Document:

ex10_2.htm

    
      

    

    Exhibit
10.2

    
       

      EMPLOYMENT
AGREEMENT

      

      

      This
EMPLOYMENT AGREEMENT (“Agreement”) is made effective
as of July 30, 2007 (“Effective
Date”) by and between Equity One, Inc, a Maryland corporation (the “Company”), and Thomas E.
McDonough (“Executive”).

       

      W
I T N E S S E T H:

       

      The
Company desires to employ Executive as of the Effective Date, on the terms and
conditions set forth in this Agreement, and Executive desires to be so
employed.

       

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

      

      Section
1.           Employment.  The
Company hereby agrees to employ Executive and Executive hereby agrees to such
employment, on the terms and conditions hereinafter set forth.

       

      Section
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,
2010.  This Agreement and the Employment Period automatically shall be
renewed 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.

       

      Section
3.           Position and Duties. From and
after the Effective Date during the Employment Period, Executive shall serve as
Executive Vice President, Chief Investment Officer of the Company and shall
report to the Chief Executive Officer.  Executive shall have those
powers and duties normally associated with the position of a Executive Vice
President and such other powers and duties as the Chief Executive Officer may
properly prescribe, provided that such other powers and duties are consistent
with Executive’s position.  Executive shall devote his full business
time, attention and energies to Company affairs as are necessary to fully
perform his duties for the Company (other than absences due to illness or
vacation).  Notwithstanding the foregoing, the Company acknowledges
that Executive has an interest in three real estate projects located in Foothill
Ranch, Novato and Indio, California and may devote time to these projects;
provided, however, that such devotion of time shall not detrimentally interfere
with the performance of his duties under this Agreement.

       

      Section
4.           Place of
Performance.  The principal place of employment of Executive
shall be at an office to be established by the Company in Irvine or Newport
Beach, California, subject to reasonable travel as required in the performance
of his duties outlined above.

       

      Section
5.           Compensation and Related
Matters.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (a)      Salary.  During
the Employment Period, the Company shall pay Executive an annual base salary of
not less than $300,000 (“Base
Salary”).  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.  The Company may not decrease Executive’s
Base Salary during the Employment Period.

       

      (b)      Annual
Bonus.  The compensation committee (the “Compensation Committee”) of
the Board of Directors of the Company (the “Board”) shall review with the
Chief Executive Officer the Executive’s performance at least annually during
each calendar year of the Employment Period and cause the Company to award
Executive such cash bonus (“Bonus”) 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.  The amount of Executive’s Bonus
shall be determined in the discretion of the Compensation Committee in
consultation with the Chief Executive Officer and shall depend on, among other
things, the Company’s achievement of certain performance levels established by
the Compensation Committee, which may include, among others, such performance
measures as growth of earnings, funds from operations per share of Company
common stock, earnings per share of Company common stock and Executive’s
performance and contribution to increasing the funds from operations; provided,
however, that in no event shall the amount of Executive’s Bonus be less than
half of the then Base Salary for each year of this Agreement ($62,500 for the
2007 calendar year).  The Company shall pay any Bonus to Executive on
or before March 15th of the
calendar year following the calendar year to which the bonus
relates.

       

      (c)      Restricted Stock and Stock
Options.

       

      (i)           On
the Effective Date, the Company shall grant to Executive, either under the
equity compensation plans of the Company or otherwise, 20,000 shares of the
Company’s restricted stock.  Such shares of restricted stock shall
vest in equal installments on each of the first, second, third and fourth
anniversaries of the Effective Date.  Dividends on restricted stock
shall be paid to Executive at such times as dividends are paid to shareholders
of the Company’s common stock.

       

      (ii)           On
the Effective Date, the Company shall grant to Executive, either under the
equity compensation plans of the Company or otherwise options to purchase 75,000
shares of the Company’s common stock.  Such stock options shall vest
in equal installments on each of the first, second, third and fourth
anniversaries of the Effective Date.

       

      (iii)           Following
each calendar year of the Employment Period, the Compensation Committee shall
review with the Chief Executive Officer the Executive’s performance during the
prior year and cause the Company to grant to Executive stock options and/or
shares of restricted stock in the amount that 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; provided, however, that in no event shall the number and terms of such
award be less favorable than granting to Executive 10,000 shares of restricted
stock and options to purchase 75,000 shares of the Company’s common stock (4,167
shares of restricted stock and options to purchase 31,250 shares of Company
common stock for the 2007 calendar year).  Stock options or shares of
restricted stock so granted or issued shall vest in equal installments on each
of the first, second, third and fourth anniversaries of the date of grant
thereof, provided however that in the event the Company issues Executive a
notice of non-renewal, all unvested restricted stock and options shall vest as
of the last day of the Employment Period.

      
        
           

        

        
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      (iv)           Any
stock options granted to the Executive in accordance with this Agreement shall
have an exercise price equal to the closing price of a share of the Company’s
common stock on the principal stock exchange on which the Company’s common stock
is listed on the date of grant thereof.  In addition, Executive shall
have the right to exercise all vested options within the six (6) month period
immediately following Executive’s termination of employment, provided, however,
that in the event Executive voluntarily terminates Executive’s employment (for
other than Good Reason), or the Company terminates Executive’s employment for
Cause, Executive shall only have ninety (90) days following termination of
employment to exercise Executive’s options.  The grant of options
and/or restricted stock to Executive shall be evidenced by a separate written
agreement(s) to be provided to Executive. In the event of any conflict between
the terms of such stock option or restricted stock agreement or the plan
relating thereto and the terms of this Agreement, the terms of this Agreement
shall control.

