Document:

exv10w3

 

Exhibit 10.3

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into effective as of
the 16th day of February, 2004, by and between COMMERCIAL NET LEASE REALTY, INC., a Maryland
corporation (“CNLR”), and CRAIG MACNAB (“Executive”).

Preliminary Statement

     WHEREAS, CNLR desires to employ Executive, and Executive desires to be employed
by CNLR; and

     WHEREAS, CNLR and Executive desire to enter into this Agreement which sets forth the terms and
conditions of Executive’s employment by CNLR.

     NOW, THEREFORE, in consideration of the mutual covenants set forth below, the Company and
Executive agree as follows:

     1. Employment. CNLR hereby employs the Executive, and Executive agrees to serve CNLR,
for the period and upon terms and conditions set forth below. Except as otherwise provided in this
Agreement, Executive’s employment shall be subject to the employment policies and practices of CNLR
in effect from time to time during the term of Executive’s employment.

     2. Term of Agreement. The term of Executive’s employment pursuant to this Agreement
shall commence on February 16, 2004 (the “Effective Date”), and shall continue in effect for a
period of three (3) years to and including February 16, 2007, unless terminated earlier in
accordance with Section 5 below. Thereafter, this Agreement may be renewed (a) by CNLR for up to a
maximum of three additional one-year terms, upon written notice by CNLR to Executive no later than
ninety days prior to the termination date of the initial or any renewal term, and (b) thereafter
upon the mutual agreement of CNLR and Executive, unless terminated sooner in accordance with
Section 5 below. (The natural termination date of the initial term or any renewal term of this
Agreement shall be referred to as the “Termination Date.”)

     3. Position and Duties. Executive shall serve as the Chief Executive Officer of CNLR
and shall have such duties, authority and responsibilities as are normally associated with and
appropriate for such position, and shall perform such other services for CNLR consistent with such
position as may be reasonably assigned to him by the Chairman of the Board of Directors of CNLR.
Executive shall devote substantially all of his working time and efforts to the business and
affairs of CNLR, except that Executive may engage in personal or charitable activities which do not
interfere with Executive’s employment duties. Executive shall comply with the policies, standards,
and regulations established from time to time by CNLR.

     4. Compensation and Related Matters

          4.1 Base Salary. During the term of this Agreement, CNLR shall pay to Executive a base
salary at an annual rate as specified in Attachment “A” to this Agreement (“Base Salary”). If CNLR
exercises its option to renew the term of Executive’s employment pursuant to Section 2 above,
Executive’s Base Salary in effect for the year prior to such renewal term shall be automatically
increased by the highest percentage increase in base salary for CNLR’s Chief Operating Officer,
Chief Financial Officer, or General Counsel for the year immediately prior to said renewal term.
The Base Salary shall be paid in equal installments in accordance with CNLR’s usual and customary
payroll practices, but not less frequently than monthly.

          4.2 Bonus and Deferred Compensation. Executive may be entitled to an annual bonus and
shall be entitled to deferred compensation as set forth in Attachment “A”.

          4.3 Benefit Plans and Arrangements. Executive shall be entitled, to the extent
Executive is eligible, to participate in and to receive benefits under all existing and future
employee benefit plans, perquisites and fringe benefit programs of CNLR that are provided generally
to other similarly situated

 

 

senior executives of CNLR, on terms similar to those provided to such other executives of CNLR,
including, but not limited to, any retirement, health benefits, and life insurance plans. Executive
shall also be entitled to the fringe benefits set forth on Attachment “B” to this Agreement.

          4.4 Expenses. CNLR shall reimburse Executive for all reasonable and customary expenses
incurred by Executive in performing services for CNLR, including, but not limited to, all
reasonable and customary expenses of travel while away from home on business or at the request of
and in the service of CNLR, provided that such expenses are incurred and accounted for by Executive
in accordance with the policies and procedures established from time to time by CNLR.

          4.5 Paid Time Off. Executive shall be entitled to no fewer than twenty (20) days of
paid time off (PTO) per year.

          4.6 Relocation Reimbursement. CNLR shall reimburse Executive, or pay on his behalf,
the following: (a) the reasonable cost and expenses of moving Executive’s household goods from his
current residence to the Orlando, Florida metropolitan area (the “Orlando Area”); (b) Executive’s
reasonable temporary living expenses in the Orlando Area in connection with his relocation; (c)
Executive’s reasonable expenses incurred in commuting between Orlando and Atlanta, Georgia on
weekends for up to six (6) months from the Effective Date; (d) the reasonable expenses incurred by
Executive’s family traveling between Atlanta and Orlando to locate a permanent residence and
schools; and (e) the closing costs (including any real estate broker’s commissions) incurred by
Executive in connection with the sale of his current primary residence in Atlanta, and the closing
costs (excluding any real estate broker’s commission) incurred by Executive in connection with his
purchase of a new primary residence in the Orlando Area. Reimbursement or payment of the expenses
provided for in this Section 4.6 shall be made by CNLR upon presentation of appropriate receipts,
invoices, closing statements, or other documentation as reasonably requested by CNLR.

          4.7 Board of Directors. Upon Executive’s commencement of employment with CNLR, CNLR
shall cause Executive to be elected to its Board of Directors.

     5. Termination. The term of Executive’s employment pursuant to this Agreement may be
terminated under the following circumstances:

          5.1 Death. The term of Executive’s employment shall terminate upon his death.

          5.2 Disability. CNLR may terminate the term of Executive’s employment as a result of
Executive’s Disability. For purposes of this Agreement, “Disability” is defined as the inability,
by reason of illness or other physical or mental incapacity or limitation, of Executive
substantially to perform the duties of his employment with the Company, as determined in good faith
by the Board of Directors of CNLR, which inability continues for at least one hundred twenty (120)
consecutive days, or for shorter periods aggregating one hundred twenty (120) days during any
consecutive twelve (12) month period.

          5.3 By CNLR for Cause. CNLR may terminate the term of Executive’s employment for
“Cause” upon written notice to Executive. For purposes of this Agreement, CNLR shall have “Cause”
to terminate Executive’s employment upon any of the following events:

               (a) Executive’s continued failure to perform, or his habitual neglect of, his duties and
obligations hereunder;

               (b) Executive’s conviction of, or plea of guilty or nolo contendre to, an indictment or
information, or an indictment or information is filed against Executive and is not discharged or
otherwise resolved within twelve (12) months thereafter, and said indictment or information charged
Executive with a felony, any crime involving moral turpitude, or any crime which is likely to
result in material injury to CNLR;

               (c) Executive’s breach of a fiduciary duty relating to the Executive’s employment with
CNLR, including but not limited to an act of fraud, theft or dishonesty; or

               (d) Executive’s material breach of this Agreement.

               Notwithstanding the foregoing, CNLR shall not be deemed to have Cause to terminate the term of
Executive’s employment under subsections (a) or (d) unless CNLR has provided written notice to the
Executive setting forth in reasonable detail the reasons for CNLR’s intention to terminate for
Cause, and Executive has failed within thirty (30) days thereafter to cure the event or deficiency
set forth in the written notice.

