<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 1-12844
--------------
JDN REALTY CORPORATION
----------------------
(Exact name of registrant as specified in its charter)
Maryland 58-1468053
- ------------------------------ ------------------------------------
(State of Jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3340 Peachtree Road, NE, Suite 1530, Atlanta, GA 30326
-------------------------------------------------------
(Address of principal executive offices - zip code)
(404) 262-3252
--------------
(Registrant's telephone number, including area code)
Not applicable
--------------
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (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________
---------
As of August 1, 1996, 11,012,054 shares of the Registrant's Common Stock, $.01
par value, were outstanding.
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Condensed Consolidated Balance Sheets - June 30, 1996 and December 31, 1995 2
Condensed Consolidated Statements of Income - Three Months Ended June 30,
1996 and 1995 3
Condensed Consolidated Statements of Income - Six Months Ended June 30,
1996 and 1995 4
Condensed Consolidated Statements of Cash Flows - Six Months Ended
June 30, 1996 and 1995 5
Notes to Condensed Consolidated Financial Statements 6
</TABLE>
1
<PAGE>
JDN REALTY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------------- --------------
(Unaudited)
(In thousands)
<S> <C> <C>
ASSETS
Shopping center properties, at cost:
Land $ 42,441 $ 40,576
Buildings and improvements 233,912 223,649
Property under development 13,394 12,593
-------------- --------------
289,747 276,818
Less: accumulated depreciation and amortization (24,012) (20,312)
-------------- --------------
Shopping center properties, net 265,735 256,506
Cash and cash equivalents 4,970 3,109
Restricted cash - escrow 2,324 3,060
Rents receivable 1,606 2,628
Investments in and advances to unconsolidated entities 50,339 22,564
Deferred costs, net of amortization 6,749 7,459
Other assets 741 542
-------------- --------------
$332,464 $295,868
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgage notes payable $144,858 $128,839
Accounts payable and accrued expenses 7,193 5,720
Other liabilities 1,232 1,323
-------------- --------------
Total Liabilities 153,283 135,882
Shareholders' Equity
Preferred stock, par value $.01 per share-
authorized 20,000,000 shares, none outstanding - -
Common stock, par value $.01 per share-
authorized 150,000,000 shares, issued and
outstanding 11,012,054 and 10,012,054 shares
in 1996 and 1995, respectively 110 100
Paid-in capital 186,160 166,975
Accumulated deficit (7,089) (7,089)
-------------- --------------
Total Shareholders' Equity 179,181 159,986
-------------- --------------
$332,464 $295,868
============== ==============
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2
</TABLE>
<PAGE>
JDN REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
1996 1995
---------------- ---------------
(In thousands, except per share amounts)
<S> <C> <C>
Revenues:
Minimum and percentage rents $ 7,959 $ 6,620
Recoveries from tenants 876 828
Other revenue 75 143
---------------- ---------------
Total revenues 8,910 7,591
Operating expenses:
Operating and maintenance 599 629
Real estate taxes 502 505
General and administrative 861 714
Depreciation and amortization 1,893 1,625
---------------- ---------------
Total operating expenses 3,855 3,473
---------------- ---------------
Income from operations 5,055 4,118
Other income (expense):
Interest expense, net (1,285) (2,175)
Other income (expense), net (52) 14
Equity in net income of unconsolidated entities 437 -
---------------- ---------------
Income before net loss on real estate sales 4,155 1,957
Net loss on real estate sales - (55)
---------------- ---------------
Net income $ 4,155 $ 1,902
================ ===============
Net income per share $ 0.38 $ 0.25
================ ===============
Weighted average shares outstanding 11,012 7,733
================ ===============
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
JDN REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1996 1995
---------- ----------
(In thousands, except per share amounts)
<S> <C> <C>
Revenues:
Minimum and percentage rents $ 15,746 $ 13,175
Recoveries from tenants 1,730 1,603
Other revenue 122 265
---------- ----------
Total revenues 17,598 15,043
Operating expenses:
Operating and maintenance 1,206 1,093
Real estate taxes 966 1,010
General and administrative 1,598 1,398
Depreciation and amortization 3,750 3,181
---------- ----------
Total operating expenses 7,520 6,682
---------- ----------
Income from operations 10,078 8,361
Other income (expense):
Interest expense, net (2,784) (4,321)
Other expense, net (63) (7)
Equity in net income of unconsolidated entities 557 -
---------- ----------
Income before net loss on real estate sales 7,788 4,033
Net loss on real estate sales (15) (55)
---------- ----------
Net income $ 7,773 $ 3,978
========== ==========
Net income per share $ 0.73 $ 0.52
========== ==========
Weighted average shares outstanding 10,699 7,633
========== ==========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
JDN REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1996 1995
-------------- --------------
(In thousands)
<S> <C> <C>
Net cash provided by operating activities $ 13,994 $ 8,275
Cash flows from investing activities:
Development of shopping center properties (12,516) (13,713)
Improvements to shopping center properties (413) (559)
Investments in and advances to unconsolidated entities (25,575) (11,744)
Other (2,437) 205
-------------- --------------
Net cash used in investing activities (40,941) (25,811)
Cash flows from financing activities:
Proceeds from mortgages and notes payable 38,361 20,834
Principal payments on mortgages and notes payable (22,342) (37,098)
Proceeds from issuance of common shares, net of
underwriting commissions and offering expenses 21,663 43,827
Dividends paid (9,566) (6,588)
Other 692 2,922
-------------- --------------
Net cash provided by financing activities 28,808 23,897
-------------- --------------
Increase in cash and cash equivalents 1,861 6,361
Cash and cash equivalents, beginning of period 3,109 437
-------------- --------------
Cash and cash equivalents, end of period $ 4,970 $ 6,798
============== ==============
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
JDN REALTY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1996
1. THE COMPANY
JDN Realty Corporation (the "Company") is a real estate company which
specializes in the development and asset management of retail shopping centers
which are located primarily in the Southeast and are anchored by value-oriented
retailers. As of June 30, 1996, the Company owned and operated, either directly
or through affiliated entities or joint ventures, a total of 43 shopping center
properties and had eight shopping centers under construction. The Company is
operating as a real estate investment trust ("REIT") for federal income tax
purposes.
