exclusive property of the Company
and shall be returned to the Company immediately upon the expiration or termination of Executive’s
employment or at the Company’s request at any time. Upon the expiration or termination of his
employment, Executive will immediately deliver to the Company all lists, books, records, schedules,
data and other information (including all copies) of every kind relating to or connected with the
Company and its activities, business and customers.




     11. Restrictive Covenant; Notice of Activities.



          (a) Non-Competition. During the Employment Period and for a period of one (1) year
after the expiration or termination of Executive’s employment, whether by resignation or






- 18 -









 







otherwise (except if Executive’s employment is terminated by the Company without Cause or by
Executive for Good Reason or results from the non-renewal of this Agreement or failure of a
Successor Employer to assume and be bound by this Agreement), Executive shall not, without the
prior written consent of the Board, directly or indirectly, (i) enter into the employment of,
render any services to, invest in, lend money to, engage, manage, operate, own or otherwise offer
other assistance to, or participate in, as an officer, director, manager, employee, principal,
proprietor, representative, stockholder, member, partner, associate, consultant or otherwise, any
person or entity that competes, plans to compete or is considering competing with the Company in
any business of the Company existing or proposed at the time Executive shall cease to perform
services hereunder (a “Competing Entity”) in any state or with respect to any region of the United
States, in either case in which the Company conducts material operations (defined as accounting for
10% or more of the Company’s revenue) or owns assets the value of which totals 10% or more of the
total value of the Company’s assets, at any time during the term of this Agreement (collectively,
the “Territory”). Notwithstanding the foregoing, Executive shall be permitted to own up to a five
percent (5%) equity interest in a publicly traded Competing Entity




          (b) Non-Interference with Business Relationships. During the Employment Period and
for a period of one (1) year after the expiration or termination of Executive’s employment, for any
reason whatsoever and whether by resignation or otherwise, Executive shall not, without the prior
written consent of the Board, directly or indirectly, () interfere with or disrupt or diminish or
attempt to disrupt or diminish, or take any action that could reasonably be expected to disrupt or
diminish, any past or present or prospective relationship, contractual or otherwise, between the
Company (or any of its subsidiaries) and any tenant, customer, supplier, sales representative,
consultant or employee of the Company (or any of its subsidiaries) or (ii) solicit for employment
or attempt to employ, or assist any other person or entity in employing or soliciting for
employment, either on a full-time or part-time or consulting basis, any employee (whether salaried
or otherwise, union or non-union) of the Company (or any of its subsidiaries) who within one year
prior thereto had been employed by the Company (or any of its subsidiaries).




          (c) Return of Confidential Information and Company Property. Executive shall not upon
expiration or termination of this Agreement take or retain any document or other medium that
constitutes, contains or represents any Confidential Information or Company Record, and as soon as
reasonably possible following any such expiration or termination, Executive shall deliver to the
Company (i) all Confidential Information and Company Records (including all copies and excerpts
thereof) and (ii) any and all property of the Company or its subsidiaries in Executive’s possession
or control, including any codes, manuals, cellular telephones, computers, palm pilots, software,
hardware, floppy disks, corporate credit cards, keys, electronic beeper or other electronic device,
data and other documents and materials that was provided or made available to Executive for the
conduct of his duties hereunder during his employment or other retention by the Company or any of
its subsidiaries, whether during or prior to the term of this Agreement.




          (d) Notice and Procedure. Executive shall, prior to accepting any employment or
engagement with any person or entity, inform such person or entity in writing of his
non-competition obligations and other restrictive covenants under this Agreement. Executive shall
also inform the Company in writing of such prospective employment or engagement prior to accepting
such employment or engagement. If the Company or Executive has any concerns






- 19 -









 







that any of Executive’s proposed or actual post-employment activities may be restricted by, or
otherwise in violation of, this Section 11, such party shall notify the other party of such
concerns and, prior to the Company commencing any action to enforce its rights under this Section
11 or Executive seeking a declaratory judgment with respect to his obligations under this Section
11, the Company and Executive shall meet and confer to discuss the prospective employment or
engagement and shall provide the other party with an opportunity to explain why such prospective
employment or engagement either does or does not violate this Section 11; provided, however, that
the Company’s obligations to give notice under this clause and to meet with Executive before
commencing any action shall not apply if Executive has not provided notice before engaging in
activities that the Company reasonably believes violate this Section 11. Any such meeting shall
occur within three business days of notice and may be held in person or by telephonic, video
conferencing or similar electronic means.