          5.4 By CNLR Without Cause. CNLR may terminate the term of Executive’s employment other
than for Cause, death or Disability at any time upon sixty (60) days prior written notice to
Executive.

 

 

          5.5 By Executive for Good Reason. Executive may terminate the term of his employment
for “Good Reason” upon written notice to CNLR. For purposes of this Agreement, “Good Reason” shall
include the following events unless otherwise consented to by Executive:

               (a) The assignment to Executive of any duties materially inconsistent with Executive’s
position, duties, responsibilities and status within CNLR;

               (b) A material reduction in Executive’s reporting responsibilities not pertaining to job
performance issues;

               (c) A “Change in Control” (as defined in Section 2.4 of CNLR’s 2000 Performance Incentive
Plan);

               (d) A requirement by CNLR that Executive’s work location be moved more than fifty (50) miles
from CNLR’s principal place of business in Orlando, Florida;

               (e) CNLR’s material breach of this Agreement; or

               (f) CNLR’s failure to obtain an agreement from any successor to the business of CNLR by which
the successor assumes and agrees to perform this Agreement.

               Notwithstanding the foregoing, Executive shall not be deemed to have Good Reason to terminate
the term of his employment under subsections (a), (b), (d), or (e) unless Executive has provided
written notice to CNLR setting forth in reasonable detail the reasons for Executive’s intention to
terminate his employment for Good Reason, and CNLR has failed within thirty (30) days thereafter to
cure the event or deficiency set forth in the written notice.

          5.6 By Executive Without Good Reason. Executive may terminate the term of Executive’s
employment other than for Good Reason at any time upon sixty (60) days prior written notice to CNLR

     6. Compensation in the Event of Termination. Upon the termination of this Agreement,
CNLR shall pay Executive compensation as set forth below:

          6.1 By CNLR Without Cause; By Executive for Good Reason. In the event that Executive’s
employment is terminated by CNLR without Cause, or by the Executive for Good Reason, CNLR shall pay
the Executive a cash payment equal to (i) two times Executive’s Base Salary in effect on the date
of termination if such termination is on or before June 30, 2005, or (ii) one times Executive’s
Base Salary in effect on the date of termination if such termination is after June 30, 2005 (the
“Severance Payment”). The Severance Payment shall be made payable in equal installments over a
twelve (12) month period in accordance with CNLR’s usual and customary payroll practices,
commencing on the first payday following Executive’s termination. Within thirty (30) days of the
date of termination of Executive’s employment, CNLR shall also pay Executive a lump sum equal to
the sum of: (a) any accrued but unpaid Base Salary, performance bonus for the prior year, and
vacation due Executive as of the date of termination of
employment; (b) reimbursements for appropriately submitted expenses which have been incurred, but
have not been paid by CNLR, as of the date of termination; and (c) a pro-rated performance bonus
for the year or partial year in which Executive’s employment hereunder is terminated, determined in
accordance with paragraph 2 of Attachment “A”. In the event that any payment to Executive pursuant
to this Section 6.1 shall be deemed to be an “excess parachute payment” under Section 280G(b)(1) of
the Internal Revenue Code of 1986, as amended (the “Code”) and subject to the excise tax under
Section 4999(a) of the Code (the “Parachute Tax”), then the amount of such payment to Executive
shall be increased by an additional amount equal to the amount, after deducting the Parachute Tax
and any income tax due on such additional amount, as may be required to enable Executive to pay the
Parachute Tax due on any payment under this Section 6.1 and any income tax due on such additional
amount.

          6.2 By CNLR for Cause; By Executive Without Good Reason. In the event that CNLR
terminates Executive’s employment for Cause, or Executive terminates his employment without Good
Reason, all compensation or benefits to which Executive may otherwise be entitled to shall cease on
the date of termination, except for (a) any accrued but unpaid Base Salary due Executive as of the
date of termination of employment; and (b) reimbursements for appropriately submitted expenses
which have been incurred, but have not been paid by CNLR, as of the date of termination.

          6.3 Death or Disability. In the event that CNLR terminates Executive’s employment due
to his death or Disability, the Company shall pay the Executive or his estate (a) lump sum equal to
one (1) times Executive’s Base Salary in effect at the date of termination, payable within thirty
(30) days of Executive’s termination; (b) any accrued but unpaid Base Salary, performance bonus for
the prior year, and vacation due Executive as of the date of termination of employment; (c)
reimbursements for appropriately submitted expenses which have been incurred, but have not been
paid by CNLR, as of the date of termination; and (d) a pro-rated performance bonus for the year or
partial year in which Executive’s employment hereunder is terminated, determined in accordance with
paragraph 2 of Attachment “A”.. This payment shall be in addition to, rather than in lieu of, the
entitlement of Executive or his estate to any other insurance or benefit proceeds as a result of
his death or Disability.

 

 

          6.4 Natural Termination. In the event that Executive’s employment by CNLR pursuant to
this Agreement naturally terminates on a Termination Date, the Company shall pay the Executive (a)
any accrued but unpaid Base Salary and performance bonus for the prior year due Executive as of the
Termination Date, (b) reimbursements for appropriately submitted expenses which have been incurred,
but have not been paid by CNLR, as of the Termination Date; and (c) a pro-rated performance bonus
for the year or partial year in which Executive’s employment hereunder is terminated, determined in
accordance with paragraph 2 of Attachment “A”. Provided, however, that at the election of CNLR in
its sole and absolute discretion and upon written notice to the Executive on or prior to the
Termination Date, CNLR may, in addition to the amounts set forth in subsections (a), (b) and (c)
above, pay the Executive an optional cash payment equal to one (1) times the Executive’s Base
Salary which is in effect on the Termination Date, which cash payment shall be made payable over a
twelve (12) month period in equal installments in accordance with CNLR’s usual and customary
payroll practices, commencing on the first payday following the Termination Date (the “Optional
Severance Payment”).

