Document:

SEC Exhibit

Exhibit 10.2
SEVERANCE AND CHANGE IN CONTROL AGREEMENT
AGREEMENT by and between EastGroup Properties, Inc., a Maryland corporation (the “Company”), with offices at 190 East Capitol Street, Suite 400, Jackson, Mississippi 39201, and [●] (the “Executive”), effective as of [●].
WHEREAS, the Company recognizes that the current business environment makes it difficult to attract and retain highly qualified executives unless a certain degree of security can be offered to such individuals against organizational and personnel changes that frequently follow changes in control of an organization; and
WHEREAS, even rumors of acquisitions or mergers may cause executives to consider major career changes in an effort to assure financial security for themselves and their families; and
WHEREAS, the Company desires to assure fair treatment of its executives in the event of a Change in Control (as defined below) and to allow them to make critical career decisions without undue time pressure and financial uncertainty, thereby increasing their willingness to remain with the Company notwithstanding the outcome of a possible Change in Control transaction; and
WHEREAS, the Company recognizes that its executives will be involved in evaluating or negotiating any offers, proposals, or other transactions that could result in Changes in Control of the Company and believes that it is in the best interest of the Company and its stockholders for such executives to be in a position, free from personal financial and employment considerations, to be able to assess objectively and pursue aggressively the interests of the Company’s security holders in making these evaluations and carrying on such negotiations; and
WHEREAS, the Board of Directors (the “Board”) of the Company believes it is essential to provide the Executive with compensation arrangements upon a Change in Control that provide the Executive with individual financial security and that are competitive with those of other corporations, and, to accomplish these objectives, the Compensation Committee has caused the Company to enter into this Agreement.
NOW THEREFORE, the parties, for good and valuable consideration and intending to be legally bound, agree as follows:
1.Operation and Term of Agreement.  This Agreement shall be effective immediately upon its execution.  This Agreement may be terminated by the Company upon 24 months’ advance written notice to the Executive; provided, however, that after a Change in Control of the Company during the term of this Agreement, this Agreement shall remain in effect until all of the obligations of the parties under the Agreement are satisfied and the Protection Period (as defined below) has expired.  Prior to a Change in Control this Agreement shall immediately terminate upon Termination of the Executive’s employment or upon the Executive’s ceasing to be an elected officer of the Company, except in the case of such Termination under circumstances set forth in Section 2(g), 3, or 4 below. 
2.Certain Definitions.  The following words and phrases shall have the meanings given for the purposes of this Agreement:
(a)“Average Annual Compensation” shall mean an amount equal to the annual average of the sums of (i) the Executive’s annual base salary from the Company plus (ii) the amount of cash bonus paid by the Company to the Executive, in each case for the three calendar years that ended immediately before (or, if applicable, coincident with) a specified date, provided that: (A) any such year in which the Executive was not employed by the Company shall be excluded from the averaging period; and (B) the base salary and cash bonus for any such year that reflects a partial year of employment shall be annualized.
(b)“Breach of Duty” shall mean (i) the Executive’s willful misconduct in the performance of his duties toward the Company; or (ii) the commission or omission of any act by the Executive that constitutes on the part of the Executive fraud or dishonesty toward the Company; provided, however, that “Breach of Duty” shall not include the Executive’s lack of professional qualifications.  For purposes of this Agreement, an act, or failure to act, on the Executive’s part shall be considered “willful” only if done, or omitted, by him not in good faith and without reasonable belief that his action or omission was in the best interest of the Company.  The Executive’s employment shall not be deemed to have been Terminated for “Breach of Duty” unless the Company shall have given or delivered to the Executive (A) reasonable notice setting forth the reasons for the Company’s intention to Terminate the Executive’s employment for “Breach of Duty”; (B) a reasonable opportunity, at any time during the 30-day period after the Executive’s receipt of such notice, for the Executive, together with his counsel, to be heard before the Board; and (C) a Notice of Termination (as defined in Section 13 below) stating that, in the good faith opinion of not less than a majority of the entire membership of the Board, the Executive was guilty of the conduct set forth in clauses (i) or (ii) of the first sentence of this Section 2(b).
(c)“Cause” shall mean (i) the continued failure by the Executive to perform his material responsibilities and duties toward the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness); (ii) the engaging by the Executive in willful or reckless conduct that is demonstrably injurious to the Company monetarily or otherwise; (iii) the Executive’s conviction, entry of a plea of nolo contendere, or admission of guilt, for any felony or any lesser crime if such lesser crime involves fraud or dishonesty, moral turpitude, or any conduct that adversely affects the business or reputation of the Company, (iv) the commission or omission of any act by the Executive that constitutes on the part of the Executive fraud, dishonesty, or malfeasance, misfeasance, or nonfeasance of duty toward the Company; or (v) any other action or conduct by the Executive that is injurious to the Company, its business, or its reputation; provided, however, that “Cause” shall not include the Executive’s lack of professional qualifications.  For purposes of this Agreement, an act, or failure to act, on the Executive’s part shall be considered “willful” or “reckless” only if done, or omitted, by him not in good faith and without reasonable belief that his action or omission was in the best interest of the Company.
(d)“Change in Control” shall mean a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirements; provided that, without limitation, a Change in Control shall be deemed to have occurred if (i) any person (as such term is used in section 13(d) and 14(d) of the Exchange Act) is or becomes beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30 percent or more of the combined voting power of the Company’s then outstanding securities; or (ii) during any period of two consecutive years, the following persons (the “Continuing Directors”) cease for any reason to constitute a majority of the Board:  individuals who at the beginning of such period constitute the Board and new directors each of whose election to the Board or nomination for election to the Board by the Company’s security holders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved; or (iii) the security holders of the Company approve a merger or consolidation of the Company with any other corporation, other than (A) a merger or consolidation that would result in the voting securities of the Company outstanding immediately before the merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of such surviving entity) a majority of the voting securities of the Company or of such surviving entity outstanding immediately after such merger or consolidation or (B) a merger of consolidation that is approved by a Board having a majority of its members persons who are Continuing Directors, of which Continuing Directors not less than two-thirds have approved the merger or consolidation; or (iv) the security holders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets. 
(e)“Code” shall mean the Internal Revenue Code of 1986, as amended.
