SIZELER PROPERTY INVESTORS INC
10-Q, 1995-08-14
REAL ESTATE INVESTMENT TRUSTS
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<PAGE>
 
                      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 AND
    EXCHANGE ACT OF 1934 

For the quarterly period ended JUNE 30, 1995

                                      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 1-9349

                       SIZELER PROPERTY INVESTORS, INC.
            (Exact name of registrant as specified in its charter)

              DELAWARE                                 72-1082589 
  (State or other jurisdiction             (I.R.S. Employer Identification No.)
of incorporation or organization)

2542 WILLIAMS BOULEVARD, KENNER, LOUISIANA              70062
 (Address of principal executive offices)            (Zip code)

Registrant's telephone number, including area
code                                               (504) 471-6200

-------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report. 

 Indicate by Check   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 (or for such shorter period that the registrant was 
required to file such reports), and (2) has been subject to such filing 
requirements for the past 90 days. Yes  [x]   No  
                                       -----      -----

               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                 PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 Indicate by check mark whether the registrant has filed all documents and 
reports required to be filed by Sections 12, 13 or 15(d) of the Securities 
Exchange Act of 1934 subsequent to the distribution of securities under a plan 
confirmed by a court. Yes           No
                           -----        -----

 APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable 
date.

              8,556,669 shares of Common Stock ($.01 Par Value) were
              outstanding as of August 9, 1995.

                                 Page 1 of 12





<PAGE>
 
               SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES

                                     INDEX

<TABLE> 
<CAPTION> 
                                                                        Page
                                                                      --------
<S>      <C>                                                          <C> 
Part I:  Financial Information
 
         Item 1.  Financial Statements

                  Consolidated Balance Sheets                                3
                  Consolidated Statements of Income                          4
                  Consolidated Statements of Cash Flows                      5
                  Notes to Consolidated Financial Statements               6-7

         Item 2.  Management's Discussion and Analysis of
                  Financial Condition and Results of Operations           8-10

Part II: Other Information

         Item 1.  Legal Proceedings                                         11

         Item 2.  Changes in Securities                                     11

         Item 3.  Defaults upon Senior Securities                           11

         Item 4.  Submission of Matters to a Vote         
                   of Security Holders                                      11

         Item 5.  Other Information                                         11

         Item 6.  Exhibits and Reports on Form 8-K                          11

Signatures                                                                  12


                                       2
</TABLE> 







<PAGE>
 
                                    PART I
                             FINANCIAL STATEMENTS

Item 1.  Financial Statements

               Sizeler Property Investors, Inc. and Subsidiaries
                          Consolidated Balance Sheets

<TABLE> 
<CAPTION> 

                                                June 30,       December 31,
                                                  1995            1994
                                              ------------     ------------
<S>                                           <C>              <C> 
     ASSETS
Real estate investments:
  Land                                        $ 47,671,000     $ 46,918,000
  Buildings and improvements, net of
   accumulated depreciation of $25,055,000
   in 1995 and $21,309,000 in 1994             217,320,000      210,498,000
  Investment in real estate partnership            971,000          973,000
                                              ------------     ------------
                                               265,962,000      258,389,000

Cash and cash equivalents                        1,103,000        1,423,000

Accounts receivable and accrued revenue,
 net of allowance for doubtful accounts
 of $440,000 in 1995 and $321,000 in 1994        2,963,000        2,931,000
Prepaid expenses and other assets                9,231,000        7,180,000
                                              ------------     ------------

              Total Assets                    $279,259,000     $269,923,000
                                              ============     ============

     LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Mortgage notes payable                        $ 77,547,000     $ 42,139,000
Notes payable                                   31,784,000       52,987,000
Accounts payable and accrued expenses            4,650,000        4,119,000
Tenant deposits and advance rents                  959,000          845,000
Commitments and contingencies                           --               --
Minority interest in real estate                  
 partnerships                                      255,000          245,000
                                              ------------     ------------
                                               115,195,000      100,335,000
Convertible subordinated debentures             62,878,000       62,878,000
                                              ------------     ------------
              Total Liabilities                178,073,000      163,213,000
                                              ------------     ------------

SHAREHOLDERS' EQUITY
Preferred stock, 3,000,000 shares
 authorized, none issued                                --               --
Common stock, par value $.01 per share,
 15,000,000 shares authorized, shares
 issued and outstanding--8,929,069
 in 1995 and 8,922,819 in 1994                      89,000           89,000
Additional paid-in capital                     127,264,000      127,199,000
Accumulated distributions in excess of
 net earnings                                  (24,205,000)     (20,551,000)
                                              ------------     ------------
                                               103,148,000      106,737,000

Treasury shares, at cost, 193,500 shares
 in 1995                                        (1,955,000)              --
Unrealized loss on securities                       (7,000)         (27,000)
                                              ------------     ------------
              Total Shareholders' Equity       101,186,000      106,710,000
                                              ------------     ------------

              Total Liabilities and
                    Shareholders' Equity      $279,259,000     $269,923,000
                                              ============     ============

</TABLE> 

                See notes to consolidated financial statements.

                                       3


 





<PAGE>
 
               SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES

                       Consolidated Statements of Income

<TABLE> 
<CAPTION> 
                                    Quarter Ended June 30,    Six Months Ended June 30,
                                    ----------------------    ------------------------- 
                                      1995          1994         1995          1994
                                    -------       --------    ----------     ----------
<S>                               <C>           <C>           <C>           <C> 
OPERATING REVENUE

 Rents and other income           $10,580,000   $ 8,861,000   $21,078,000   $16,413,000
 Equity in income of partnership       31,000        21,000        53,000        30,000
                                  -----------   -----------   -----------   -----------
                                   10,611,000     8,702,000    21,131,000    16,443,000
                                  -----------   -----------   -----------    ----------
OPERATING EXPENSES
 Management & leasing fees            441,000       368,000       963,000       729,000
 Utilities                            457,000       416,000       896,000       766,000
 Real estate taxes                    790,000       618,000     1,578,000     1,117,000
 Operations & maintenance           1,567,000     1,237,000     3,084,000     2,276,000
 Depreciation & amortization        2,101,000     1,472,000     4,046,000     2,786,000
 Other operating expenses             596,000       445,000     1,155,000       829,000
                                  -----------   -----------   -----------    ----------
                                    5,952,000     4,556,000    11,722,000     8,503,000
                                  -----------   -----------   -----------    ----------

    INCOME FROM RENTAL OPERATIONS   4,659,000     4,146,000     9,409,000     7,940,000
                                  -----------   -----------   -----------    ----------
OTHER INCOME (EXPENSES)   
 Interest & dividend income            16,000         7,000        24,000        51,000
 Interest expense                  (3,527,000)   (2,237,000)   (7,078,000)   (4,045,000)
 Administrative expenses             (527,000)     (440,000)   (1,039,000)     (865,000)
                                  -----------   -----------   -----------    ----------
                                    4,038,000     2,670,000     8,093,000     4,859,000
                                  -----------   -----------   -----------    ----------

    INCOME BEFORE GAIN ON SALE OF
     INVESTMENT SECURITIES            621,000     1,476,000     1,316,000     3,081,000
                                  -----------   -----------   -----------    ----------

Gain on sale of investment
 securities                                --            --            --         8,000
                                  -----------   -----------   -----------    ----------
                                           --            --            --         8,000
                                  -----------   -----------   -----------    ----------
   NET INCOME                     $   621,000   $ 1,476,000   $ 1,316,000    $3,089,000
                                  ===========   ===========   ===========    ==========
   Net income per share           $       .07   $      0.17   $      0.15    $     0.35
                                  ===========   ===========   ===========    ==========

</TABLE> 

                See notes to consolidated financial statements.




                                       4


<PAGE>
 
               SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE> 
<CAPTION> 
                                                    Six Months Ended June 30,
                                                        1995         1994
                                                    ------------ ------------

<S>                                                 <C>          <C> 
OPERATING ACTIVITIES:
 Net income                                         $ 1,316,000  $  3,089,000
 Adjustments to reconcile net income to net cash
  provided by operating activities:
  Depreciation                                        4,046,000     2,786,000
  Gain on sale of investment securities                      --        (8,000)
  Equity in depreciation of real estate partnership,
   net of minority interest depreciation                  2,000        20,000
  Changes in operating assets and liabilities:
   Increase in accounts receivable and accrued
    revenue                                             (32,000)      (37,000)
   Increase in prepaid expenses and other assets       (120,000)     (268,000)
   Increase in accounts payable and accrued
    expense                                             826,000     1,048,000
   Increase in tenant deposits and advance rents        114,000       289,000
                                                    -----------  ------------
    Net Cash Provided by Operating Activities         6,152,000     6,919,000
                                                    -----------  ------------
INVESTING ACTIVITIES:
 Acquisitions of real estate investments, net of 
  debt assumed                                       (4,747,000)  (29,808,000)
 Improvements to real estate investments             (6,867,000)   (3,309,000)
                                                    -----------  ------------
    Net Cash Used In Investing Activities           (11,614,000)  (33,117,000)
                                                    -----------  ------------
FINANCING ACTIVITIES:
 Proceeds from mortgage notes payable and notes
  payable to banks                                   35,825,000    29,500,000
 Principal payments on mortgage notes payable and
  notes payable to banks                            (21,620,000)   (3,154,000)
 Debt issuance costs and mortgage escrow deposits    (2,214,000)     (150,000)
 Cash dividends paid                                 (4,969,000)   (4,811,000)
 Issuance of shares pursuant to stock options/
  ownership plans                                        65,000       125,000

 Purchases of treasury shares                        (1,955,000)
 Minority interest in real estate partnerships           10,000        20,000
                                                    -----------  ------------
    Net Cash Provided By Financing
     Activities                                       5,142,000    21,530,000
                                                    -----------  ------------
 Net increase (decrease) in cash and cash
  equivalents                                          (320,000)   (4,668,000)
 Cash and cash equivalents at beginning of year       1,423,000     6,299,000
                                                    -----------  ------------
    CASH AND CASH EQUIVALENTS AT END OF PERIOD      $ 1,103,000  $  1,631,000
                                                    ===========  ============
</TABLE> 

                See notes to consolidated financial statements.

                                       5


<PAGE>
 
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1995

NOTES A--SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION: The accompanying consolidated financial statements have 
been prepared in accordance with generally accepted accounting principles for 
interim financial information and with instructions to Form 10-Q and Article 10 
of Regulation S-X. Accordingly, they do not include all of the information and 
footnotes required by generally accepted accounting principles for complete 
financial statements. In the opinion of management, all adjustments (consisting 
of normal recurring accruals) necessary for a fair presentation have been 
included. Operating results for the three-month period ended June 30,1995, are 
not necessarily indicative of the results that may be expected for the year 
ending December 31, 1995. The consolidated balance sheet at December 31, 1994 
has been derived from the audited consolidated financial statements at that 
date, but does not include all of the information and footnotes required by 
generally accepted accounting principles for complete financial statements. For 
further information, refer to the consolidated financial statements and 
footnotes thereto included in the Sizeler Property Investors, Inc. Annual Report
on Form 10-K for the year ended December 31, 1994.

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the 
accounts of Sizeler Property Investors, Inc. and its majority-owned subsidiaries
and partnerships (the "Company"). All significant intercompany transactions and 
accounts have been eliminated in consolidation.