       

      (v)           If
any shares or options provided for above are not issued under the equity
compensation plans of the Company, the Company hereby agrees to use commercially
reasonable efforts to prepare and file with the Securities and Exchange
Commission a registration statement and such other documents as may be necessary
in order to comply with the provisions of the Securities Act of 1933, as
amended, so as to permit the registered resale of the shares of restricted stock
granted hereunder and to permit the registered issuance of any shares of common
stock pursuant to the stock options granted hereunder to the extent not covered
by an existing, effective registration statement of the Company.

       

      (d)      Long Term Cash Incentive
Compensation.  Executive shall
be entitled to the long-term cash incentive compensation, if any, determined in
accordance with Exhibit A attached
hereto.

       

      (e)      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.

      
        
           

        

        
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      (f)      Vacation;
Illness.  Executive shall be entitled to the number of weeks of
vacation per year provided to the Company’s senior executive officers, 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.

       

      (g)      Welfare, Pension and
Incentive Benefit Plans.  During the Employment Period,
Executive (and his wife and dependents to the extent provided therein) 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 provided for any of its senior executives 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 maintained
from time to time by the Company on terms no less favorable than provided for
any of its senior executives.

       

      (h)      Automobile.  During
the Employment Period, the Company shall provide Executive with an automobile
allowance equal to $650 per month.

       

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

       

      (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, 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:

      
        
           

        

        
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      (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.

       

      For
purposes of this Section 6(d), no act, or failure to act, by Executive shall be
considered “willful” unless committed in bad faith and without a reasonable
belief that the act or omission was in the best interests of the Company or
Company Affiliate; provided, however, that the willful requirement outlined in
paragraph (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 any entity in control of, controlled by or under common control
with the Company or in which the Company owns any common or preferred stock or
interest or any entity in control of, controlled by or under common control with
such entity thereof.

       

      Cause
shall not exist under paragraph (i) or (iii) above unless and until the Company
has delivered to Executive written notice of its determination that Executive
was guilty of the conduct set forth in paragraph (i) or (iii) and specifying the
particulars thereof in detail.  However, in the case of conduct
described in paragraph (i), Cause will not be considered to exist unless
Executive is given 30 days from the date of such notice to cure such breach, or
if the breach cannot be reasonably cured within such 30 day period, to commence
to cure such breach, to the satisfaction of the Company, within such 30 day
period.  If Executive has not cured such breach to the satisfaction of
the Company within 90 days after the date of such notice, the Company shall give
a Notice of Termination to Executive.  In the event a final
determination is made by a court of competent jurisdiction that the Company’s
stated reason for 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)      Following Change in
Control.  Within twelve (12) months after a Change in Control
occurs, Executive may resign his employment or his employment may be terminated
for any reason, including, without limitation, death or
Disability.  For purposes of this Agreement, such a termination of
employment (including, without limitation, as a result of such a resignation) is
referred to as “Termination Following Change in Control.”  For this
purpose, a “Change in Control” means:

      
        
           

        

        
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      (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,
or (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)
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, 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) 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 (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.  If an event described in Section 6(e)(i), (e)(ii), or
(e)(iii) above occurs, but the event does not constitute a Change in Control
pursuant to the provisions of this paragraph, the Performance Period (as defined
in Exhibit A which is attached hereto and made part hereof) shall be deemed to
end on the business day immediately preceding the applicable
event.

      
        
           

        

        
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      (f)      Resignation Other Than
Termination Following Change in Control.  Executive shall have
the right to resign his employment by providing the Company with a Notice of
Termination, as provided in Section 7.  If such resignation occurs
other than within twelve (12) months after a Change in Control occurs,
Executive’s resulting termination of employment shall be considered as other
than Termination Following Change in Control.  Any termination
pursuant to this paragraph 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 for Good Reason.  For purposes
of this Agreement, Executive shall have Good Reason to terminate Executive’
employment 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 (it being agreed that a requirement that the
Executive move the principal place of employment by more than 30 miles from that
provided in Section 4 above shall constitute a material breach by the Company);
or

       

      (ii)           any
substantial or material diminution of Executive’s responsibilities including
without limitation a change in reporting responsibilities to anyone other than
the Chief Executive Officer and/or a change in title.

       

      Section
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), shall be communicated by written Notice of Termination to the
other party hereto in accordance with Section 15.  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 of Executive’s employment under the provision so
stated.

       

      (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) set forth in such
Notice of Termination.

      
        
           

        

        
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      Section
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 benefits set forth below; provided,
however, as a specific condition to being entitled to any payments or benefits
under this Section 8, Executive must have resigned as a director, trustee and
officer of the Company and all of its subsidiaries and as a member of any
committee of the board of directors of the Company and its subsidiaries of which
he is a member and, except in the case of a termination under Section 8(c)
below, must have joined the Company in having executed a mutual release of both
the Company and its Affiliates as well as Executive, in the form attached hereto
as Exhibit
B.  Executive acknowledges and agrees that the payments 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.