(f)“Disability,” for purposes of this Agreement, shall mean total disability as defined in any long-term disability plan sponsored by the Company in which the Executive participates, or, if there is no such plan or it does not define such term, then Disability shall mean the physical or mental incapacity of the Executive that prevents the Executive from substantially performing the duties of the office or position to which the Executive was elected or appointed by the Board for a period of at least 180 days, which incapacity is expected to be permanent and continuous through the Executive’s 65th birthday.
(g)The “Change in Control Date” shall be any date during the term of this Agreement on which a Change in Control occurs.  Notwithstanding any contrary provision in this Agreement, if the Executive’s employment or status as an elected officer with the Company is Terminated by the Company within six months before the date on which a Change in Control occurs, and it is reasonably demonstrated that such Termination (i) was at the request of a third party who has taken steps reasonably calculated or intended to effect a Change in Control or (ii) otherwise arose in connection with or anticipation of a Change in Control, then for the purposes of this Agreement the “Change in Control Date” shall mean the date immediately before the date of such Termination.
(h)“Good Reason” means:
(i)the assignment to the Executive within the Protection Period of any duties materially inconsistent with the Executive’s position (including status, offices, titles and reporting requirements, authority, duties, or responsibilities) or any other action that results in a material diminution in such position, authority, duties, or responsibilities;
(ii)a material reduction by the Company in the Executive’s base salary in effect immediately before the beginning of the Protection Period or as increased from time to time after the beginning of the Protection Period;
(iii)a material reduction by the Company in the Executive’s annual bonus opportunity or in the target level for such bonus or in the level of the Executive’s long term bonus opportunity or equity incentive opportunity, as compared to such opportunity or level in effect immediately before the beginning of the Protection Period;
(iv)the Company’s requiring the Executive, without the Executive’s written consent, to be based at any office or location materially distant from his office location immediately before the beginning of the Protection Period, except for travel reasonably required in the performance of the Executive’s responsibilities;
(v)any purported Termination by the Company of the Executive’s employment for Breach of Duty otherwise than as referred to in Section 2(b) of this Agreement; or
(vi)any failure by the Company to obtain the assumption of the obligations contained in this Agreement by any successor as contemplated in Section 12 of this Agreement;
provided, however, that Good Reason shall not exist unless the Executive gives notice to the Company of the existence of a condition described in paragraph (i), (ii), (iii), (iv), (v), or (vi) within 90 days of the initial existence of the condition, and the Company does not remedy the condition within 30 days of receipt of notice from the Executive.
(i)“Parent” means any entity that directly or indirectly through one or more other entities owns or controls more than 50 percent of the voting securities or shares of beneficial interest of the Company.
(j)“Protection Period” means the period beginning on the Change in Control Date and ending on the last day of the 18-calendar month following the Change in Control Date.
(k)“Subsidiary” means a company 50 percent or more of the voting securities of which are owned, directly or indirectly, by the Company.
(l)The words “Terminate” or “Termination” with respect to the Executive’s employment shall refer to the Executive’s separation from service with the Company, as that term is defined in the regulations under section 409A of the Code.
3.Termination Without Cause, not During the Protection Period.  Should the Company Terminate the Executive’s employment without Cause (as defined in Section 2(c)), other than during the Protection Period described in Section 2(j), the Company shall pay the amount described in Section 3(a) to the Executive and, provided the Executive signs and does not revoke a waiver and release agreement as described in Section 3(c), the Company shall also pay the amount described in Section 3(b):
(a)    The Executive’s base salary and vacation pay (for vacation not taken) accrued but unpaid through the date of Termination of employment, to be paid in cash upon the customary pay date.
(b)    A lump sum severance payment in an amount equal to the product of 1.5 times the Executive’s Average Annual Compensation as of the date of Termination, to be paid in cash on the 60th day after the date of Termination.
(c)    As a condition of the Company’s obligation to pay the amount described in Section 3(b), the Executive shall execute a waiver and release agreement, in a form satisfactory to the Company and by the time specified by the Company, that releases the Company and all affiliates from any and all claims of any nature whatsoever, including, without limit, any and all statutory claims, and shall not revoke the waiver and release within any revocation period required by law or permitted by the Company.
4.Death During Employment.  Should the Executive die while employed by the Company, the Company shall pay the following amounts to the Executive’s estate:
(a)    The Executive’s base salary and vacation pay (for vacation not taken) accrued but unpaid through the date of the Executive’s death.
(b)    A lump sum death benefit in an amount equal to the Executive’s Average Annual Compensation as of the date of death, to be paid in cash within 60 days of death, provided that, if the 60-day period straddles two calendar years, the Company shall designate the year of payment.
5.Disability.  During the first 90 days of a Disability, the Company shall continue to pay the Executive’s salary, and the Executive shall remain in the employ of the Company during that period.
6.Benefits upon Termination under Certain Circumstances During the Protection Period.  If the Executive’s employment is Terminated by the Company during the Protection Period other than for Breach of Duty or Disability and other than as a result of the Executive’s death, or if the Executive Terminates his employment during the Protection Period for Good Reason, the Company shall pay to the Executive in a lump sum in cash within ten days after the date of Termination the aggregate of the amounts described in paragraphs (a) and (b) and shall provide the benefits described in paragraphs (c), (d), and (e).
(a)    The Executive’s base salary and vacation pay (for vacation not taken) accrued but unpaid through the date of Termination of employment; and
(b)    A lump sum severance payment in an amount equal to the product of 1.5 times the Executive’s Average Annual Compensation as of the Change in Control; and
(c)    Upon the date of Termination, all outstanding options issued to the Executive by the Company to purchase shares of the Company’s common stock (“Common Shares”) shall become immediately exercisable, and all stock appreciation rights issued to the Executive by the Company with respect to Common Shares shall become immediately exercisable.
(d)    The Company shall provide the Executive with life insurance coverage and health plan coverage substantially comparable to the coverage the Executive was receiving from the Company immediately before Termination of employment; the provision of such coverage will continue until the expiration of the 18-calendar month period following the date of the Termination of the Executive’s employment, or, if earlier, until the date on which the Executive becomes eligible for comparable coverage in connection with subsequent employment (the “Coverage Period”), subject to the following:
(i)    For any portion of the Coverage Period (i) that coincides with a period during which COBRA continuation coverage is available to the Executive under the Company’s health plan and (ii) during which health plan coverage is not provided under an insured plan, the Executive shall duly elect and pay for COBRA continuation coverage.  The Company’s obligation with respect to health plan coverage is conditioned on the Executive’s duly electing, and then paying for, such COBRA coverage.  The Company shall reimburse the Executive for the cost of such COBRA coverage and shall pay such reimbursement upon receipt of reasonable substantiating documentation from the Executive, but in any event not later than the end of the calendar year following the year in which the COBRA expense was incurred.
(ii)    For any portion of the Coverage Period during which health plan coverage or life insurance coverage, or both, is or are not available under insured plans covering employees of the Company, except, in the case of health plan coverage, the period covered by paragraph (i), the Company shall, rather than providing such coverage for the Executive, reimburse the Executive for the Executive’s expense of procuring comparable coverage, up to the amount that would be incurred for comparable coverage by an individual of the Executive’s age on a standard risk basis.  The Company shall pay such reimbursement promptly upon receipt of reasonable documentation from the Executive, but in any event not later than the end of the calendar year following the year in which the expense was incurred.
(iii)    To the extent the Company’s cost of coverage under paragraph (i) or any reimbursement due under paragraph (ii) would be includable in the Executive’s gross income for federal income tax purposes, then the Company’s payment of such cost or reimbursement shall be subject to the provisions of Section 7 (regarding a six‐month delay).
(e)    All of the Executive’s benefits accrued under any supplemental retirement plans, excess retirement plans, and deferred compensation plans maintained by the Company or any of its Subsidiaries shall become immediately vested in full.
7.Specified Employee – Section 409A Six Month Delay.  Notwithstanding any other provision of this Agreement, this Section 7 shall apply if the Executive is a “specified employee” within the meaning of section 409A of the Internal Revenue Code upon the Termination of his employment with the Company.  If this Section 7 is applicable, any payment that is deferred compensation for the purposes of section 409A payable on account of separation from service (within the meaning of section 409A) and that is otherwise due the Executive under this Agreement or any other arrangement during the six-month period following the Executive’s separation from service with the Company shall be accumulated and paid to the Executive, with interest at the rate payable on three-month Treasury bills, on the first day of the seventh full calendar month following such separation from service.
The cost of coverage and reimbursements described in Section 6(d)(iii) shall be considered a payment for the purposes of this Section 7; and accordingly:
(a)    The Company shall not provide such coverage for the six‐month period following the Executive’s separation from service, if the Executive is then a specified employee, unless and only for so long as the Executive advances to the Company amounts equal to the premiums for such coverage, before the premiums’ due dates.  Provided the Executive does so, the Company shall repay the amount of such advances back to the Executive, as if the repayment were accumulated payments under the first paragraph of this section.
(b)    If the Executive is a specified employee, the Company shall not pay any reimbursement described in Section 6(d)(iii) during the first six months following the Executive’s separation from service, but shall pay those reimbursements as if they were accumulated payments under the first paragraph of this section.
8.Non-exclusivity of Rights.  Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any benefit, bonus, incentive, or other plans, practices, policies, or programs provided by the Company or any of its Subsidiaries and for which the Executive may qualify, nor shall anything in this Agreement limit or otherwise affect such rights as the Executive may have under any stock option or other agreements with the Company or any of its Subsidiaries.  Any amount of vested benefit or any amount to which the Executive is otherwise entitled under any plan, practice, policy, or program of the Company or any of its Subsidiaries shall be payable in accordance with the plan, practice, policy, or program; provided, however, that if the Executive is entitled to benefits under Section 3 or 6, the Executive shall not be entitled to severance pay, or benefits similar to severance pay, under any plan, practice, policy, or program generally applicable to employees of the Company or any of its Subsidiaries.  The provision of severance pay or other benefits pursuant to Section 3 or 6 shall not be deemed to be a continuance of the Executive’s employment for any purposes.
9.Full Settlement; No Obligation to Seek Other Employment; Legal Expenses.  The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense, or other claim, right, or action the Company may have against the Executive or others.  The Executive shall not be obligated to seek other employment or take any action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement.  The Company agrees to pay all legal fees and expenses the Executive may reasonably incur as a result of any dispute or contest by or with the Company or others regarding the validity or enforceability of, or liability under, any provision of this Agreement, and the Executive agrees that, if the Executive does not obtain a recovery or other relief from the Company as a result of such dispute or contest, the Executive shall repay to the Company 100 percent of the amount paid by the Company toward the Executive’s legal fees and expenses.  The Company shall pay or reimburse the Executive for such legal fees and expenses not later than December 31 of the calendar year following the calendar year in which the Executive incurred such legal fees and expenses, provided that the Company’s obligation shall be contingent upon the Executive’s provision to the Company, at least 30 days before such date, of
(a)    documentation of the fees and expenses incurred and
(b)    the Executive’s note, in a form satisfactory to the Company, promising to pay the Company, on demand, if the Executive does not obtain such recovery or relief against the Company, 100 percent of the amount paid by the Company, with interest at the rate payable on three‐month Treasury bills.
In any such action brought by the Executive for damages or to enforce any provisions of this Agreement, the Executive shall be entitled to seek both legal and equitable relief and remedies, including, without limitation, specific performance of the Company’s obligations under this Agreement, in the Executive’s sole discretion.
10.Cut Back in Benefits.  Notwithstanding any other provision of this Agreement, the cash lump sum payment and other benefits otherwise to be provided pursuant to Section 3 or 6 of this Agreement (the “Severance Benefit”) shall be reduced as described below if the Net After-Tax Benefit (as defined below) the Executive would realize would be greater with the reduction than without the reduction.  The Net After-Tax Benefit is the sum of the parachute payments (within the meaning of section 280G of the Code) payable to the Executive under this Agreement and all other plans, practices, policies, or programs of the Company, reduced by the federal, state, and local income taxes payable with respect to the parachute payments and any excise tax imposed on the Executive with respect to the parachute payments under section 4999 of the Code.  If the Net After-Tax Benefit would be greater with the reduction, then the Severance Benefit shall be reduced, but only to the extent required to avoid the imposition on the Executive of any excise tax under section 4999 of the Code.  Tax counsel designated in the manner described below shall make all determinations required for the purposes of this Section 10, including the determination of which payments or benefits are parachute payments, the value of the parachute payments, the amount of Net After-Tax Benefit realizable with and without a reduction, and the amount of the reduction required to avoid the excise tax.  