REAL ESTATE INVESTMENTS: Real estate investments are carried at cost. 
Depreciation of buildings and improvements is provided by the straight-line 
method over the estimated useful lives of the assets, ranging from ten to forty 
years. Maintenance and repairs are expensed in the period incurred.

INVESTMENT IN REAL ESTATE PARTNERSHIP: An investment in a partnership for which 
the Company owns a 50% interest is accounted for by use of the equity method.

RENTAL INCOME: Rental income includes rents from shopping center and apartment 
properties. Minimum rents from shopping center leases are accounted for ratably 
over the term of the lease. Percentage rents are recognized based upon tenant 
sales that exceed specified levels. Tenant reimbursements are recognized as the 
applicable services are rendered or related expenses incurred.

INCOME TAXES: The Company has elected to be taxed as a real estate investment 
trust (REIT) under the Internal Revenue Code and intends to maintain its 
qualification as a REIT in the future. Accordingly, no provision for federal or 
state income taxes was made.

A real estate investment trust is required to distribute to shareholders at 
least 95% of its ordinary taxable income. Taxable income differs from net income
for financial reporting purposes principally because of differences in the 
method and timing of depreciation of the properties.

EARNINGS PER SHARE: Primary earnings per share is based upon the weighted 
average number of shares outstanding. The weighted average number of shares 
outstanding were 8,791,000 and 8,909,000 for the three months ended

                                       6
<PAGE>
 
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1995

NOTE A--SIGNIFICANT ACCOUNTING POLICIES (continued)

June 30, 1995 and 1994, respectively, and 8,857,000 and 8,905,000 for the six
months ended June 30, 1995 and 1994, respectively.

Fully-diluted per share amounts are similarly computed, but include the effect, 
when dilutive, of the Company's common stock equivalents. The Company's 
outstanding debentures and options are excluded in these calculations for 1995 
and 1994, due to their antidilutive effect.

NOTE B--MORTGAGE NOTES PAYABLE

The Company's mortgage notes payable are secured by certain land, buildings, and
improvements. The respective book values of the mortgaged properties and related
mortgage balances at June 30, 1995, are as follows:

<TABLE> 
<CAPTION> 

      Interest       Maturity               Book              Mortgage
        Rate           Date                 Value             Balance
      --------    -------------        ------------         -----------
      <S>         <C>                  <C>                  <C>
        9.75%     Sept. 1, 1996        $  4,605,000         $ 3,491,000
        8.35%     Nov.  1, 1996          35,304,000          22,750,000
        9.00%     Mar.  1, 1997           3,380,000           2,246,000
       10.88%     Dec.  1, 1999           4,587,000           3,576,000
        9.00%     Dec. 27, 1999           4,031,000           2,207,000
        9.47%     Feb.  1, 2000          18,318,000          12,025,000
        9.47%     Feb.  1, 2000          12,021,000           7,800,000
        8.35%     May   1, 2000          27,664,000          16,000,000
        8.25%     July  1, 2000          10,511,000           6,884,000
        8.50%     July 15, 2003           4,330,000             568,000
                                       ------------         -----------
                                       $100,818,000         $77,547,000
                                       ============         ===========
</TABLE> 

NOTE C--ISSUANCE OF COMMON STOCK AND CONVERTIBLE SUBORDINATED DEBENTURES

On March 7, 1994, the Company filed a shelf Registration Statement (Form S-3)
with the Securities and Exchange Commission, pursuant to which it may offer for
sale, from time to time, convertible subordinated debentures, preferred stock,
or common stock, with a cumulative public offering price of up to $150 million.
To date, no securities have been issued pursuant to this Registration.

                                       7

<PAGE>
 
FINANCIAL INFORMATION (continued)
RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
OF OPERATIONS.

COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994.

     Operating revenue from all properties in the portfolio for the quarter 
ended June 30, 1995, compared to 1994, increased $1.9 million (22%), due 
principally to newly-acquired properties, and, to a lesser extent, higher rental
rates on properties which were a part of the Company's portfolio during both 
comparative periods. Revenue from shopping centers and apartments increased $1.4
million and $499,000, respectively. Rental operating expenses of all properties 
increased $1.4 million (31%); rental operating expenses of shopping centers and 
apartments increased $968,000 and $428,000, respectively. Income from rental 
operations of all properties increased $513,000 (12%); income from rental 
operations of shopping centers and apartments increased $463,000 and $629,000, 
respectively. The reported increases in operating revenue, operating expenses, 
and income from rental operations were due principally to newly-acquired 
properties.

     Operating revenue from properties owned during both comparable periods 
increased $82,000 (1%) in 1995, attributable to higher rental rates and higher 
average occupancies at certain of the Company's properties. Income from rental 
operations of these properties decreased $151,000 (4%) for the quarter ended 
June 30, 1995, compared to 1994, primarily attributable to an increase in 
depreciation expense resulting from capital improvements completed at several of
the Company's properties during 1994 and 1995. At June 30, 1995, the Company's 
shopping center and apartment properties were 96% and 97% leased, respectively.

     Interest expense increased $1.3 million for the quarter ended June 30, 
1995, compared to that of 1994, attributable to the following: (1) an increase 
of $1.2 million in mortgage interest expense resulting from mortgage debt 
assumed in the third quarter of 1994 for the term financing of the North Shore 
Square Shopping Mall ($22.8 million principal amount at 8.35%); mortgage 
financing completed in the first quarter of 1995 on the Lafayette Square, 
Hampton Park, and Pine Bend Apartments ($19.8 million principal amount at 
9.47%); and mortgage financing completed in the second quarter of 1995 on the 
Lakeview Club Apartments ($16.0 million principal amount at 8.35%); and (2) 
$129,000 of interest expense on bank debt (average bank borrowings were 
approximately $37.3 million and $17.8 million, with an average rate of interest 
of 8.2% and 7.0% for the second quarter of 1995 and 1994, respectively).

     Administrative expenses increased $87,000 (20%) for the quarter ended June 
30, 1995, compared to 1994, principally attributable to increased payroll costs,
professional fees, and other administrative costs associated with the Company's 
increased portfolio size and capital structure.

     Net income decreased between the quarters ended June 30, 1995 and 1994 in
the aggregate and on a per-share basis. The decrease was attributable to an
increase in income from rental operations principally offset by increased
depreciation expense relative to the Company's additional investment in real
estate properties and higher interest expense resulting from increased
borrowings and higher interest rates.

                                       8

<PAGE>
 
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994.

     Operating revenue from all properties in the portfolio for the six months 
ended June 30, 1995, compared to the same period in 1994 increased $4.69 million
(29%), due principally to newly-acquired properties and, to a lesser extent, 
higher rental rates on properties which were a part of the portfolio during both
comparable periods; revenue from shopping centers and apartments increased $2.99
million and $1.70 million, respectively; rental operating expenses of all 
properties increased $3.22 million (39%); rental operating expenses of shopping 
centers and apartments increased $1.97 million and $1.24 million, respectively; 
and income from rental operations of all properties increased $1.47 million 
(18%); income from rental operations of shopping centers and apartments 
increased $1.02 million and $458,000, respectively. The reported increases in 
operating revenue, operating expenses, and income from rental operations were 
due principally to newly-acquired properties.

     Operating revenue from properties owned during both comparable periods 
increased $411,000 (3%) in 1995, attributable to higher rental rates and higher 
average occupancies at several of the Company's properties. Rental operating 
expenses of these properties increased $592,000 (8%), due to higher maintenance 
and repair, payroll, insurance costs, and depreciation expense. Income from 
rental operations of these properties decreased $181,000 (2%) in the first six 
months of 1995, compared to the same period a year ago, principally attributable
to the increase in depreciation expense resulting from capital improvements 
completed at several of the Company's properties during 1994 and 1995.

     Interest, dividend, and other income decreased $25,000 in the first six 
months of 1995, compared to the same period a year ago, due to the Company 
selling a portion of its investments in marketable securities in 1994.

     Interest expense increased $3.03 million (75%) for the six-month period 
ended June 30, 1995, compared to the same period in 1994, attributable to (1) an
increase of $2.04 million in mortgage interest expense resulting from mortgage 
debt assumed in the third quarter of 1994 for the term financing of the North 
Shore Square Shopping Mall ($22.8 million principal amount at 8.35%); mortgage
financing completed in the first quarter of 1995 on the Lafayette Square,
Hampton Park, and Pine Bend Apartments ($19.8 million principal amount at
9.47%); and mortgage financing completed in the second quarter of 1995 on the
Lakeview Club Apartments ($16.0 million principal amount at 8.35%); (2) $993,000
of interest expense on bank debt, due to higher average interest rates on
borrowed funds used to finance new acquisitions (average borrowings were
approximately $41.6 million and $14.6 million, with an average interest rate of
8.3% and 6.9%, for the 1995 and 1994 periods, respectively).

     Administrative expenses increased $174,000 (20%) in the six months ended 
June 30, 1995, as compared to the same period of 1994. The increase is 
principally attributable to the same factors described above in the three-month 
comparison.

     The decrease in net income between 1995 and 1994 is principally 
attributable to the same factors described above in the three-month comparison, 
and to a lesser degree, was affected by the recognition of an $8,000 (less than 
$.01 per share) gain on sale of the Company's investments in marketable 
securities in 1994.

                                       9
<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES

     The primary source of working capital for the Company is net cash provided 
by operating activities, from which the Company funds normal operating
requirements and distributions to shareholders. In addition, the Company
maintains unsecured credit lines with commercial banks, which it utilizes to
temporarily finance the cost of portfolio growth, property improvements, and
other expenditures.

     At the beginning of 1995, the Company had $1.4 million of cash and cash 
equivalents and $78 million of bank lines of credit, of which $25 million was 
available. During the first six months of 1995, these lines of credit were 
increased to $95 million, of which $63.2 million was available as of June 30,
1995.

     Net cash flows from operating activities decreased $767,000 in the first
six months of 1995 compared to 1994. The decrease was primarily attributable to
the reduction in net income, offset by increased depreciation expense, as a
result of the factors described in the previous section.

     Net cash flows used in investing activities decreased $21.5 million in 1995
from 1994. This decrease is attributable to a reduction in the Company's
property acquisition program during the first six months of 1995 compared to
1994. In January 1995, the Company acquired the Jamestown Estates Apartments in
Pensacola, Florida, at a cost of $4.75 million. During the first six months of
1994 the Company acquired additional land adjoining the Lantana Plaza Shopping
Center and acquired the Lakeview Club Apartments at costs of $1.8 million and
$27.6 million, respectively. The increase in the cost of improvements to real
estate properties during 1995 was attributable to renovation programs at the
Company's Southland Mall Shopping Center and Westward Shopping Center, both of
which were substantially complete as of June 30, 1995.

