<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM TO
---------- ----------
Commission file number 1-12244
NEW PLAN EXCEL REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 33-0160389
(State or other Jurisdiction of (IRS Employer
Incorporation) Identification No.)
1120 Avenue of the Americas, New York, New York 10036
(Address of Principal Executive Office) (Zip Code)
212-869-3000
Registrant's Telephone Number
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---
The number of shares of common stock outstanding at April 30, 2000 was
87,650,665.
<PAGE> 2
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
<S> <C> <C>
Revenues:
Rental income and related revenues $103,398 $104,323
Interest, dividend and other income 2,130 6,843
-------- --------
Total revenues 105,528 111,166
Expenses:
Operating costs 23,189 23,288
Real estate and other taxes 10,789 9,506
Interest 22,573 18,947
Depreciation and amortization 15,989 15,639
Provision for doubtful accounts 754 1,406
Non-recurring charge 2,749 --
General and administrative 1,997 2,254
-------- --------
Total expenses 78,040 71,040
-------- --------
Income before real estate sales and minority interest 27,488 40,126
Loss on sale of real estate and securities (1) --
Minority interest in income of partnership (238) (457)
-------- --------
Net income 27,249 39,669
Other comprehensive income (loss):
Unrealized gain (loss) on securities for the period 120 (71)
-------- --------
Comprehensive income $ 27,369 $39,598
======== ========
Net income available to common stock - basic $ 21,590 $ 33,867
======== ========
Net income available to common stock - diluted $ 21,828 $ 34,324
======== ========
Basic earnings per share $ 0.25 $0.38
======== ========
Diluted earnings per share $ 0.25 $ 0.38
======== ========
Average shares outstanding - basic 87,607 88,804
======== ========
Average shares outstanding - diluted 89,031 91,394
======== ========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
2
<PAGE> 3
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ASSETS
MARCH 31, 2000
UNAUDITED DECEMBER 31, 1999
-------------- -----------------
<S> <C> <C>
Real estate:
Land $ 552,411 $ 552,146
Building and improvements 2,311,499 2,328,499
Accumulated depreciation (229,218) (216,274)
---------- ----------
Net real estate 2,634,692 2,664,371
Real estate held for sale 21,634 --
Cash and cash equivalents 19,207 10,834
Marketable securities 1,310 1,190
Receivables:
Trade, less allowance for doubtful accounts of $13,532
and $13,897 at March 31, 2000 and December 31, 1999, respectively 30,907 30,225
Other, net 20,870 15,825
Mortgages and notes receivable 60,198 59,142
Prepaid expenses and deferred charges 15,527 13,076
Investment in and loans to ERT Development Corporation 157,220 150,432
Other assets 6,987 8,046
---------- ----------
Total assets $2,968,552 $2,953,141
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages payable, including unamortized premium of $9,565 and
$9,921 at March 31, 2000 and December 31, 1999, respectively $ 331,906 $ 341,643
Notes payable, net of unamortized discount of $2,200 and $2,264
at March 31, 2000 and December 31, 1999, respectively 662,800 662,736
Credit facilities 230,721 188,721
Capital leases 27,351 27,351
Other liabilities 85,577 88,591
Tenant security deposits 7,681 7,480
---------- ----------
Total liabilities 1,346,036 1,316,522
---------- ----------
Minority interest in partnership 24,802 25,100
---------- ----------
Commitments and contingencies -- --
Stockholders' equity:
Preferred stock, $.01 par value, 25,000 shares authorized: Series A: 4,600
shares designated as 8 1/2% Series A Cumulative Convertible Preferred 1,507
outstanding at March 31, 2000 and December 31, 1999; Series B:
6,300 depository shares, each representing 1/10 of one share of 8 5/8% Series
B Cumulative Redeemable Preferred, 630 outstanding at March 31, 2000 and
December 31, 1999; Series D: 1,500 depositary shares, each representing 1/10
of one share of Series D Cumulative Voting Step-Up Premium Rate Preferred,
150 shares outstanding at March 31, 2000 and December 31, 1999. 23 23
Common stock, $.01 par value, 250,000 shares authorized;
87,651 and 87,555 shares issued and outstanding as of
March 31, 2000 and December 31, 1999, respectively 876 875
Additional paid-in capital 1,708,825 1,708,186
Accumulated other comprehensive income 334 214
Accumulated distribution in excess of net income (112,344) (97,779)
---------- ----------
Total stockholders' equity 1,597,714 1,611,519
---------- ----------
Total liabilities and stockholders' equity $2,968,552 $2,953,141
========== ==========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
3
<PAGE> 4
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 27,249 $ 39,669
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization 15,989 15,639
Amortization of premium/discount on mortgages and notes payable (292) (855)
Foreign currency loss/(gain) 16 (196)
Provision for doubtful accounts 754 1,406
Loss on sale of properties, net 1 --
Minority interest in income of partnership 238 457
Equity in loss/(income) of affiliate 5,276 (1,023)
Change in investment in and accrued interest on loans to ERT
Development Corporation (4,100) (3,776)
Changes in operating assets and liabilities, net:
Change in trade receivables (1,436) (1,020)
Change in other receivables (5,045) (2,276)
Change in other liabilities (497) 4,364
Change in sundry assets and liabilities (1,322) (2,390)
-------- --------
Net cash provided by operating activities 36,831 49,999
-------- --------
Cash flows from investing activities:
Real estate acquisitions and building improvements (7,836) (24,374)
Proceeds from real estate sales, net 60 --
Advances for mortgage notes receivable, net (2,602) (2,300)
Loans to ERT Development Corporation (8,000) (1,280)
Repayments of mortgage notes receivable 390 64
-------- --------
Net cash used in investing activities (17,988) (27,890)
-------- --------
Cash flows from financing activities:
Principal payments of mortgages and notes payable (9,382) (1,930)
Dividends paid (41,598) (40,863)
Minority interest distributions paid (536) (891)
Proceeds from dividend reinvestment plan -- 4,804
Proceeds from credit facility borrowing 42,000 37,500
Proceeds from exercise of stock options 6,600 158
Payments for the repurchase of common stock (7,554) --
-------- --------
Net cash used in financing activities (10,470) (1,222)
-------- --------
Net increase in cash and cash equivalents 8,373 20,887
Cash and cash equivalents at beginning of period 10,834 13,951
-------- --------
Cash and cash equivalents at end of period $ 19,207 $ 34,838
======== ========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
4
<PAGE> 5
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared by the Company pursuant to the rules of the Securities and
Exchange Commission ("SEC") and, in the opinion of the Company, include all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation of financial position, results of operations and cash flows in
accordance with accounting principles generally accepted in the United States.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States have been condensed or omitted pursuant to such SEC rules.
The Company believes that the disclosures made are adequate to make the
information presented not misleading. The consolidated statements of income for
the three months ended March 31, 2000 and 1999 are not necessarily indicative of
the results expected for the full year. These financial statements should be
read in conjunction with the audited financial statements and notes thereto
included in the Company's latest annual report on Form 10-K.
Excel Realty Trust, Inc. ("Excel") was formed in 1985 and subsequently
reincorporated as a Maryland corporation. New Plan Realty Trust (the "Trust")
was organized in 1972 as a Massachusetts business trust. On September 28, 1998,
Excel and the Trust consummated a merger pursuant to an Agreement and Plan of
Merger dated as of May 14, 1998, as amended as of August 7, 1998 (the "Merger
Agreement"). As discussed more fully in the Company's Annual Report on Form
10-K, the Merger has been treated as a purchase by the Trust of the assets and
liabilities of Excel using the purchase method of accounting in the accompanying
consolidated financial statements.
NOTE 2: ERT DEVELOPMENT CORPORATION
In 1995, ERT Development Corporation ("ERT") was organized to finance,
acquire, develop, hold and sell real estate in the short-term for capital gains
and/or to receive fee income. The Company owns 100% of the outstanding preferred
shares of ERT. An officer and director of the Company owns all the common
shares. The preferred shares are entitled to receive 95% of dividends, if any.
Cash requirements to facilitate ERT's transactions have primarily been obtained
through borrowings from the Company.
Investment in and loans to ERT are comprised of the following (in
thousands):
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31, 1999
-------------- -----------------
<S> <C> <C>
Investment ($1,051) $ 4,227
Unsecured loans and accounts receivable 78,275 129,790
Secured loans receivable 58,900 --
Accrued interest 21,096 16,415
-------- --------
$157,220 $150,432
======== ========
</TABLE>
Interest and principal payments from ERT are primarily received upon the
completion of development projects. Interest receivable from ERT was $21,096,000
and $16,415,000 at March 31, 2000 and December 31, 1999, respectively. Interest
income recognized by the Company was $4,681,000 and $3,605,000 for the three
months ended March 31, 2000 and 1999, respectively.
5
<PAGE> 6
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOTE 2: ERT DEVELOPMENT CORPORATION, CONTINUED
For the three months ended March 31, 2000 and 1999, the equity in the
(losses) income of ERT recorded by New Plan Excel Realty Trust, Inc. was ($5.3
million) and $1.0 million, respectively.
Summary unaudited financial information for ERT is as follows (in
thousands).
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31, 1999
-------------- -----------------
<S> <C> <C>
CONDENSED BALANCE SHEETS
Notes receivable from developers, March 31, 2000 and December
31, 1999 interest at 10% to 12% $ 33,394 $ 33,405
Real estate and other assets, net of depreciation 212,656 212,238
-------- --------
Total Assets $246,050 $245,643
======== ========
Notes payable to New Plan Excel Realty Trust, Inc. $136,903 $128,903
Accrued interest payable to New Plan Excel Realty Trust, Inc. 21,096 16,415
Construction and land loans 78,475 84,013
Other liabilities 10,625 12,085
-------- --------
Total liabilities 247,099 241,416
Total stockholders' equity (1,049) 4,227
-------- --------
Total liabilities and stockholders' equity $246,050 $245,643
======== ========
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 2000 MARCH 31, 1999
------------------ ------------------
<S> <C> <C>
CONDENSED STATEMENTS OF INCOME
Revenues $ 6,456 $ 6,273
Interest expense to New Plan Excel Realty Trust, Inc. (4,681) (3,605)
Other expenses (7,051) (1,645)
-------- -------
Net income (loss) ($5,276) $ 1,023
-======= =======
</TABLE>
Pointe Orlando Development Company, which is consolidated with ERT, had a
term loan in the amount of $78.5 million at March 31, 2000, of which $30.0
million was guaranteed by the Company and construction and land loans in the
amount of $84.0 million outstanding at December 31, 1999, of which $35.0 million
was guaranteed by the Company. ERT has an investment in a joint venture
partnership related to a retail development project in Frisco, Texas (The Centre
at Preston Ridge). The Company has guaranteed $68.0 million of the loan on this
project, which has an outstanding balance of $61.0 million and $58.6 million at
March 31, 2000 and December 31, 1999, respectively. (See Note 9.) In addition,
the Company guarantees $1.3 million of the debt on an ERT retail development
project, Vail Ranch II, in Temecula, California. The outstanding loan balance is
$1.9 million at March 31, 2000.
6
<PAGE> 7
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 3: STATEMENT OF CASH FLOWS -- SUPPLEMENTAL DISCLOSURE (IN THOUSANDS)
The amounts paid for interest for the three months ended March 31, 2000 and
1999 were $23,363 and $22,173, respectively. State and local income taxes paid
for the three months ended March 31, 2000 and 1999 were $76 and $144,
respectively.
NOTE 4: STOCKHOLDERS' EQUITY
EARNINGS PER SHARE (EPS)
In accordance with the disclosure requirements of SFAS No. 128, a
reconciliation of the numerator and denominator of basic and diluted EPS is
provided as follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
<S> <C> <C>
Basic EPS
Numerator:
Net income $27,249 $39,669
Preferred dividends (5,659) (5,802)
------- -------
Net income available to common shares - basic $21,590 $33,867
======= =======
Denominator:
Weighted average of common shares outstanding 87,607 88,804
======= =======
Earnings Per Share $ 0.25 $ 0.38
======= =======
Diluted EPS
Numerator:
Net income $27,249 $39,669
Preferred dividends (5,659) (5,802)
Minority interest 238 457
------- -------
Net income available to common shares - diluted $21,828 $34,324
======= =======
Denominator:
Weighted average of common shares outstanding 87,607 88,804
Effect of diluted securities:
Common stock options and warrants 189 388
Excel Realty Partners, L.P. third party units 1,235 2,202
------- -------
89,031 91,394
======= =======
Earnings Per Share $ 0.25 $ 0.38
======= =======
</TABLE>
Preferred A shares are anti-dilutive for earnings per share calculations.