All determinations shall be made in accordance with sections 280G and 4999 and other relevant provisions of the Code.  Tax counsel shall be designated as follows:  the Executive and the Company shall each designate a party to serve as co-tax counsel.  The co-tax counsel shall endeavor to agree upon the determinations required for the purposes of this Section 10, but if they have not done so by the end of the tenth business day following the change in control, the accounting firm that was the independent auditor of the Company immediately before the change in control shall designate a third party to serve as successor tax counsel, and all of its determinations shall prevail.  To the extent this section requires a reduction in the Severance Benefit, the Company shall apply the reduction in the following order:  first to any cash payments that are parachute payments but not deferred compensation for purposes of section 409A of the Code; next to any cash payments that are parachute payments and deferred compensation for purposes of section 409A; next to the vesting of any stock options, beginning with those granted most recently; and then to the vesting of any stock appreciation rights, beginning with those granted most recently.  The Company shall be responsible for payment of the fees charged by all parties serving as tax counsel (whether as co-tax counsel or otherwise) and by the accounting firm for services rendered in connection with this Section.
11.Confidential Information.  The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge, or data relating to the Company or any of its Subsidiaries, and their respective businesses, obtained by the Executive during the Executive’s employment by the Company or any of its Subsidiaries and that has not become public knowledge (other than by acts of the Executive or his representatives in violation of this Agreement).  After the date of Termination of the Executive’s employment with the Company, the Executive shall not, without the prior written consent of the Company, communicate or divulge any such information, knowledge, or data to anyone other than the Company and those designated by it.  In no event shall an asserted violation of the provisions of this Section 11 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement.
12.Successors.
(a)    This Agreement is personal to the Executive and shall not be assignable by the Executive other than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives or successors in interest.  The Executive may designate a successor or successors in interest to receive any and all amounts due the Executive under this Agreement after the Executive’s death.  A designation of a successor in interest shall be made in writing, signed by the Executive, and delivered to the Company pursuant to Section 16(b).  This Section 12(a) shall not supersede any designation of beneficiary or successor in interest made by the Executive or provided for under any other plan, practice, policy, or program of the Company.
(b)    This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
(c)    The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company and any Parent of the Company or any successor and without regard to the form of transaction utilized to acquire the business or assets of the Company, to assume expressly 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 or parentage had taken place.  As used in this Agreement, “Company” shall mean the Company as defined above and any successor to its business or assets as aforesaid (and any Parent of the Company or any successor) that is required by this clause to assume and agree to perform this Agreement or that otherwise assumes and agrees to perform this Agreement.
13.Notice of Termination.  Any Termination of the Executive’s employment by the Company for Cause or by the Executive for Good Reason shall be communicated by Notice of Termination to the other party given in accordance with Section 16(b) of this Agreement.  For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination of the Executive’s employment under the provision so indicated, and (iii) if the date of Termination is other than the date of receipt of such notice, specifies the Termination date (which date shall be not more than fifteen days after the giving of such notice).  The failure by the Executive to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason shall not waive any right of the Executive under this Agreement or preclude the Executive from asserting such fact or circumstance in enforcing his rights
14.Requirements and Benefits if Executive Is Employee of Subsidiary of Company.  If the Executive is an employee of any Subsidiary of the Company, he shall be entitled to all of the rights and benefits of this Agreement as though he were an employee of the Company and the term “Company” shall be construed to include the Subsidiary by which the Executive is employed.  The Company guarantees the performance of its Subsidiary under this Agreement.
15.Dispute Resolution.  The Company and the Executive shall attempt to resolve between them any dispute that arises under this Agreement.  If they cannot agree within ten days after either party submits a demand for arbitration to the other party, then the issue shall be submitted to arbitration with each party having the right to appoint one arbitrator and those two arbitrators mutually selecting a third arbitrator.  The rules of the American Arbitration Association for the arbitration of commercial disputes shall apply and the decision of two of the three arbitrators shall be final.  The arbitrators must reach a decision within 60 days after the selection of the third arbitrator.  The arbitration shall take place in Jackson, Mississippi.  The arbitrators shall apply Mississippi law.  The costs of such arbitration shall be shared equally by the Executive and the Company.
16.Miscellaneous.
(a)    This Agreement shall be governed by and construed in accordance with the laws of the State of Mississippi, without reference to principles of conflict of laws.  The captions of this Agreement are not part of the Agreement and shall have no force or effect.  This Agreement may be amended or modified only by a written agreement executed by the parties or their respective successors and legal representatives.
(b)    All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, to the addresses for each party as first written above or to such other address as either party shall have furnished to the other in writing in accordance with this Section 16.  Notices and communications to the Company shall be addressed to the attention of the Company’s Corporate Secretary.  Notice and communications shall be effective when actually received by the addressee.
(c)    Whenever reference is made in this Agreement to any specific plan or program of the Company, to the extent that the Executive is not a participant in the plan or program or has no benefit accrued under it, whether vested or contingent, as of the Change in Control Date, then such reference shall be null and void and the Executive shall acquire no additional benefit as a result of such reference.
(d)    The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(e)    The Company may withhold from any amounts payable under this Agreement such federal, state, or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(f)    The Company’s or the Executive’s failure to insist upon strict compliance with any provision of this Agreement shall not be construed to be a waiver of such provision or any other provision.
(g)    Except in the case of Termination of employment or elected officer status under the circumstances set forth in Section 2(g), 3, or 4 above, upon a Termination of the Executive’s employment or upon the Executive’s ceasing to be an elected officer of the Company, in each case, prior to the Change in Control Date, there shall be no further rights under this Agreement.
[Intentionally Left Blank.]
IN WITNESS WHEREOF, the Executive has set his hand to this Agreement and, pursuant to the authorization from the Compensation Committee of the Board of Directors, the Company has caused this Agreement to be executed as of the day and year first above written.
EASTGROUP PROPERTIES, INC.