     12. Violations of Covenants.



          (a) Injunctive Relief. Executive agrees and acknowledges (i) that the services to be
rendered by him hereunder are of a special and original character that gives them unique value,
(ii) that the provisions of Sections 10 and 11 above are, in view of the nature of the business of
the Company, reasonable and necessary to protect the legitimate interests of the Company and its
subsidiaries, (iii) that his violation of any of the covenants or agreements contained in such
Sections would cause irreparable injury to the Company and its subsidiaries, (iv) that the remedy
at law for any violation or threatened violation thereof would be inadequate, and (v) that, in the
event of any violation or threatened violation thereof, the Company shall be entitled to temporary
and permanent injunctive or other equitable relief as it may deem appropriate without the
accounting of all earnings, profits and other benefits arising from any such violation, which
rights shall be cumulative and in addition to any other rights or remedies available to the
Company. Executive hereby further agrees that, in the event of any such violation or threatened
violation, the Company shall be entitled to commence an action, suit or proceeding in any court of
appropriate jurisdiction (which, notwithstanding anything to the contrary in Section 17 below, need
not be any Circuit Court of the State of Florida or the United States District Court for the
Southern District of Florida or any other court located in Miami-Dade County, Florida) for any such
preliminary and permanent injunctive relief and other equitable relief and shall not be required,
as a condition to seeking or obtaining any such relief, to provide any bond or other surety, which
Executive hereby expressly waives.




          (b) Enforcement. The Company and Executive recognize that the laws and public
policies of the various states of the United States and the District of Columbia may differ as to
the validity and enforceability of certain of the provisions contained herein. Accordingly, if any
provision of this Agreement shall be deemed to be invalid or unenforceable, as may be determined by
a court of competent jurisdiction, this Agreement shall be deemed to delete or modify, as
necessary, the offending provision and to alter the balance of this Agreement in order to render
the same valid and enforceable to the fullest extent permissible as aforesaid.




          (c) Survival. The provisions of this Section 12 and of Sections 10 and 11 above shall
survive the expiration or earlier termination of this Agreement for any reason whatsoever.







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     13. Insurance.



          (a) Key Man Life Insurance. Executive agrees to facilitate the Company to purchase
and maintain “Key Man Insurance” in an amount desired by the Company for the benefit of the Company
and to reasonably cooperate with the Company and its designated insurance agent to facilitate the
purchase and maintenance of such insurance.




          (b) Insurance Policies for Executive. The Company shall provide promptly (and, in
any event, within thirty (30) days following receipt from Executive of written evidence of
Executive’s having made expenditures therefor) reimburse Executive (up to an aggregate maximum of
$15,000 in any year) for premiums paid by Executive for life, disability and/or similar insurance
policies.




     14. Successors; Binding Agreement.



          (a) Company’s Successors. No rights or obligations of the Company under this
Agreement may be assigned or transferred except that the Company will require a Successor Employer
to expressly assume and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken place.




          (b) Executive’s Successors. No rights or obligations of Executive under this
Agreement may be assigned or transferred other than his rights to payments or benefits hereunder,
which may be transferred only by will or the laws of descent and distribution. Upon Executive’s
death, this Agreement and all rights of Executive hereunder shall inure to the benefit of and be
enforceable by, and shall be binding upon and enforceable against, Executive’s beneficiary or
beneficiaries, personal or legal representatives, or estate, to the extent any such person succeeds
to Executive’s interests under this Agreement. Executive shall be entitled to select and change a
beneficiary or beneficiaries to receive any benefit or compensation payable hereunder following
Executive’s death by giving the Company written notice thereof. In the event of Executive’s death
or a judicial determination of his incompetence, references in this Agreement to Executive shall be
deemed, where appropriate, to refer to his beneficiary(ies), estate or other legal
representative(s). If Executive should die following the Date of Termination while any amounts
would still be payable to him hereunder if he had continued to live, all such amounts unless
otherwise provided herein shall be paid in accordance with the terms of this Agreement to such
person or persons so appointed in writing by Executive or otherwise to his legal representatives or
estate.




     15. Notice. All notices or other communications that are required or permitted
hereunder shall be in writing and sufficient if delivered personally, or sent by
nationally-recognized, overnight courier or by registered or certified mail, return receipt
requested and postage prepaid, addressed as follows:



	 	 	 
	To the Company:
	 	Equity One, Inc.
	 
	 	1600 NE Miami Gardens Drive
	 
	 	North Miami Beach, Florida 33179
	 
	 	Attention: General Counsel






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	 	With copies to:
	 
	 	 
	 
	 	The Chair of the Compensation Committee
	 
	 	 
	 
	 	and to
	 
	 	 
	 
	 	Herbert F. Kozlov, Esq.
	 
	 	Reed Smith LLP
	 
	 	599 Lexington Avenue
	 
	 	New York, New York 10022
	 
	 	 
	To Executive:
	 	Arthur L. Gallagher
	 
	 	Equity One, Inc.
	 
	 	1600 NE Miami Gardens Drive
	 
	 	North Miami Beach, Florida 33179
	 
	 
	 	and	 
	 
	 
	 	Arthur L. Gallagher
	 
	 	4420 Monserrate Street
	 
	 	Coral Gables, Florida 33146
	 
	 	(or such other address as may be provided in the Company’s payment records)





or to such other address as either party may have furnished to the other in writing in accordance
herewith. All such notices and other communications shall be deemed to have been received (a) in
the case of personal delivery, on the date of such delivery, (b) in the case of delivery by
nationally-recognized, overnight courier, on the business day following dispatch, and (c) in the
case of mailing, on the third business day following such mailing.