7
<PAGE> 8
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 5: SEGMENT INFORMATION
The Company's two reportable business segments are retail and residential
properties. At March 31, 2000, the retail segment consists of 304 shopping
centers (included in this amount are seven office and other properties) and the
residential segment consists of 53 garden apartment communities. Selected
financial information for each segment is as follows (in thousands):
<TABLE>
<CAPTION>
RETAIL RESIDENTIAL OTHER TOTAL
---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
FOR THREE MONTHS ENDED
MARCH 31, 2000
Revenue $ 84,551 $ 18,847 $ 2,130 $ 105,528
Expenses and minority interest 24,222 10,510 4,984 39,716
Interest expense 22,573 22,573
Depreciation and amortization 13,766 2,223 15,989
Gain/(loss) on sale of securities/properties (1) (1)
---------- -------- --------- ----------
Net income $ 46,563 $ 6,114 ($25,428) $ 27,249
========== ======== ========= ==========
Real Estate Assets, net $2,288,825 $345,867 $2,634,692
========== ======== ==========
FOR THREE MONTHS ENDED
MARCH 31, 1999
Revenue $ 84,953 $ 19,370 $ 6,843 $ 111,166
Expenses and minority interest 24,093 10,564 2,254 36,911
Interest expense 18,947 18,947
Depreciation and amortization 13,465 2,174 -- 15,639
---------- -------- --------- ----------
Net income $ 47,395 $ 6,632 ($14,358) $ 39,669
========== ======== ========= ==========
Real Estate Assets, net $2,321,468 $353,645 $2,675,113
========== ======== ==========
</TABLE>
NOTE 6: REAL ESTATE HELD FOR SALE
At the end of the first quarter, two retail properties were classified as
"Real estate held for sale". Both properties are located in Pennsylvania and
have an aggregate gross leasable area of 408,000 square feet. The transaction
was completed on May 1, 2000. In the aggregate, these assets contributed $1.1
million in revenue and $0.6 million in net income for the three months ended
March 31, 2000.
NOTE 7: ENVIRONMENTAL MATTERS
Under various federal, state and local laws, ordinances and regulations,
the Company may be considered an owner or operator of real property or may have
arranged for the disposal or treatment of hazardous or toxic substances and,
therefore, may become liable for the costs of removal or remediation of certain
hazardous substances released on or in its property or disposed of by it, as
well as certain other potential costs which could relate to hazardous or toxic
substances (including governmental fines and injuries to persons and property).
Such liability may be imposed whether or not the Company knew of, or was
responsible for, the presence of such hazardous or toxic substances. Except as
discussed below, the Company is not aware of any significant environmental
condition at any of its properties.
8
<PAGE> 9
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 7: ENVIRONMENTAL MATTERS, CONTINUED
Soil and groundwater contamination exists at certain of the Company's
properties. The Company currently estimates that the total cumulative cost of
remediation for these properties will be approximately $2.8 million to $6.5
million. In connection with certain of these properties, the Company has entered
into remediation and indemnity agreements, which obligate the prior owners of
certain of the properties (including in some cases, principals of the prior
owners) to perform the remediation and to indemnify the Company for any losses
the Company may suffer because of the contamination or remediation. Although
there can be no assurance that the remediation estimates of the Company will
prove accurate or that the prior owners will perform their obligations under the
remediation and indemnity agreements, the Company does not expect the
environmental conditions at these properties to have a material adverse effect
on the Company. The Company has also identified asbestos minerals relating to
spray-applied fireproofing materials at certain properties. Included in other
liabilities in the Company's Consolidated Balance Sheet at March 31, 2000 is
$3.2 million related to the clean-up of these asbestos minerals.
NOTE 8: NON-RECURRING CHARGE
In connection with the retirement of Arnold Laubich from his positions as
President and Chief Executive Officer, the Company entered into a retirement
agreement with Mr. Laubich. The non-recurring charge is primarily the lump sum
payments provided for in the retirement agreement.
NOTE 9: SUBSEQUENT EVENTS
On April 5, 2000, the loan related to The Centre at Preston Ridge, in
Texas, was refinanced. The existing loan and guarantee were reduced from $68.0
million to $26.8 million and the current amount outstanding under the loan at
May 1, 2000 was $23.5 million. Concurrently, construction financing of $66.5
million was obtained from a second bank, of which $11.0 million is guaranteed
by the Company. The construction loan amount outstanding at May 1, 2000 was
$18.9 million. In connection with the refinancing, ERT made a loan of $21.3
million to the development partnership. In addition, ERT will provide
additional funding of approximately $14.6 million to be paid out equally over
an eleven-month period commencing in May 2000. The Company has guaranteed that
this $14.6 million funding will be provided to the development partnership.
This guarantee is reduced commensurately as the funds are provided by ERT.
On April 17, 2000, the Company announced the appointment of John B. Roche
as Chief Financial Officer. Mr. Roche will be responsible for directing the
Company's capital markets, MIS, financial controls, SEC reporting and compliance
activities. He will assume his responsibilities on May 15, 2000.
In April 2000, an additional $70 million was drawn on the Fleet National
Bank term loan facility.
On May 1, 2000, the Company completed the sale of York Marketplace, a
300,000 square foot shopping center located in York, Pennsylvania, and Northland
Center, a 108,000 square foot shopping center located in State College,
Pennsylvania. The sale was to a single buyer for an aggregate selling price of
approximately $31.4 million.
On May 11, 2000, the Company announced the resignation of James M.
Steuterman as Executive Vice President and Chief Operating Officer of the
Company and as a member of the Company's Board of Directors. Mr. Steuterman's
day-to-day responsibilities will be assumed by members of the Company's senior
management team, including the Company's recently appointed Chief Financial
Officer. In connection with the resignation, the Company expects to record a one
time non-recurring charge of approximately $0.9 million.
9
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The following information should be read in conjunction with the
Company's consolidated financial statements and notes thereto as of March 31,
2000 included in this quarterly report and the Company's Annual Report on Form
10-K for the year ended December 31, 1999. This quarterly report contains
forward-looking statements. Such statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievement of the Company to be materially different from the results of
operations or plans expressed or implied from such forward-looking statements.
Cash flow from operations has been the principal source of capital to fund
the Company's ongoing operations. The Company's issuance of common and preferred
stock, use of the Company's revolving credit facilities and financing from
uncollateralized notes and mortgage debt are an additional sources of capital.
In order to continue to expand and develop its portfolio of properties and
other investments, the Company intends to finance future acquisitions and growth
through the most advantageous sources of capital available to the Company at the
time, which may include excess cash flow, the sale of common stock, preferred
stock or debt securities through public offerings or private placements, the
incurrence of additional indebtedness through borrowings, and the reinvestment
of proceeds from the disposition of assets. The Company also may enter into
joint ventures with institutions to acquire portfolios of properties. The
Company's financing strategy is to maintain a strong and flexible financial
position by (i) maintaining a prudent level of leverage, (ii) maintaining a
large pool of unencumbered properties, (iii) managing its exposure to interest
rate risk represented by its floating rate debt and (iv) where possible,
amortizing existing non-recourse mortgage debt secured by specific properties
over the term of the leases with anchor tenants at such mortgaged properties.
As of March 31, 2000, the Company had approximately $20.5 million in
available cash, cash equivalents and marketable securities.
The Company has two revolving credit facilities with The Bank of New York,
each of which provides for $122.5 million in uncollateralized advances from a
group of banks. One facility expires in November 2000 and the other expires in
November 2002. As of March 31, 2000, the Company had $225.7 million outstanding
under these facilities. The covenants of these credit facilities include
maintaining certain ratios such as liabilities to assets of less than 50% and
maintaining a minimum unencumbered assets coverage ratio of 2 to 1. In addition,
on March 7, 2000, the Company established a term loan facility with Fleet
National Bank, pursuant to which the Company may draw down up to $75 million
through April 27, 2000. The Company had $5.0 million outstanding under this
facility as of March 31, 2000 and drew down the remaining $70 million in April
2000. Loans drawn under this facility mature on March 5, 2001, and accrue
interest at LIBOR plus 80 basis points (based on the Company's credit rating at
March 31, 2000). The term loan agreement prepared in connection with the
facility contains covenants substantially similar to those included in the two
credit facilities of the Company with The Bank of New York.
In addition to outstanding amounts on the Company's credit facilities, debt
as of March 31, 2000 consisted of $331.9 million of mortgages payable having a
weighted average interest rate of 7.8% and $662.8 million of notes payable with
a weighted average interest rate of 7.2%. Of this debt, $115.6 million bear
variable interest rates. Additionally, the Company has $1.3 million in
marketable equity securities which are sensitive to market price changes and
notes receivable in the amount of Canadian $16.0 million (approximately U.S.
$11.1 million as of March 31, 2000) which are sensitive to currency exchange
rate fluctuations. The Company has guaranteed a maximum of $99.3 million of
indebtedness of ERT of which $92.4 million was outstanding as of March 31, 2000.
ERT has third-party debt of $78.5 million, excluding notes payable to the
Company, having a weighted average interest rate of 7.5%. The Company provides
substantially all of the capital required to fund ERT's operations.
In October 1999, the Company commenced a program to repurchase up to $75
million of the Company's outstanding common stock from time to time through
periodic open market transactions or through privately negotiated transactions.
Through March 31, 2000, 1,651,000 shares had been repurchased and retired at an
average purchase price
10
<PAGE> 11
of $15.77 per share. Of this amount, approximately 420,000 shares were
repurchased and retired in the three months ended March 31, 2000
Other sources of funds are available to the Company. Based on management's
internal evaluation of the Company's properties, many of which are free and
clear of mortgages, the estimated value is considerably in excess of the
outstanding mortgage indebtedness. Accordingly, management believes that
potential exists for additional mortgage financing as well as unsecured
borrowing capacity from banks and other lenders.
The Company has three classes of preferred stock outstanding as of March
31, 2000: (i) 1,507,000 shares of 8 1/2% Series A Cumulative Convertible
Preferred Stock outstanding which have an annual distribution of $2.125 per
share payable quarterly; (ii) 6,300,000 depositary shares outstanding, each
representing 1/10 of a share of 8 5/8% Series B Cumulative Redeemable Preferred
Stock, with an annual distribution of $2.15625 per depositary share payable
quarterly; and (iii) 1,500,000 depositary shares outstanding, each representing
1/10 of one share of 7.8% Series D Cumulative Voting Step-Up Premium Rate
Preferred Stock, with a liquidation preference and annual distribution of $50
and $3.90 per depositary share, respectively.
The current quarterly dividend on the Company's common stock is $.4125 per
share. The maintenance of this dividend will be subject to various factors,
including the discretion of the Board of Directors of the Company, the ability
to pay dividends under applicable law and the effect which the payment of
dividends may have from time to time on the maintenance by the Company of its
status as a REIT.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
REVENUES:
Rental revenue decreased by approximately $0.9 million due to several
factors. Between January 1, 1999 and March 31, 2000, five retail shopping
centers and one residential property were acquired. These acquisitions produced
revenue increases of approximately $1.3 million and $0.2 million, respectively.
During the same period, the Company sold four retail and two residential
properties which accounted for revenue reductions of $0.4 million and $0.7
million, respectively. The balance of the revenue change, a $1.3 million
decrease, occurred in the retail portfolio and is in large part attributable to
Valley Fair and Clearwater Malls, properties under review for redevelopment.
Interest, dividend and other revenue decreased $4.7 million. The primary
reasons for the decline were a decrease of $6.3 million in the equity
participation in ERT Development Corporation and a $1.5 million increase in
interest income. Fee revenue and foreign currency change reflected a net
increase of $0.1 million. The decrease in the equity participation in ERT, from
a gain of $1.0 million in the quarter ended March 1999 to a loss of $5.3 million
in the quarter ended March 2000, was primarily the result of factors relating to
two operating mall properties, a decrease in interest income and an increase in
interest expense.