     7. Non-Competition; Non-Solicitation; and Confidentiality.

          7.1 Disclosure of Confidential Information. Executive acknowledges that CNLR will
provide Executive with confidential and proprietary information regarding the business in which
CNLR or any of its current or future subsidiaries or affiliates (collectively, other than CNLR, the
“CNLR Affiliates”) are involved, and CNLR and the CNLR Affiliates will provide Executive with trade
secrets, as defined in Section 688.002(4) of the Florida Statutes, of CNLR and the CNLR Affiliates
(hereinafter all such confidential information and trade secrets referred to as the “Confidential
Information”). For purposes of this Agreement, “Confidential Information” includes, but is not
limited to:

               (a) Information related to the business of CNLR and the CNLR Affiliates, including but not
limited to marketing strategies and plans, sales procedures, operating policies and procedures,
pricing and pricing strategies, business and strategic plans, financial statements and projections,
accounting and tax
positions and procedures, and other business and financial information of CNLR and the CNLR
Affiliates;

               (b) Information regarding the customers of CNLR and the CNLR Affiliates which Executive
acquired as a result of his employment with CNLR, including but not limited to, customer contracts,
customer lists, work performed for customers, customer contacts, customer requirements and needs,
data used by CNLR and the CNLR Affiliates to formulate customer proposals, customer financial
information and other information regarding the customer’s business;

               (c) Information regarding the vendors of CNLR and the CNLR Affiliates which Executive acquired
as a result of his employment with CNLR, including but not limited to, product and service
information and other information regarding the business activities of such vendors;

               (d) Training materials developed by and utilized by CNLR and the CNLR Affiliates;

               (e) Any other information which Executive acquired as a result of his employment with CNLR and
which Executive has a reasonable basis to believe CNLR or the CNLR Affiliates, as the case may be,
would not want disclosed to a business competitor or to the general public; and

               (f) Information which:

                    (i) is proprietary to, about or created by CNLR or the CNLR Affiliates;

                    (ii) gives CNLR or any of the CNLR Affiliates some competitive advantage, the opportunity of
obtaining such advantage or the disclosure of which could be detrimental to the interests of CNLR
or the CNLR Affiliates;

                    (iii) is not typically disclosed to non-executives by CNLR or otherwise is treated as
confidential by CNLR or the CNLR Affiliates; or

                    (iv) is designated as Confidential Information by CNLR or from all the relevant circumstances
should reasonably be assumed by Executive to be confidential to CNLR or any CNLR Affiliates.

                    Notwithstanding the foregoing, “Confidential Information” does not include information that
(i) was known to Executive prior to disclosure by the Company; (ii) was generally known or
available to the public at the time the Company disclosed the information to Executive; (iii)
became generally known or available to the public after disclosure by the Company through no act or
omission of Executive; or (iv) was disclosed to Executive by a third party having a bona fide right
both to possess the information and to disclose the information to Executive.

 

 

          7.2 Covenant Not to Compete. While employed by CNLR and for a period of one (1) year
thereafter, in consideration of the obligations of CNLR hereunder, including without limitation
their disclosure of Confidential Information to Executive, Executive shall not, directly or
indirectly, for compensation or otherwise, engage in or have any interest in any sole
proprietorship, partnership, corporation, company, association, business or any other person or
entity (whether as an employee, officer, corporation, business or any creditor, consultant or
otherwise) that, directly or indirectly, competes with any of the business enterprises in which
CNLR or any CNLR Affiliate is now, or during Executive’s employment becomes engaged in, including,
but not limited to, all aspects of commercial real estate development, leasing and financing
(collectively, “CNLR’s Business”) in any and all states in which CNLR or any CNLR Affiliate
conducts such business while Executive is employed by CNLR or any CNLR Affiliate; provided,
however, Executive may continue to hold securities of CNLR or any CNLR Affiliate or acquire, solely
as an investment, shares of capital stock or other equity securities of any company which are
traded on any national securities exchange or are regularly quoted in the over-the-counter market,
so long as Executive does not control, acquire a controlling interest in, or become a member of a
group which exercises direct or indirect control of more than five percent (5%) of any class of
capital stock of such corporation. Notwithstanding the foregoing, in the event that Executive’s
employment by CNLR naturally
terminates on the Termination Date and CNLR elects not to pay Executive the Optional Severance
Payment pursuant to Section 6.4 above, then the prohibitions contained in this Section 7.2 shall
terminate on the Termination Date. Further provided, that the prohibitions of this Section 7.2
shall not apply following termination by CNLR without Cause or termination by the Executive for
Good Reason.

          7.3 Nonsolicitation of Clients. While employed by CNLR and for a period of one (1)
year thereafter, in consideration of the obligations of CNLR hereunder, including without
limitation their disclosure of Confidential Information to Executive, Executive shall not, directly
or indirectly, for himself or as principal, agent, independent contractor, consultant, director,
officer, member, or employee of any other person, firm, corporation, partnership, company,
association, business or other entity, solicit, attempt to contract with, or enter into a
contractual or business relationship of any kind pertaining to any aspect of CNLR’s Business, or
any other business conducted by CNLR or any CNLR Affiliate, with any person or entity with which
CNLR or any CNLR Affiliate had any contractual or business relationship, or engaged in negotiations
toward such a contract, in the previous twenty-four (24) months. Further provided, that the
prohibitions of this Section 7.3 shall not apply following termination by CNLR without Cause or
termination by the Executive for Good Reason.

          7.4 Nonsolicitation of Employees. While employed by CNLR and for a period of one (1)
year thereafter, in consideration of the obligations of CNLR hereunder, including without
limitation their disclosure of Confidential Information to Executive, Executive shall not directly
or indirectly, for himself or as principal, agent, independent contractor, consultant, director,
officer, member, or employee of any other person, firm, corporation, partnership, company,
association or other entity, either (a) hire, attempt to employ, contact, solicit with respect to
hiring or enter into any contractual arrangement with any employee or former employee of CNLR or
any CNLR Affiliate, or (b) induce or otherwise advise or encourage any employee of CNLR or any CNLR
Affiliate to leave his or her employment unless, in each such case, such employee or former
employee has not been employed by CNLR or an CNLR Affiliate for a period in excess of six (6)
months at the time of such solicitation, attempt to employ, contact, employment, or inducement.
Further provided, that the prohibitions of this Section 7.4 shall not apply following termination
by CNLR without Cause or termination by the Executive for Good Reason.

          7.5 Nondisparagement. While employed by CNLR and after Executive’s employment
terminates, in consideration of the obligations of CNLR hereunder, including without limitation
their disclosure of Confidential Information to Executive, Executive shall not disparage, denigrate
or comment negatively upon, either orally or in writing, CNLR, any CNLR Affiliate, or any of their
officers or directors, including, but not limited to, James M. Seneff, Jr. and Robert A. Bourne
(collectively, the “Benefited Persons”), to or in the presence of any person or entity unless
compelled to act by a valid subpoena or other legal mandate; provided, however, if Executive
receives such a subpoena or other legal mandate he shall provide CNLR with written notice of same
at least five (5) business days prior to the date on which Executive is required to make the
disclosure. Unless Executive is terminated for Cause, CNLR shall not disparage, denigrate or
comment negatively upon, either orally or in writing, the Executive to any prospective employer or
third party after Executive’s employment terminates unless compelled to do so by subpoena or other
legal mandate; provided however, if CNLR receives such a subpoena or other legal mandate it shall
provide Executive with written notice of same at least five (5) business days prior to the date on
which CNLR is required to make the disclosure.