       

      (a)      Disability;
Death.  During any period that Executive fails to perform his
duties hereunder as a result of Disability, Executive shall continue to receive
his full Base Salary set forth in Section 5(a) and his full Bonus as set forth
in Section 5(b) until his employment is terminated pursuant to Section
6(b).  In addition, if Executive’s employment is terminated for
Disability pursuant to Section 6(b), or due to Executive’s death pursuant to
Section 6(a), in each case other than a Termination Following Change in
Control:

       

      (i)           the
Company shall pay to Executive or his estate, as the case may be, a lump sum
payment as soon as practicable following the Date of Termination equal to (A)
his Base Salary, Accrued Bonus (as defined in Section 8(d) below) and accrued
vacation pay through the Date of Termination, plus (B) one of the
following two amounts, as applicable, (1) if there is one year or more remaining
in the Employment Period, the sum of Executive’s then current Base Salary for
one year plus his Average Bonus (as defined in Section 8(d) below), or (2) if
there is less than one year remaining in the Employment Period, the amount of
Base Salary (as provided for in Section 5(a)) Employee would have received
through the end of the Employment Period plus his Average Bonus pro rated for
the portion of the fiscal year following the date of termination through the end
of the Employment Period and plus (C) the amount
not yet paid to Executive under Section 5(d);

       

      (ii)           stock
options and restricted stock granted to Executive prior to the Date of
Termination that were to vest based on the passage of time shall fully vest as
of the Date of Termination;

       

      (iii)           the
Company shall reimburse Executive, or his estate, as the case may be, pursuant
to Section 5(e) for reasonable expenses incurred, but not paid prior to such
termination of employment; and

       

      (iv)           Executive
or his estate or named beneficiaries shall be entitled to any 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 agreements,
plans or programs of the Company.

      
        
           

        

        
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      (b)      Termination By Company
Without Cause, Termination by Executive for Good Reason or Termination Following
Change in Control.  If Executive’s employment is terminated by
the Company without Cause, Executive terminates his employment with the Company
for Good Reason, or if Executive resigns or is terminated by reason of death or
Disability and such resignation or termination as a result of death or
Disability is a Termination Following Change in Control:

       

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

       

      (ii)          the
Company shall pay to Executive as soon as practicable following the Date of
Termination a lump-sum payment equal to two (2) times the sum of Executive’s
then current Base Salary plus his Average Bonus;

       

      (iii)         the
Company shall pay to Executive as soon as practicable following the Date of
Termination a lump-sum payment equal to the amount not yet paid to Executive
under Section 5(d);

       

      (iv)   
     in the case of termination by the Company without
Cause or termination by Executive for Good Reason, stock options and restricted
stock granted to Executive prior to the Date of Termination that were to vest
based on the passage of time shall fully vest as of the Date of
Termination;

       

      (v)           in
the case of Executive’s resignation or his termination by reason of death or
Disability and such resignation or termination as a result of death or
Disability is a Termination Following Change in Control (A) stock options and
restricted stock granted to Executive prior to the Date of Termination that were
to vest based on the passage of time shall fully vest as of the Date of
Termination; and (B) if Executive’s Date of Termination precedes the otherwise
applicable end-date for a performance period for stock options or restricted
stock granted to Executive pursuant to Section 5(c), or granted to Executive
under any equity-based award program sponsored by the Company, a percentage of
such stock options or restricted stock shall vest as of the Date of Termination
equal to the period of time that has elapsed since the date of award of such
stock options or restricted stock compared to the total time during the
performance period stated in the award of such stock options or restricted
stock;

       

      (vi)           the
Company shall reimburse Executive pursuant to Section 5(e) for reasonable
expenses incurred, but not paid prior to such termination of employment;
and

       

      (vii)           Executive
shall be entitled to any other rights, compensation and/or benefits as may be
due to Executive in accordance with the terms and provisions of any agreements,
plans or programs of the Company.

      
        
           

        

        
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      (c) 
    Termination by the Company
for Cause or Resignation By Executive Other Than Termination For Good Reason and
other than Termination Following Change in Control.  If
Executive’s employment is terminated by the Company for Cause, or if Executive’s
resignation is other than for Good Reason or other than a Termination Following
Change in Control:

       

      (i)           the
Company shall pay Executive his 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(e) for reasonable
expenses incurred, but not paid prior to such termination of employment, unless
such termination resulted from a misappropriation of Company funds;

       

      (iii)           Executive
shall be entitled to any other rights, compensation and/or benefits as may be
due to Executive in accordance with the terms and provisions of any agreements,
plans or programs of the Company; and

       

      (iv)           All
unvested stock options and unvested restricted stock granted to Executive shall
be forfeited.

       