By:___________________________________ 
Name:     
Title:    

EXECUTIVE

______________________________________ 
Name:
Address:    

-  -SEC Exhibit

Exhibit 10.1

May 12, 2016
Thomas M. Herzog

Re:  Resignation from UDR, Inc.
Dear Tom:
This letter (this "Letter Agreement") reflects our agreement with respect to the resignation of your employment with the Company.  Your employment with UDR, Inc. (the "Company") will end effective June 3, 2016 (the "Resignation Date").  
1.Vacation Pay.  You will be paid an amount equal to all accrued but unused vacation up to the Resignation Date which is $9,255.34 and which will be included in your final paycheck.  

2.Consideration.  In consideration of  your execution of this Letter Agreement, and contingent upon the expiration of all applicable revocation periods without revocation, the Company agrees as follows:

(a)If you execute and deliver to the Company this Letter Agreement and do not revoke this Letter Agreement as provided in Section 8, you may continue to participate in the Company’s group health insurance plans following the Resignation Date at the same dependent coverage level as immediately prior to the Resignation Date.  Coverage will continue until the first to occur of (i) June 27, 2016; or (ii) you default in the payment of or no longer continue to pay your portion of the premium (individually and collectively, the “Transition Period”).  During the Transition Period, the Company shall continue to pay its portion of the premiums and you will pay your portion of the premiums.  At the end of the Transition Period, if you do not have health insurance from another employer, you may continue coverage through the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) at your own expense.  