          7.6 Confidentiality. While employed by CNLR and after Executive’s employment
terminates, in consideration of the obligations of CNLR hereunder, including without limitation
their disclosure of Confidential Information to Executive, Executive shall keep secret and retain
in strictest confidence, shall not disclose to any third-party, and shall not use for his benefit
or the benefit of others, except in connection with the business affairs of CNLR or any other
Benefited Persons, all confidential and proprietary information and trade secrets relating to the
business of CNLR or any of the other Benefited Persons, including, without limitation, the
Confidential Information, which information is not generally known or otherwise obtainable in the
public domain, unless such disclosure is required by a valid subpoena or other legal mandate. In
the event Executive receives such a subpoena or legal mandate he shall provide CNLR with written
notice of same at least five (5) business days prior to the date on which Executive is required to
make the disclosure.

 

 

     8. Tangible Items. All files, records, documents, manuals, books, forms, reports,
memoranda, studies, data, calculations, recordings, or correspondence, in whatever form they may
exist, and all copies, abstracts and summaries of the foregoing, and all physical items related to
the business of CNLR or any other Benefited Person, whether of a public nature or not, and whether
prepared by Executive or not, are and shall remain the exclusive property of CNLR or any other
Benefited Person, as the case may be, and shall not be removed from their premises, except as
required in the course of Executive’s employment by CNLR, without the prior written consent of
CNLR. Such items, including any copies or other reproductions thereof, shall be promptly returned
by Executive to CNLR on or before the Termination Date or at any earlier time upon the written
request of CNLR.

     9. Remedies.

          9.1 Injunctive Relief. CNLR and Executive acknowledge and agree that a breach by
Executive of any of the covenants contained in Sections 7 and 8 of this Agreement will cause
immediate and irreparable harm and damage to CNLR and/or any other Benefited Person, and that
monetary damages will be inadequate to compensate CNLR, and/or any other Benefited Person, as the
case may be, for such breach. Accordingly, Executive acknowledges that CNLR and/or any other
Benefited Person affected shall, in addition to any other remedies available to them at law or in
equity, be entitled to an injunction from any court of competent jurisdiction enjoining and
restraining any violation of said covenants by Executive or any of his affiliates, associates,
partners or agents, either directly or indirectly, without the necessity of proving the inadequacy
of legal remedies or irreparable harm. In addition, Executive acknowledges that in the event of his
breach of any of the provisions of Sections 7 or 8 of this Agreement, in addition to any other
remedies CNLR may have, CNLR may cease making the balance of the payments specified in Section 6.1
or 6.4.

          9.2 Arbitration. Except with regard to Section 9.1, all disputes between the parties
or any claims concerning the performance, breach, construction or interpretation of this Agreement,
or in any manner arising out of this Agreement, shall be submitted to binding arbitration in
accordance with the Commercial Arbitration Rules, as amended from time to time, of the American
Arbitration Association (the “AAA”), which arbitration shall be carried out in the manner set forth
below:

               (a) Within fifteen (15) days after written notice by one party to the other party of its
demand for arbitration, which demand shall set forth the name and address of its designated
arbitrator, the other party shall appoint its designated arbitrator and so notify the demanding
party. Within fifteen (15) days thereafter, the two arbitrators so appointed shall appoint the
third arbitrator. If the two appointed arbitrators cannot agree on the third arbitrator, then the
AAA shall appoint an independent arbitrator as the third arbitrator. The dispute shall be heard by
the arbitrators within ninety (90) days after appointment of the third arbitrator. The decision of
any two or all three of the arbitrators shall be binding upon the parties without any right of
appeal. The decision of the arbitrators shall be final and binding upon CNLR, its successors and
assigns, and upon Executive, his heirs, personal representatives, and legal representatives.

               (b) The arbitration proceedings shall take place in Orlando, Florida, and the judgment and
determination of such proceedings shall be binding on all parties. Judgment upon any award rendered
by the arbitrators may be entered into any court having competent jurisdiction without any right of
appeal.

               (c) Each party shall pay its or his own expenses of arbitration, and the expenses of the
arbitrators and the arbitration proceeding shall be shared equally. However, if in the opinion of a
majority of the arbitrators, any claim or defense was unreasonable, the arbitrators may assess, as
part of their award, all or any part of the arbitration expenses of the other party (including
reasonable attorneys’ fees) and of the arbitrators and the arbitration proceeding.

     10. Indemnification. CNLR shall indemnify and hold harmless Executive from any claims,
losses or damages (including reasonable attorney’s fees and costs) resulting from any action or
inaction on his part while serving as an officer or director of CNLR, or any of its subsidiaries,
and shall advance the expenses of defending any claim against Executive related thereto, but only
to the extent permitted by CNLR’s
certificate of incorporation and by-laws.

     11. Severability. As the provisions of this Agreement are independent of and severable
from each other, CNLR and Executive agree that if, in any action before any court or agency legally
empowered to enforce this Agreement, any term, restriction, covenant, or promise hereof is found to
be unreasonable or otherwise unenforceable, then such decision shall not effect the validity of the
other provisions of this Agreement, and such invalid term, restriction, covenant, or promise shall
also be deemed modified to the extent necessary to make it enforceable.

 

 

     12. Notice. For purposes of this Agreement, notices, demands and all other
communications provided for in the Agreement shall be in writing and shall be deemed to have been
duly given when received if delivered in person, the next business day if delivered by overnight
commercial courier (e.g. Federal Express), or the third (3rd) business day if mailed by
United States certified mail, return receipt requested, postage prepaid, to the following
addresses:

If to Executive:

Craig Macnab

Commercial Net Lease Realty, Inc.

450 South Orange Avenue — 14th Floor

Orlando, Florida 32801

If to CNLR:

Commercial Net Lease Realty, Inc.

450 South Orange Avenue — 14th Floor

Orlando, Florida 32801

Attn: James M. Seneff, Jr.

   Chairman of the Board of Directors

     Either party may change its address for notices in accordance with this Section 11 by
providing written notice of such change to the other party.

     13. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida.

     14. Benefits; Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective heirs, personal representatives, legal
representatives, successors and permitted assigns. Executive shall not assign this Agreement.

     15. Entire Agreement Amendment. This Agreement, including its incorporated Attachments
“A”, “B” and “C”, constitutes the entire agreement between the parties, and all prior
understandings, agreements or undertakings between the parties concerning Executive’s employment or
the other subject matters of this Agreement are superseded in their entirety by this Agreement.
This Agreement may not be modified or amended other than by an agreement in writing executed an
delivered by both parties hereto.

     16. Counterparts. This Agreement may be executed in counterparts, each of which will
be deemed and original, but which together shall be one and the same instrument.

     17. Tax Advice. Executive confirms and represents to CNLR that he has had the
opportunity to obtain the advice of legal counsel, financial and tax advisers, and such other
professionals as he deems necessary for entering into this Agreement, and he has not relied upon
the advice of CNLR or CNLR’s officers, directors, or employees.

     18. Interpretation. As both parties having had the opportunity to consult with legal
counsel, no provision of this Agreement shall be construed against or interpreted to the
disadvantage of any party by reason of such party having, or being deemed to have, drafted,
devised, or imposed such provision.

[Signatures appear on following page.]