      (d)      Bonus.  If
Executive’s termination of employment occurs after the end of any fiscal year of
the Company for which a Bonus would be payable to Executive pursuant to Section
5(b) above and Executive’s termination is not for Cause and Executive’s
termination occurs prior to the date bonuses for senior executives are paid for
the fiscal year (including, without limitation, the Bonus), Executive (or his
estate, as the case may be) shall be entitled to payment of any Bonus that is
earned for such fiscal year without regard to whether Executive’s termination of
employment precedes the Bonus payment date.  If Executive’s
termination of employment occurs prior to the end of any fiscal year of the
Company for which a Bonus would be payable to Executive pursuant to Section 5(b)
above and Executive’s termination is not for Cause or a voluntary termination by
Executive (other than for Good Reason or a Termination Following a Change of
Control), Executive (or his estate, as the case may be) shall be entitled to
payment of a pro rated portion of the Bonus calculated as
follows:  Executive’s Average Bonus shall be multiplied by a fraction
the numerator of which shall be the number of days in the fiscal year that
elapsed prior to Executive’s termination of employment and the denominator of
which shall be 365.  The amount Executive is entitled to under either
of the two preceding sentences shall be referred to in this Agreement as the
“Accrued
Bonus”.  For purposes of this Agreement, the “Average Bonus” shall mean the
average annual Bonus (not including any Bonus payable for the calendar year
including the Effective Date), if any, for the three (3) most recently completed
fiscal years. In addition, if Executive’s termination occurs before Executive
has worked and been eligible to receive a Bonus for three fiscal years, any
references in this Section 8 to Executive’s Average Bonus will be interpreted to
mean such lesser number of fiscal years during which Executive was employed
before termination and eligible to receive a Bonus.  If Executive’s
employment is terminated during the first fiscal year following the year
including the Effective Date, then the Average Bonus shall be deemed to mean an
amount equal to 100% of the Base Salary.

      
        
           

        

        
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      (e)      Tax Payment by the
Company.

       

      (i)           If
any amount or benefit paid or distributed to Executive pursuant to this
Agreement, taken together with any amounts or benefits otherwise paid or
distributed to Executive by the Company or any affiliated company (collectively,
the “Covered Payments”),
are or become subject to the tax (the “Excise Tax”) imposed under
Section 4999 of the Code, or any similar tax that may hereafter be imposed, the
Company shall pay to Executive at the time specified below an additional amount
(the “Tax Reimbursement
Payment”) such that the net amount retained by Executive with respect to
such Covered Payments, after deduction of any Excise Tax on the Covered Payments
and any Federal, state and local income or employment tax and Excise Tax on the
Tax Reimbursement Payment provided for by this Section 8(e), but before
deduction for any Federal, state or local income or employment tax withholding
on such Covered Payments, shall be equal to the amount of the Covered
Payments.

       

      (ii)           For
purposes of determining whether any of the Covered Payments will be subject to
the Excise Tax and the amount of such Excise Tax:  (A) such Covered
Payments will be treated as “parachute payments” within the meaning of Section
280G of the Code, and all “parachute payments” in excess of the “base amount”
(as defined under Section 280G(b)(3) of the Code) shall be treated as subject to
the Excise Tax, unless, and except to the extent that, in the good faith
judgment of the Company’s independent certified public accountants appointed
prior to the date of the Change in Control or tax counsel selected by such
accountants (the “Accountants”), the Company has
a reasonable basis to conclude that such Covered Payments (in whole or in part)
either do not constitute “parachute payments” or represent reasonable
compensation for personal services actually rendered (within the meaning of
Section 280G(b)(4)(B) of the Code) in excess of the allocable “base amount,” or
such “parachute payments” are otherwise not subject to such Excise Tax, and (B)
the value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Accountants in accordance with the principles of Section 280G
of the Code.

       

      (iii)           For
purposes of determining the amount of the Tax Reimbursement Payment, Executive
shall be deemed to pay:  (A) Federal income, social security, Medicare
and other employment taxes at the highest applicable marginal rate of Federal
income taxation for the calendar year in which the Tax Reimbursement Payment is
to be made, and (B) any applicable state and local income or other employment
taxes at the highest applicable marginal rate of taxation for the calendar year
in which the Tax Reimbursement Payment is to be made, net of the maximum
reduction in Federal income taxes that could be obtained by Executive from the
deduction of such state or local taxes if paid in such year.

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      (iv)           The
Tax Reimbursement Payment (or portion thereof) provided for above shall be paid
to Executive not later than 10 business days following the payment of the
Covered Payments.

       

      (v)           If
the Excise Tax is subsequently determined by the Accountants or pursuant to any
proceeding or negotiations with the Internal Revenue Service to be less than the
amount taken into account hereunder in calculating the Tax Reimbursement Payment
made, Executive shall repay to the Company, at the time of such determination,
the portion of the prior Tax Reimbursement Payment that would not have been paid
if the reduced Excise Tax had been taken into account in initially calculating
the Tax Reimbursement Payment, plus interest on the amount of such repayment at
the rate provided in Section 1274(b)(2)(b) of the
Code.  Notwithstanding the foregoing, if any portion of the Tax
Reimbursement Payment to be refunded to the Company has been paid to any
Federal, state or local tax authority, repayment thereof shall not be required
until actual refund or credit of such portion has been made to Executive, and
interest payable to the Company shall not exceed interest received or credited
to Executive by such tax authority for the period it held such
portion.  Executive and the Company shall mutually agree upon the
course of action to be pursued (and the method of allocating the expenses
thereof) if Executive’s good faith claim for refund or credit is
denied.

       

      (vi)           If
the Excise Tax is later determined by the Accountants or pursuant to any
proceeding or negotiations with the Internal Revenue Service to exceed the
amount taken into account hereunder at the time the Tax Reimbursement Payment is
made (including, but not limited to, by reason of any payment the existence or
amount of which cannot be determined at the time of the Tax Reimbursement
Payment), the Company shall make an additional Tax Reimbursement Payment in
respect of such excess (plus any interest or penalty payable with respect to
such excess) at the time that the amount of such excess is finally
determined.