     16. Attorneys’ Fees. The Company shall reimburse Executive for the reasonable
attorneys’ fees and costs incurred by Executive in connection with the review, negotiation and
execution of this Agreement. If either party is required to seek legal counsel to interpret or
enforce the terms and provisions of this Agreement, the prevailing party in any action, suit or
proceeding shall be entitled to recover reasonable attorneys’ fees and costs (including on appeal).



     17. Miscellaneous and Waiver of Jury Trial. No provisions of this Agreement may be
amended, modified or waived unless such amendment or modification is agreed to in writing signed by
Executive and by a duly authorized officer of the Company or such waiver is set forth in writing
and signed by the party to be charged therewith. No waiver by either party hereto at any time of
any breach by the other party hereto of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have been made by
either party that are not set forth expressly in this Agreement. Except as herein otherwise
provided, the respective rights and obligations of the parties hereto under this Agreement shall
survive the expiration or termination of Executive’s employment (whether by resignation or
otherwise) and the expiration or termination of this Agreement to the extent necessary for the



- 22 -









 




intended preservation of such rights and obligations. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of the State of
Florida without regard to its conflicts of law principles. Each party unconditionally and
irrevocably agrees that the exclusive forum and venue for any action, suit or proceeding shall be
in Miami-Dade County, Florida, and consents to submit to the exclusive jurisdiction, including,
without limitation, personal jurisdiction, and forum and venue of the Circuit Courts of the State
of Florida or the United States District Court for the Southern District of Florida, in each case,
located in Miami-Dade County, Florida. EACH OF THE PARTIES HERETO EXPRESSLY WAIVES ITS OR HIS
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY SUIT, LITIGATION OR OTHER JUDICIAL PROCEEDING REGARDING
THIS AGREEMENT OR ANY DISPUTE HEREUNDER OR RELATING HERETO.




     18. Validity. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect. In the event that any provision or
provisions contained in this Agreement shall be deemed illegal or unenforceable, the remaining
provisions contained in this Agreement shall remain in full force and effect, and this Agreement
shall be interpreted as if such illegal or unenforceable provision or provisions were not contained
in this Agreement, subject, however, to Section 12(b) above, which to the extent applicable shall
supersede and govern.



     19. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together will constitute one and the same
instrument.



     20. Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or warranties, whether oral or
written, by any officer, director, employee or representative of either party hereto in respect of
such subject matter. For purposes of clarification and avoidance of any doubt, (a) notwithstanding
anything contained herein to the contrary unless otherwise specifically provided herein, the terms
and conditions of Executive’s employment by the Company and termination (including payments upon
termination) through January 31, 2011 and prior to the Effective Date are and shall continue to be
governed by the terms and conditions set forth in the Current Employment Agreement, but thereafter
the terms and conditions of Executive’s employment by the Company and termination (including
payments upon termination) shall be governed by the terms and conditions of this Agreement, which
terms and conditions shall, from and after the Effective Date, supersede and control and (b)
notwithstanding anything contained herein to the contrary, if the Current Employment Agreement is
terminated prior to the Effective Date in accordance with the terms thereof, (i) Executive’s
entitlement to any payment on account of or with respect to such termination shall be governed
solely by the terms of the Current Employment Agreement, (ii) from and after the Effective Date,
the Current Agreement (to the extent it otherwise shall not have been terminated prior thereto)
shall be deemed to have been amended and restated as provided herein and the Company’s obligations
and liabilities to Executive from and after the Effective Date shall be limited to those expressly
provided herein and (iii) the Company shall have no continuing obligations or liabilities to
Executive under or pursuant to the Current Agreement. From and after the Effective Date, in the
event of any conflict or inconsistency between the terms and conditions of this Agreement and the
terms and



- 23 -









 




conditions of the Current Agreement, of any stock option or restricted stock agreement or plan
relating thereto or of any other separate agreement, the terms and conditions of this Agreement
shall supersede, govern and prevail.




     21. Withholding. All payments hereunder shall be subject to any required withholding
of Federal, state and local taxes pursuant to any applicable law or regulation.



     22. Insurance; Indemnity. Executive shall be covered by the Company’s directors’ and
officers’ liability insurance policy, and errors and omissions coverage, to the extent such
coverage is generally provided by the Company to its directors and officers and to the fullest
extent permitted by such insurance policies. Nothing herein is or shall be deemed to be a
representation by the Company that it provides, or a promise by the Company to obtain, maintain or
continue, any liability insurance coverage whatsoever for its executives. In addition, the Company
shall enter into its standard indemnity agreement by which Company commits to indemnify a Company
officer in connection with claims, suits or proceedings arising as a result of Executive’ service
to the Company.



     23. Section Headings. The section headings in this Agreement are for convenience of
reference only, and they form no part of this Agreement and shall not affect its interpretation.



[Remainder of this Page Intentionally left Blank]






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     The parties hereto have executed this Agreement effective as provided above.



	 	 	 	 	 
	 	EQUITY ONE, INC.

 	 
	 	By 	            /s/ Jeffrey S. Olson
 	 
	 	 	Name: Jeffrey S. Olson 	 
	 	 	Title:   Chief Executive Officer 	 
	 
	 	 	 
	 	/s/ Arthur L. Gallagher
 	 
	 	ARTHUR L. GALLAGHER