 

 

     

     IN WITNESS WHEREOF, the undersigned have executed this Agreement to be effective as of the
date first above written.

	 	 	 
	

	 	“Executive”

	

	 	/s/Craig Macnab
	 

	 	 
	Witness

	 	Craig Macnab
	 
	 	 
	 
	 	 
	

	 	“CNLR”

Commercial Net Lease Realty, Inc.

	 

	 	/s/James M. Seneff, Jr.
	 

	 	 
	Witness

	 	James M. Seneff, Jr.

Chairman of the Board of Directors

ATTACHMENTS INTENTIONALLY OMITTEDexv10w4

 

Exhibit 10.4

EMPLOYMENT AGREEMENT

(Julian E. Whitehurst)

     THIS EMPLOYMENT AGREEMENT is dated as of February 1, 2003, by and between COMMERCIAL NET LEASE
REALTY, INC., a Maryland corporation (hereinafter referred to as the “Company”), and JULIAN E.
WHITEHURST (hereinafter referred to as the “Executive”).

     WHEREAS, the Company wishes to offer employment to the Executive, and the Executive wishes to
accept such offer, on the terms set forth below.

     Accordingly, the parties hereto agree as follows:

     1. Term. The Company hereby employs the Executive, and the Executive hereby accepts
such employment for an initial term commencing as of the date hereof and ending on December 31,
2003, unless sooner terminated in accordance with the provisions of Section 4 or Section 5 (the
period during which the Executive is employed hereunder being hereinafter referred to as the
“Term”). The Term shall be subject to automatic one (1) year renewals unless either party hereto
notifies the other, in accordance with Section 7.5, of non-renewal at least ninety (90) days prior
to the end of any such Term.

     2. Duties. The Executive, in his capacity as Executive Vice President and General
Counsel of Commercial Net Lease Realty, Inc., shall faithfully perform for the Company the duties
of said office and shall perform such other duties of an executive, managerial or administrative
nature as shall be specified and designated from time to time by the Board of Directors of the
Company (the “Board”), the Chief Executive Officer or the President of the Company (including the
performance of services for, and serving on the Board of Directors of, any subsidiary of the
Company without any additional compensation). The Executive shall devote substantially all of the
Executive’s business time and effort to the performance of the Executive’s duties hereunder,
provided that in no event shall this sentence prohibit the Executive from performing personal and
charitable activities and any other activities approved by the Board, so long as such activities do
not interfere with the Executive’s duties for the Company.

     3. Compensation.

          3.1. Salary. The Company shall pay the Executive during the Term a salary at the rate
of $200,850 per annum (the “Annual Salary”), in accordance with the customary payroll practices of
the Company applicable to senior executives generally. Annual Salary will increase annually on
January 1 of each year by an amount as may be approved by the Board, with such increase to be
effective on the date salary increases are effective for the employees of the Company generally
and, upon such increase, the increased amount shall thereafter be deemed to be the Annual Salary.

          3.2. Bonus. The Executive will be eligible to participate in the Company’s Annual
Bonus Program (the “Bonus Plan”), the terms of which will be established by the Compensation
Committee of the Company.

          3.3. Benefits — In General. The Executive shall be permitted during the Term to
participate in any group life, hospitalization or disability insurance plans, health programs,
pension and profit sharing plans and similar benefits that may be available to other senior
executives of the Company generally, on the same terms as may be applicable to such other
executives, in each case to the extent that the Executive is eligible under the terms of such plans
or programs.

          3.4. Vacation. The Executive shall be entitled to vacation of twenty (20) days per
year.

          3.5. Automobile. The Company will provide the Executive a monthly allowance of $500
for the use of an automobile. At the option of the Company, in lieu of providing such allowance,
the Company will provide the Executive with an automobile of suitable standard to the Executive’s
position.

          3.6. Disability Benefits and Life Insurance. The Executive shall be entitled to
long-term disability coverage providing benefits (to continue for such period as is provided in the
applicable disability plan or program, as amended from time to time) equal to two-thirds of Annual
Salary in the case of a covered disability and life insurance benefits with a face amount equal to
Annual Salary.

          3.7. Expenses. The Company shall pay or reimburse the Executive for all ordinary and
reasonable out-of-pocket expenses actually incurred (and, in the case of reimbursement, paid) by
the Executive during the Term in the performance of the Executive’s services under this Agreement,
provided that the Executive submits such expenses in accordance with the policies applicable to
senior executives of the Company generally.

 

 

     4. Termination upon Death or Disability. If the Executive dies during the Term,
the obligations of the Company to or with respect to the Executive shall terminate in their
entirety except as otherwise provided under this Section 4. If the Executive becomes eligible for
disability benefits under the Company’s long-term disability plans and arrangements (or, if none
apply, would have been so eligible under the most recent plan or arrangement), the Company shall
have the right, to the extent permitted by law, to terminate the employment of the Executive upon
notice in writing to the Executive; provided that the Company will have no right to terminate the
Executive’s employment if, in the opinion of a qualified physician reasonably acceptable to the
Company, it is reasonably certain that the Executive will be able to resume the Executive’s duties
on a regular full-time basis within ninety (90) days of the date the Executive receives notice of
such termination. Upon death or other termination of employment by virtue of disability, (i) the
Executive (or the Executive’s estate or beneficiaries in the case of the death of the Executive)
shall have no right to receive any compensation or benefit hereunder on and after the effective
date of the termination of employment other than Annual Salary and other benefits (but excluding
any bonuses except as provided in the Bonus Plan or in clause (ii) below) earned and accrued under
this Agreement prior to the date of termination (and reimbursement under this Agreement for
expenses incurred prior to the date of termination); (ii) the Executive (or the Executive’s estate
or beneficiaries in the case of the death of the Executive) shall be entitled to a cash payment
equal to the Executive’s Annual Salary (as in effect on the effective date of such termination)
payable no later than thirty (30) days after such termination; and (iii) this Agreement shall
otherwise terminate upon such death or other termination of employment and there shall be no
further rights with respect to the Executive hereunder (except as provided in Section 7.14).

     5. Certain Terminations of Employment.

          5.1. Termination for Cause; Termination of Employment by the Executive Without Good
Reason.

               (a) For purposes of this Agreement, “Cause” shall mean:

                    (i) the Executive’s (A) conviction for (or pleading nolo contendere to) any felony, or a
misdemeanor involving moral turpitude, or (B) indictment for any felony or misdemeanor involving
moral turpitude, if such indictment is not discharged or otherwise resolved within eighteen (18)
months;

                    (ii) the Executive’s commission of an act of fraud, theft or dishonesty related to the
performance of the Executive’s duties hereunder;

                    (iii) the willful and continuing failure or habitual neglect by the Executive to perform the
Executive’s duties hereunder;

                    (iv) any material violation by the Executive of the covenants contained in Section 6; or

                    (v) the Executive’s willful and continuing material breach of this Agreement.