(b)If you do not revoke this Letter Agreement as provided in Section 8, the following restricted stock awards shall be fully vested as of the Resignation Date:

		
	(i)
	16,286 shares of restricted common stock from the 2014 Long-Term Incentive grant awarded to you under the Restricted Stock Award Agreement dated February 6, 2014; and

1745 Shea Center Dr., Suite 200
Highlands Ranch, CO 80129
 
Tel:   720.283.6120
Fax:  720.283.2453
 
www.udr.com

Opening doors to the future® 

Thomas M. Herzog
May 12, 2016
Page 2

		
	(ii)
	12,165 restricted stock units constituting the second tranche from the 2015 FFO as Adjusted Long-Term Incentive grant awarded to you under the Restricted Stock Unit Agreement dated January 1, 2015.

3.Stock Award.  The remaining shares of common stock, restricted stock units or Class 2 LTIP Units awarded to you under the following agreements have not vested and therefore shall automatically be forfeited and deemed re‐conveyed to the Company on the Resignation Date, in accordance with the terms of each of the agreements:

		
	(i)
	2,153 shares of common stock awarded to you under the Restricted Stock Award Agreement dated January 2, 2013; 

		
	(ii)
	36,502 restricted stock units awarded to you under the Restricted Stock Unit Agreement dated January 1, 2015;

		
	(iii)
	2,240 shares of common stock awarded to you under the Restricted Stock Award Agreement dated February 5, 2015; 

		
	(iv)
	25,496 restricted stock units awarded to you under the Restricted Stock Unit Agreement dated February 4, 2016; and

		
	(v)
	20,845 Class 2 LTIP Units awarded to you under the Class 2 LTIP Unit Agreement dated February 4, 2016.

4.Other Benefits.  Except as provided explicitly in this Letter Agreement, after the Resignation Date you will not be entitled to any other or further benefits from Company, including, without limitation, participation in health and dental insurance plans, disability and life insurance plans, stock plans, 401(k) plans and profit sharing plans.

5.Expenses.  Your expense report for expenses incurred through the Resignation Date must be received within three business days after the Resignation Date.  You will be reimbursed for expenses incurred through the Resignation Date in accordance with ordinary Company reimbursement practices and policies.  If a final accounting of these new expenditures indicates that you owe the Company any amount (e.g., for charges to Company accounts) after your expense reports have been processed, you must pay such amount within three days after the Resignation Date.

6.Compliance Warranty.  You represent and warrant that you are not aware of any compliance issues, concerns, or any violations or suspected violations of laws, policies or regulations other than those, if any, that you have brought to the attention of the Company’s management before signing this Letter Agreement.

7.Company Property.  On the Resignation Date, you will return to the Company (a) all Company documents (including copies), including, but not limited to, the following proprietary information of the 

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Company:  files, memoranda, notes, computer-recorded information, personnel records (except copies of any agreements you may have signed with the Company), and (b) all property which you may possess, including but not limited to, laptop computer, iPad, cell phone, keys, entry cards, identification, credit cards, and any other materials of any kind that embodies any confidential or proprietary information of the Company (and all reproductions thereof); provided however, that you may keep the Company iPhone and iPad issued to you but you agree that as a condition precedent that you will provide the iPhone and iPad to the Company prior to the Resignation Date so that the Company can cancel the phone and data packages with the cell phone providers for the iPhone and iPad and redact any Confidential Information (as defined in Section 11 hereof) from the iPhone and iPad.

8.Revocation.  The Company advises you to consult with an attorney prior to signing this Letter Agreement.  You understand that you have twenty-one (21) days to consider whether to sign this Letter Agreement (the “Consideration Period”).  You must return this signed Letter Agreement to the Company within the Consideration Period.  If you sign and return this Letter Agreement before the end of the Consideration Period, it is because you have freely chosen to do so after carefully considering its terms.  You further understand that you have seven (7) days following your execution of this Letter Agreement to validly revoke this Letter Agreement.  Such right of revocation constitutes a unilateral right afforded to you and the Company shall have no such right of revocation.  Any revocation within this period must be submitted, in writing, to UDR, Inc., c/o Warren L. Troupe, Senior Executive Vice President, 1745 Shea Center Drive, Suite 200, Highlands Ranch, CO 80129, by certified mail, return receipt requested, post-marked within seven (7) days of execution of this Letter Agreement and state, "I hereby revoke my acceptance of the Letter Agreement."  This Letter Agreement shall not become effective or enforceable until the revocation period has expired without revocation.  If the last day of the revocation period is a Saturday, Sunday, or legal holiday in Colorado, then the revocation period shall not expire until the next following day which is not a Saturday, Sunday, or legal holiday in Colorado.  If it is not validly revoked, this Letter Agreement will become irrevocable and enforceable on the eighth day after you sign this Letter Agreement (the “Effective Date”).  Any modification or alteration of any terms of this Letter Agreement by you voids this Letter Agreement in its entirety.  

9.General Release of Claim and Covenant Not to Sue.  