       

      (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, is subject to Section 409A of the
Internal Revenue Code of 1986 (“Code”), as amended, and that
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 if such
payment would violate the provisions of Code Section 409A and the regulations
issued thereunder, 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 termination of Executive’s
employment until the date of payment.

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      Section
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 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 is required pursuant to the Sarbanes-Oxley Act of 2002 or other
applicable law, rule or regulation, within thirty (30) days after notice thereof
from the Company, Executive shall pay to the Company the amount required to be
forfeited.

       

      Section
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 disseminating 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, whether prepared by Executive or
otherwise coming into Executive’s possession, shall be the exclusive property of
the Company and shall be returned immediately to the Company 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.

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      Section
11.          Restrictive Covenant; Notice of
Activities.

       

      (a)      Restricted
Activities.  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 otherwise,
(except if Executive’s employment is terminated by the Company without Cause or
by Executive for Good Reason, or if Executive’s termination of employment
constitutes a Termination Following Change in Control or results due to
non-renewal of this Agreement), Executive shall not, without the prior written
consent of the Company, 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 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 or in which
Executive conducted or supervised operations of the Company, at any time during
the term of this Agreement (collectively, the “Territory”); (ii) 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 and any tenant, customer, supplier, sales representative, consultant or
employee of the Company; (iii) directly or indirectly 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 who within one year of the time Executive ceased to perform services
hereunder had been employed by the Company, or (iv) communicate with, solicit,
accept business or enter into any business relationship with any person or
entity who was a tenant or customer of the Company or any present or future
tenant or customer of the Company (including without limitation tenants or
customers previously or in the future generated or produced by Executive), in
any manner that interferes with or disrupts or diminishes or might interfere
with or might disrupt or diminish such tenant’s or customer’s relationship with
the Company, or in an effort to obtain such tenant or customer as a tenant or
customer of any person in the Territory.  Notwithstanding the
foregoing, Executive shall be permitted to own up to a five percent equity
interest in a publicly traded Competing Entity.

       

      (b)      Notice and
Procedure.  Executive shall
inform in writing any person or entity that seeks to employ or engage him in any
capacity, of his noncompetition obligations under this Agreement, prior to
accepting such employment or engagement.  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 the
Executive has any concerns 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 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 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.

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      Section
12.          Violations of
Covenants.

       

      (a)      Injunctive
Relief.  Executive agrees
and acknowledges that (i) 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, are, in view of the nature of the business of
the Company, reasonable and necessary to protect the legitimate interests of the
Company, (iii) that his violation of any of the covenants or agreements
contained in this Agreement would cause irreparable injury to the Company, (iv)
that the remedy at law for any violation or threatened violation thereof would
be inadequate, and (v) that 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
agrees that in the event of any such violation, the Company shall be entitled to
commence an action, suit or proceeding in any court of appropriate jurisdiction
for any such preliminary and permanent injunctive relief and other equitable
relief.

       

      (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.

       

      Section
13.         “Key Man” Insurance. At the request of the
Company, 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.

       

      Section
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
any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company 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.  As used in this Agreement,
“Company” shall mean the Company as herein before defined and any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company that
executes and delivers the agreement contemplated by this Section 14 or that
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      (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 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 his
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.

       

      Section
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 Employer:

              	
                Equity
      One, Inc.

                1600
      NE Miami Gardens Drive

                North
      Miami Beach, Florida 33179

                Attention:  General
      Counsel

              
	 
      	 
      
	
                To
      Executive:

              	
                Thomas
      E. McDonough

                44
      Sunlight

                Irvine,
      California 92603

              

      

      

      or to
such other address as any party may have furnished to the others 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.

       

      Section
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).

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      Section
17.          Miscellaneous.  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, and such waiver is set forth in writing and
signed by the party to be charged.  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.  The respective rights and obligations of the parties
hereunder of 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 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.

       

      Section
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.

       

      Section
19.          Counterparts.  This
Agreement may be executed in one 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.

       

      Section
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 any party hereto in respect of
such subject matter.  Any prior agreement of the parties hereto in
respect of the subject matter contained herein is hereby terminated and
canceled.

       

      Section
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.

       

      Section
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.

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      Section
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]

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

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

      

      

      
        	 
      	
                EQUITY
      ONE, INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Arthur L. Gallagher
	 
      	 
      	
                Name:

              	Arthur
      L. Gallagher
	 
      	 
      	
                Title:

              	SVP,
      General Counsel
	 
      	 
      	
                 Date:

              	
                July 27,
      2007

              
	 
      	 
      
	 
      	 
      
	 
      	/s/
      Thomas E. McDonough
	 
      	
                Thomas
      E. McDonough

              
	 
      	
                 

              	
                Date:

              	
                July 27,
      2007

              

      

      

      

      Exhibit A
– Long Term Cash Incentive Compensation

      Exhibit B
– Form of Release

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      EXHIBIT
A TO EMPLOYMENT AGREEMENT

      BETWEEN
EQUITY ONE, INC. AND THOMAS E. MCDONOUGH

      

      

      This
EXHIBIT A sets forth the terms and conditions of the long term cash incentive
compensation provided for by Section 5(d) of the Employment Agreement between
Equity One, Inc. and Thomas E. McDonough effective July 30, 2007 (the “Agreement”).