Notwithstanding the foregoing, if there exists (without regard to this sentence) an event or
condition that constitutes Cause under clause (iii) or (v) above, the Executive shall have thirty
(30) days from the date such notice is given to cure such event or condition and, if the Executive does so, such event or
condition shall not constitute Cause hereunder.

               (b) For purposes of this Agreement, “Good Reason” shall mean, unless otherwise consented to by
the Executive:

                    (i) the material reduction of the Executive’s authority, duties and responsibilities, or the
assignment to the Executive of

     duties materially inconsistent with the Executive’s position or positions with the Company and its subsidiaries;

                    (ii) a reduction in Annual Salary of the Executive;

                    (iii) the failure by the Company to obtain an agreement in form and substance reasonably
satisfactory to the Executive from any successor to the business of the Company to assume and agree
to perform this Agreement; or

                    (iv) the Company’s material and willful breach of this Agreement.

 

 

Notwithstanding the foregoing, if there exists (without regard to this sentence) an event or
condition that constitutes Good Reason under clause (i), (ii) or (iv) above, the Company shall have
thirty (30) days from the date on which the Executive gives the notice thereof to cure such event
or condition and, if the Company does so, such event or condition shall not constitute Good Reason
hereunder.

               (c) The Company may terminate the Executive’s employment hereunder for Cause. If the Company
terminates the Executive for Cause, (i) the Executive shall have no right to receive any
compensation or benefit hereunder on and after the effective date of the termination of employment
other than Annual Salary and other benefits (but excluding any bonuses except as provided in the
Bonus Plan) earned and accrued under this Agreement prior to the effective date of the termination
of employment (and reimbursement under this Agreement for expenses incurred prior to the effective
date of the termination of employment); and (ii) this Agreement shall otherwise terminate upon such
termination of employment and the Executive shall have no further rights hereunder (except as
provided in Section 7.14).

               (d) The Executive may terminate his employment without Good Reason. If the Executive
terminates the Executive’s employment with the Company without Good Reason: (i) the Executive shall
have no right to receive any compensation or benefit hereunder on and after the effective date of
the termination of employment other than Annual Salary and other benefits (but excluding any
bonuses except as provided in the Bonus Plan) earned and accrued under this Agreement prior to the
effective date of the termination of employment (and reimbursement under this Agreement for
expenses incurred prior to the effective date of the termination of employment); and (ii) this
Agreement shall otherwise terminate upon such termination of employment and the Executive shall
have no further rights hereunder (except as provided in Section 7.14).

     5.2. Termination Without Cause; Termination for Good Reason; Failure to Renew
Employment Agreement. The Company may terminate the Executive’s employment at any time for any
reason or no reason and the Executive may terminate the Executive’s employment with the Company for
Good Reason. If the Company or the Executive terminates the Executive’s employment and such
termination is not described in Section 4 or Section 5.1, or if the Company, for any reason, does
not renew this agreement at the expiration of its Term, (i) the Executive shall have no right to
receive any compensation or benefit hereunder on and after the effective date of the termination of
employment or expiration of the Term other than Annual Salary and other benefits (but excluding any
bonuses except as provided in the Bonus Plan and clause (ii) below) earned and accrued under this
Agreement prior to the effective date of the termination of employment or expiration of the Term
(and reimbursement under this Agreement for expenses incurred prior to the effective date of the
termination of employment or expiration of the Term); (ii) except as otherwise provided in Section
5.3 below, the Executive shall receive (A) a cash
payment equal to two (2) times the Executive’s Annual Salary (as in effect on the effective date of
such termination or expiration) payable in twelve (12) equal monthly installments (plus interest on
such unpaid amount at the Prime Rate, as hereinafter defined, commencing on the first day of the
first calendar month following such termination or expiration and continuing on the first day of
each calendar month thereafter until paid in full and (B) for a period of one (1) year after
termination of employment or expiration of the term such continuing health benefits (including any
medical, vision or dental benefits), under the Company’s health plans and programs applicable to
senior executives of the Company generally as the Executive would have received under this
Agreement (and at such costs to the Executive) as would have applied in the absence of such
termination or expiration (but not taking into account any post-termination increases in Annual
Salary that may otherwise have occurred without regard to such termination and that may have
favorably affected such benefits) it being expressly understood and agreed that nothing in this
clause (ii)(B) shall restrict the ability of the Company to amend or terminate such plans and
programs from time to time in its sole discretion; provided, however, that the Company shall in no
event be required to provide such coverage after such time as the Executive becomes entitled to
receive health benefits from another employer or recipient of the Executive’s services (and
provided, further, that such entitlement shall be determined without regard to any individual
waivers or other arrangements); (iii) all outstanding unvested options held by the Executive shall
vest and such options shall remain exercisable for one (1) year following termination or expiration
(or, if shorter, the balance of the regular term of the options); and (iv) this Agreement shall
otherwise terminate upon such termination of employment or expiration of the Term and the Executive
shall have no further rights hereunder (except as provided in Section 7.14). As used herein, the
term “Prime Rate” shall mean the prime rate of interest as published in the Wall Street Journal
(or, if the Wall Street Journal is no longer published, a similar national business publication)
from time to time.

     5.3. Change of Control. Immediately upon a “change of control”, as hereinafter
defined, then the provisions of Section 5.2 (ii)(A) above shall be automatically deleted and
replaced with the following new Section 5.2(ii)(A):

     “. . . [(ii) except
as otherwise provided in Section 5.3 below, the Executive shall receive] (A)
a cash payment equal to two (2) times (x) the Executive’s Annual Salary (as in effect on the
effective date of such termination or expiration) plus (y) the average of the Executive’s annual
bonus compensation for the previous three (3) years (or such lesser period of time as the Executive
has been employed by the Company if the Executive has not been so employed for three (3) previous
years) payable no later than thirty (30) days after
such termination or expiration and [B] . . .”

 

 

     For the purposes hereof, the term “change of control” shall mean:

               (a) a “person” or “group” (which terms shall have the meaning they have when used in Section
13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than the
Company, any trustee or other fiduciary holding securities under an employee benefit plan of the
Company, any corporation owned directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of voting securities of the Company) becomes
(other than solely by reason of a repurchase of voting securities by the Company), the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of forty percent
(40%) or more of the combined voting power of the Company’s then total outstanding voting
securities; or

               (b) the Company consolidates with or merges with or into another corporation or partnership or
conveys, transfers or leases, in any transaction or series of transactions, all or substantially
all of its assets to any corporation or partnership, or any corporation or partnership consolidates
with or merges with or into the Company, in any event pursuant to a transaction in which the
outstanding voting stock of the Company is reclassified or changed into or exchanged for cash,
securities or other property, other than any such transaction where (i) the outstanding voting
securities of the Company are changed into or exchanged for voting securities of the surviving
corporation and (ii) the persons who were the beneficial owners of the Company’s voting securities
immediately prior to such transaction beneficially own immediately after such transaction fifty
percent (50%) or more of the total outstanding voting power of the surviving corporation, or the
Company is liquidated or dissolved or adopts a plan of liquidation or
dissolution.