Pointe Orlando, a mall in Florida, which in the prior year was accounted
for using the equity method with ERT as a 38.5% owner, is now 100% owned and
consolidated with ERT. Pointe Orlando had an increased loss in the quarter ended
March 2000 of $0.7 million. This was due primarily to increased litigation costs
of $1.0 million relating to a legal action revolving around the construction and
delayed opening of the mall and an increase in bad debt expense of approximately
$0.8 million.
The Mall at 163rd Street, a property owned by ERT, had a reduction in net
income of $2.7 million due primarily to an increase in the bad debt expense of
$0.5 million and lease settlement income of $1.9 million received in the prior
period, which did not recur in the current period.
Interest income decreased $1.7 million mainly due to the acquisition and
consolidation of Pointe Orlando and the elimination of interest income, which
was $1.4 million in the March 1999 quarter. Furthermore, interest income was
reduced $0.3 million because ERT no longer accrues interest on certain notes
receivable. ERT's interest expense to New Plan Excel increased $1.1 million due
to higher borrowings. This was the primary reason for the $1.5 million increase
in interest income in the Company.
EXPENSES:
11
<PAGE> 12
Total expenses increased $7.0 million. The major areas of increase were
interest expense, real estate and other taxes and a non-recurring charge.
Interest expense increased $3.6 million due primarily to increased
borrowings in connection with development projects, stock repurchases, the
redemption of Excel Realty Partners partnership units and property acquisitions.
Real estate and other taxes increased $1.3 million. Approximately $150,000
was attributable to the net effect of acquisitions and dispositions. The
remaining $1.15 million was due to generally higher real estate taxes across the
retail and residential portfolios.
Bad debt expense decreased $0.7 million due to the collection of amounts
previously thought to be uncollectible and improved collection experience. The
decrease was partially offset by an increase in the reserve for bad debts at the
Clearwater Mall.
In February 2000, Arnold Laubich retired from his positions as President
and Chief Executive Officer of the Company. The $2.7 million non-recurring
charge are payments made to him in connection with the retirement agreement.
Operating expenses, after eliminating the impact of acquisitions and
dispositions, increased $0.3 million. General and administrative expenses
decreased $0.3 million. Higher personnel costs were offset by an increase in the
management charge to the operating properties.
FUNDS FROM OPERATIONS
The company calculates funds from operations ("FFO") as net income
attributable to common shareholders on a diluted basis before gain or loss on
sales of real estate and securities, plus depreciation and amortization on real
estate and amortized leasing commission costs. Effective January 1, 2000, the
Company adopted the NAREIT definition of Funds From Operations which requires
the inclusion of both recurring and non-recurring results of operations. FFO is
not a substitute for cash flows from operations or net income as defined by
generally accepted accounting principles, and may not be comparable to other
similarly titled measures of other REITs. FFO is presented because industry
analysts and the Company consider FFO to be an appropriate supplemental measure
of performance of REITs.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
Net income $27,249 $39,669
Preferred dividends (5,659) (5,802)
Minority interest 238 457
------- -------
Net income applicable to common shareholders - diluted 21,828 34,324
Loss on sale of real estate and securities 1 --
Depreciation and amortization
New Plan Excel real estate assets 15,989 15,639
ERT Development Corp. real estate assets(1) 1,116 --
Preferred dividends 800 943
------- -------
Funds from operations $39,734 $50,906
======= =======
Weighted average of common shares outstanding - diluted 90,905 93,602
======= =======
FFO per share $ 0.44 $ 0.54
======= =======
</TABLE>
- ----------
(1) As of the quarter ended September 30, 1999, the Company recognizes
depreciation and amortization from Pointe Orlando, The Mall at 163rd
Street and Valley Fair Apartments for FFO purposes.
12
<PAGE> 13
QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
As of March 31, 2000, the Company had approximately $115.6 million of
outstanding floating rate mortgages and notes payable. In addition, the Company
had $230.7 million outstanding as of March 31, 2000 in connection with floating
rate borrowings under credit facilities. The Company does not believe that the
interest rate risk represented by its floating rate debt is material as of that
date in relation to the approximately $1.225 billion of outstanding total debt
of the Company, the approximately $2.969 billion of total assets of the Company
and the approximately $1.205 billion market capitalization of the Company's
common stock as of that date.
The Company was not a party to any hedging agreements with respect to its
floating rate debt as of March 31, 2000. In the event of a significant increase
in interest rates, the Company would consider entering into hedging agreements
with respect to all or a portion of its floating rate debt. Although hedging
agreements would enable the Company to convert floating rate liabilities into
fixed rate liabilities, such agreements would expose the Company to the risk
that the counterparties to such agreements may not perform, which could increase
the Company's exposure to rising interest rates. Generally, however, the
counterparties to hedging agreements that the Company would enter into would be
major financial institutions. The Company may borrow additional money with
floating interest rates in the future. Increases in interest rates, or the loss
of the benefits of any hedging agreements that the Company may enter into in the
future, would increase the Company's interest expense, which would adversely
affect cash flow and the ability of the Company to service its debt. If the
Company enters into any hedging agreements in the future, decreases in interest
rates thereafter would increase the Company's interest expense as compared to
the underlying floating rate debt and could result in the Company making
payments to unwind such agreements.
As of March 31, 2000, the Company had notes receivable in the total amount
of Canadian $16 million (approximately U.S. $11.1 million as of March 31, 2000).
The Company does not believe that the foreign currency exchange risk associated
with these loans is material. The Company had no other material exposure to
market risk (including foreign currency exchange risk, commodity price risk or
equity price risk) as of March 31, 2000.
13
<PAGE> 14
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<S> <C>
*3.1 Amendments to the Bylaws of the Company,
dated February 7, 2000, filed as Exhibit 3.6 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1999.
*10.1 Unconditional Guaranty of Payment and
Performance, dated as of January 28, 2000, by the
Company (Pointe Orlando), filed as Exhibit 10.39 to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1999.
*10.2 Amendment to the Amended and Restated 1993
Stock Option Plan of the Company, dated February 17,
2000, filed as Exhibit 10.5 to the Company's Annual
Report on Form 10-K for the year ended December 31,
1999.
*10.3 Amendment to the Amended and Restated 1994
Directors' Stock Option Plan of the Company, dated
February 17, 2000, filed as Exhibit 10.8 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1999.
*10.4 Employment Agreement, dated as of February
23, 2000, by and between the Company and Glenn J.
Rufrano, filed as Exhibit 10.1 to the Company's
Current Report on Form 8-K, dated March 9, 2000.
*10.5 Stock Option Agreement, dated as of February
23, 2000 by and between the Company and Glenn J.
Rufrano (relating to 460,976 options), filed as
Exhibit 10.2 to the Company's Current Report on Form
8-K, dated March 9, 2000.
*10.6 Stock Option Agreement, dated as of February
23, 2000 by and between the Company and Glenn J.
Rufrano (relating to 39,024 options), filed as
Exhibit 10.3 to the Company's Current Report on Form
8-K, dated March 9, 2000.
*10.7 Stock Option Agreement, dated as of February
23, 2000 by and between the Company and Glenn J.
Rufrano (relating to 200,000 options), filed as
Exhibit 10.4 to the Company's Current Report on Form
8-K, dated March 9, 2000.
*10.8 Stock Option Agreement, dated as of February
23, 2000 by and between the Company and Glenn J.
Rufrano (relating to 515,121 options), filed as
Exhibit 10.5 to the Company's Current Report on Form
8-K, dated March 9, 2000.
*10.9 Recourse Promissory Note, dated February 23,
2000, made by Glenn J. Rufrano in favor of the
Company, filed as Exhibit 10.6 to the Company's
Current Report on Form 8-K, dated March 9, 2000.
*10.10 Limited Recourse Promissory Note, dated
February 23, 2000, made by Glenn J. Rufrano in favor
of the Company, filed as Exhibit 10.7 to the
Company's Current Report on Form 8-K, dated March 9,
2000.
</TABLE>
14
<PAGE> 15
<TABLE>
<S> <C>
*10.11 Stock Pledge Agreement, dated February 23,
2000 between the Company and Glenn J. Rufrano, filed
as Exhibit 10.8 to the Company's Current Report on
Form 8-K, dated March 9, 2000.
*10.12 Agreement, dated as of February 23, 2000, by
and between the Company and Arnold Laubich, filed as
Exhibit 10.9 to the Company's Current Report on Form
8-K, dated March 9, 2000.
*10.13 Term Loan Agreement, dated as of March 7,
2000, between the Company and Fleet National Bank,
filed as Exhibit 10.41 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1999.
*10.14 Guaranty, dated as of March 7, 2000, by the
Trust and Excel Realty Trust - ST, Inc., filed as
Exhibit 10.42 to the Company's Annual Report on Form
10-K for the year ended December 31, 1999.
10.15 Employment Agreement, dated as of April 14, 2000, by
and between the Company and John Roche.
10.16 Agreement, dated as of May 5, 2000, by and between the
Company and James M. Steuterman.
12 Ratio of Earnings to Fixed Charges
27(1) Financial Data Schedule
</TABLE>
- ----------
* Incorporated herein by reference as indicated above.
(1) Filed as an exhibit to the electronic filing only.
(b) During the period covered by this report the Company filed the
following reports on Form 8-K:
Form 8-K filed on March 9, 2000 containing Item 5, Other Events.
The filing relates to the retirement of Arnold Laubich from
certain positions including President and Chief Executive Officer
and the employment of Glenn J. Rufrano as President and Chief
Executive Officer.
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 12, 2000
NEW PLAN EXCEL REALTY TRUST, INC.
By: /s/ Glenn J. Rufrano
------------------------
Glenn J. Rufrano
President and
Chief Executive Officer
By: /s/ Michael I. Brown
------------------------
Michael I. Brown
Controller and
Chief Accounting Officer
16
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
*3.1 Amendments to the Bylaws of the Company, dated February 7, 2000,
filed as Exhibit 3.6 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1999.
*10.1 Unconditional Guaranty of Payment and Performance, dated as of
January 28, 2000, by the Company (Pointe Orlando), filed as
Exhibit 10.39 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1999.
*10.2 Amendment to the Amended and Restated 1993 Stock Option Plan of
the Company, dated February 17, 2000, filed as Exhibit 10.5 to
the Company's Annual Report on Form 10-K for the
year ended December 31, 1999.
*10.3 Amendment to the Amended and Restated 1994 Directors' Stock
Option Plan of the Company, dated February 17, 2000, filed as
Exhibit 10.8 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1999.
*10.4 Employment Agreement, dated as of February 23, 2000, by and
between the Company and Glenn J. Rufrano, filed as Exhibit 10.1
to the Company's Current Report on Form 8-K, dated March 9, 2000
*10.5 Stock Option Agreement, dated as of February 23, 2000 by and
between the Company and Glenn J. Rufrano (relating to 460,976
options), filed as Exhibit 10.2 to the Company's Current Report
on Form 8-K, dated March 9, 2000.
*10.6 Stock Option Agreement, dated as of February 23, 2000 by and
between the Company and Glenn J. Rufrano (relating to 39,024
options), filed as Exhibit 10.3 to the Company's Current Report
on Form 8-K, dated March 9, 2000.
*10.7 Stock Option Agreement, dated as of February 23, 2000 by and
between the Company and Glenn J. Rufrano (relating to 200,000
options), filed as Exhibit 10.4 to the Company's Current Report
on Form 8-K, dated March 9, 2000.
*10.8 Stock Option Agreement, dated as of February 23, 2000 by and
between the Company and Glenn J. Rufrano (relating to 515,121
options), filed as Exhibit 10.5 to the Company's Current Report
on Form 8-K, dated March 9, 2000.
*10.9 Recourse Promissory Note, dated February 23, 2000, made by
Glenn J. Rufrano in favor of the Company, filed as Exhibit 10.6
to the Company's Current Report on Form 8-K, dated March 9, 2000.
*10.10 Limited Recourse Promissory Note, dated February 23, 2000, made
by Glenn J. Rufrano in favor of the Company, filed as
Exhibit 10.7 to the Company's Current Report on Form 8-K, dated
March 9, 2000.
*10.11 Stock Pledge Agreement, dated February 23, 2000 between the
Company and Glenn J. Rufrano, filed as Exhibit 10.8 to the
Company's Current Report on Form 8-K, dated March 9, 2000.
*10.12 Agreement, dated as of February 23, 2000, by and between the
Company and Arnold Laubich, filed as Exhibit 10.9 to the
Company's Current Report on Form 8-K, dated March 9, 2000.