     Net cash flows from financing activities decreased $16.4 million in 1995 
from 1994, primarily attributable to a reduction in incremental borrowings
related to the Company's acquisition program as described above. During the
first six months of 1995, the Company mortgaged four of its apartment
properties, three of which were for a combined loan amount of $19.8 million, and
one for a loan amount of $16.0 million, at fixed rates of interest of 9.47% and
8.35%, respectively. Proceeds from the financings were used to pay down
outstanding borrowings from the Company's bank lines of credit and to fund
investing activities and other cash requirements. In connection with these
mortgage financings, and a financing assumed subsequent to the second quarter
of 1994, the Company paid $ 2.1 million in debt issuance costs and mortgage
escrow deposits during 1995. In June, 1995, the Company paid off a mortgage loan
encumbering one of its properties ($293,000 remaining principal balance). In
February, 1995, the Company announced that its board of directors authorized a
program pursuant to which it may repurchase up to an aggregate of $10 million of
its common stock and convertible subordinated debentures. Pursuant to this
program, the Company acquired 193,500 shares of its common stock at a cost of
$1,955,000, during the first six months of 1995.

     As of June 30, 1995, eleven of the Company's properties, comprising 
approximately 45% of its gross investment in real estate, were subject to a 
total of $77.5 million in mortgage debt, all of which bears a fixed rate of 
interest for a fixed term. The remainder of the portfolio is available for
additional debt financing, if determined appropriate. The Company anticipates
that its current cash balance, operating cash flows and borrowings (including
borrowings under its lines of credit) will be adequate to fund the Company's
future (i) operating the administrative expenses, (ii) debt service obligations,
(iii) distributions to shareholders, (iv) capital improvements, and (v) normal
repair and maintenance expenses at its properties.

     The Company's current dividend policy is to pay quarterly dividends to 
shareholders, based upon, among other factors, funds from operations. Because
funds from operations excludes the deduction of non-cash charges, principally
depreciation and non-operating items, quarterly dividends will typically be
greater than net income and may include a tax-deferred return of capital
component. On August 3, 1995, the Company's Board of Directors declared a cash
dividend with respect to the period April 1, 1995 through June 30, 1995, of
$.28 per share, payable to shareholders of record as of August 22, 1995, on
September 5, 1995.

                                      10
<PAGE>
 
FUNDS FROM OPERATIONS

     Funds from operations is defined by the Company as net income, excluding 
gains (or losses) from sales of property and other non-operating extraordinary 
items, plus depreciation, and after adjustments for unconsolidated partnerships 
to reflect funds from operations on the same basis. Funds from operations does 
not represent cash flows from operations as defined by generally accepted 
accounting principles, nor is it indicative that cash flows are adequate to fund
all cash needs. Funds from operations is not to be considered as an alternative
to net income as defined by generally accepted accounting principles or to cash
flows as a measure of liquidity. Real estate industry analysts utilize the
concept of funds from operations as an important measure of a REIT's financial
performance. The Company considers funds from operations in evaluating its
operating results, and its dividend policy is also based, in part, on the
concept of funds from operations.

     For the quarter ended June 30, 1995, funds from operations totalled $2.7
million, a decrease of $230,000 (8%), and for the six months ended June 30, 
1995, $5.4 million, a decrease of $523,000 (8.9%), over the same respective
periods in 1994. During the first six months of 1995, funds from operations was
affected by several factors, as described above. The operating performance of
the Company's real estate properties experienced overall growth in income from
rental operations, in line with the Company's expectations. However, rising
interest rates, combined with a higher level of borrowings, resulted in
increased interest expense, and a negative impact on 1995 funds from operations.

EFFECTS OF INFLATION

     Substantially all of the Company's retail leases contain provisions 
designed to provide the Company with a hedge against inflation. Most of the 
Company's retail leases contain provisions which enable the Company to receive 
percentage rentals based on tenant sales in excess of a stated breakpoint and/or
provide for periodic increases in minimum rent during the lease term. Also, the 
majority of the Company's retail leases are for terms of less than ten years, 
which allows the Company to adjust rentals to changing market conditions. In 
addition, most retail leases require tenants to contribute towards property 
operating expenses, thereby reducing the Company's exposure to higher costs 
caused by inflation. Apartment leases are written for short terms, generally six
to twelve months.

                                      11
<PAGE>
 
                                    PART II
                               OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         There are no pending legal proceedings to which the Company is a party
         or to which any of its properties is subject, which in the opinion of
         management has resulted or will result in any materially adverse effect
         on the financial position of the Company.

ITEM 2.  CHANGES IN SECURITIES.

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.

ITEM 5.  OTHER INFORMATION.

         None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a)  Exhibits

              10A  Severance Agreement between the Company and Thomas A. 
                   Masilla, Jr., dated June 1, 1995.

              10B  Non-elective Deferred Compensation Agreement between the 
                   Company and Thomas A. Masilla, Jr., dated June 1, 1995.

              27   Financial Data Schedule.

         (b)  Reports on Form 8-K

              None.

                                      12


<PAGE>
 
                                  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.



                                        SIZELER PROPERTY INVESTORS, INC.
                                  -------------------------------------------
                                                 (Registrant)




                             BY:          /s/ John J. Gilluly, Jr.
                                  -------------------------------------------
                                             John J. Gilluly, Jr.
                                           Vice President/Treasurer
                                           Principal Financial and
                                             Accounting Officer



Date:  August 14, 1995
     ---------------------

                                      13

<PAGE>
 
                                                                     EXHIBIT 10A

                              SEVERANCE AGREEMENT


          THIS AGREEMENT, entered into this 1st day of June 1995, by and between
Sizeler Property Investors, Inc., a Delaware corporation qualified as a real
estate investment trust ("SPI"), with principal offices at 2542 Williams
Boulevard, Kenner, Louisiana, and THOMAS A. MASILLA, JR., an individual residing
in Metairie, Louisiana ("Executive").

                                R E C I T A L S

          A.   The Board of Directors of SPI (the "Board") believes it to be in
the best interests of SPI and its shareholders to assure the Executive's
continued service to SPI, and Executive agrees to continue in the service of SPI
under the terms set forth below.

          B.   The Board, considering the potential for adverse effects on SPI
and on the work environment and executive morale were there a proposal for a
change in control of SPI, has determined that appropriate steps should be taken
to reinforce and encourage Executive's continued attention and devotion to his
duties without distraction notwithstanding such a proposal.

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

          1.   Employment.  SPI shall continue to employ Executive, and
Executive shall remain in the employ of SPI, under the terms set forth in this
agreement.

          2.   Responsibilities.  SPI shall employ Executive, and Executive
shall serve SPI, during the term of this Agreement in such executive capacity as
may be specified from time to time by the Board.  Executive shall, during the
term of this agreement, devote his full time and attention to and exert his best
efforts in the performance of his duties toward SPI, provided, however, that
with the approval of the Board, Executive may serve on the board of directors or
trustees of, or hold other positions with respect to, Sizeler Realty Co., Inc.
("SRC"), and other companies and organizations.

          3.   Term.  This agreement shall take effect as of June 1, 1995, and
shall terminate on May 31, 1997, provided, however, that on the first day of
each month following June 1, 1995, this agreement shall automatically be
extended to cover the 24-month period beginning on such date.  Notwithstanding
the preceding provisions of this paragraph, this agreement may be terminated at
any time in accordance with the provisions of paragraph 5 or 6 below.

          4.   Compensation.  Except as provided in paragraphs 5 and 6 below,
SPI shall pay to Executive as compensation for his services under this agreement
a base salary at the annual rate of not less than $160,000, in accordance with
the customary payroll practices of SPI, for the term of this agreement.  As
used in this agreement, the term "base
<PAGE>
 
salary" shall mean the amount stated in the preceding sentence or such greater
amount as the Board may, from time to time, designate as Executive's base
salary.  Executive may participate in such bonus, stock option, deferred
compensation, employee benefit, and fringe benefit plans or arrangements as the
Board may from time to time determine.

          5.   Termination of Agreement.

               5.1  General.  This agreement may be terminated at any time under
the following terms except to the extent paragraph 6, with respect to a Change
in Control, is applicable.  Any termination of this agreement under this
paragraph 5 shall be subject to the provisions of paragraphs 5.2, 7, 9, and 14,
which shall survive the termination.

                    5.1.1  Without Cause.  Executive serves as an officer and
executive of SPI at the pleasure of the Board.

                           5.1.1(A) The Board may terminate Executive's
employment with SPI and this agreement at any time without a determination of
Cause (as defined below), by written notice to Executive.

                           5.1.1(B) The Board may terminate this agreement at
any time without a determination of Cause and without requiring the termination
of Executive's employment with SPI, by written notice to Executive.

                    5.1.2  Cause.  Upon a determination by the Board that
Executive has breached or neglected his duties to SPI (such conduct by Executive
being referred to in this agreement as "Cause"), the Board may terminate
Executive's employment with SPI and this agreement by written notice to
Executive.

                    5.1.3  Death.  This agreement shall terminate upon
Executive's death.

                    5.1.4  Disability.  Upon a determination by the Board that
Executive is unable to perform his duties to SPI under this agreement by reason
of illness or other incapacity that will qualify Executive for benefits under
any long term disability arrangement or policy maintained with respect to
Executive's employment with SPI (such condition of Executive being referred to
in this agreement as "Disability"), the Board may terminate Executive's
employment with SPI and this agreement by written notice to Executive.

                    5.1.5  Voluntary Resignation.  Executive may terminate this
agreement at any time by submitting his resignation with at least 30 days prior
written notice to the Board.

                                       2
<PAGE>
 
               5.2  Obligations upon Termination.

                    5.2.1  Without Cause.

                           5.2.1(A) Should SPI terminate this agreement without
Cause in accordance with paragraph 5.1.1 above, SPI shall pay to Executive an
amount equal to the base salary that would have been payable under paragraph 4
for the 24-month period beginning on the date of termination of this agreement,
at the rate in effect on the date of termination and at the times such salary
would otherwise have been payable.  Furthermore, Executive shall continue to
participate for such 24-month period in any life, disability, accident and
health insurance benefits substantially similar to those Executive was receiving
or entitled to receive from SPI immediately before notice of termination or, at
SPI's option, such life, disability, accident and health insurance benefits as
may be generally in effect for executives of SPI during that period.  In the
case of a termination under paragraph 5.1.1(B), the provisions of this paragraph
shall be applicable whether or not Executive's employment with SPI continues.

                           5.2.1(B) Should SPI terminate this agreement without
Cause and without requiring the termination of Executive's employment under
paragraph 5.1.1(B), and should SPI and Executive agree upon terms regarding the
continuation of Executive's employment with SPI, such terms whether written or
oral shall be subject (i) to paragraph 5.2.1(A) above, and (ii), if the
termination of this agreement occurs within 24 months after a Change in Control
(as defined in paragraph 6 below), to the survival of paragraph 6 below, unless
Executive specifically waives such provisions.

                    5.2.2  With Cause or Voluntary Resignation.  Should SPI
terminate this agreement with Cause in accordance with paragraph 5.1.2 above, or
should the agreement terminate upon Executive's voluntary resignation in
accordance with paragraph 5.1.5 above, SPI shall pay Executive's base salary
through the date of termination at the rate in effect immediately before the
earlier of the date of termination or notice of termination or resignation and
shall pay any amounts to which Executive is entitled at date of termination
under any compensation plans, programs, or other agreements then in effect, and
SPI shall have no further obligations to Executive under this agreement.