      

      Section
1.           Definitions.  Any
capitalized term used in this Exhibit but not specifically defined in this
Section shall have the meaning set forth in the main body of the
Agreement.  For purposes of this Exhibit, the following definitions
apply:

      

      (a)           “PGTSR” means the average TSR
for the entities listed below:

       

      Acadia
Realty Trust

      Cedar
Shopping Centers, Inc.

      Developers
Diversified Realty Corporation

      Federal
Realty Investment Trust

      New Plan
Excel Realty Trust, Inc.

      Ramco-Gershenson
Properties Trust

      Regency
Centers Corporation

      Saul
Centers, Inc.

      Weingarten
Realty Investors

       

      (b)         “Performance Period” means the
approximate three (3) year and six (6) month period beginning on Effective Date
and ending December 31, 2010, or such shorter period as is applicable under the
terms of Section 3(b) or Section 4 of this Exhibit A.

      

      (c)         “TSR” means, with respect to an entity, the
total shareholder return (expressed as a percentage) for the Performance Period
(or shortened Performance Period) determined on an annualized basis as
calculated using Bloomberg’s  “Total Return Analysis” and assuming
complete reinvestment of dividends into the entity’s common stock.  To
the extent that the TSR cannot be determined using Bloomberg for any reason,
then Thompson One shall be used, and, if the TSR cannot be determined using
Thompson One for any, then a similar reporting tool shall be
used.

      

      Section
2.           Additional Incentive
Compensation.  Executive shall be entitled to payment of the
amount derived from the table below if (a) the Company’s TSR exceeds the PGTSR
by the amounts stated in the table below and (b) the Company’s TSR for the
Performance Period equals or exceeds six percent (6%).

      

      
        	
                If
      Company TSR Exceeds PGTSR by:

              	 	
                Amount
      Paid to Executive:

              	 
	
                At
      least 50 basis points but less than 100 basis points

              	 	$	
                333,333

              	 
	
                At
      least 100 basis points but less than 200 basis points

              	 	$	
                666,667

              	 
	
                At
      least 200 basis points but less than 300 basis points

              	 	$	
                1.333333
      million

              	 
	
                300
      or more basis points

              	 	$	
                2.0
      million

              	 

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      The
Company shall calculate the Company’s TSR and the PGTSR within thirty days
following the end of the Performance Period.  Any payment due
hereunder shall be made within forty-five days after the end of the Performance
Period.

      

      Section
3.           Termination of Employment Before End
of Performance Period.

      

      (a)        If
Executive’s employment is terminated by the Company for Cause, or if Executive’s
resignation is other than for Good Reason or a Termination Following Change in
Control, then no amount will be due to Executive under this
Exhibit.

      

      (b)        If
Executive’s employment is terminated (i) by the Company without Cause, (ii) for
Disability pursuant to Section 6(b) of the Agreement, (iii) due to Executive’s
death pursuant to Section 6(a) of the Agreement or (iv) due to resignation that
is for Good Reason or is a Termination Following Change in Control, as provided
for in Section 6(e) of the Agreement, the Performance Period shall be deemed to
end on the business day immediately preceding the date of termination of
employment.  The Company’s TSR and the PGTSR will be calculated with
respect to the shortened Performance Period.

      

      Section
4.           Certain Other Events Before End of
Performance Period.  If an event described in Section 6(e)(i),
(e)(ii), or (e)(iii) of the Agreement occurs, but the event does not constitute
a Change in Control pursuant to the provisions of the last paragraph of Section
6(e) of the Agreement, the Performance Period shall be deemed to end on the
business day immediately preceding the applicable event.  The
Company’s TSR and the PGTSR will be calculated with respect to the shortened
Performance Period.

      

      Section
5.           Anti-Dilution
Provision; Change in Peer Group.

      

      (a)         If
a reorganization, recapitalization, stock split, stock dividend, combination of
shares, rights offer, merger, consolidation, spin-off, sale of assets, or any
other change in or affecting the corporate structure or capitalization of the
Company or an entity listed in Section 1(a) of this Exhibit occurs, the shares
used for calculating the affected entity’s TSR shall be treated as the number
and kind of securities or property into which each outstanding share of that
entity’s common stock shall be deemed to be converted or exchanged or which
shall be deliverable with respect to each outstanding share of that entity’s
common stock as a result of such event, and the provisions of this Exhibit A
shall continue to apply to such substituted securities or property.

      

      (b)      
  If one or more of the entities listed at Section 1(a) of this
Exhibit changes substantially or no longer exists by the end of the Performance
Period, either that entity will be excluded from the PGTSR or the Company will
reasonably decide how, if at all, that entity’s TSR will be used for the
relative TSR comparison or, alternatively, whether another entity’s TSRs will be
used for the relative TSR comparison.

      

      (c)        The
Company shall make all decisions, determinations and interpretations under this
Exhibit A in accordance with the terms of this Exhibit and in a reasonable and
good faith manner, which decisions, determinations and interpretations shall be
final, conclusive and binding.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      EXHIBIT
B TO EMPLOYMENT AGREEMENT

      BETWEEN
EQUITY ONE, INC. AND THOMAS E. MCDONOUGH

      

      

      The
following form of release is provided pursuant to Section 8 of the Employment
Agreement between Equity One, Inc. and Thomas E. McDonough effective July 30,
2007.

      

      

      MUTUAL
GENERAL RELEASE

      

      

      Equity
One, Inc., and its agents, servants, officers, directors, employees,
predecessors, subsidiaries, affiliates, and successors, are hereinafter
collectively referred to as “Employer.”