*10.13 Term Loan Agreement, dated as of March 7, 2000, between the
Company and Fleet National Bank, filed as Exhibit 10.41 to the
Company's Annual Report on Form 10-K for the year ended December
31, 1999.
</TABLE>
17
<PAGE> 18
<TABLE>
<CAPTION>
<S> <C>
*10.14 Guaranty, dated as of March 7, 2000, by the Trust and Excel
Realty Trust - ST, Inc., filed as Exhibit 10.42 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1999.
10.15 Employment Agreement, dated as of April 14, 2000, by and between
the Company and John Roche.
10.16 Agreement, dated as of May 5, 2000, by and between the Company and
James M. Steuterman.
12 Ratio of Earnings to Fixed Charges
27(1) Financial Data Schedule
</TABLE>
- ----------
* Incorporated herein by reference as indicated above.
(1) Filed as an exhibit to the electronic filing only.
18
<PAGE> 1
EXHIBIT 10.15
EMPLOYMENT AGREEMENT
AGREEMENT ("Agreement"), dated as of April 14, 2000, by and between New
Plan Excel Realty Trust, Inc., a Maryland corporation (the "Company") and John
Roche ("Executive").
RECITAL
The Company desires to employ Executive on the terms and conditions set
forth in this Agreement, and Executive desires to be so employed.
AGREEMENT
IN CONSIDERATION of the premises and the mutual covenants set forth below,
the parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ Executive and Executive
hereby accepts such employment, on the terms and conditions hereinafter set
forth.
2. Term. The period of employment of Executive by the Company hereunder
(the "Employment Period") shall commence on the date Executive commences full
time employment with the Company (the "Effective Date") (but in no event later
than the date that is thirty (30) days from the date hereof) and shall continue
through the third anniversary of the Effective Date. Thereafter, the Employment
Period shall automatically be extended for one (1) additional year unless either
party shall provide notice of nonrenewal not less than six (6) months prior to
the date on which such extension would be effective. The Employment Period may
be sooner terminated by either party in accordance with Section 6 of this
Agreement. At the time Executive ceases to be a full-time employee of the
Company, the Executive agrees that he shall resign from any positions Executive
holds as a director, trustee or officer of the Company and its subsidiaries and
any entity in control of, controlled by or under common control with the Company
or in which the Company owns any common or preferred stock or interest or any
entity in control of, controlled by or under common control with such entity
("Affiliate") and as a member of any committee of the board of directors and the
board of trustees of the Company and its subsidiaries and Affiliates of which he
is a member.
3. Position and Duties.
(a) Chief Financial Officer. At all times during the Employment Period,
Executive shall serve as Chief Financial Officer of the Company. Executive shall
have those powers and duties normally associated with the position of a Chief
Financial Officer and such other powers and duties as may be properly prescribed
by the Chief Executive Officer of the Company, provided that such other powers
and duties are consistent with Executive's position as Chief Financial Officer.
Except as specifically set forth in this section, Executive shall perform
full-time services for the Company and devote such time, attention and energies
to Company affairs as are necessary to fully perform his duties (other than
absences due to illness or vacation) for the Company. Notwithstanding the above,
Executive shall be permitted, to the extent such activities do not materially
and adversely affect the ability of Executive to fully perform his duties and
responsibilities hereunder, to (i) manage Executive's personal, financial and
legal affairs and (ii) serve on civic or charitable boards or committees.
4. Place of Performance. The principal place of employment of Executive
shall be at the Company's corporate offices in New York, New York.
5. Compensation and Related Matters.
(a) Salary. During the Employment Period, the Company shall pay Executive
an annual base salary of $275,000 ("Base Salary"). Executive's Base Salary shall
be paid in approximately equal installments in accordance with the Company's
customary payroll practices. If Executive's Base Salary is increased by the
Company, such increased Base Salary shall then constitute the Base Salary for
all purposes of this Agreement.
19
<PAGE> 2
(b) Bonus. The executive compensation and stock option committee (the
"Compensation Committee") of the Board of Directors of the Company (the "Board")
shall review Executive's performance at least annually during each year of the
Employment Period and cause the Company to award Executive a cash bonus of up to
100% of his Base Salary which the Compensation Committee shall reasonably
determine as fairly compensating and rewarding Executive for services rendered
to the Company and/or as an incentive for continued service to the Company, but
in no event shall Executive's bonus for the period from the Effective Date
through March 1, 2001 be less than $150,000 (the "First Year Bonus"). The amount
of Executive's cash bonus shall be determined in the discretion of the
Compensation Committee and shall be dependent upon, among other things, the
achievement of certain performance levels by the Company, including, without
limitation, growth in funds from operations, and Executive's performance and
contribution to increasing the funds from operations. Notwithstanding anything
contained herein to the contrary, except with respect to the First Year Bonus,
there shall be no guarantee as to the amount of Executive's yearly bonus and a
decrease in Executive's bonus to an amount less than the First Year Bonus shall
not constitute a breach or violation of this Agreement by the Company or
constitute a Good Reason Event.
(c) Expenses. The Company shall promptly reimburse Executive for all
reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified with
respect to all senior executive officers of the Company.
(d) Vacation. Executive shall be entitled to the number of weeks of
vacation per year provided to the Company's senior executive officers, but in no
event less than four (4) weeks annually.
(e) Welfare, Pension and Incentive Benefit Plans. During the Employment
Period, Executive (and his spouse and dependents to the extent provided therein)
shall be entitled to participate in and be covered under all the welfare benefit
plans or programs maintained by the Company from time to time on terms no less
favorable than provided for any of its full time senior executives (other than
the Chief Executive Officer) including, without limitation, all medical,
hospitalization, dental, disability, accidental death and dismemberment and
travel accident insurance plans and programs. In addition, during the Employment
Period, Executive shall be eligible to participate in and be covered under all
pension, retirement, savings and other employee benefit, perquisite, change in
control and executive compensation plans and any annual incentive or long-term
performance plans and programs maintained from time to time by the Company on
terms no less favorable than provided for any of its full time senior executives
(other than the Chief Executive Officer).
(f) Automobile. During the Employment Period, the Company shall provide
Executive with an automobile allowance in the amount of $600 per month.
(g) Option. Executive shall be granted on the Effective Date options
("Option") to purchase one hundred fifty thousand (150,000) shares of common
stock of the Company ("Shares"). Such Option shall be granted by the
Compensation Committee pursuant to the 1993 Stock Option Plan of New Plan Excel
Realty Trust, Inc., as amended ("Stock Option Plan"). The Option shall be an
incentive stock option to the extent permissible under the limitations
applicable to incentive stock options under the Stock Option Plan and under
applicable law. The Option shall have an exercise price per Share equal to the
fair market value (as defined in the Stock Option Plan) of a Share underlying an
option granted on the Effective Date, i.e., the closing price on the last
trading day preceding the Effective Date (the "Effective Date Market Price").
(i) Of the Option, options to purchase one hundred eight thousand
(108,000) Shares ("Time Vested Options") shall become vested at the rate of
twenty one thousand six hundred (21,600) Shares on each anniversary of the
Effective Date. Notwithstanding the foregoing, Time Vested Options shall
become vested if the Executive's employment is terminated (x) during the
Employment Period but after the first anniversary of the Effective Date by
the Company without "Cause" (as herein defined) or by the Executive for
"Good Reason" (as herein defined) or (y) after the Employment Period if
Executive's termination after the expiration of the Employment Period would
have accelerated the vesting of the Time Vested Options if such employment
was terminated during the Employment Period, as provided, in (x) above. In
addition, if the Executive dies or the Executive's employment is terminated
because of Disability during the Employment Period, 50% of the Time Vested
Options which were not vested immediately prior to his death or
20
<PAGE> 3
Disability shall become vested on the date of his death or Disability.
Subject to the provisions of the Stock Option Plan, the Time Vested Options
shall have a maximum term of ten years from the Effective Date but no
additional vesting of Time Vested Options shall occur after termination of
Executive's employment (subject however to acceleration of said Time Vested
Options as otherwise specifically provided in this Agreement) and the Time
Vested Options shall terminate earlier [1] on the ninetieth (90th) day
after Executive is no longer employed by the Company on a full-time basis
for any reason other than death or Disability, or [2] on the first
anniversary of the Executive's termination of employment by reason of death
or Disability.
(ii) Of the Option, options to purchase forty-two thousand (42,000)
Shares ("Performance Vested Options") shall vest on the eighth anniversary
of the Effective Date provided Executive is a full-time employee of the
Company at such time or may vest earlier on the basis of performance as
herein described.
[1] Performance Vested Options for twenty-one thousand
(21,000) Shares shall vest on the fourth anniversary of the Effective
Date if the annualized return on investment on a Share from the
Effective Date through the fourth anniversary of the Effective Date
(determined in good faith by the Compensation Committee based upon
dividends paid and appreciation in Share price during such period)
("Cumulative Four Year ROI") is at least 16%. If Cumulative Four Year
ROI is not greater than 14%, no Performance Vested Options shall vest
on the fourth anniversary of the Effective Date. To the extent
Cumulative Four Year ROI is greater than 14% but not at least 16%,
Performance Vested Options for one hundred five (105) Shares shall
become vested on the fourth anniversary of the Effective Date for each
.01% by which Cumulative Four Year ROI exceeds 14%.
[2] All Performance Vested Options which have not previously
vested shall vest on the fifth anniversary of the Effective Date if
the annualized return on investment of a Share from the Effective Date
through the fifth anniversary of the Effective Date (determined in
good faith by the Compensation Committee based upon dividends paid and
appreciation in Share price during such period) ("Cumulative Five Year
ROI") is at least 16%. If Cumulative Five Year ROI is not greater than
14%, no additional Performance Vested Options shall vest on the fifth
anniversary of the Effective Date. To the extent Cumulative Five Year
ROI is greater than 14% but not at least 16%, for each .01% by which
Cumulative Five Year ROI exceeds 14%, additional Performance Vested
Options shall become vested for a number of Shares equal to the
quotient of (A) the difference between forty-two thousand (42,000) and
the number of Performance Vested Options which became vested on the
fourth anniversary of the Effective Date and (B) two hundred (200).
[3] Notwithstanding the foregoing, Performance Vested Options
shall become vested if the Executive's employment with the Company is
terminated by the Company (x) during the Employment Period but after
the first anniversary of the Effective Date by the Company without
"Cause" (as herein defined) or by the Executive for "Good Reason" (as
herein defined) or (y) after the Employment Period if Executive's
termination after the expiration of the Employment Period would have
accelerated the vesting of the Performance Vested Options if such
employment was terminated during the Employment Period, as provided in
(x) above. If the Executive dies or the Executive's employment is
terminated because of Disability during the Employment Period prior to
the fourth anniversary of the Effective Date, Performance Vested
Options for twenty-one thousand (21,000) Shares shall vest if the
cumulative return on investment from the Effective Date through the
date of death or termination of Executive's employment because of
Disability is at least 16% or Performance Vested Options for one
hundred five (105) Shares for each .01% by which the cumulative return
on investment from the Effective Date through the date of death or
Disability exceeds 14% (up to 16%) shall vest (such determinations to
be made in a manner consistent with the Cumulative Four Year ROI
calculations). Subject to the provisions of the Stock Option Plan, the
Performance Vested Options shall have a maximum term of ten years
21
<PAGE> 4
but no additional vesting of Performance Vested Options shall occur
after termination of Executive's employment (subject however to
acceleration of said Time Vested Options as otherwise specifically
provided in this Agreement) and the Performance Vested Options shall
terminate earlier [A] on the ninetieth (90th) day after Executive is
no longer employed by the Company as a full-time employee for any
reason other than death or Disability, or [B] on the first anniversary
of the Executive's termination of employment by reason of death or
Disability.
(i) No Hedging. During the Employment Period, Executive will not in any way
attempt to limit the financial risk with respect to the Options which are not
vested by means of any hedging (including without limitation, selling short) or
other techniques.
6. Termination. Executive's employment hereunder may be terminated during
the Employment Period under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate upon his death.
(b) Disability. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been substantially unable to
perform his duties hereunder for an entire period of one hundred twenty (120)
days, and within thirty (30) days after written Notice of Termination (as
defined in Section 7(a)) is given after such one hundred twenty (120) day
period, Executive shall not have returned to the substantial performance of his
duties on a full-time basis, the Company shall have the right to terminate
Executive's employment hereunder for "Disability", and such termination in and
of itself shall not be, nor shall it be deemed to be, a breach of this
Agreement. For purposes of this Agreement, the Disability of Executive shall be
determined by an independent physician mutually selected by the Company and
Executive.