                    5.2.3  Upon Death.

                           5.2.3(A) Should this agreement terminate upon
Executive's death in accordance with paragraph 5.1.3 above, SPI shall pay a
death benefit to Executive's designated beneficiary or beneficiaries or, if
Executive has not designated a beneficiary or no designated beneficiary survives
Executive, to the executor or administrator of Executive's estate.  The death
benefit shall equal the base salary that would have been payable to Executive
under paragraph 4 for the 24-month period beginning on the date of Executive's
death, at the rate in effect on such date and at the times such salary would
otherwise have been payable.

                                       3
<PAGE>
 
                  5.2.3(B) Executive may designate a beneficiary or
beneficiaries for purposes of this agreement.  The designation of beneficiary
shall be made in writing, shall not be effective unless filed with the Secretary
of SPI before Executive's death, and may be changed or revoked at any time
without notice to any beneficiary by the filing of a subsequent designation with
the Secretary.  If Executive designates more than one beneficiary, each shall
share equally unless Executive specifies a different allocation or preference.

                    5.2.4  Upon Disability.  Should SPI terminate this agreement
on account of Executive's Disability in accordance with paragraph 5.1.4 above,
SPI shall pay to Executive an amount equal to the difference between (i) the
base salary that would have been payable under paragraph 4 for the 24-month
period beginning on the date of termination at the rate in effect on the date of
termination and at the time such salary would otherwise have been payable, and
(ii) the amount payable to Executive during such period under any long term
disability arrangement or insurance policy maintained with respect to
Executive's employment with SPI, except that SPI's obligation to pay such amount
shall cease to the extent that payment by SPI would reduce the amount payable to
Executive under any long term disability arrangement or insurance policy.

          6.   Change in Control.

               6.1  Definitions.  For the purposes of this paragraph 6, the
following definitions shall apply:

                    6.1.1  "Acquiring Person" shall mean any Person who or which
together with all Affiliates and Associates of such Person, without the prior
approval of a majority of the Continuing Directors, shall be the Beneficial
Owner of 20 percent or more of the shares of Common Stock then outstanding,
provided, however, that Acquiring Person shall not mean (i) SPI, (ii) any
Subsidiary of SPI, (iii) any employee benefit plan of SPI or any Subsidiary of
SPI, (iv) any entity holding shares of Common Stock organized, appointed, or
established by SPI or any of its Subsidiaries for or pursuant to the terms of
any such plan, (v) Sidney W. Lassen, together with his spouse, descendants and
any trust established for the benefit of Sidney W. Lassen, his spouse and
descendants or any one or more of them or (vi) SRC.

                    6.1.2  "Person" shall mean any individual, firm,
corporation, partnership or other entity and shall include any successor (by
merger or otherwise) of such entity.

                    6.1.3  "Affiliate" shall mean, with respect to a specified
Person, a Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the Person specified.

                                       4
<PAGE>
 
                    6.1.4 "Associate" shall mean, with respect to a specified
Person, (i) any corporation or organization (other than SPI or SRC or a
Subsidiary of SPI or SRC) of which such Person is an officer or partner or is,
directly or indirectly, the Beneficial Owner of 10 percent or more of any class
of equity security as defined in Rule 3a-11 of the General Rules and Regulations
under the Exchange Act, (ii) any trust or other estate in which such Person has
a substantial beneficial interest or as to which such Person serves as trustee
or in a similar fiduciary capacity, and (iii) any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such Person, or
is an officer or director of any corporation controlling or controlled by such
Person.

                    6.1.5  "Subsidiary" shall mean, with reference to any
Person, any corporation of which a majority of any class of equity security is
Beneficially Owned, directly or indirectly, by such Person.

                    6.1.6  "Beneficial Ownership" shall be determined pursuant
to Rule 13d-3 of the General Rules and Regulations under the Exchange Act (or
any successor rule or statutory provision) or, if Rule 13d-3 shall be rescinded
and there shall be no successor rule or statutory provision thereto, pursuant to
Rule 13d-3 as in effect on the date of this agreement; provided, however, that a
Person shall, in any event, also be deemed to be the "Beneficial Owner" of any
securities:

                           6.1.6(A) which such Person or any Affiliate or
Associate thereof beneficially owns, directly or indirectly;

                           6.1.6(B) which such Person or any Affiliate or
Associate thereof, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," (i) securities
tendered pursuant to a tender or exchange offer made by such Person or any
Affiliate or Associate thereof until the tendered securities are accepted for
purchase or exchange, or (ii) securities issuable upon exercise of rights;

                           6.1.6(C) which such Person or any Affiliate or
Associate thereof, directly or indirectly, has sole or shared voting or
investment power with respect thereto pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (C) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding (i) arises solely from a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations under the
Exchange Act, and (ii) is not also then reportable by such Person on Schedule
13D under the Exchange Act; or

                                       5
<PAGE>
 
                           6.1.6(D) which are beneficially owned, directly or
indirectly, by any other Person or any Affiliate or Associate thereof with which
such Person or any Affiliate or Associate thereof has any agreement, arrangement
or understanding (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in
subparagraph (C) of this paragraph 6.1.6) or disposing of any voting securities
of the Company.

                    6.1.7  "Common Stock" shall mean the common stock, par value
$.01 per share, of SPI.

                    6.1.8  "Continuing Director" shall mean any director of the
Company who is not an Acquiring Person or a representative or nominee of an
Acquiring Person, and who (i) was elected by the stockholders or appointed by
the Board prior to the date as of which the Acquiring Person in question became
an Acquiring Person, or (ii) was designated (before his initial election or
appointment as a director) as a Continuing Director by a majority of the Whole
Board, but only if a majority of the Whole Board shall then consist of
Continuing Directors, or, if a majority of the Whole Board shall not then
consist of Continuing Directors, by a majority of the then Continuing Directors.

                    6.1.9  "Whole Board" shall mean the total number of
directors SPI would have if there were no vacancy on the Board.

                    6.1.10 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.

                    6.1.11 "Adverse Circumstances" shall mean any of the
following sets of circumstances surrounding the termination of Executive's
employment with SPI after a Change in Control:

                           6.1.11(A)  The termination or notice of termination
of Executive's employment with SPI without Breach of Duty.

                           6.1.11(B)  The assignment to Executive of any duties
inconsistent with his status as an executive of SPI, the removal of Executive
from the position he held before the Change in Control of SPI, or a substantial
diminution in the nature or status of the Executive's responsibilities from
those in effect immediately before the Change in Control.

                           6.1.11(C)  A reduction by SPI in Executive's annual
base salary as in effect on the date immediately before the Change in Control or
as the same may be increased from time to time.

                           6.1.11(D)  Either the relocation of the executive
office of SPI or the relocation of Executive's individual office in Kenner,
Louisiana, to a

                                       6
<PAGE>
 
location outside of the New Orleans Standard Metropolitan Statistical Area
(SMSA) so as to require Executive to be based anywhere other than in the New
Orleans SMSA except for required travel on the business of SPI and its
subsidiaries to an extent substantially consistent with Executive's present
business travel obligations.

                    6.1.12 "Breach of Duty" shall mean a determination by two-
thirds of SPI's Continuing Directors of Executive's willful breach of duty in
the course of his employment that is demonstrably and materially injurious to
SPI, monetarily or otherwise, or that Executive neglected his employment duties.
For purposes of this paragraph 6, no act, or failure to act, on Executive's part
shall be deemed willful unless done, or omitted to be done, in bad faith and
without Executive's reasonable belief that the action or omission was in the
best interest of SPI.  Notwithstanding the foregoing, Executive's employment
shall not be deemed to have been terminated for Breach of Duty unless and until
there shall have been delivered to him a copy of a resolution duly adopted by
the requisite vote of the Continuing Directors at a meeting of the Continuing
Directors called and held for such purpose (after reasonable notice to Executive
and an opportunity for Executive, together with counsel, to be heard before the
Continuing Directors), finding that in the good faith opinion of the Continuing
Directors Executive was guilty of conduct set forth above in this paragraph
6.1.12 and specifying the particulars of such conduct in detail.

               6.2  Change in Control Defined; Effect of Change in Control.  For
purposes of this agreement, a "Change in Control" shall have occurred when (i)
any Person shall have become an Acquiring Person, and (ii) a majority of the
Board of SPI shall not be Continuing Directors.

          Paragraph 6.3 shall apply to determine SPI's and Executive's rights
and obligations under this agreement if Executive's employment with SPI
terminates other than by reason of death or Disability (as defined in paragraph
5.1.4) within 24 months following a Change of Control of SPI and either (i) this
agreement has not been terminated before such termination of employment, or (ii)
SPI had terminated this agreement under paragraph 5.1.1(B) coincident with or
following the Change in Control.

               6.3  Rights and Obligations upon Termination of Employment Other
Than by Reason of Death or Disability Following a Change in Control of SPI.  The
following provisions shall apply under the circumstances described in paragraph
6.2:

                    6.3.1  Should SPI terminate Executive's employment for
Breach of Duty or should Executive's employment with SPI terminate under
circumstances other than those described above as Adverse Circumstances, SPI
shall pay Executive's base salary through the date of termination of employment
at the rate in effect at the time notice of termination is given and shall pay
any amounts to which Executive is entitled at date of termination of employment
under any other compensation plans, programs, or agreements then in effect, and
SPI shall have no further obligations to Executive under this agreement.

                                       7
<PAGE>
 
                    6.3.2 Should Executive's employment with SPI terminate under
circumstances described above as Adverse Circumstances, then, subject to
paragraph 6.3.2(E), Executive shall be entitled to the payments and benefits
described in paragraphs 6.3.2(A) through 6.3.2(D) (the "Severance Benefit") in
lieu of any other rights or benefits under this agreement.

                           6.3.2(A) SPI shall pay to Executive his base salary
through the date of termination of employment at the rate in effect at the time
notice of termination is given.  Payment shall be made no later than the fifth
business day following the date of termination.  SPI shall also pay to Executive
all other amounts to which Executive is entitled at date of termination of
employment under any compensation plans, programs, or agreements then in effect.
For purposes of this agreement, a "business day" means a day that is not a
Saturday, Sunday or legal holiday on which banks may remain closed in New
Orleans, Louisiana;

                           6.3.2(B) SPI shall also pay to Executive a severance
payment (the "Severance Payment") that will equal two times the total of: (i)
the base annual salary payable to Executive at the rate in effect on the date of
notice of termination of employment, and (ii) one-half of the total of any
amounts that were, during the 24-month period preceding the date of termination,
credited to Executive as a nonelective deferral under any deferred compensation
arrangement between SPI and Executive, and (iii) one-half of the total amount of
any bonuses or awards paid to Executive as an employee of SPI during the 24-
month period preceding the date of termination, including any bonus or award
paid in the forms of shares of Common Stock of SPI, but excluding any bonus or
award paid in the form of options relating to securities of SPI.  (For the
purposes of the preceding sentence, shares of Common Stock of SPI shall be taken
into account at their value on the date of the bonus or award as determined
under the terms of the plan under which the bonus or award was paid or, if the
plan does not provide for such a valuation, as determined in good faith by the
Board of Directors of SPI.)  SPI shall pay the Severance Payment in a lump sum
no later than the fifth business day following the date of termination.

                           6.3.2(C) SPI shall also pay to Executive an amount
equal to all reasonable legal fees and expenses incurred by Executive as a
result of such termination (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in seeking to obtain
or enforce any right or benefit provided by this agreement) provided that it is
finally determined that Executive is entitled to a Severance Payment under this
agreement by a final judgment, order, or decree of a court of competent
jurisdiction (which is not appealable or the time for appeal therefrom having
expired and no appeal having been perfected).