     6. Covenants of the Executive.

          6.1. Covenant Against Competition; Other Covenants. The Executive acknowledges that
(i) the principal business of the Company is the acquisition, ownership and management of a
diversified portfolio of high-quality, single-tenant, freestanding properties leased to retail
businesses (such business, and any and all other businesses that after the date hereof, and from
time to time during the Term, become material and substantial with respect to the Company’s
then-overall business, herein being collectively referred to as the “Business”); (ii) the Company
knows of a limited number of persons who have developed the Company’s Business; (iii) the Company’s
Business is, in part, national in scope; (iv) the Executive’s work for the Company and its
subsidiaries (and the predecessors of either) has given and will continue to give the Executive
access to the confidential affairs and proprietary information of the Company; (vi) the covenants
and agreements of the Executive contained in this Section 6 are essential to the business and
goodwill of the Company; and (vii) the Company would not have entered into this Agreement but for
the covenants and agreements set forth in this Section 6. In light of the foregoing, during the
Term and for a period of one (1) year thereafter (and, as to Sections 6.1(b) and (d), at any time
during and after the Executive’s employment with the Company and its subsidiaries (and the
predecessors of either)):

               (a) The Executive shall not, directly or indirectly, own, manage, control or participate in
the ownership, management, or control of, or be employed or engaged by or otherwise affiliated or
associated as an employee, employer, consultant, agent, principal, partner, stockholder, corporate
officer, director or in any other individual or representative capacity, engage or participate in
any business that is in competition in any manner whatsoever with the Business of the Company in
any state in which the Company conducts its Business. In the case of a termination by the Company
without Cause or by the Executive for Good Reason, the preceding covenant shall expire on the date
of termination; provided, however, that notwithstanding the foregoing, the Executive may invest in
securities of any entity, solely for investment purposes and without participating in the business
thereof, if (i) such securities are traded on any national securities exchange or the National
Association of Securities Dealers, Inc. Automated Quotation System, (ii) the Executive is not a
controlling person of, or a member of a group which controls, such entity, and (iii) the Executive
does not, directly or indirectly, own one percent (1%) or more of any class of securities of such
entity.

               (b) The Executive shall keep secret and retain in strictest confidence, and shall not use for
his benefit or the benefit of others, except in connection with the business and affairs of the
Company and its affiliates, all confidential matters relating to the Company’s Business and the
business of any of its affiliates and to the Company and any of its affiliates, learned by the
Executive heretofore or hereafter directly or indirectly from the Company or any of its
subsidiaries (or any predecessor of either) (the “Confidential Company Information”), including,
without limitation, information with respect to the Business and any aspect thereof, profit or loss
figures, and the Company’s or its affiliates’, (or any of their predecessors) properties, and shall
not disclose such Confidential Company Information to anyone outside of the Company except with the
Company’s express written consent and except for Confidential Company Information which (i) at the
time of receipt or thereafter becomes publicly known through no wrongful act of the Executive, (ii)
is clearly obtainable in the public domain, (iii) was not acquired by the Executive in connection
with the Executive’s employment or affiliation with the Company, (iv) was not acquired by the
Executive from the Company or its representatives or from a third party who has an agreement with
the Company not to disclose such information, or (v) is required to be disclosed by rule of law or
by order of a court or governmental body or agency.

 

 

               (c) The Executive shall not, without the Company’s prior written consent, directly or
indirectly, (i) knowingly solicit or encourage to leave the employment or other service of the
Company or any of its affiliates, any employee thereof or hire (on behalf of the Executive or any
other person or entity) any employee who has left the employment or other service of the Company or
any of its affiliates (or any predecessor of either) within one (1) year of the termination of such
employee’s or independent contractor’s employment or other service with the Company and its
affiliates, or (ii) whether for the Executive’s own account or for the account of any other person,
firm, corporation or other business
organization, intentionally interfere with the Company’s or any of its affiliates’, relationship
with, or endeavor to entice away from the Company or any of its affiliates, any person who during
the Executive’s employment with the Company and its affiliates (or the predecessors of either) is
or was a customer or client of the Company or any of its affiliates (or any predecessor of either).

               (d) All memoranda, notes, lists, records, property and any other tangible product and
documents (and all copies thereof) made, produced or compiled by the Executive or made available to
the Executive concerning the Business of the Company and its affiliates shall be the Company’s
property and shall be delivered to the Company at any time on request.

               (e) Notwithstanding anything set forth in this Section to the contrary, if at any time after a
“change of control”, as defined above, (i) the Company or the Executive terminates the Executive’s
employment and such termination is not described in Section 4 or Section 5.1, or (ii) the Company,
for any reason, does not renew this agreement at the expiration of its Term, then the covenants set
forth in this Section 6.1 shall expire and terminate immediately upon the expiration or earlier
termination of this Agreement.

          6.2. Rights and Remedies upon Breach. The Executive acknowledges and agrees that any
breach by him of any of the provisions of Section 6.1 (the “Restrictive Covenants”) would result in
irreparable injury and damage for which money damages would not provide an adequate remedy.
Therefore, if the Executive breaches, or threatens to commit a breach of, any of the Restrictive
Covenants, the Company and its affiliates shall have the right and remedy to have the Restrictive
Covenants specifically enforced (without posting bond and without the need to prove damages) by any
court having equity jurisdiction, including, without limitation, the right to an entry against the
Executive of restraining orders and injunctions (preliminary, mandatory, temporary and permanent)
against violations, threatened or actual, and whether or not then continuing, of such covenants.
This right and remedy shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company and its affiliates under law or in equity (including, without limitation,
the recovery of damages). The existence of any claim or cause of action by the Executive, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement of the
Restrictive Covenants.

     7. Other Provisions.

          7.1. Severability. The Executive acknowledges and agrees that (i) the Executive
has had an opportunity to seek advice of counsel in connection with this Agreement and (ii) the
Restrictive Covenants are reasonable in geographical and temporal scope and in all other respects.
If it is determined that any of the provisions of this Agreement, including, without limitation,
any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder
of the provisions of this Agreement shall not thereby be affected and shall be given full affect,
without regard to the invalid portions.

          7.2. Duration and Scope of Covenants. If any court or other decision maker of
competent jurisdiction determines that any of the Executive’s covenants contained in this
Agreement, including, without limitation, any of the Restrictive Covenants, or any part thereof,
are unenforceable because of the duration or geographical scope of such provision, then, after such
determination has become final and unappealable, the duration or scope of such provision, as the
case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form,
such provision shall then be enforceable and shall be enforced.