(c) Cause. The Company shall have the right to terminate
Executive's employment for Cause, and such termination in and of itself shall
not be, nor shall it be deemed to be, a breach of this Agreement. For purposes
of this Agreement, the Company shall have "Cause" to terminate Executive's
employment upon Executive's:
(i) conviction of, or plea of guilty or nolo contendere to, a felony;
or
(ii) willful and continued failure to use reasonable best efforts to
substantially perform his duties hereunder (other than such failure
resulting from Executive's incapacity due to physical or mental illness or
subsequent to the issuance of a Notice of Termination by Executive for Good
Reason (as defined in Section 6(d)) after demand for substantial
performance is delivered by the Company in writing that specifically
identifies the manner in which the Company believes Executive has not used
reasonable best efforts to substantially perform his duties; or
(iii) willful misconduct (including, but not limited to, a willful
breach of the provisions of Section 10) that is materially economically
injurious to the Company or to any Affiliate.
For purposes of this Section 6(c), no act, or failure to act, by Executive
shall be considered "willful" unless committed in bad faith and without a
reasonable belief that the act or omission was in the best interests of the
Company or any Affiliates thereof; provided, however, that the willful
requirement outlined in paragraphs (ii) or (iii) above shall be deemed to have
occurred if the Executive's action or non-action continues for more than ten
(10) days after Executive has received written notice of the inappropriate
action or non-action. Failure to achieve performance goals, in and of itself,
shall in no event be grounds for a termination for Cause hereunder. Cause shall
not exist under paragraph (ii) or (iii) above unless and until the Company has
delivered to Executive a copy of a resolution duly adopted by a majority of the
Board (excluding Executive for purposes of determining such majority) at a
meeting of the Board called and held for such purpose (after reasonable (but in
no event less than thirty (30) days) notice to Executive and an opportunity for
Executive, together with his counsel, to be heard before the Board), finding
that in the good faith opinion of the Board, Executive was guilty of the conduct
set forth in paragraph (ii) or (iii) and specifying the particulars thereof in
detail. This Section 6(c) shall not prevent Executive from challenging in any
court of competent jurisdiction the Board's
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<PAGE> 5
determination that Cause exists or that Executive has failed to cure any act (or
failure to act) that purportedly formed the basis for the Board's determination.
(d) Good Reason. Executive may terminate his employment for "Good
Reason" upon the occurrence, without the written consent of Executive, of one of
the following events (a "Good Reason Event"); provided, however, that the
Company shall have the right to challenge in any court of competent jurisdiction
the Executive's determination that he has the right to terminate his employment
for "Good Reason.":
(i) the assignment to Executive of duties materially and adversely
inconsistent with Executive's status as Chief Financial Officer of the
Company or a material and adverse alteration in the nature of Executive's
duties and/or responsibilities, reporting obligations, titles or authority
as Chief Financial Officer;
(ii) a reduction by the Company in Executive's Base Salary or a
failure by the Company to pay any such amounts when due;
(iii) the relocation of the Company's executive offices or Executive's
own office location to a location that is more than fifty (50) miles from
New York, New York;
(iv) any purported termination of Executive's employment
for Cause which is not effected substantially in accordance with
the procedures of Section 6(c) (and for purposes of this
Agreement, no such purported termination shall be effective);
(v) the failure to grant the Option as provided in Section 5(g)
of this Agreement or the Company's failure to pay or provide in any
material respect any employee benefits due to be provided to Executive
under this Agreement;
(vi) the Company's failure to provide in all material respects the
indemnification set forth in Section 11 of this Agreement, or to require
any successor to assume and agree to perform this Agreement as set forth in
Section 13 of this Agreement; or
(vii) a Change in Control (as defined below) of the Company.
In order for the Executive to terminate his employment hereunder
for Good Reason, the Executive shall be required to give the Company written
notice (the "Cure Notice") of the alleged Good Reason Event within thirty (30)
days following the date on which the Executive obtains actual knowledge of the
occurrence of such Good Reason Event, which Cure Notice shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to constitute such Good
Reason Event. In the event that the Company fails to cure such alleged Good
Reason Event within thirty (30) days (the "Cure Period") following the date on
which the Executive delivered the Cure Notice to the Company, then Executive
shall have a period of thirty (30) days from the expiration of the Cure Period
to deliver a Notice of Termination pursuant to Section 7(a) hereof.
Notwithstanding anything to the contrary contained in this Agreement, in the
event that the Executive fails to deliver the Cure Notice or the Notice of
Termination within the required time periods set forth above (time being of the
essence with respect thereto), then Executive shall thereafter waive any rights
to terminate this Agreement with respect to the facts and circumstances giving
rise to such Good Reason Event.
Executive's right to terminate his employment hereunder for Good Reason
shall not be affected by his incapacity due to physical or mental illness.
Executive's continued employment during the Cure Period shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
If Executive terminates employment hereunder for Good Reason and is
reemployed by the Company or any successor within six months of such termination
of employment, Executive's termination of employment shall retroactively not be
considered a termination for Good Reason and Executive shall have no entitlement
to any payments or benefits pursuant to Section 8(a) (including without
limitation, Section 8(a)(v)). To the extent Executive has already received
payments or benefits pursuant to Section 8(a) (including without limitation,
Section 8(a)(v)), Executive shall
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<PAGE> 6
repay to the Company such payments or benefits or make other equitable
restitution to the Company, as the Board shall determine.
For purposes of this Agreement, a "Change in Control" of the Company
means the occurrence of one of the following events:
(1) individuals who, on the Effective Date, constitute the
Board (the "Incumbent Directors") cease for any reason to constitute
at least a majority of the Board, provided that any person becoming a
director subsequent to the Effective Date whose election or nomination
for election was approved by a vote of a majority of the Incumbent
Directors then on the Board (either by a specific vote or by approval
of the proxy statement of the Company in which such person is named as
a nominee for director, without objection to such nomination) shall be
an Incumbent Director; provided, however, that no individual initially
elected or nominated as a director of the Company as a result of an
actual or threatened election contest with respect to directors or as
a result of any other actual or threatened solicitation of proxies by
or on behalf of any person other than the Board shall be an Incumbent
Director;
(2) any "person" (as such term is defined in Section 3(a)(9)
of the Securities Exchange Act of 1934 (the "Exchange Act") and as
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or
becomes, after the Effective Date, a "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined
voting power of the Company's then outstanding securities eligible to
vote for the election of the Board (the "Company Voting Securities");
provided, however, that an event described in this paragraph (2) shall
not be deemed to be a Change in Control if any of following becomes
such a beneficial owner: (A) the Company or any majority-owned entity
(provided, that this exclusion applies solely to the ownership levels
of the Company or the majority-owned entity), (B) any tax-qualified,
broad-based employee benefit plan sponsored or maintained by the
Company or any majority-owned entity, (C) any underwriter temporarily
holding securities pursuant to an offering of such securities, (D) any
person pursuant to a Non-Qualifying Transaction (as defined in
paragraph (3)), or (E) Executive or any group of persons including
Executive (or any entity controlled by Executive or any group of
persons including Executive);
(3) the consummation of a merger, consolidation, share
exchange or similar form of transaction involving the Company or any
of its subsidiaries, or the sale of all or substantially all of the
Company's assets (a "Business Transaction"), unless immediately
following such Business Transaction (i) more than 50% of the total
voting power of the entity resulting from such Business Transaction or
the entity acquiring the Company's assets in such Business Transaction
(the "Surviving Corporation") is beneficially owned, directly or
indirectly, by the Company's shareholders immediately prior to any
such Business Transaction, and (ii) no person (other than the persons
set forth in clauses (A), (B), or (C) of paragraph (2) above or any
tax-qualified, broad-based employee benefit plan of the Surviving
Corporation or its Affiliates) beneficially owns, directly or
indirectly, 30% or more of the total voting power of the Surviving
Corporation (a "Non-Qualifying Transaction"); provided, however, that
in the event a definitive agreement is entered into providing for the
occurrence of an event which, if consummated, would result in a Change
in Control of the Company (a "Merger Event"), then all options and
equity interests granted or acquired by the Executive pursuant to this
Agreement which have not then become fully vested, shall become fully
vested but only on a provisional basis, for the sole purpose of
enabling the Executive to exercise any such options and tender any
such equity interests as necessary to permit the Executive to
participate in the Merger Event on the same basis as all other
stockholders. If the Merger Event is consummated, such accelerated
vesting shall no longer be provisional. If the Merger Event is not
consummated, the Executive shall continue to have the same vested
status in his options and equity interests as he had without regard to
the provisional vesting terms included herein; or
(4) Board and to the extent necessary, shareholder approval
of a liquidation or dissolution of the Company, unless the voting
common equity interests of an ongoing entity (other than a liquidating
trust) are beneficially owned, directly or indirectly, by the
Company's shareholders
24
<PAGE> 7
in substantially the same proportions as such shareholders owned the
Company's outstanding voting common equity interests immediately prior
to such liquidation and such ongoing entity assumes all existing
obligations of the Company to Executive under this Agreement and the
Stock Option Agreements pursuant to which the Stock Options were
granted.
(e) Without Good Reason. Executive shall have the right to terminate his
employment hereunder without Good Reason by providing the Company with a Notice
of Termination, and such termination shall not in and of itself be, nor shall it
be deemed to be, a breach of this Agreement.
7. Termination Procedure.
(a) Notice of Termination. Any termination of Executive's employment by the
Company or by Executive during the Employment Period (other than termination
pursuant to Section 6(a)) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 14 and subject to the other
provisions of this Agreement. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated.
(b) Date of Termination. "Date of Termination" shall mean (i) if
Executive's employment is terminated by his death, the date of his death,
(ii) if Executive's employment is terminated pursuant to Section 6(b), thirty
(30) days after Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period), and (iii) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.
8. Compensation Upon Termination or During Disability. In the event
Executive is disabled or his employment terminates during the Employment Period,
the Company shall provide Executive with the payments and benefits set forth
below; provided, however, as a specific condition to being entitled to any
payments or benefits under this Section 8 Executive must have resigned from any
position as a director, trustee and officer of the Company and all of its
subsidiaries and Affiliates and as a member of any committee of the board of
directors and the board of trustees of the Company and its subsidiaries and
Affiliates of which he is a member and must have joined the Company in having
executed a mutual release of the Company and its Affiliates, in a form
reasonably acceptable to the Company and Executive. Executive acknowledges and
agrees that the payments set forth in this Section 8 constitute liquidated
damages for termination of his employment during the Employment Period.
(a) Termination By Company Without Cause or By Executive for Good Reason.
If Executive's employment is terminated by the Company without Cause or by
Executive for Good Reason:
(i) the Company shall pay to Executive his Base Salary and
accrued vacation pay through the Date of Termination, as soon as
practicable following the Date of Termination; and
(ii) the Company shall pay to Executive a payment equal to two times
Executive's average total cash compensation paid (Base Salary and bonus
only) for the two (2) preceding fiscal years of the Company ending prior to
termination as soon as practicable following the Date of Termination;
provided, however, if the Executive has previously given a notice of
non-renewal with respect to the Employment Period pursuant to Section 2,
the payment referred to in this subsection (ii) shall not be made;
(iii) the Company shall reimburse Executive pursuant to Section 5(c)
for reasonable expenses incurred, but not paid prior to such termination of
employment;
(iv) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company; and
25
<PAGE> 8
(v) to the extent that termination occurs after the first
anniversary of the Effective Date, the stock options described in Section
5(g) shall fully vest as of the Date of Termination.
The foregoing notwithstanding, the total of the severance payments payable
under this Section 8(a) shall be reduced to the extent the payment of such
amounts would cause Executive's total termination benefits (as determined by
Executive's tax advisor) to constitute an "excess" parachute payment under
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") and
by reason of such excess parachute payment Executive would be subject to an
excise tax under Section 4999(a) of the Code, but only if Executive determines
that the after-tax value of the termination benefits calculated with the
foregoing restriction exceed those calculated without the foregoing restriction.
(b) Termination by Company For Cause or By Executive Without Good Reason.