                           6.3.2(D) SPI shall arrange to provide Executive with
life, disability, accident, and health insurance benefits substantially similar
to those Executive was receiving or entitled to receive from SPI immediately
before termination; such provision shall continue until the expiration of the
24-month period following the date of

                                       8
<PAGE>
 
termination of Executive's employment or, if earlier, the date upon which
Executive becomes eligible for comparable benefits in connection with subsequent
employment.

                           6.3.2(E) The Severance Benefit shall be reduced as
described below if SPI would, by reason of section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), not be entitled to deduct for federal
income tax purposes any part of the Severance Benefit or any part of any other
payment or benefit to which Executive is entitled under any plan or program.
For the purposes of this agreement, SPI's independent auditors shall determine
the value of any deferred payments or benefits in accordance with the principles
of section 280G of the Code, and tax counsel selected by SPI's independent
auditors and acceptable to SPI shall determine the deductibility of payments and
benefits to which Executive is entitled.  The Severance Benefit shall be reduced
only to the extent required, in the opinion of such tax counsel, to prevent such
nondeductibility of any part of the remaining Severance Benefit and other
payments and benefits to which Executive is entitled.  SPI shall determine which
elements of the Severance Benefit shall be reduced to conform to the provisions
of this paragraph, provided, however, that there shall be no reduction under
this paragraph in the amount payable to Executive under a deferred compensation
arrangement between SPI and Executive to the extent such amount is attributable
to deferrals elected by Executive or to Executive's vested interest, determined
as of the date of termination of employment without regard to any acceleration
resulting from a Change in Control, in nonelective deferrals credited to him.
Any determination made by SPI's independent auditors or by tax counsel pursuant
to this paragraph shall be conclusive and binding on Executive.

               6.4  Termination of Agreement; Survival of Certain Terms.  To the
extent it has not terminated earlier under paragraph 5.1.1(B), this agreement
shall terminate on the date of the termination of Executive's employment under
circumstances to which this paragraph 6 applies, subject to the survival of the
provisions of paragraphs 6.3, 7, 9, and 14.

          7.  Confidential Information.  Unless he has obtained SPI's prior
written consent, Executive shall not, during or following his employment with
SPI, directly or indirectly, disclose to any person, other than SPI, or any
affiliate of SPI, or its officers, directors, or employees entitled to such
information, or use for his own or another's benefit, any confidential or
proprietary information relating to the business affairs or operations of SPI
including, without limitation, SPI's marketing plans and acquisition strategies.

          8.  Covenant Against Competition.  Executive shall not, so long as
SPI employs Executive under this agreement, directly or indirectly, as a
principal, officer, director, shareholder (except as owner of less than two
percent of the shares of a corporation the stock of which is publicly traded),
partner, or employee or in any capacity whatsoever, engage in or become
associated with, or advise or assist, any enterprise that is engaged in any
business or provides any services that is or are competitive with any business
or services that is engaged in or are offered by or being developed by SPI.  It
is agreed that Executive's services are unique and irreplaceable and that the
loss of Executive's services or the use of

                                       9
<PAGE>
 
those services by a competitor would cause irreparable harm to SPI.  Any breach
or threatened breach by Executive of any provision of this paragraph 8 cannot be
remedied solely by damages.  Accordingly, in the event of a breach or a
threatened breach by Executive of any of the provisions of this paragraph 8, SPI
shall be entitled to injunctive relief.  For purposes of this paragraph 8,
payment of a Severance Benefit under paragraph 6.3 of this agreement does not
constitute employment.

          9.  Covenant Against Interference with Employees.  Executive shall
not, during his employment with SPI and the 24-month period following his
employment with SPI, interfere with SPI's relationship with any of its other
employees by recruiting any SPI employee for employment with a Competitor (as
defined in paragraph 8, above) or by requesting the services of an SPI employee
for a Competitor.  This agreement shall not preclude Executive's response on
behalf of a Competitor to an application for employment by an SPI employee,
provided Executive did not in any manner solicit the application.

          10.  Successors; Binding Agreement.

               10.1  SPI shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business or assets of SPI to assume and agree to
perform this agreement in the same manner and to the same extent that SPI would
be required to perform it if no such succession had taken place. Failure of SPI
to obtain such assumption and agreement shall be a breach of this agreement and
shall entitle Executive to compensation from SPI in the same amount and on the
same terms as he would be entitled if he terminated his employment with SPI
following a Change in Control under Adverse Circumstances (as described in
paragraph 6) of this agreement. As used in this agreement, "SPI" shall mean SPI
as defined above and any successor to its business or assets that assumes and
agrees to perform this agreement by operation of law or otherwise.

               10.2  This agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees.

          11.  Notice.  For the purpose of this agreement, notices shall be in
writing and shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage prepaid,
and addressed, in the case of SPI, to the address set forth on the first page of
this agreement and directed to the attention of the office of the Chairman, and,
in the case of Executive, to the most recent address for Executive in SPI's
payroll records, or addressed to such other address as either party may have
furnished to the other in writing in accordance with this paragraph, except that
notice of change of address shall be effective only upon receipt.

          12.  Miscellaneous.  No provision of this agreement may be modified,
waived, or discharged except by an instrument in writing executed by Executive
and an

                                      10
<PAGE>
 
authorized officer of SPI.  A waiver by either party of any breach of, or
compliance with, any condition or provision of this agreement shall not be
deemed a waiver of similar or dissimilar provisions or conditions at the same or
any prior or subsequent time.  No agreements or representations, oral or
otherwise, with respect to the subject matter of this agreement have been made
by either party that are not expressly set forth in this agreement.  The
validity, interpretation, construction, and performance of this agreement shall
be governed by the internal laws of the State of Louisiana, without regard to
the principles of conflicts of law.  All references to sections of the Exchange
Act and the Code shall be deemed also to refer to any successor provisions to
such sections.  Any payments provided for under this agreement shall be subject
to any applicable tax withholding as required under federal, state, or local
law.

          13.  Validity.   The invalidity or unenforceability of any provision
of this agreement shall not affect the validity of any other provision of this
agreement, which shall remain in full force and effect.

          14.  Dispute Resolution.

               14.1  Mediation.  Executive and SPI agree that if any claim,
dispute, or controversy ("Dispute") arises with respect to the interpretation or
operation of this agreement or with respect to any aspect of the employment
relationship between Executive and SPI and if the Dispute cannot be resolved by
negotiation, they will attempt in good faith to resolve the Dispute by mediation
under the Commercial Mediation Rules of the American Arbitration Association
("AAA") before resorting to litigation or some other dispute resolution
procedure.  If either party initiates mediation by filing with the AAA a
submission to mediation or a written request for mediation, the expense of the
initial AAA filing fee paid by the initiating party will be shared equally by
both parties.

               14.2  Litigation.  No party shall commence litigation to
resolve a dispute unless mediation has occurred. If litigation occurs, the
parties agree that the litigation will be initiated and conducted in courts of
the State of Louisiana within Orleans or Jefferson Parish or, if federal courts
have jurisdiction over the dispute, in the United States District Court for the
Eastern District of Louisiana.

          15.  Counterparts.  This agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

                                SIZELER PROPERTY INVESTORS, INC.


                                By: 
                                   ---------------------------------------------

                                   ---------------------------------------------
                                                      Executive

                                      11

<PAGE>
 
                                                                     EXHIBIT 10B

                  NONELECTIVE DEFERRED COMPENSATION AGREEMENT

          THIS AGREEMENT, entered into this 1st day of June, 1995, by and
between Sizeler Property Investors, Inc., a Delaware corporation qualified as a
real estate investment trust ("SPI"), with principal offices at 2542 Williams
Boulevard, Kenner, Louisiana, and THOMAS A. MASILLA, JR., an individual residing
in Metairie, Louisiana ("Executive").

                                 R E C I T A L

          SPI wishes to provide for compensation that will become payable to
Executive upon his retirement or other termination of employment with SPI,
provided Executive satisfies certain conditions.

          NOW, THEREFORE, SPI and Executive agree as follows:

Section 1.  Definitions

          1.01  The following definitions shall apply for the purposes of this
Agreement.

          1.02  "Agreement" shall mean the agreement set out in this document,
as it may be amended from time to time.

          1.03  "Account" shall mean the bookkeeping account established for
Executive under this Agreement.

          1.04  "Committee" shall mean the Compensation Committee of the Board
of Directors of SPI.

          1.05  "Designated Fair Market Value" shall mean, in the case of a
listed security, the closing price on the date of reference or, if there were no
sales on such date, then the closing price on the nearest preceding day on which
there were such sales, and, in the case of an unlisted security, the mean
between the bid and asked prices on the date of reference or, if no such prices
are available for such date, then the mean between the bid and asked prices on
the nearest preceding day for which such prices are available.

          1.06  "Effective Date" shall mean June 1, 1995.

          1.07  "Eligible Securities and Other Property" shall mean cash; cash
equivalents; stock, bonds, notes, and debentures, either listed on a national
securities exchange or for which price quotations are published in newspapers of
general circulation, including The Wall Street Journal; and mutual funds.
<PAGE>
 
          1.08  "Executive" shall mean Thomas A. Masilla, Jr.

          1.10  "Nonelective Deferral" shall mean the amount SPI determines to
credit to Executive as deferred compensation for a given year, as described in
Section 2.

          1.11  "Severance Agreement" means the Severance Agreement dated
June 1, 1995, by and between SPI and Executive.

          1.12  "SPI" shall mean Sizeler Property Investors, Inc.

Section 2.  Nonelective Deferrals

          2.01  With respect to each calendar year beginning with 1995, SPI
shall credit Executive's Account with an amount of compensation that is to be
payable to Executive in the future, subject to the further provisions of this
Section 2.

          2.02  The amount of compensation to be credited to Executive's Account
with respect to a given year shall be determined by the Committee but shall not
be less than $16,000.  As used in this Agreement, the term "Nonelective
Deferral" shall mean the amount stated in the preceding sentence or such greater
amount as the Committee may, from time to time, designate as the amount to be
credited to Executive's Account under this Section 2 with respect to a given
year.

          2.03  The Nonelective Deferral for a given year shall be credited to
Executive's Account as of January 1 of that year.

          2.04  Notwithstanding the amount of Nonelective Deferrals credited to
Executive's Account, the amount payable to Executive under this Agreement shall
be subject to the provisions of Sections 3 and 4 of this Agreement regarding the
imputation of investment experience and forfeitures.

Section 3.  Executive's Account

          3.01  SPI shall establish on its books for Executive an Account to
which Executive's Nonelective Deferrals shall be credited.

          3.02  The Committee shall adjust the balance credited to Executive's
Account in accordance with Sections 3.03 through 3.05 below to reflect the
imputation of investment experience to the Executive's Account.

          3.03  The amount credited to the Account shall be deemed to have been
invested and reinvested from time to time in such Eligible Securities and Other
Property as Executive shall designate.  The Eligible Securities and Other
Property designated by Executive shall be deemed to have been purchased, sold,
or held for the Account in accordance with Executive's investment designations.