      

      Thomas E.
McDonough, his heirs, successors and assigns are hereinafter referred to as
“Employee.”

      

      WHEREAS, this Employer and
Employee previously entered into an Employment Agreement that governed the terms
and conditions of Employee’s employment by Employer, a copy of which is attached
and made a part hereof (the “Agreement”).

      

      WHEREAS, this Mutual General
Release (this “Release”)
is the release referred to in Section 8 of the Agreement.

      

      WHEREAS, following execution
of this Release and expiration of the seven-day revocation period referred to in
Section 10 below, Employee will be entitled to payment of certain amounts, and
other rights, referred to in Section 8 of the Agreement.

      

      WHEREAS, Employee desires to
compromise, finally settle, and fully release actual or potential claims
including those related to Employee’s employment and termination of employment
that Employee in any capacity may have or claim to have against
Employer.

      

      WHEREAS, Employee acknowledges
that Employee is waiving his rights or claims only in exchange for consideration
in addition to anything of value to which he already is entitled.

      

      NOW,
THEREFORE, in consideration of the foregoing and the Employer’s agreement to pay
the amounts described in Section 8___ of the Agreement [list specific subsection
under which payment will be made], Employer and Employee agrees as
follows:

      

      Section
1.           The recitals
above are true and correct.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Section
2.           Except as
provided in Section 3 below, effective upon Employee’s receipt of the amounts
described in Section 8___ of the Agreement, Employee does hereby release and
discharge Employer from any and all claims, demands or liabilities whatsoever,
whether known or unknown, which Employee ever had or may now have against the
Employer, from the beginning of time to the date of this Release, including,
without limitation, any claims, demands or liabilities in connection with
Employee’s employment, including wrongful termination, breach of express or
implied contract, unpaid wages, or pursuant to any federal, state, or local
employment laws, regulations, or executive orders prohibiting inter alia, age, race, sex,
national origin, religion, handicap, and disability discrimination, such as the
Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964,
the Civil Rights Act of 1966, the Employee Retirement Income Security Act of
1974, the Americans with Disabilities Act of 1990, the Rehabilitation Act of
1973, the Florida Private Sector Whistleblower Act, the Fair Labor Standards
Act, the Immigration Reform and Control Act, the Florida Civil Rights Act, the
Family and Medical Leave Act, the Florida and Federal Constitutions; and any and
all other federal, state, and local laws and regulations prohibiting, without
limitation, discrimination in employment, retaliation, conspiracy, tortious or
wrongful discharge, breach of an express or implied contract, breach of a
covenant of good faith and fair dealing, intentional and/or negligent infliction
of emotional distress, defamation, misrepresentation or fraud, negligence,
negligent supervision, hiring, or retention, assault, battery, detrimental
reliance, or any other offense.

      

      Section
3.           Employee’s
release provided in Section 2 above does not waive (a) Employer’s obligations
under the Agreement, (b) rights or claims that may arise after this Release is
executed, or (c) rights under this Release.

      

      Section
4.           Except as
provided in Section 5 below, Employer does hereby release and discharge Employee
from any and all claims, demands or liabilities whatsoever, whether known or
unknown or suspected to exist by Employer that Employer ever had or may now have
against Employee from the beginning of time to the date of this Release
including without limitation any claims, demands or liabilities in connection
with Employee’s employment or termination of employment including without
limitation breach of contract, wrongful termination, retaliation, assault,
battery, negligence, negligent supervision, hiring or retention, intentional
and/or negligent infliction of emotional distress, defamation and promissory
estoppel.

      

      Section
5.           Employer’s
release provided in Section 4 above does not waive: (a) any claims that are not
waivable by law, (b) rights or claims that may arise after this Release is
executed, (c) rights under this Release, (d) any criminal, malicious, dishonest
or fraudulent acts committed by Employee in violation of any federal or state
laws or regulations, (e) any breach of fiduciary duty Employee owed or owes to
Employer, (f) any gross negligence or willful misconduct by Employee in the
performance of his obligations under the Agreement and (g) any obligations of
Employee to Employer under the Agreement that continue beyond expiration of the
Agreement.

      

      Section
6.           Employee
acknowledges that, during his employment with Employer, he had access to
Confidential Information, as defined in Section 10(a) of the
Agreement.  Employee agrees that he will not at any time, unless
required by court order, judgment or decree, or as directed by the Employer’s
Board of Directors, directly or indirectly use, divulge, furnish or make
accessible any Confidential Information to any other person or
entity.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      Section
7.           Employee
represents and warrants that he has not taken any documents that contain or
represent Confidential Information, proprietary information or trade secrets of
the Employer.  Employee agrees, as a condition precedent to receipt of
any money pursuant to this Release, that he will deliver to Employer 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 Employer, whether prepared by Employee or
otherwise coming into Employee’s possession, and any and all books, notebooks,
financial statements, passwords, 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 in his possession or control relating to any of Employer’s
Confidential Information, or which is otherwise the property of
Employer.

      

      Section
8.           Employee
acknowledges that Employer will not pay any consideration other than as provided
for by this Release.

      

      Section
9.           Employee
fully understands that if any fact with respect to which this Release is
executed is found hereafter to be different from the facts Employee now believes
to be true, he expressly accepts and assumes the risk of such possible
difference in fact and agrees that this Release shall be effective
notwithstanding such difference in fact.