          7.3. Enforceability; Jurisdictions. The Company and the Executive intend to and hereby
confer jurisdiction to enforce the Restrictive Covenants upon the courts of any jurisdiction within
the geographical scope of the Restrictive Covenants. If the courts of any one or more of such
jurisdictions hold the Restrictive Covenants wholly unenforceable by reason of breadth of scope or
otherwise it is the intention of the Company and the Executive that such determination not bar or
in any way affect the Company’s right, or the right of any of its affiliates, to the relief
provided above in the courts of any other jurisdiction within the geographical scope of such
Restrictive Covenants, as to breaches of such Restrictive Covenants in such other respective
jurisdictions, such Restrictive Covenants as they relate to each jurisdiction’s being, for this
purpose, severable, diverse and independent covenants, subject, where appropriate, to the doctrine
of res judicata. Any controversy or claim arising out of or relating to this
Agreement or the breach of this Agreement that is not resolved by the Executive and the Company (or
its affiliates, where applicable), other than those arising under Section 6, to the extent
necessary for the Company (or its affiliates, where applicable) to avail itself of the rights and
remedies provided under Section 6.2, shall be submitted to arbitration in Orlando, Florida, in
accordance with Florida law and the procedures of the American Arbitration Association. The
determination of the arbitrators shall be conclusive and binding on the Company (or its affiliates,
where applicable) and the Executive and judgment may be entered on the arbitrator(s)’ award in any
court having jurisdiction.

 

 

     7.4. Attorneys’ Fees. In the event of any legal proceeding (including an arbitration
proceeding) relating to this Agreement or any term or provision thereof, the losing party shall be
responsible to pay or reimburse the prevailing party for all reasonable attorneys’ fees incurred by
the prevailing party in connection with such proceeding.

     7.5. Notices. Any notice or other communication required or permitted hereunder shall
be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile
transmission or sent by certified, registered or express mail, postage prepaid. Any such notice
shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, five (5) days after the date of deposit in the United States mail as
follows:

	 	 	 	 	 	 	 
	

	 	(i)
	 	If to the Company, to:
	 	450 South Orange Avenue
	

	 	 	 	 	 	Suite 1400
	

	 	 	 	 	 	Orlando, Florida 32801
	

	 	 	 	 	 	Attention: James M. Seneff, Jr.
	

	 	 	 	 	 	Facsimile: (407) 650-1011
	 
	

	 	 	 	with a copy to:
	 	Shaw Pittman LLP
	

	 	 	 	 	 	2300 N Street, N.W.
	

	 	 	 	 	 	Washington, D.C. 20037
	

	 	 	 	 	 	Attention: John McDonald, Esquire
	

	 	 	 	 	 	Facsimile: (202) 663-8007
	 
	

	 	(ii)
	 	If to the Executive, to:
	 	Julian E. Whitehurst
	

	 	 	 	 	 	450 South Orange Avenue
	

	 	 	 	 	 	Suite 900
	

	 	 	 	 	 	Orlando, Florida 32801
	

	 	 	 	 	 	Facsimile: (407) 650-1044
	 
	

	 	 	 	with a copy to:
	 	Julian E. Whitehurst
	

	 	 	 	 	 	2077 Santa Antilles Road
	

	 	 	 	 	 	Orlando, FL 32806

Any such person may by notice given in accordance with this Section to the other parties hereto
designate another address or person for receipt by such person of notices hereunder.

     7.6. Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior agreements, written or
oral, with the Company or its subsidiaries (or any predecessor of either).

     7.7. Waivers and Amendments. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege nor any single or
partial exercise of any such
right, power or privilege, preclude any other or further exercise thereof or the exercise of any
other such right, power or privilege.

     7.8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

     7.9. Assignment. This Agreement, and the Executive’s rights and obligations hereunder,
may not be assigned by the Executive; any purported assignment by the Executive in violation hereof
shall be null and void. In the event of any sale, transfer or other disposition of all or
substantially all of the Company’s assets or business, whether by merger, consolidation or
otherwise, the Company may assign this Agreement and its rights hereunder.

     7.10. Withholding. The Company shall be entitled to withhold from any payments or
deemed payments any amount of withholding required by law. No other taxes, fees, impositions,
duties or other charges or offsets of any kind shall be deducted or withheld from amounts payable
hereunder, unless otherwise required by law.

 

 

     7.11. No Duty to Mitigate. The Executive shall not be required to mitigate damages or
the amount of any payment provided for under this Agreement by seeking other employment or
otherwise, nor will any payments hereunder be subject to offset in the event the Executive does
mitigate.

     7.12. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors, permitted assigns, heirs, executors and legal
representatives.

     7.13. Counterparts. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original but all such
counterparts together shall constitute one and the same instrument. Each counterpart may consist of
two (2) copies hereof each signed by one of the parties hereto.

     7.14. Survival. Anything contained in this Agreement to the contrary
notwithstanding the provisions of Section 6, 7.3, 7.4, 7.10, and the other provisions of this
Section 7 (to the extent necessary to effectuate the survival of Sections 6, 7.3, 7.4, and 7.10)
shall survive termination of this Agreement and any termination of the Executive’s employment
hereunder.

     7.15. Existing Agreements. Executive represents to the Company that the Executive is
not subject or a party to any employment or consulting agreement, non-competition covenant or other
agreement, covenant or understanding which might prohibit the Executive from executing this
Agreement or limit the Executive’s ability to fulfill the Executive’s responsibilities hereunder.

     7.16. Headings. The headings in this Agreement are for reference only and shall not
affect the interpretation of this Agreement.

     7.17. Parachute Provisions. If any amount payable to or other benefit receivable by
the Executive pursuant to this Agreement is deemed to constitute a Parachute Payment (as defined
below), alone or when added to any other amount payable or paid to or other benefit receivable or
received by the Executive which is deemed to constitute a Parachute Payment (whether or not under
an existing plan, arrangement or other agreement), and would result in the imposition on the
Executive of an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended,
then, in addition to any other benefits to which the Executive is entitled under this Agreement,
the Executive shall be paid by the Company an amount in cash equal to the sum of the excise taxes
payable by the Executive by reason of receiving Parachute Payments plus the amount necessary to put
the Executive in the same after-tax position (taking into account any and all applicable federal,
state and local excise, income or other taxes at the highest applicable rates on such Parachute
Payments and on any payments under this Section 7.17) as if no excise taxes had been imposed with
respect to Parachute Payments. The amount of any payment under this Section 7.17 shall be computed
by a certified public accounting firm mutually and reasonably acceptable to
the Executive and the Company, the computation expenses of which shall be paid by the Company.
“Parachute Payment” shall mean any payment deemed to constitute a “parachute payment” as defined in
Section 280G of the Internal Revenue Code of 1986, as amended.

     IN WITNESS WHEREOF, the parties hereto have signed their names as of the day and year first
above written.

	 	 	 	 	 
	 	COMPANY:

COMMERCIAL NET LEASE REALTY, INC.

 	 
	 	By:  	/s/Gary M. Ralston	 
	 	Name: 	Gary M. Ralston	 
	 	Its:	President 	 
	 
	 	EXECUTIVE:

 	 
	 	By:  	/s/Julian E. Whitehurst	 
	 	 	Julian E. Whitehurst

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