                                       2
<PAGE>
 
          3.04  Except as provided in Section 3.05, the following principles
shall apply to the adjustment of the Account:

                (a) In the case of any purchase, the Account shall be charged
with a dollar amount equal to the quantity and kind of each security deemed to
have been purchased multiplied by the Designated Fair Market Value of such
security on the date of reference and shall be credited with the quantity and
kind of each security so deemed to have been purchased.

                (b) In the case of any sale, the Account shall be charged with
the quantity and kind of each security deemed to have been sold and shall be
credited with a dollar amount equal to the quantity and kind of each security
deemed to have been sold multiplied by the Designated Fair Market Value of such
security on the date of reference.

                (c) The Account shall be charged with amounts equal to the
brokerage fees and stock transfer taxes the Committee determines would have been
incurred in connection with such transactions.

                (d) The Account shall be credited with dollar amounts equal to
cash dividends paid from time to time upon the securities deemed to be held in
the Account. Dividends shall be credited as of the payment date. The Account
shall similarly be credited with interest payable on interest bearing securities
deemed to be held in the Account. Interest shall be credited as of the payment
date, except that, in the case of the purchase of interest bearing securities,
the Account shall be charged with the dollar amount of interest accrued to the
date of purchase and, in the case of sales, the Account shall be credited with
the dollar amount of interest accrued to the date of sale.

                (e) The Account shall be equitably adjusted to reflect stock
dividends, stock splits, recapitalizations, mergers, consolidations,
reorganizations, and other changes affecting securities and other property
deemed to be held in the Account.

                (f) The Account shall be reduced by the amount of any payments
to Executive and his beneficiaries and by the amount of any forfeitures under
this Agreement.

                (g) As of any given date, the securities and other property
deemed held in the Account shall be valued at their Designated Fair Market
Value.

          3.05  SPI may, but shall not be required to, purchase, hold, or
dispose of any of the securities or other property designated by Executive. If
SPI does elect to purchase, hold, and dispose of such securities and other
property in a manner that parallels Executive's investment designations, or if
SPI causes any trust described in Section 6.03 to do so, the following
principles shall apply to the adjustment of the Account.

                (a) Purchases; sales; receipts of dividends, interest, and other
amounts of income and proceeds of sales with respect to such securities and
other property; disbursements including payments of expenses, payments to
Executive and his beneficiaries,

                                       3
<PAGE>
 
and forfeitures under this Agreement; and other transactions with respect to
such securities and other property shall be reflected in the Account at their
actual dollar amounts on a cash or accrual basis, as the Committee determines
appropriate.

                (b) The Account shall be charged with brokerage fees, brokerage
account expenses, and stock transfer taxes with respect to such transactions,
but with no other costs or expenses except such reasonable costs and expenses as
SPI or a trustee described in Section 6.03 incurs to secure, protect, or enforce
its rights in or to collect income with respect to such securities and other
property, provided that similar costs and expenses would be incurred by a
prudent investor familiar with such matters acting under like circumstances, and
provided further that fees and expenses paid to a trustee described in Section
6.03 shall not be charged against the Account.

                (c) As of any given date, the securities and other property held
with respect to the Account shall be valued at their Designated Fair Market
Value, or, if SPI or a trustee has engaged a custodian or brokerage firm to hold
such securities and other property, at their fair market value as determined by
the custodian or brokerage firm in the normal course of its business.

                (d) Notwithstanding any other provision of this Agreement, to
the extent the Company or a trustee does purchase any of the securities or other
property designated by Executive, the same shall remain the sole property of the
Company, or the trustee, subject to the claims of the Company's general
creditors, and shall not be deemed to form part of the Account.

          3.06  The Committee shall, on a periodic basis, deliver to Executive a
written report of the adjusted value of the Executive's Account.  The report
shall show all deemed transactions occurring with respect to securities and
other property deemed to be credited to the Account, including the deemed
purchase, collection, and sale of investments, the income, gains, and losses
deemed realized, the cost and fair market value of all securities and other
property deemed to be on hand at the close of the period, and all disbursements
deemed made during the period including payment of expenses, payments to
Executive and his beneficiaries, and forfeitures under this Agreement.

                (a) The report may be delivered to the Executive personally or
by mail; delivery shall be complete five days after mailing. Upon the expiration
of 30 days from the completion of the delivery of such report, the acts,
transactions, adjusted value, and all other matters reflected in the report
shall be deemed accepted by and conclusive and binding upon Executive, his
beneficiaries, and his estate, except with respect to any matter with respect to
which Executive has objected in writing to the Secretary of SPI within such
30-day period.

                (b) If SPI or a trustee has engaged a custodian or brokerage
firm to hold securities and other property acquired with respect to the Account,
an accounting or report by such custodian or brokerage firm shall be deemed to
be the Committee's report for

                                       4
<PAGE>
 
purposes of this Agreement, except to the extent the Committee may inform
Executive otherwise.

          3.07  The Committee shall promulgate rules governing the manner in
which Executive may make investment designations with respect to his Account,
the frequency with which changes in investment designations may be made, and the
time at which such designations and changes will be given effect.

          3.08  Any payment to be made or amount to be forfeited under this
Agreement shall be based on the adjusted value of the Executive's Account as of
the business day immediately preceding payment or forfeiture.

Section 4.  Vesting and Forfeitures

          4.01 Subject to Sections 4.02, 4.03, and 4.04, below, Executive's
interest in his Account shall become vested at the rate of 2.7778 percent for
each completed calendar month of Executive's employment with SPI, beginning with
June, 1995. Executive's vested interest in his Account shall be recalculated at
the end of each calendar month and shall be expressed as a percentage rounded to
the nearest hundredth of one percent. For example:

<TABLE>
<CAPTION>
If the date of Executive's       His vested interest in
termination of employment is     his Account will be:
<S>                              <C>

          11/30/95                    16.67 percent
          05/31/96                    33.33 percent
          05/31/97                    66.67 percent
          06/01/97                    66.67 percent
          05/31/98                   100.00 percent
</TABLE>

          4.02  Notwithstanding any other provision of this Agreement, should
SPI terminate Executive's employment upon a determination by its Board of
Directors that Executive has breached or neglected his duties to SPI, then
Executive shall forfeit completely an amount from his Account equal to the
Nonelective Deferral credited to the Account as of January 1 of the year of the
termination. Executive's Account balance shall be reduced by the forfeiture
required by this Section 4.02 before the application of the forfeiture
provisions of Section 4.05.

          4.03  Executive's interest in his Account shall automatically become
fully vested upon Executive's death or disability, in either case while
Executive is in the employ of SPI.  Executive shall be considered disabled for
purposes of this Agreement upon his qualification for benefits under any long
term disability arrangement or policy maintained with respect to Executive's
employment with SPI.

          4.04  Executive's interest in his Account shall automatically become
fully vested upon the termination of Executive's employment with SPI under such
circumstances and at such a time as would, under the terms of Executive's
Severance Agreement with SPI,

                                       5
<PAGE>
 
entitle Executive to a Severance Benefit as defined in paragraph 6.3.2 of the
Severance Agreement.  Furthermore, paragraph 6.3.2(E) of the Severance Agreement
shall be applied as if such Severance Benefit included the vesting of
Executive's interest in his Account under this Section 4.03.  This Section 4.03
and the limitations of paragraph 6.3.2(E) of the Severance Agreement shall apply
whether or not the Severance Agreement remains in effect on the date of the
termination of Executive's employment with SPI.  Paragraph 6 of the Severance
Agreement is attached as an appendix to this Agreement.

          4.05  Upon the termination of Executive's employment with SPI before
his interest in his Account is fully vested, Executive shall forfeit that
portion of his Account in which his interest is not vested, and the balance
credited to his Account shall be reduced accordingly.

          4.06  Unless specifically amended by a written agreement executed by
Executive and on behalf of SPI, this Section 4 shall continue to apply should
Executive's employment with SPI continue notwithstanding the termination of this
Agreement.

Section 5.  Terms of Payment

          5.01  Executive's vested interest in the amount credited to his
Account shall be payable in accordance with this Section 5.

          5.02  If Executive's employment with SPI terminates for any reason
other than death, Executive shall be entitled to payment of his vested interest
in his Account in whichever of the following forms Executive elects:

                (a) Lump sum. Payment shall be made as soon as practicable
following the termination of Executive's employment with SPI.

                (b) Annual installments over a number of years elected by
Executive but not to exceed ten years. Annual installment payments shall begin
as soon as practicable following the termination of Executive's employment with
SPI. The amount of each payment shall be calculated in a manner that the
Committee in its discretion determines should result in approximately equal
annual installments over the entire payment period.

          5.03  Executive shall elect the form of payment within 30 days of the
execution of this Agreement by filing with the Secretary of SPI a completed and
executed election in the form prescribed by the Committee.  Executive may not
change or revoke an election made under this Section 5.  Should Executive not
make an election within such 30-day period, payment shall be made over ten
years.

          5.04  Upon Executive's death before full payment of his vested
interest in his Account has been made or begun, Executive's vested interest in
his Account shall be paid or continue to be paid to the Executive's designated
beneficiary in the form elected under Sections 5.02 and 5.03 above; provided,
however, that Executive may elect, at the time and

                                       6
<PAGE>
 
the manner described in Section 5.03 above, a different form of payment for
amounts payable on account of Executive's death before the termination of his
employment with SPI.

          5.05  Executive may designate one or more primary and contingent
beneficiaries to receive any amounts payable under this Agreement on his death.
The designation of beneficiary shall be made in writing, shall not be effective
unless filed with the Secretary of SPI before Executive's death, and may be
changed or revoked at any time without notice to any beneficiary by the filing
of a subsequent designation with the Secretary.  If Executive designates more
than one beneficiary, each shall share equally unless Executive specifies a
different allocation or preference.  If Executive fails to designate a
beneficiary, or should no designated beneficiary survive him, payment shall be
made to Executive's estate.

                If a beneficiary entitled to payment should die after
Executive's death but before receiving payment of the entire amount payable to
him, the balance of any amounts payable shall be paid when due to the surviving
beneficiary or beneficiaries designated by Executive in accordance with
Executive's beneficiary designation. If there should be no designated
beneficiaries surviving, the balance of such payments shall be paid when due to
the executor or administrator of the last beneficiary to die.

          5.06  Notwithstanding any other provision of this Agreement, if SPI or
a trustee described in Section 6.03 holds securities and other property in
connection with Executive's Account in the manner described in Section 3.05, and
if SPI determines that its status as a real estate investment trust ("REIT")
under section 856 of the Internal Revenue Code of 1986, as amended (or under any
successor provision of the Code) may be prejudiced by reason of the holding of
such securities or other property or by reason of the gross income generated or
expected to be generated by such securities or other property, considering such
holdings and gross income together with SPI's or a trustee's holdings and gross
income in connection with other nonqualified deferred compensation agreements or
arrangements to which SPI is a party, then payment shall be made to Executive of
an amount of his vested interest in his Account.  The amount of the payment
shall equal the amount by which SPI determines it necessary to reduce its
holdings of securities and other property to preserve its status as a REIT.  SPI
shall take similar action with respect to nonqualified deferred compensation
payable under the other agreements and arrangements to which SPI is a party, to
the extent possible under such agreements and arrangements.

          5.07  Payments under this Agreement shall be subject to any applicable
tax withholding as required under federal, state, and local law.