      

      Section
10.          Pursuant to the
provisions of the Older Workers Benefit Protection Act (OWBPA), which applies to
Employee’s waiver of rights under the Age Discrimination in Employment Act,
Employee has had a period of at least twenty-one (21) days within which to
consider whether to execute this Release.  Also pursuant to the OWBPA,
Employee may revoke the Release within seven (7) days of its
execution.  It is specifically understood that this Release shall not
become effective or enforceable until the seven-day revocation period has
expired.  Consideration for this Release as described in Section 8___
of the Agreement shall be paid by Employer to Employee upon the later of (a)
expiration of the seven-day revocation period or (b) the date provided for in
the Agreement.

      

      Section
11.          Employee
acknowledges that, pursuant to the OWBPA, Employer advised Employee, in writing,
to consult with an attorney before executing this Release.

      

      Section
12.          This Release does
not constitute an admission of a violation of any law, order, regulation, or
enactment, or of wrongdoing of any kind by Employer or Employee and is entered
into by the parties solely to end any controversy between them.

      

      Section
13.          This Release
shall be governed by and construed and enforced in accordance with the laws of
the State of Florida, both substantive and remedial.  Each party
unconditionally and irrevocably agrees that the exclusive forum and venue for
any action, suit or proceeding involving the Release 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.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      Section
14.          The failure of
any provision of this Release shall in no manner affect the right to enforce the
same, and the waiver by any party of any breach of any provision of this Release
shall not be construed to be a waiver of such party of any succeeding breach of
such provision or a waiver by such party of any breach of any other
provision.  In the event that any provision or portion of this Release
shall be determined to be invalid or unenforceable for any reason, the remaining
provisions of this Release shall be unaffected thereby and shall remain in full
force and effect.

      

      Section
15.          This Release
represents the entire understanding and agreement between the parties with
respect to the subject matter hereof and there are no promises, agreements,
conditions, undertakings, warranties, or representations, whether written or
oral, express or implied, between the parties other than as set forth
herein.  This Release cannot be amended, supplemented, or modified
except by an instrument in writing signed by the parties against whom
enforcement of such amendment, supplement or modification is
sought.

      

      Section
16.          This Release may
be executed and delivered (including by facsimile transmission) in one or more
counterparts, and by the parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same Release.

      

      Section
17.          EMPLOYEE STATES
THAT HE HAS CAREFULLY READ THIS RELEASE, IT HAS BEEN FULLY EXPLAINED TO HIM,
THAT HE HAS HAD THE OPPORTUNITY TO HAVE IT REVIEWED BY AN ATTORNEY, AND THAT HE
FULLY UNDERSTANDS ITS FINAL AND BINDING EFFECT, AND THAT THE ONLY PROMISES MADE
TO HIM TO SIGN THE RELEASE ARE THOSE STATED IN THE RELEASE, AND THAT EMPLOYEE IS
SIGNING THIS RELEASE VOLUNTARILY WITH THE FULL INTENT OF RELEASING EMPLOYER OF
ALL CLAIMS DESCRIBED HEREIN.

      

      The
parties hereto have executed this Release effective upon execution by the last
party to execute this Release, subject to expiration of the seven-day revocation
period referred to in Section 10 above.

      

      

      
        	 
      	
                EQUITY
      ONE, INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	 
	 
      	 
      	
                Name:

              	 
	 
      	 
      	
                Title:

              	 
	 
      	 
      	
                Date:

              	
                 

              
	 
      	 
      
	 
      	
                 

              
	 
      	
                Thomas
      E. McDonough

              
	 
      	 	Date:	
                 

              

      

      
 

       4ex10_3.htm

    
      

    

     

    
      	
              Equity
      One, Inc

            	 	 	 	 	
              Exhibit 10.3

            	 
	
              Ratio
      of Earnings to Fixed Charges

            	 	 	 	 	 	 
	
              For
      the Three Months Ended March 31, 2008

            	 	 	 	 	 	 
	
              (In
      thousands, except ratio computation)

            	 	 	 	 	 	 
	 
      	 	 	 	 	 	 
	
              Income
      from Continuing Operations

            	 	 	 	 	$	20,743	 
	 
      	 	 	 	 	 	 	 
	
              Adjustments:

            	 	 	 	 	 	 	 
	
              Minority
      interest

            	 	 	28	 	 	 	 	 
	
              Fixed
      charges

            	 	 	17,739	 	 	 	 	 
	
              Capitalized
      interest

            	 	 	(790	)	 	 	16,977	 
	 
      	 	 	 	 	 	 	 	 
	
              Earnings,
      as defined

            	 	 	 	 	 	$	37,720	 
	 
      	 	 	 	 	 	 	 	 
	
              Fixed
      Charges:

            	 	 	 	 	 	 	 	 
	
              Interest
      expense

            	 	 	15,982	 	 	 	 	 
	
              Capitalized
      interest

            	 	 	790	 	 	 	 	 
	
              Amortization
      of debt premiums/discounts

            	 	 	538	 	 	 	 	 
	
              Amortization
      of loan fees

            	 	 	429	 	 	 	17,739	 
	 
      	 	 	 	 	 	 	 	 
	
              Fixed
      Charges

            	 	 	 	 	 	$	17,739	 
	 
      	 	 	 	 	 	 	 	 
	
              Ratio
      of earnings to fixed charges

            	 	 	 	 	 	 	2.13

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