If Executive's employment is terminated by the Company for Cause or by Executive
(other than for Good Reason):
(i) the Company shall pay Executive his Base Salary and, to the
extent required by law or the Company's vacation policy, his accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination; and
(ii) the Company shall reimburse Executive pursuant to Section 5(c)
for reasonable expenses incurred, but not paid prior to such termination of
employment, unless such termination resulted from a misappropriation of
Company funds; and
(iii) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company.
(c) Disability. During any period that Executive fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness
("Disability Period"), Executive shall continue to receive his full Base Salary
set forth in Section 5(a) until his employment is terminated pursuant to Section
6(b). In the event Executive's employment is terminated for Disability pursuant
to Section 6(b):
(i) the Company shall pay to Executive (A) his Base Salary and accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination, and (B) continued Base Salary (as
provided for in Section 5(a)) for six (6) months; and
(ii) the Company shall reimburse Executive pursuant to Section 5(c)
for reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company.
(d) Death. If Executive's employment is terminated by his death:
(i) the Company shall pay in a lump sum to Executive's
beneficiary, legal representatives or estate, as the case may be,
Executive's Base Salary through the Date of Termination and one (1) times
Executive's annual rate of Base Salary;
(ii) the Company shall reimburse Executive's beneficiary, legal
representatives, or estate, as the case may be, pursuant to Section 5(c)
for reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executive's beneficiary, legal representatives or estate, as the
case may be, shall be entitled to any other rights, compensation and
benefits as may be due to any such persons or estate in accordance with the
terms and provisions of any agreements, plans or programs of the Company.
26
<PAGE> 9
(e) Failure to Extend. A failure to renew the term of this Agreement by
either party shall not be deemed to constitute a termination of Executive's
employment for purposes of this Agreement.
(f) Bonus. In the event the Executive's termination of employment occurs
for any reason after the end of any fiscal year of the Company for which annual
bonus performance criteria have been established, the Executive shall be
entitled to payment of any bonus which is earned by reason of such performance
criteria having been met for such fiscal year according to the performance
criteria established, without regard to whether the Executive's termination of
employment precedes the bonus payment date.
9. Mitigation. Executive shall not be required to mitigate amounts payable
under this Agreement by seeking other employment or otherwise, and there shall
be no offset against amounts due Executive under this Agreement on account of
subsequent employment. Additionally, amounts owed to Executive under this
Agreement shall not be offset by any claims the Company may have against
Executive, and the Company's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any other circumstances, including, without limitation, any
counterclaim, recoupment, defense or other right which the Company may have
against Executive or others.
10. Confidential Information, Ownership of Documents; Non-Competition.
(a) Confidential Information. Executive shall hold in a fiduciary
capacity for the benefit of the Company all trade secrets and confidential
information, knowledge or data relating to the Company and its businesses and
investments, which shall have been obtained by Executive during Executive's
employment by the Company and which is not generally available public knowledge
(other than by acts by Executive in violation of this Agreement). Except as may
be required or appropriate in connection with his carrying out his duties under
this Agreement, Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or any legal process, or as is
necessary in connection with any adversarial proceeding against the Company (in
which case Executive shall use his reasonable best efforts in cooperating with
the Company in obtaining a protective order against disclosure by a court of
competent jurisdiction), communicate or divulge any such trade secrets,
information, knowledge or data to anyone other than the Company and those
designated by the Company or on behalf of the Company in the furtherance of its
business or to perform duties hereunder.
(b) Removal of Documents; Rights to Products. All records, files,
drawings, documents, models, equipment, and the like relating to the Company's
business, which Executive has control over shall not be removed from the
Company's premises without its written consent, unless such removal is in the
furtherance of the Company's business or is in connection with Executive's
carrying out his duties under this Agreement and, if so removed, shall be
returned to the Company promptly after termination of Executive's employment
hereunder, or otherwise promptly after removal if such removal occurs following
termination of employment. Executive shall assign to the Company all rights to
trade secrets and other products relating to the Company's business developed by
him alone or in conjunction with others at any time while employed by the
Company.
(c) Protection of Business. During the Employment Period and if the
Executive is terminated by the Company with or without Cause or Executive
terminates employment without Good Reason, until the first anniversary of
Executive's Date of Termination, the Executive will not (i) serve as an officer,
employee, director or consultant of a REIT or other real estate business with a
significant portion of its business involved with community shopping centers;
(ii) engage, anywhere within the geographical areas in which the Company or any
of its Affiliates (the "Designated Entities") are conducting their business
operations or providing services as of the Date of Termination, in any business
which is being engaged in by the Designated Entities as of the Date of
Termination or pursue or attempt to develop any project known to Executive and
which the Designated Entities are pursuing, developing or attempting to develop
as of the Date of Termination, unless such project has been inactive for over
nine (9) months (a "Project"), directly or indirectly, alone, in association
with or as a shareholder, principal, agent, partner, officer, director, employee
or consultant of any other organization; (iii) divert to any entity which is
engaged in any business conducted by the Designated Entities in the same
geographic area as the Designated Entities, any Project or any customer of any
of the Designated Entities; or (iv) solicit any officer, employee (other than
secretarial staff) or consultant of any of the Designated Entities to leave the
employ of any of the Designated Entities. Notwithstanding the preceding
sentence, Executive shall not be prohibited from owning less than three (3%)
percent of any publicly traded
27
<PAGE> 10
corporation, whether or not such corporation is in competition with the Company.
If, at any time, the provisions of this Section 10(c) shall be determined to be
invalid or unenforceable, by reason of being vague or unreasonable as to area,
duration or scope of activity, this Section 10(c) shall be considered divisible
and shall become and be immediately amended to only such area, duration and
scope of activity as shall be determined to be reasonable and enforceable by the
court or other body having jurisdiction over the matter; and Executive agrees
that this Section 10(c) as so amended shall be valid and binding as though any
invalid or unenforceable provision had not been included herein.
(d) Injunctive Relief. In the event of a breach or threatened breach of
this Section 10, Executive agrees that the Company shall be entitled to
injunctive relief in a court of appropriate jurisdiction to remedy any such
breach or threatened breach, Executive acknowledging that damages would be
inadequate and insufficient.
(e) Continuing Operation. Except as specifically provided in this Section
10, the termination of Executive's employment or of this Agreement shall have no
effect on the continuing operation of this Section 10.
11. Indemnification.
(a) General. The Company agrees that if Executive is made a party or a
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"), by reason of the
fact that Executive is or was a trustee, director or officer of the Company or
any subsidiary of the Company or is or was serving at the request of the Company
or any subsidiary as a trustee, director, officer, member, employee or agent of
another corporation or a partnership, joint venture, trust or other enterprise,
including, without limitation, service with respect to employee benefit plans,
whether or not the basis of such Proceeding is alleged action in an official
capacity as a trustee, director, officer, member, employee or agent while
serving as a trustee, director, officer, member, employee or agent, Executive
shall be indemnified and held harmless by the Company to the same extent as
other officers and directors, as in effect from time to time, against all
Expenses incurred or suffered by Executive in connection therewith, and such
indemnification shall continue as to Executive even if Executive has ceased to
be an officer, director, trustee or agent, or is no longer employed by the
Company and shall inure to the benefit of his heirs, executors and
administrators.
(b) Expenses. As used in this Agreement, the term "Expenses" shall include,
without limitation, damages, losses, judgments, liabilities, fines, penalties,
excise taxes, settlements, and costs, attorneys' fees, accountants' fees, and
disbursements and costs of attachment or similar bonds, investigations, and any
expenses of establishing a right to indemnification under this Agreement.
(c) Enforcement. If a claim or request under this Agreement is not paid by
the Company or on its behalf, within thirty (30) days after a written claim or
request has been received by the Company, Executive may at any time thereafter
bring suit against the Company to recover the unpaid amount of the claim or
request and, if Executive prevails in respect to the material issues, Executive
shall be entitled to be paid also the Expenses of prosecuting such suit. All
obligations for indemnification hereunder shall be subject to, and paid in
accordance with, applicable Maryland law.
(d) Partial Indemnification. If Executive is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of any
Expenses, but not, however, for the total amount thereof, the Company, shall
nevertheless indemnify Executive for the portion of such Expenses to which
Executive is entitled.
(e) Advances of Expenses. Expenses incurred by Executive in connection with
any Proceeding shall be paid by the Company in advance upon request of Executive
that the Company pay such Expenses; but only in the event that Executive shall
have delivered in writing to the Company (i) an undertaking to reimburse the
Company for Expenses with respect to which Executive is not entitled to
indemnification and (ii) an affirmation of his good faith belief that the
standard of conduct necessary for indemnification by the Company has been met.
(f) Notice of Claim. Executive shall give to the Company notice of any
claim made against him for which indemnification will or could be sought under
this Agreement. In addition, Executive shall give the Company
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<PAGE> 11
such information and cooperation as it may reasonably require and as shall be
within Executive's power and at such times and places as are convenient for
Executive.
(g) Defense of Claim. With respect to any Proceeding as to which Executive
notifies the Company of the commencement thereof:
(i) The Company will be entitled to participate therein at its own
expense; and
(ii) Except as otherwise provided below, to the extent that it may
wish, the Company will be entitled to assume the defense thereof, with
counsel reasonably satisfactory to Executive, which in the Company's sole
discretion may be regular counsel to the Company and may be counsel to
other officers and directors of the Company or any subsidiary. Executive
also shall have the right to employ his own counsel in such action, suit or
proceeding if he reasonably concludes that failure to do so would involve a
conflict of interest between the Company and Executive, and under such
circumstances the fees and expenses of such counsel shall be at the expense
of the Company.
(iii) The Company shall not be liable to indemnify Executive under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall not settle any
action or claim in any manner which would impose any penalty or limitation
on Executive or which would otherwise adversely affect Executive's personal
or professional reputation without in either case obtaining Executive's
written consent. Neither the Company nor Executive will unreasonably
withhold or delay their consent to any proposed settlement.
(h) Non-exclusivity. The right to indemnification and the payment of
expenses incurred in defending a Proceeding in advance of its final disposition
conferred in this Section 11 shall not be exclusive of any other right which
Executive may have or hereafter may acquire under any statute, provision of the
declaration of trust or certificate of incorporation or by-laws of the Company
or any subsidiary, agreement, vote of shareholders or disinterested directors or
trustees or otherwise.
12. Legal Fees and Expenses. If any contest or dispute shall arise between
the Company and Executive regarding any provision of this Agreement, the Company
shall reimburse Executive for all legal fees and expenses reasonably incurred by
Executive in connection with such contest or dispute, but only if Executive
prevails in respect of the material issues in dispute of Executive's claims
brought and pursued in connection with such contest or dispute. Such
reimbursement shall be made as soon as practicable following the final
resolution of such contest or dispute to the extent the Company receives
reasonable written evidence of such fees and expenses.
13. Successors; Binding Agreement.
(a) Company's Successors. No rights or obligations of the Company
under this Agreement may be assigned or transferred except that the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as herein before defined and any successor to
its business and/or assets (by merger, purchase or otherwise) which executes and
delivers the agreement provided for in this Section 13 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(b) Executive's Successors. No rights or obligations of Executive under
this Agreement may be assigned or transferred by Executive other than his rights
to payments or benefits hereunder, which may be transferred only by will or the
laws of descent and distribution. Upon Executive's death, this Agreement and all
rights of Executive hereunder shall inure to the benefit of and be enforceable
by Executive's beneficiary or beneficiaries, personal or legal representatives,
or estate, to the extent any such person succeeds to Executive's interests under
this Agreement. Executive shall be entitled to select and change a beneficiary
or beneficiaries to receive any benefit or compensation payable hereunder
following Executive's death by giving the Company written notice thereof. In the
event of Executive's death or a judicial determination of his incompetence,
reference in this Agreement to Executive shall be
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<PAGE> 12
deemed, where appropriate, to refer to his beneficiary(ies), estate or other
legal representative(s). If Executive should die following his Date of
Termination while any amounts would still be payable to him hereunder if he had
continued to live, all such amounts unless otherwise provided herein shall be
paid in accordance with the terms of this Agreement to such person or persons so
appointed in writing by Executive, or otherwise to his legal representatives or
estate.
14. Notice. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally,
or sent by nationally recognized, overnight courier or by telecopy with copy
sent by personal delivery or nationally recognized overnight courier, or by
registered or certified mail, return receipt requested and postage prepaid,
addressed as follows:
If to Executive:
Mr. John Roche
c/o New Plan Excel Realty Trust, Inc.