Section 6.  Source of Payments

          6.01  SPI shall not establish any special fund nor issue any notes or
securities with respect to Executive's Account.  Any credit entries made to
Executive's Account constitute a mere promise by SPI to make payments to
Executive, his beneficiary, or his estate subject to and in accordance with this
Agreement, from the general assets of SPI, when the payments become due.

                                       7
<PAGE>
 
          6.02  Nothing contained in this Agreement shall create a trust or
create a fiduciary relationship of any kind between SPI and Executive.  To the
extent that any person acquires a right to receive payments from SPI under this
Agreement, such right shall be no greater than the right of any unsecured
general creditor of SPI.

          6.03  SPI may, in its discretion, enter into an agreement with a
trustee and establish a trust to which SPI may make contributions, with the
intent that the assets of the trust would assist SPI in meeting its obligations
under this Agreement.  However, the assets of any such trust shall be subject to
the claims of SPI's creditors.

          6.04  SPI and Executive acknowledge it is their intent and they agree
that for purposes of Title I of the Employee Retirement Income Security Act of
1974, as amended, and for purposes of the Internal Revenue Code of 1986, as
amended, and for all other purposes, this Agreement and any trust that SPI may
establish in connection with this Agreement constitute an unfunded arrangement
maintained for the purpose of providing deferred compensation for an individual
who is a member of a select group of management or highly compensated employees.

Section 7.  Prohibition Against Assignment

          7.01  Except to the extent required by law, the right of Executive or
any beneficiary to payment of Executive's vested interest in his Account shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of
Executive or beneficiary.

Section 8.  Amendment and Termination

          8.01  This Agreement may be amended or terminated at any time by
resolution of the Board of Directors of SPI, but no such amendment or
termination shall adversely affect Executive's rights with respect to the
amounts previously credited to his Account.

          8.02  This Agreement shall terminate automatically, and Executive's
interest in his Account shall become fully vested, upon the liquidation or
dissolution of SPI.  Payment of Executive's Account shall be made to him or, if
Executive is deceased, his beneficiary, in a lump sum as soon as practicable
following such liquidation or dissolution.

Section 9.  Dispute Resolution.

          9.01  Executive and SPI agree that if any claim, dispute, or
controversy ("Dispute") arises with respect to the interpretation or operation
of this Agreement and if the Dispute cannot be resolved by negotiation, they
will attempt in good faith to resolve the Dispute by mediation under the
Commercial Mediation Rules of the American Arbitration Association ("AAA")
before resorting to litigation or some other dispute resolution procedure.  If
either party initiates mediation by filing with the AAA a submission to

                                       8
<PAGE>
 
mediation or a written request for mediation, the expense of the initial AAA
filing fee paid by the initiating party will be shared equally by both parties.

          9.02  No party shall commence litigation to resolve a Dispute unless
mediation has occurred.  If litigation occurs, the parties agree that the
litigation will be initiated and conducted in courts of the State of Louisiana
within Orleans or Jefferson Parish or, if federal courts have jurisdiction over
the dispute, in the United States District Court for the Eastern District of
Louisiana.

          9.03  SPI shall pay to Executive an amount equal to all reasonable
legal fees and expenses incurred by Executive in seeking to obtain or enforce
any right or benefit provided by this Agreement, provided that it is determined
that Executive is entitled to payment under this Agreement by a final judgment,
order, or decree of a court of competent jurisdiction (which is not appealable
or the time for appeal therefrom having expired and no appeal having been
perfected).

Section 10.  Miscellaneous

          10.01 Nothing contained in this Agreement shall be deemed to create a
contract of continuing employment between SPI and Executive.

          10.02 The Committee shall administer this Agreement in accordance with
the Agreement's terms and shall have full power and authority necessary or
appropriate for carrying out its duties.  The Committee shall have the full
power to establish any rules and procedures it finds appropriate for the
administration of this Agreement.  The Committee may correct any defect or
reconcile any inconsistency in the Agreement to the extent the Committee finds
it necessary to carry out the purposes of the Agreement.  The Committee shall
have full power and authority to interpret the Agreement and to decide all
matters arising in connection with the administration of the Agreement.  In
exercising its power and authority, the Committee shall have complete discretion
and its determinations shall be final.

          10.03 Neither SPI nor the Committee nor any trustee described in
Section 6.03 shall have any duty to question any investment designations of
Executive or to make recommendations to Executive with respect to investment
designations.  Neither SPI nor the Committee nor any trustee described in
Section 6.03 shall be liable for any reduction in the amount credited to
Executive's Account that is the result of Executive's investment designations or
a failure of Executive to make or change an investment designation.

                Notwithstanding any other provision of this Agreement,
Executive's investment designation shall not be given effect if the Committee in
its discretion determines that such an investment would be unlawful or
impracticable if actually made by SPI or a trustee or that such designation does
not involve Eligible Securities and Other Property.

          10.04 The provisions of this Section 10.04 shall apply notwithstanding
any contrary provisions of Section 3.

                                       9
<PAGE>
 
                (a) Upon Executive's death, Executive's beneficiary or
beneficiaries to the extent of their interests, or, if Executive fails to
designate a beneficiary or no beneficiary survives him, the executor or
administrator of Executive's estate, shall succeed to Executive's right to make
investment designations with respect to the Account, and all references to
Executive in Section 3 and Section 10.03 shall be interpreted as references to
the beneficiary, beneficiaries, executor, or administrator, as appropriate.

                (b) If, in the Committee's opinion, Executive or a beneficiary
entitled to make investment designations under this Agreement is under a legal
disability or incapacitated in any way so as to be unable to manage his
financial affairs, and if the Committee determines that a legal representative
of Executive or his beneficiary is authorized to make such designations on
behalf of Executive or his beneficiary, then such legal representative shall be
considered the Executive or beneficiary for all purposes of Section 3 and
Section 10.03.

                (c) If, in the situation described in paragraph (b) (involving
the Executive's legal disability or incapacity), the Committee determines that
no legal representative is authorized to make such designations on behalf of
Executive or his beneficiary, then neither the Committee nor SPI nor any trustee
shall be under any obligation to take any action with respect to the investment
designations in effect with respect to the Account. However, in such a
situation, the Committee may, from time to time, in its discretion, make
investment designations on the Executive's behalf, but only from among the
following types of Eligible Certificates and Other Property: certificates of
deposit or interest bearing accounts in banks, savings banks, or savings and
loan associations; obligations of the United States government and obligations
guaranteed as to principal and interest by the United States government;
obligations of a state, a territory, or a possession of the United States, or of
any political subdivision of any of the foregoing, or of the District of
Columbia; commercial paper, maturing and becoming due and payable within nine
months of the date of purchase, and rated either Prime-1 by Moody's Investors
Service, Inc. or A-1 by Standard & Poor's Corporation; and cash deposit
accounts. Neither the Committee, SPI, nor any trustee shall be liable to
Executive, his beneficiary, or his estate for taking no action with respect to
investment designations in effect with respect to the Account or for taking the
action described in the preceding sentence.

          10.05 No provision of this Agreement may be modified, waived, or
discharged except by an instrument in writing executed by Executive and an
authorized officer of SPI.  A waiver by either party of any breach of, or
compliance with, any condition or provision of this Agreement shall not be
deemed a waiver of similar or dissimilar provisions or conditions at the same or
any prior or subsequent time. No agreements or representations, oral or
otherwise, with respect to the subject matter of this Agreement have been made
by either party that are not expressly set forth in this Agreement.

          10.06 The validity, interpretation, construction, and performance of
this Agreement shall be governed by the internal laws of the State of Louisiana,
without regard to the principles of conflicts of law.

                                      10
<PAGE>
 
          10.07 The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity of any other provision of this
Agreement, which shall remain in full force and effect.

          10.08 This Agreement shall be binding on and inure to the benefit of
SPI, its successors and assigns, Executive, and Executive's heirs, executors,
administrators, and legal representatives.

          IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.

                              SIZELER PROPERTY INVESTORS, INC.



                              By
                                 -----------------------------------------------


                              --------------------------------------------------
                              THOMAS A. MASILLA, JR.

                                      11
<PAGE>
 
                        DEFERRED COMPENSATION AGREEMENT

                                    APPENDIX

         Excerpt from Severance Agreement dated June 1, 1995, by and between SPI
         and Executive.

          6.   Change in Control.

               6.1  Definitions. For the purposes of this paragraph 6,
the following definitions shall apply:

                    6.1.1  "Acquiring Person" shall mean any Person who or
which together with all Affiliates and Associates of such Person, without the
prior approval of a majority of the Continuing Directors, shall be the
Beneficial Owner of 20 percent or more of the shares of Common Stock then
outstanding, provided, however, that Acquiring Person shall not mean (i) SPI,
(ii) any Subsidiary of SPI, (iii) any employee benefit plan of SPI or any
Subsidiary of SPI, (iv) any entity holding shares of Common Stock organized,
appointed, or established by SPI or any of its Subsidiaries for or pursuant to
the terms of any such plan, (v) Thomas A. Masilla, Jr., together with his
spouse, descendants and any trust established for the benefit of Thomas A.
Masilla, Jr., his spouse and descendants or any one or more of them or (vi) SRC.

                    6.1.2  "Person" shall mean any individual, firm,
corporation, partnership or other entity and shall include any successor (by
merger or otherwise) of such entity.

                    6.1.3  "Affiliate" shall mean, with respect to a
specified Person, a Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the Person specified.

                    6.1.4  "Associate" shall mean, with respect to a
specified Person, (i) any corporation or organization (other than SPI or SRC or
a Subsidiary of SPI or SRC) of which such Person is an officer or partner or is,
directly or indirectly, the Beneficial Owner of 10 percent or more of any class
of equity security as defined in Rule 3a-11 of the General Rules and Regulations
under the Exchange Act, (ii) any trust or other estate in which such Person has
a substantial beneficial interest or as to which such Person serves as trustee
or in a similar fiduciary capacity, and (iii) any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such Person, or
is an officer or director of any corporation controlling or controlled by such
Person.
<PAGE>
 
                    6.1.5 "Subsidiary" shall mean, with reference to any Person,
any corporation of which a majority of any class of equity security is
Beneficially Owned, directly or indirectly, by such Person.

                    6.1.6 "Beneficial Ownership" shall be determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange Act (or any
successor rule or statutory provision) or, if Rule 13d-3 shall be rescinded and
there shall be no successor rule or statutory provision thereto, pursuant to
Rule 13d-3 as in effect on the date of this agreement; provided, however, that a
Person shall, in any event, also be deemed to be the "Beneficial Owner" of any
securities:

                          6.1.6(A)  which such Person or any Affiliate or
Associate thereof beneficially owns, directly or indirectly;

                          6.1.6(B)  which such Person or any Affiliate or
Associate thereof, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," (i) securities
tendered pursuant to a tender or exchange offer made by such Person or any
Affiliate or Associate thereof until the tendered securities are accepted for
purchase or exchange, or (ii) securities issuable upon exercise of rights;

                          6.1.6(C) which such Person or any Affiliate or
Associate thereof, directly or indirectly, has sole or shared voting or
investment power with respect thereto pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (C) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding (i) arises solely from a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations under the
Exchange Act, and (ii) is not also then reportable by such Person on Schedule
13D under the Exchange Act; or

                          6.1.6(D)  which are beneficially owned, directly or
indirectly, by any other Person or any Affiliate or Associate thereof with which
such Person or any Affiliate or Associate thereof has any agreement, arrangement
or understanding (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in
subparagraph (C) of this paragraph 6.1.6) or disposing of any voting securities
of the Company.