(a)In consideration of the benefits provided to you under this Letter Agreement, and except for the obligations created by this Letter Agreement, you knowingly and voluntarily release and forever discharge the Company, its parents, divisions and its affiliates, as well as their respective officers, directors, employees, stockholders, agents, attorneys, insurers, representatives, assigns and successors, past and present, and each of them (hereinafter together and collectively referred to as the "Released Parties") of, with respect to and from any and all demands, actions, causes of action, suits, damages, losses, expenses and claims of any kind, known and unknown, suspected or unsuspected, against the Released Parties, which you, your heirs, executors, administrators, successors, and assigns (together and collectively "Executive") have or may have through the Effective Date, including, but not limited to, any alleged violation of:

The National Labor Relations Act, as amended;

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Title VII of the Civil Rights Act of 1964, as amended;
Sections 1981 through 1988 of Title 42 of the United States Code, as amended;
The Employee Retirement Income Security Act of 1974, as amended;
The Immigration Reform Control Act, as amended;
The Americans with Disability Act of 1990, as amended;
The Age Discrimination in Employment Act of 1967, as amended;
The Fair Labor Standards Act, as amended;
The Occupational Safety and Health Act, as amended;
The Equal Pay Act;
The Family and Medical Leave Act of 1993;
all Colorado laws concerning the workplace; and/or
any other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance; based upon any covenant of good faith and fair dealing, implied or express contract, wrongful discharge, promissory estoppel, equitable estoppel, employee benefit, violation of public policy, negligent or intentional infliction of emotional distress, defamation, false light, compelled self-publication, fraud, misrepresentation, invasion of privacy, assault, battery, tortious interference with a contract, tortious interference with a business relationship or economic interest, negligent retention, negligent hiring, negligent supervision, negligence, negligent misrepresentation, gross negligence, loss of consortium, equity or any intentional or other tort; and/or
(i)    Arising out of or related to the Released Parties' personnel practices, policies, or procedures; and
(ii)    Arising out of or related to Executive’s employment or the initiation, existence or cessation of Executive’s employment with the Released Parties, including any claims for salary, wages, severance pay, vacation pay, sick pay, bonuses, and any other compensation or benefit of any nature; and
(iii)    Arising out of or related to any statements or representations to or about Executive; and
(iv)    Arising out of or related to any other wrong, injury or loss allegedly suffered by Executive; and
(v)    any allegation for costs, fees, or other expenses including attorneys' fees incurred in these matters (collectively the "Released Claims").

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To the maximum extent allowed by law, you waive the right to sue or initiate against the Released Parties any action or proceeding, or participate in the same, individually or as a member of a class, under any contract (express or implied), or any federal, state or local law, statute or regulation pertaining in any manner to the Released Claims.
This is intended to be a general release of all claims, so, to the extent you still possess any viable claims or causes of action against the Released Parties, to the maximum extent allowed by law, you hereby assign to the Company all such claims.
(b)The release set forth in Section 9(a) above does not waive claims (i) for unemployment or workers’ compensation, (ii) for vested rights under ERISA-covered employee benefit plans as applicable on the date you sign this Letter Agreement, (iii) that may arise after the Effective Date or (iv) which cannot be released by private agreement.  The release set forth in Section 9(a) does not bar you from (i) filing suit to challenge a release of age discrimination claims pursuant to the Older Workers Benefit Protection Act, or (ii) filing a charge with an administrative agency provided that you cannot recover any economic or injunctive relief for yourself as a result of such charge.  You understand that if this Letter Agreement had not been signed, you would have the right to voluntarily assist other individuals or entities in bringing claims against the Company.  To the maximum extent allowed by applicable law, you waive the right to voluntarily assist other individuals or entities in bringing claims against the Company and, unless your assistance is specifically sought by a governmental entity or compelled by applicable law or valid court order, you agree not to aid or assist others in their pursuit of claims against the Company.

Notwithstanding any of the foregoing, the release provisions in this Letter Agreement shall not be interpreted as waiving or releasing any right to indemnification or insurance coverage, if any, that you currently have under any of the Company’s existing insurance policies, the Company’s Amended and Restated Bylaws or the Company’s Charter or indemnification agreements with respect to actions taken by you in the course and scope of your employment with the Company.

(c)Except for the obligations created by this Letter Agreement, the Company hereby covenants not to sue and releases and forever discharges you from any and all claims, known and unknown, which the Company has or may have against you, including all claims arising from your position as Senior Vice President and Chief Financial Officer or as an employee of the Company or its subsidiaries or affiliates and the termination of that relationship (and specifically including any and all claims related to prior promises or contracts of employment), as of the date of this Letter Agreement; provided, however, the Company does not release you with respect to claims arising out of or relating to fraud, gross negligence, willful misconduct or under the Company’s Recoupment of Performance-Based Incentives policy.

10.No Claims Exist.  You confirm that no claim, charge, complaint, or action exists pertaining in any manner to the Released Claims in any forum or form.  You further confirm that you have not assigned or transferred to any third party any of the Released Claims.  In the event that any such claim, charge, complaint or action is filed, you shall not be entitled to recover any relief or recovery therefrom, including costs and attorney's fees.