1120 Ave of the Americas
New York, NY 10036
Fax: 212-302-4776
With copy to:
Joseph P. Carlucci, Esq.
Cuddy & Feder & Worby LLP
90 Maple Avenue
White Plains, New York 10601
Fax: 914-761-6405
If to the Company:
New Plan Excel Realty Trust, Inc.
1120 Ave of the Americas
New York, NY 10036
Attn: General Counsel
Fax: 212-302-4776
or to such other address as any party may have furnished to the others in
writing in accordance herewith. All such notices and other communications shall
be deemed to have been received (a) in the case of personal delivery, on the
date of such delivery, (b) in the case of delivery by nationally-recognized,
overnight courier, on the business day following dispatch, (c) in the case of
telecopy, on the date of transmission if copy is delivered not later than the
next business day via either personal delivery or nationally-recognized
overnight courier, and (d) in the case of mailing, on the third business day
following such mailing.
15. Miscellaneous. No provisions of this Agreement may be amended,
modified, or waived unless such amendment or modification is agreed to in
writing signed by Executive and by a duly authorized officer of the Company, and
such waiver is set forth in writing and signed by the party to be charged.
Subject to the provisions of Section 6(d) of this Agreement, no waiver by either
party hereto at any time of any breach by the other party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
The respective rights and obligations of the parties hereunder of this Agreement
shall survive Executive's termination of employment and the termination of this
Agreement to the extent necessary for the intended preservation of such rights
and obligations. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of New York without
regard to its conflicts of law principles.
30
<PAGE> 13
16. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
18. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersede
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer,
director, employee or representative of any party hereto in respect of such
subject matter. Any prior agreement of the parties hereto in respect of the
subject matter contained herein is hereby terminated and canceled.
19. Attorney Fees. The Company shall pay, or reimburse Executive for at
Executive's discretion, reasonable attorney fees actually incurred by Executive
in connection with the negotiation, execution and delivery of this Agreement in
an amount up to ten thousand dollars ($10,000).
20. Withholding. All payments hereunder shall be subject to any required
withholding of Federal,
state and local taxes pursuant to any applicable law or regulation.
21. Noncontravention. The Company represents that the Company is not
prevented from entering into, or performing this Agreement by the terms of any
law, order, rule or regulation, its by-laws or certificate of incorporation, or
any agreement to which it is a party, other than which would not have a material
adverse effect on the Company's ability to enter into or perform this Agreement.
Executive represents to the Company that he is not a party to any contract that
would preclude him from accepting employment as Chief Financial Officer of the
Company and he has no reason to believe that accepting employment as Chief
Financial Officer of the Company would result in a disclosure of any
confidential information of any prior employer.
22. Section Headings. The section headings in this Agreement are for
convenience of reference only, and they form no part of this Agreement and shall
not affect its interpretation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
NEW PLAN EXCEL REALTY TRUST, INC.,
a Maryland corporation
By: /s/ GLENN J. RUFRANO
-------------------------------
Name: Glenn J. Rufrano
Title: President and Chief
Executive Officer
/s/ JOHN ROCHE
-----------------------------------
JOHN ROCHE
<PAGE> 1
EXHIBIT 10.16
AGREEMENT
AGREEMENT ("Agreement"), dated as of May 5, 2000 ("Effective Date"), by and
between New Plan Excel Realty Trust, Inc., a Maryland corporation ("Company"),
and James M. Steuterman ("Steuterman").
RECITALS
A. Steuterman is currently Chief Operating Officer and Executive Vice
President of the Company.
B. The Company and Steuterman entered into an employment agreement dated as
of September 25, 1998, which provides for, among other things, Steuterman's
employment by the Company as Co-Chief Operating Officer and Executive Vice
President (the "Employment Agreement").
C. Steuterman desires to, among other things, resign as Chief Operating
Officer and Executive Vice President of the Company.
AGREEMENT
IN CONSIDERATION of the premises and the mutual covenants set forth below,
the parties hereby agree as follows:
32
<PAGE> 2
1. Resignation. Steuterman hereby resigns effective as of the Effective Date
as (a) an officer, director and member of any committee (Board or otherwise) of
the Company, including, but not limited to, his position as Chief Operating
Officer and Executive Vice President of the Company, (b) a representative,
agent, signatory and other similar positions in connection with or for the
benefit of the Company and (c) an officer, director, member of any committee
(Board or otherwise), trustee, representative, agent, signatory and other
similar position of any and all subsidiaries, affiliates (including without
limitation, ERT Development Corporation and its subsidiaries and affiliates) and
benefit plans of the Company. Steuterman agrees to execute all documents that
the Company reasonably determines are necessary or desirable to effectuate or
reflect the foregoing.
2. Payments and Benefits. In consideration of the resignations set forth in
Section 1 above, the Company shall provide Steuterman with the payments and
benefits set forth below:
(a) the Company shall pay Steuterman, upon execution of the Loan Documentation
(as defined below), the sum of $865,000.00 (the "Gross Amount"), subject to the
remaining provisions of this clause (a). As of the date hereof, Steuterman has
certain demand loans (the "Outstanding Loans") outstanding to the Company (or
its subsidiaries) in the aggregate principal amount of $575,505.00, plus accrued
interest thereon from January 1, 2000 through the date hereof in the amount of
$10,951.70. It is agreed that the Gross Amount shall be reduced by $296,456.70
(the "Offset Loan Amount"), which Offset Loan Amount represents all accrued
interest outstanding on the Outstanding Loans as of the date hereof in the
amount of $10,951.70 plus $285,505.00 of the outstanding principal balance on
the Outstanding Loans. In consideration of the Offset Loan Amount being deducted
from the Gross Amount, the Outstanding Loans shall be modified to reflect the
payment of the Offset Loan Amount and Steuterman and the Company shall enter
into appropriate documentation (the "Loan Documentation") to evidence the
reduction of the Outstanding Loans by the Offset Loan Amount. In addition, the
Loan Documentation shall include the modification of the Outstanding Loans to
provide a maturity date for the balance of the outstanding amounts under the
Outstanding Loans (i.e., $290,000.00 principal balance plus accrued interest
from May 6, 2000 through repayment in full of the Outstanding Loan Amount) of
May 1, 2001 and such documentation as is necessary to pledge 22,000 shares of
the Company common stock to secure the Outstanding Loans (the "Pledge"). The
Company agrees that upon the request of Steuterman, which request shall only be
made one time prior to May 1, 2001 and after May 15, 2000, the Company shall
revalue the pledged shares and to the extent that the value of the pledged
shares exceeds the then outstanding balance of the Loan Amount, the Company
shall release such number of shares as equals such excess value. Upon payment in
full of the Outstanding Loans, the Company shall return to Steuterman the
original promissory notes representing the Outstanding Loans marked "Paid in
Full", the shares pledged to secure the Outstanding Loans, as well as all other
original documents, if any, evidencing the Outstanding Loans and the Pledge;
(b) the Company shall pay Steuterman, upon exectuion of the Loan Documentation,
the sum of $34,057.69 for all accrued vacation to which he is entitled as of the
Effective Date. Steuterman acknowledges that this amount is the accrued vacation
to which he is entitled as of the Effective Date, that he will not accrue
additional vacation during the Transition Period (as defined in Section 3
below), and that upon termination of the Transition Period he shall have no
right to payment for any accrued vacation with respect to the Transition Period;
(c) all stock options held by Steuterman shall be cancelled as of the Effective
Date;
(d) the Company shall provide Steuterman, his spouse and dependents, until
May 30, 2003, those benefits set forth in Section 8(a)(ii) of the Employment
Agreement in accordance with the terms of said Section 8(a)(ii), subject,
however, to the provisos contained in said Section 8(a)(ii), which Section
8(a)(ii) shall survive the termination of the Employment Agreement;
(e) the Company shall allow Steuterman to keep the Company car currently being
used by Steuterman and shall transfer title of the car to Steuterman, except
that Steuterman shall, from and after the Effective Date, be responsible for all
costs and insurance with respect to the car; and
(f) the provisions of Sections 8(a)(iii), (iv) (exclusive of any stock options)
and (vii) of the Employment Agreement shall survive the termination of the
Employment Agreement.
3. Transition Period. During the period from the Effective Date through
May 30, 2000 (or such sooner period as provided below) (the "Transition
Period"), Steuterman will render to the Company such services as are reasonably
necessary for a transition of duties resulting from Steuterman's resignation
from the Company. During the Transition Period, the Company shall pay Steuterman
at his current annual base salary and Steuterman shall be
33
<PAGE> 3
entitled during the Transition Period to the same coverage and benefits
currently being provided as of the Effective Date. Steuterman's services during
the Transition Period may be terminated by the Company at any time upon written
notice to Steuterman. Upon termination of the Transition Period, Steuterman
shall not be entitled to receive any compensation, benefits, payments, severance
or other remuneration other than payment of his current base salary through the
date of termination and otherwise as specifically provided herein.
4. Retention of Items and Documents. Except as otherwise provided in
section 2(e) regarding the Company car and except that Steuterman shall be
permitted to keep the laptop computer currently being used by Steuterman,
Steuterman will return to the Company on or prior to May 30, 2000 all items
related to the Company including, but without limitation, all originals and all
copies of documents, notes, computer discs, tapes or other tangible information
of any sort which he has in his possession or under his custody or control that
is the property of Company or is confidential information and will not retain
any copies of such items. In addition, on the Effective Date, Steuterman shall
return to the Company the Company credit card and phone currently being used by
Steuterman.
5. Release.
(a) Steuterman. In consideration of the promises made by the parties in
this Agreement and the payments to be made by Company under this Agreement, the
receipt and sufficiency of which are hereby acknowledged, Steuterman hereby
releases and forever discharges, except as expressly provided herein, the
Company and its subsidiaries and affiliates and their shareholders, directors,
officers, agents, representatives, and employees and successors and assigns,
past and present ("Employer Released Parties"), jointly and individually, from
any and all claims, obligations, demands, damages, causes of action or
liabilities of any nature or kind whatsoever, known or unknown, which
Steuterman, his heirs, successors or assigns ever had or now have arising out of
or in any way connected with his employment and/or separation from Company or
its subsidiaries and affiliates including, but not limited to, claims arising
under or relating to the Employment Agreement and Steuterman's services in any
of the capacities described in Section 1; provided, however, that this release
does not include, and specifically excludes, any and all claims, obligations,
demands, damages, causes of action or liabilities relating to or arising out of
(i) this Agreement and (ii) indemnification under the Company's articles of
incorporation or by-laws or indemnification obligations under this Agreement.
Without limiting the generality of the foregoing or the excluded items contained
in the proviso in the immediately preceding sentence, this release applies to
any right which Steuterman, his heirs, successors or assigns have or may have to
commence or maintain a charge or action alleging discrimination under any
federal, state, or local statute (whether before a court or an administrative
agency), including, but not limited to, Title VII of the Civil Rights Act of
1964, the Employee Retirement Income Security Act of 1974, the Americans with
Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards
Act, all as amended from time to time, and to any right which Steuterman, his
heirs, successors or assigns have or may have to commence or maintain a claim
for attorneys' fees, wrongful discharge, estoppel, breach of contract, damage to
personal or professional reputation, misrepresentation, and/or intentional or
negligent infliction of emotional distress. Steuterman warrants and represents
he has not directly or indirectly transferred or assigned rights or causes of
action against the Employer Released Parties. Steuterman agrees not to make,
assert or maintain any charge, claim, demand or action which would be covered by
this release. If Steuterman breaches this provision, he agrees to indemnify the
Employer Released Parties against all liability, costs and expenses, including
reasonable attorneys' fees, related to such breach.