                                      ii
<PAGE>
 
                    6.1.7  "Common Stock" shall mean the common stock, par
value $.01 per share, of SPI.

                    6.1.8  "Continuing Director" shall mean any director
of the Company who is not an Acquiring Person or a representative or nominee of
an Acquiring Person, and who (i) was elected by the stockholders or appointed by
the Board prior to the date as of which the Acquiring Person in question became
an Acquiring Person, or (ii) was designated (before his initial election or
appointment as a director) as a Continuing Director by a majority of the Whole
Board, but only if a majority of the Whole Board shall then consist of
Continuing Directors, or, if a majority of the Whole Board shall not then
consist of Continuing Directors, by a majority of the then Continuing Directors.

                    6.1.9  "Whole Board" shall mean the total number of
directors SPI would have if there were no vacancy on the Board.

                    6.1.10 "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.

                    6.1.11 "Adverse Circumstances" shall mean any of the
following sets of circumstances surrounding the termination of Executive's
employment with SPI after a Change in Control:

                           6.1.11(A)  The termination or notice of termination
of Executive's employment with SPI without Breach of Duty.

                           6.1.11(B)  The assignment to Executive of any
duties inconsistent with his status as an executive of SPI, the removal of
Executive from the position he held before the Change in Control of SPI, or a
substantial diminution in the nature or status of the Executive's
responsibilities from those in effect immediately before the Change in Control.

                           6.1.11(C)  A reduction by SPI in Executive's annual
base salary as in effect on the date immediately before the Change in Control or
as the same may be increased from time to time.

                           6.1.11(D)  Either the relocation of the executive
office of SPI or the relocation of Executive's individual office in Kenner,
Louisiana, to a location outside of the New Orleans Standard Metropolitan
Statistical Area (SMSA) so as to require Executive to be based anywhere other
than in the New Orleans SMSA except for required travel on the business of SPI
and its subsidiaries to an extent substantially consistent with Executive's
present business travel obligations.

                                      iii
<PAGE>
 
                           6.1.12 "Breach of Duty" shall mean a determination
by two-thirds of SPI's Continuing Directors of Executive's willful breach of
duty in the course of his employment that is demonstrably and materially
injurious to SPI, monetarily or otherwise, or that Executive neglected his
employment duties. For purposes of this paragraph 6, no act, or failure to act,
on Executive's part shall be deemed willful unless done, or omitted to be done,
in bad faith and without Executive's reasonable belief that the action or
omission was in the best interest of SPI. Notwithstanding the foregoing,
Executive's employment shall not be deemed to have been terminated for Breach of
Duty unless and until there shall have been delivered to him a copy of a
resolution duly adopted by the requisite vote of the Continuing Directors at a
meeting of the Continuing Directors called and held for such purpose (after
reasonable notice to Executive and an opportunity for Executive, together with
counsel, to be heard before the Continuing Directors), finding that in the good
faith opinion of the Continuing Directors Executive was guilty of conduct set
forth above in this paragraph 6.1.12 and specifying the particulars of such
conduct in detail.

               6.2  Change in Control Defined; Effect of Change in Control.
For purposes of this agreement, a "Change in Control" shall have occurred when
(i) any Person shall have become an Acquiring Person, and (ii) a majority of the
Board of SPI shall not be Continuing Directors.

                    Paragraph 6.3 shall apply to determine SPI's and Executive's
rights and obligations under this agreement if Executive's employment with SPI
terminates other than by reason of death or Disability (as defined in paragraph
5.1.4) within 24 months following a Change of Control of SPI and either (i) this
agreement has not been terminated before such termination of employment, or (ii)
SPI had terminated this agreement under paragraph 5.1.1(B) coincident with or
following the Change in Control.

               6.3  Rights and Obligations upon Termination of Employment
Other Than by Reason of Death or Disability Following a Change in Control of
SPI.  The following provisions shall apply under the circumstances described in
paragraph 6.2:

                    6.3.1  Should SPI terminate Executive's employment for
Breach of Duty or should Executive's employment with SPI terminate under
circumstances other than those described above as Adverse Circumstances, SPI
shall pay Executive's base salary through the date of termination of employment
at the rate in effect at the time notice of termination is given and shall pay
any amounts to which Executive is entitled at date of termination of employment
under any other compensation plans, programs, or agreements then in effect, and
SPI shall have no further obligations to Executive under this agreement.

                    6.3.2 Should Executive's employment with SPI terminate under
circumstances described above as Adverse Circumstances, then, subject to
paragraph 6.3.2(E), Executive shall be entitled to the payments and benefits
described in paragraphs

                                      iv
<PAGE>
 
6.3.2(A) through 6.3.2(D) (the "Severance Benefit") in lieu of any other rights
or benefits under this agreement.

                          6.3.2(A)  SPI shall pay to Executive his base salary
through the date of termination of employment at the rate in effect at the time
notice of termination is given. Payment shall be made no later than the fifth
business day following the date of termination. SPI shall also pay to Executive
all other amounts to which Executive is entitled at date of termination of
employment under any compensation plans, programs, or agreements then in effect.
For purposes of this agreement, a "business day" means a day that is not a
Saturday, Sunday or legal holiday on which banks may remain closed in New
Orleans, Louisiana;

                          6.3.2(B) SPI shall also pay to Executive a severance
payment (the "Severance Payment") that will equal two times the total of: (i)
the base annual salary payable to Executive at the rate in effect on the date of
notice of termination of employment, and (ii) one-half of the total of any
amounts that were, during the 24-month period preceding the date of termination,
credited to Executive as a nonelective deferral under any deferred compensation
arrangement between SPI and Executive, and (iii) one-half of the total amount of
any bonuses or awards paid to Executive as an employee of SPI during the 24-
month period preceding the date of termination, including any bonus or award
paid in the forms of shares of Common Stock of SPI, but excluding any bonus or
award paid in the form of options relating to securities of SPI. (For the
purposes of the preceding sentence, shares of Common Stock of SPI shall be taken
into account at their value on the date of the bonus or award as determined
under the terms of the plan under which the bonus or award was paid or, if the
plan does not provide for such a valuation, as determined in good faith by the
Board of Directors of SPI.) SPI shall pay the Severance Payment in a lump sum no
later than the fifth business day following the date of termination.

                          6.3.2(C) SPI shall also pay to Executive an amount
equal to all reasonable legal fees and expenses incurred by Executive as a
result of such termination (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in seeking to obtain
or enforce any right or benefit provided by this agreement) provided that it is
finally determined that Executive is entitled to a Severance Payment under this
agreement by a final judgment, order, or decree of a court of competent
jurisdiction (which is not appealable or the time for appeal therefrom having
expired and no appeal having been perfected).

                          6.3.2(D) SPI shall arrange to provide Executive with
life, disability, accident, and health insurance benefits substantially similar
to those Executive was receiving or entitled to receive from SPI immediately
before termination; such provision shall continue until the expiration of the
24-month period following the date of

                                       v
<PAGE>
 
termination of Executive's employment or, if earlier, the date upon which
Executive becomes eligible for comparable benefits in connection with subsequent
employment.

                          6.3.2(E) The Severance Benefit shall be reduced as
described below if SPI would, by reason of section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), not be entitled to deduct for federal
income tax purposes any part of the Severance Benefit or any part of any other
payment or benefit to which Executive is entitled under any plan or program. For
the purposes of this agreement, SPI's independent auditors shall determine the
value of any deferred payments or benefits in accordance with the principles of
section 280G of the Code, and tax counsel selected by SPI's independent auditors
and acceptable to SPI shall determine the deductibility of payments and benefits
to which Executive is entitled. The Severance Benefit shall be reduced only to
the extent required, in the opinion of such tax counsel, to prevent such
nondeductibility of any part of the remaining Severance Benefit and other
payments and benefits to which Executive is entitled. SPI shall determine which
elements of the Severance Benefit shall be reduced to conform to the provisions
of this paragraph, provided, however, that there shall be no reduction under
this paragraph in the amount payable to Executive under a deferred compensation
arrangement between SPI and Executive to the extent such amount is attributable
to deferrals elected by Executive or to Executive's vested interest, determined
as of the date of termination of employment without regard to any acceleration
resulting from a Change in Control, in nonelective deferrals credited to him.
Any determination made by SPI's independent auditors or by tax counsel pursuant
to this paragraph shall be conclusive and binding on Executive.

               6.4  Termination of Agreement; Survival of Certain Terms.  To
the extent it has not terminated earlier under paragraph 5.1.1(B), this
agreement shall terminate on the date of the termination of Executive's
employment under circumstances to which this paragraph 6 applies, subject to the
survival of the provisions of paragraphs 6.3, 7, 9, and 14.

                                      vi
<PAGE>
 
                  NONELECTIVE DEFERRED COMPENSATION AGREEMENT

                          Election of Form of Payment

          In accordance with Section 5 of the Nonelective Deferred Compensation
Agreement by and between Sizeler Property Investors, Inc. ("SPI"), and myself, I
elect the following form of payment of my vested interest in the amount credited
to my Account:

     a)   For any payment due on the termination of my employment with SPI on
account of retirement, resignation, discharge, or any other reason other than
death:

          [ ]  1.  Lump sum, to be made as soon as practicable following
                   termination.

                                           - or -

          [ ]  2.   Annual installments over ____ [not more than 10] years, to
                    begin as soon as practicable following termination.

The election made above shall continue to be applicable should I die after the
termination of my employment with SPI but before payment of my entire vested
interest in my Account.

     b)   For any payment due on my death before the termination of my
employment with SPI:

          [ ]  1.   Lump sum, to be made as soon as practicable following my
                    death.

                                           - or -

          [ ]  2.   Annual installments over ______ [not more than 10] years, to
                    begin as soon as practicable following my death.


          I understand that I may not change or revoke the elections made above.



Date ______________________, 1995        _______________________________________
                                                  Thomas A. Masilla, Jr.

<TABLE> <S> <C>

<PAGE>
 
<ARTICLE> 5
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-1995
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               JUN-30-1995
<CASH>                                       1,103,000
<SECURITIES>                                         0
<RECEIVABLES>                                2,963,000
<ALLOWANCES>                                   440,000
<INVENTORY>                                          0
<CURRENT-ASSETS>                            13,297,000
<PP&E>                                     265,962,000
<DEPRECIATION>                              25,055,000
<TOTAL-ASSETS>                             279,259,000
<CURRENT-LIABILITIES>                       36,434,000
<BONDS>                                    140,425,000
<COMMON>                                        89,000
                                0
                                          0
<OTHER-SE>                                 103,059,000
<TOTAL-LIABILITY-AND-EQUITY>               279,259,000
<SALES>                                              0
<TOTAL-REVENUES>                            21,131,000
<CGS>                                                0
<TOTAL-COSTS>                               11,722,000
<OTHER-EXPENSES>                             1,015,000
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                           7,078,000
<INCOME-PRETAX>                                      0
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                 1,316,000
<EPS-PRIMARY>                                      .15
<EPS-DILUTED>                                        0
        

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