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11.Proprietary Information.  You acknowledge that you have been exposed to and have learned a substantial amount of information, which is proprietary and confidential to the Company, whether or not you developed or created such information.  You acknowledge that such proprietary and confidential information may include, but is not limited to, trade secrets; acquisition or merger information; advertising and promotional programs; resource or developmental projects; plans or strategies for future business development; financial or statistical data; customer information, including, but not limited to, customer lists, sales records, account records, sales and marketing programs, pricing matters, and strategies and reports; and any Company manuals, forms, techniques, and other business procedures or methods, devices, computer software or matters of any kind relating to or with respect to any confidential program or projects of the Company, or any other information of a similar nature made available to you and not known in the trade in which the Company is engaged, which, if misused or disclosed, could adversely affect the business or standing of the Company (collectively, the "Confidential Information").  Confidential Information shall not include information that is generally known or generally available to the public through no fault of your own.  You agree that except as required by court order, you will not at any time divulge to any person, agency, institution, the Company or other entity any information which you know or has reason to believe is proprietary or confidential to the Company, including but not limited to the types of information described above, or use such information to the competitive disadvantage of the Company.  You agree that your duties and obligations under this Section 11 will continue until the later of twelve (12) months from the Resignation Date, or as long as the Confidential Information remains proprietary or confidential to the Company.

12.Confidentiality.  The nature and terms of this Letter Agreement are strictly confidential and they have not been and shall not be disclosed by you at any time to any person other than your lawyer or accountant, the IRS, or your immediate family without the prior written consent of a senior officer of the Company, except as necessary in any legal proceedings directly related to the provisions and terms of this Letter Agreement, to prepare and file income tax forms, or as required by court order after reasonable notice to the Company.  

13.Cooperation.  You agree to cooperate with the Released Parties regarding any pending or subsequently filed litigation, claims or other disputes involving the Released Parties that relate to matters within your knowledge or responsibility, including, without limitation, any potential claim or action by the Company.  Without limiting the foregoing, you agree (i) to meet with Released Party’s representatives, its counsel or other designees at mutually convenient times and places with respect to any items within the scope of this provision; (ii)  to appear, at the request of Company, at any deposition, administrative proceeding or trial in any pending or future litigation; (iii) to provide truthful testimony regarding same to any court, agency, or other adjudicatory body; and (iv) to provide the Company with notice of contact by any adverse party or such adverse party’s representative, except as may be required by law.  Except as prohibited by law, the Company will reimburse you for reasonable documented expenses including legal fees for any counsel approved by the Company to represent you in connection with the cooperation described in this paragraph except that it will not compensate you for any time testifying at any proceeding.

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14.Non-Disparagement.  You agree not to make statements to clients, customers and suppliers of the Company (or any of its affiliates) or to other members of the public that are in any way disparaging or negative towards the Company, any of its affiliates, or the products, services, representatives or employees of any of the foregoing except as required by subpoena or government agency having jurisdiction over the matter at issue.  In response to inquiries about you from individuals outside of the Company, the Company’s official response shall be to provide our standard reference information of dates of employment and title.

15.Assistance.  In partial consideration for the benefits provided to you by the Company under this Letter Agreement, to which you are not otherwise entitled, you agree to provide reasonable assistance related to transition matters to the Company and/or its employees.
 
16.Non-Solicitation.  As further consideration for the benefits provided in this Letter Agreement for a period terminating twelve (12) months from the Resignation Date, you agree not to directly or indirectly solicit for employment any person employed by the Company or its affiliates.

17.Joint Preparation of Agreement.  This Letter Agreement is deemed to have been drafted jointly by the parties.  In any interpretation of this Letter Agreement, the provisions of this Letter Agreement shall not be interpreted or construed against any party on the basis that the party was the drafter.

18.Severability.  If any provision of this Letter Agreement is determined to be invalid or unenforceable, in whole or in part, such determination will not affect any other provision of this Letter Agreement.  For example, if the release of a particular claim is held by a court to be invalid or unenforceable, such ruling will not affect the releases of any other claims.

19.Entire Agreement.  This Letter Agreement contains the entire agreement between you and the Company and is the complete, final and exclusive embodiment of our agreement with regard to the subject matter.  It is entered into without reliance on any promise or representation other than those expressly contained herein, and it may not be modified except in writing signed by you and an officer of the Company.

20.Notices.  Except as set forth in Section 8, any notice or communication required or permitted under this Letter Agreement shall be in writing and shall be deemed received (a) on the date personally delivered, (b) the same day of sending by email, (c) the next day after sending via Federal Express or any other next-day carrier service, or (d) the third day after mailing via first-class mail, return receipt requested, to a party at the address specified below or such other address as designated from time to time:

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To you at:
Thomas M. Herzog

Email:
To UDR, Inc. at:
UDR, Inc.
1745 Shea Center Drive, Suite 200
Highlands Ranch, Colorado 80129
Attn: Warren L. Troupe
Email: wtroupe@udr.com
21.Governing Law.  This Letter Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Colorado, as applied to contracts made and performed entirely within the State of Colorado.

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Please sign and return this Letter Agreement to me, keeping a copy for yourself.  Our sincerest wishes in your future endeavors.
Sincerely,
UDR, Inc.

	
					
	/s/ Warren L. Troupe
	 
	 
	 

	Warren L. Troupe
	 
	 
	 

	Senior Executive Vice President
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Accepted and Agreed:
	 
	 
	 

	Date:
	May 12, 2016
	 
	By:
	/s/ Thomas M. Herzog

	 
	 
	 
	 
	Thomas M. Herzog

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