(b) Company. In consideration for the promises made by the parties in this
Agreement, the receipt and sufficiency of which are hereby acknowledged, the
Company (which for purposes of this paragraph shall be deemed to include all
Employer Released Parties) hereby releases and forever discharges, except as
hereinafter expressly provided, Steuterman and his successors and assigns, past
and present ("Steuterman Released Parties"), jointly and individually, from any
and all claims, obligations, demands, damages, causes of action or liabilities
of any nature or kind whatsoever, known or unknown, which the Company and/or a
subsidiary or affiliate of the Company ever had or now has arising out of or in
any way connected with Steuterman's employment and/or separation from Company or
its subsidiaries and affiliates including, but not limited to, claims arising
under or relating to the Employment Agreement and Steuterman's services in any
capacities described in Section 1; provided, however, that this release does not
include, and specifically excludes, any and all claims, obligations, demands,
damages, causes of action or liabilities relating to or arising from any claims
as to which indemnification of a director or officer of the Company would be
unavailable under Maryland law. The Company warrants and represents that neither
it, nor a subsidiary, nor an affiliate of the Company has directly or indirectly
transferred or assigned rights or causes of action against the Steuterman
Released Parties. The Company agrees not to make, assert or maintain (either
directly or indirectly through a subsidiary or an affiliate of the Company) any
34
<PAGE> 4
charge, claim, demand or action which would be covered by this release. If the
Company breaches this provision, it agrees to indemnify the Steuterman Released
Parties against all liability, costs and expenses, including reasonable
attorneys' fees, related to such breach.
6. Non-Disparagement.
(a) Steuterman agrees that he will not, directly or indirectly, individually or
in concert with others, intentionally engage in any conduct or make any
statement that is calculated or likely to have the effect of undermining or
disparaging the reputation of the Company or any entity in control of,
controlled by or under common control with the Company or in which the Company
owns any material amount of common or preferred stock or interest or any entity
in control of, controlled by or under common control with such entity
("Affiliate"), or their good will, products, or business opportunities or that
is calculated or likely to have the effect of undermining or disparaging the
reputation of any officer, director, agent, representative, or employee, past or
present, of the Company and/or its Affiliates.; provided, however, that
Steuterman will be able to respond to any statement made or published by the
Company in breach of its obligations under Section 6(b) below (and/or a
statement made by a current or former director or officer of the Company that
would have been in violation of this provision had such person been a party to
this Agreement).
(b) The Company (which for purposes of this paragraph shall be deemed to
include all Employer Released Parties) agrees that it will not, directly or
indirectly, individually or in concert with others, intentionally engage in any
conduct or make any statement that is calculated or likely to have the effect of
undermining or disparaging the reputation of Steuterman; provided, however, that
the Company will be able to respond to any statement made or published by
Steuterman in breach of his obligations under Section 6(a) above. The Company
will inform its directors and executive officers of this requirement and will
take reasonable measures to cause its directors and officers to comply with it.
7. ADEA Waiver. Steuterman acknowledges that this Agreement includes a
waiver of any rights and claims arising under the Age Discrimination in
Employment Act ("ADEA"). Steuterman understands he is not waiving rights or
claims that may arise after the date this Agreement is executed. Steuterman
acknowledges that the consideration he is receiving in exchange for his waiver
of the rights and claims specified herein exceeds anything of value to which he
already is entitled. Steuterman acknowledges that he was advised in writing on
or prior to May 3, 2000, to consult with an attorney prior to executing this
Agreement. Steuterman acknowledges that he has entered into this Agreement
knowingly and voluntarily with full understanding of its terms and after having
had the opportunity to seek and receive advice and counsel from his attorney.
Steuterman acknowledges that he was given a period of at least twenty-one (21)
days within which to consider this Agreement and was so advised in writing on or
prior to May 3, 2000. Steuterman understands that he may revoke this ADEA waiver
during the seven (7) days following the execution of this Agreement and that the
ADEA waiver shall not become effective or enforceable until that seven-day
revocation period has expired.
8. Mitigation. Steuterman shall not be required to mitigate amounts
payable under this Agreement by seeking other employment or otherwise, and there
shall be no offset against amounts due Steuterman under this Agreement on
account of subsequent employment. Additionally, but subject to clause (a) of
Section 2 of this Agreement, amounts owed to Steuterman under this Agreement
shall not be offset by any claims the Company may have against Steuterman, and
the Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
other circumstances, including, without limitation, any counterclaim,
recoupment, defense or other right which the Company may have against Steuterman
or others.
9. Confidential Information, Ownership of Documents, Indemnification and
Insurance.
(a) The provisions of Sections 10(a), 10(b), 10(d), 10(e) and 11 of the
Employment Agreement shall apply as if set forth herein. For purposes of
incorporating Section 11 of the Employment Agreement in this Agreement, the term
Company shall be deemed to include affiliates of the Company.
(b) From the Effective Date through the sixth anniversary of the Effective
Date, the Company agrees that Steuterman shall be covered under any director's
and officer's liability insurance policy maintained by the Company with respect
to the Board and senior executive officers as in effect from time to time but
the Company shall have no requirement or obligation to continue to maintain any
director's and officer's liability insurance policy.
35
<PAGE> 5
10. Successors; Binding Agreement.
(a) Company's Successors. No rights or obligations of the Company under this
Agreement may be assigned or transferred except that the Company will require
any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its business
and/or assets (by merger, purchase or otherwise) which executes and delivers the
agreement provided for in this Section 10 or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law.
(b) Steuterman's Successors. No rights or obligations of Steuterman
under the Agreement may be assigned or transferred by Steuterman other than his
rights to payments or benefits hereunder, which may be transferred only by will
or the laws of descent and distribution. Upon Steuterman's death, this Agreement
and all rights of Steuterman hereunder shall inure to the benefit of and be
enforceable by Steuterman's beneficiary or beneficiaries, personal or legal
representatives, or estate. In the event of Steuterman's death or a judicial
determination of his incompetence, reference in this Agreement to Steuterman
shall be deemed, where appropriate, to refer to his beneficiary(ies), estate or
other legal representative(s). If Steuterman should die after the Effective Date
while any amounts would still be payable to him hereunder if he had continued to
live, all such amounts unless otherwise provided herein shall be paid in
accordance with the terms of this Agreement to such person or persons so
appointed in writing by Steuterman, or otherwise to his legal representatives or
estate and the provisions of Section 2(d) relating to medical, dental and
hospitalization benefits shall continue to apply with respect to Steuterman's
surviving spouse and/or dependents.
11. Notice. For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered either personally or by United
States certified or registered mail, return receipt requested, postage prepaid,
addressed as follows:
If to Steuterman:
James M. Steuterman
5 Stults Drive
Plainsboro, New Jersey 08536
with a copy to:
Michael Shapiro, PLLC
420 Lexington Avenue
Suite 1910
New York, New York 10170
If to the Company:
New Plan Excel Realty Trust, Inc.
1120 Avenue of the Americas
New York, New York 10036
Attn: General Counsel
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
12. Miscellaneous. No provisions of this Agreement may be amended, modified, or
waived unless such amendment or modification is agreed to in writing signed by
Steuterman and by a duly authorized officer of the Company, and such waiver is
set forth in writing and signed by the party to be charged. No waiver by either
party hereto at any time of any breach by the other party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. The respective rights and
obligations of the parties hereunder of this Agreement
36
<PAGE> 6
shall survive Steuterman's termination of employment and the termination of this
Agreement to the extent necessary for the intended preservation of such rights
and obligations. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of New York without
regard to its conflicts of law principles.
13. Validity. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of the Agreement, which shall remain in full force and effect.
14. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
15. Entire Agreement. Except as otherwise expressly provided herein, this
Agreement sets forth the entire agreement of the parties hereto in respect of
the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of any party hereto in respect of such subject matter. Any prior agreement of
the parties hereto in respect of the subject matter contained herein, including
without limitation, the Employment Agreement, is hereby terminated and canceled
with no rights or claim to any payment or benefits thereunder (including without
limitation any payments or benefits under the Employment Agreement for
termination by the Company without Cause or by Steuterman for Good Reason).
16. Withholding. All payments or benefits under this Agreement (including,
without limitation, the Gross Amount) shall be subject to any required
withholding of Federal, state and local taxes pursuant to any applicable law or
regulation and the Company shall be permitted to take any other action required
to comply with withholding obligations.
17. Press Release. The Company and Steuterman will mutually agree upon the
text of a statement concerning the circumstances of Steuterman's resignation
from the Company, and the Company will inform Steuterman reasonably in advance
of the making of such statement. All subsequent announcements and communications
to be made by the Company in relation to Steuterman's resignation shall be based
upon and consistent with such statement. The Company will inform its directors
and executive officers of this requirement and will take reasonable measures to
cause its directors and officers to comply with it.
18. Noncontravention. The Company represents that the Company is not
prevented from entering into, or performing this Agreement by the terms of any
law, order, rule or regulation, its by-laws or certificate of incorporation, or
any agreement to which it is a party, other than which would not have a material
adverse effect on the Company's ability to enter into or perform this Agreement.
19. Section Headings. The section headings in this Agreement are for
convenience of reference only, and they form no part of this Agreement and shall
not affect its interpretation.
20. Cooperation. For one (1) year after expiration of the Transition
Period, Steuterman agrees upon request of the Company to make himself available
at reasonable times during normal business hours and upon reasonable notice for
the purpose of assisting the Company with responding to questions, depositions,
administrative proceedings and court hearings, executing documents, and
cooperating with Company and its accountants and legal counsel with respect to
claims and litigation of which he has personal or corporate knowledge. The
Company agrees to pay Steuterman a per diem of $2500 per day (including travel
days) for such services and the Company shall reimburse Steuterman for all
reasonable expenses, including, without limitation, travel expenses, incurred in
connection with such service upon the presentation of reasonable itemized
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified with
respect to all senior executive officers.
21. Shareholder Approval. The Company represents and warrants to Steuterman
that no shareholder approval is required for the Company to enter into this
Agreement and provide the benefits hereunder.
22. ACKNOWLEDGMENT. STEUTERMAN REPRESENTS AND AGREES THAT HE FULLY
UNDERSTANDS HIS RIGHT TO DISCUSS ALL ASPECTS OF THIS AGREEMENT WITH LEGAL
COUNSEL AND, TO THE EXTENT HE DEEMS APPROPRIATE, HE HAS FULLY AVAILED HIMSELF OF
THIS
37
<PAGE> 7
RIGHT, AND HE HAS CAREFULLY READ AND FULLY UNDERSTANDS ALL THE PROVISIONS OF
THIS AGREEMENT AND IS VOLUNTARILY ENTERING INTO THEM.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
NEW PLAN EXCEL REALTY TRUST, INC.,
a Maryland corporation
By:/s/ GLENN J. RUFRANO
--------------------------------
Name: Glenn J. Rufrano
------------------------------
Title: President and Chief
Executive Officer
-----------------------------
JAMES M. STEUTERMAN
/s/ James M. Steuterman
-----------------------------------
38
<PAGE> 1
EXHIBIT 12.1
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the three months ended March 31,
2000 is: 1.9 : 1
For purposes of computing these ratios, earnings have been calculated by
adding fixed charges (excluding capitalized interest) to income before
extraordinary items. Fixed charges consist of interest costs, whether expensed
or capitalized, preferred stock dividend requirements, the interest component of
rental expense, if any, and amortization of debt discounts and issue costs,
whether expensed or capitalized.
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
THREE MONTHS ENDED MARCH 31, 2000
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
EARNINGS:
<S> <C>
Net income $27,249
Interest expense (including amortization of debt discount and
issuing costs) 22,573
Equity in loss of affiliate 5,276
Other adjustments 105
-------
$55,203
=======
FIXED CHARGES:
Interest expense (including amortization of debt discount and
issuing costs) $22,573
Capitalized interest 198
Preferred stock dividends 5,659
Other adjustments 105
-------
$28,535
=======
RATIO OF EARNINGS TO FIXED CHARGES 1.9
</TABLE>
39
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 19,207
<SECURITIES> 1,310
<RECEIVABLES> 30,907
<ALLOWANCES> 13,532
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,885,544
<DEPRECIATION> 229,218
<TOTAL-ASSETS> 2,968,552
<CURRENT-LIABILITIES> 0
<BONDS> 1,225,427
0
23
<COMMON> 876
<OTHER-SE> (112,010)
<TOTAL-LIABILITY-AND-EQUITY> 2,968,552
<SALES> 0
<TOTAL-REVENUES> 105,528
<CGS> 0
<TOTAL-COSTS> 54,713
<OTHER-EXPENSES> 238
<LOSS-PROVISION> 754
<INTEREST-EXPENSE> 22,573
<INCOME-PRETAX> 27,249
<INCOME-TAX> 0
<INCOME-CONTINUING> 27,249
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,249
<EPS-BASIC> 0.25
<EPS-DILUTED> 0.25
</TABLE>