The Company was incorporated in the State of Maryland on December 2, 1993,
by the shareholders of JDN Enterprises, Inc. (the "Principals") and merged with
JDN Enterprises, Inc. ("Enterprises") on December 29, 1993 in order to continue
and expand the real estate businesses of the Principals and Enterprises. On
March 29, 1994, the Company completed an initial public offering of 6,785,000
shares of common stock at $22.00 per share (the "1994 Offering"). On July 26,
1995, the Company completed an offering of 2,479,600 shares of common stock at
$20.25 per share (the "1995 Offering"), and on February 27, 1996, the Company
completed an offering of 1,000,000 shares of common stock at $23.00 per share
(the "1996 Offering"). The net cash proceeds from the 1994 Offering along with
proceeds from a $75 million, seven year, 6.75% fixed-rate term loan were used
primarily to purchase third party or the Principals' interests in certain
shopping centers and to repay all outstanding Company debt. Upon completion of
the 1994 Offering, the Company owned 33 shopping center properties. The net
proceeds from the 1995 Offering and the 1996 Offering were used primarily to
repay interim financing incurred in connection with the Company's development,
redevelopment, expansion and acquisition activities.
In December 1994, the Company participated in the organization of JDN
Development Company, Inc. ("Development Company") in order to enhance its
development flexibility. Development Company is structured such that the
Company owns 99% of the economic interest while J. Donald Nichols, the Company's
Chairman and Chief Executive Officer, owns the remaining 1% and controls
Development Company's operations and activities through his voting common stock
ownership. Current tax laws restrict the ability of REITs to engage in certain
activities, such as the sale of certain properties and third party fee
development; because it is not a REIT, Development Company may engage in real
estate development activities such as the sale of all or a portion of a
development project. As of June 30, 1996, the Company had invested $4.6 million
in Development Company in the form of equity capital, $29.0 million in the form
of secured notes receivable and $10.2 million in the form of unsecured advances.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the 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
6
<PAGE>
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. The consolidated balance sheet at December 31, 1995 has been
derived from the audited consolidated financial statements at that date.
Operating results for the three and six month periods ended June 30, 1996 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1996 or any other interim period. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Company's Annual Report on Form 10-K for the year ended December 31, 1995.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Income Taxes. The Company has elected to be taxed as a REIT under the
Internal Revenue Code of 1986 (the "Code") and has operated as such since March
27, 1994. As a result, the Company will not be subject to federal income taxes
to the extent that it distributes annually at least 95% of its taxable income to
its shareholders and satisfies certain other requirements defined in the Code.
Accordingly, no provision has been made for federal income taxes in the
accompanying condensed consolidated financial statements for the periods
presented.
Earnings Per Share. Net income per share for the three and six months
ended June 30, 1996 and 1995 is based on the weighted average number of common
shares outstanding during the respective periods.
Reclassifications. Certain amounts as previously reported have been
reclassified to conform to the current period's presentation.
4. DISTRIBUTION
On June 11, 1996, the Company's Board of Directors declared a cash
distribution of $.475 per share payable July 16, 1996 to shareholders of record
on June 30, 1996.
5. BANK CREDIT FACILITY AMENDMENT
On June 21, 1996, the Company executed an amendment to the Company's $40
million line of credit with a bank group (the "Bank Credit Facility") which
reduced the interest rate on the Bank Credit Facility by 50 basis points to 150
basis points over the rate for 30-day Eurodollar deposits.
6. SUBSEQUENT EVENT
On July 10, 1996, the Company and Morgan Guaranty Trust Company of New York
("Morgan") entered into a swap transaction as a hedge against increasing
interest rates on its floating rate debt. Under the terms of the agreement, the
Company will pay a fixed rate of 6.44% and will receive a variable rate equal to
the rate for the one-month LIBOR rate based on the following notional amounts:
7
<PAGE>
<TABLE>
<CAPTION>
NOTIONAL AMOUNT PERIOD
--------------- ------
<S> <C>
$50 million September 3, 1996 to September 30, 1996
$70 million October 1, 1996 to December 31, 1996
$80 million January 1, 1997 to January 2, 1998
</TABLE>
The Company expects to account for this transaction as a hedge and to
accordingly adjust interest expense for any net amounts received from or paid to
Morgan.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
THE COMPANY
JDN Realty Corporation (the "Company") is a real estate company which
specializes in the development and asset management of retail shopping centers
which are located primarily in the Southeast and are anchored by value-oriented
retailers. As of June 30, 1996, the Company owned and operated, either directly
or through affiliated entities or joint ventures, a total of 43 shopping center
properties and had eight shopping centers under construction. The Company is
operating as a real estate investment trust ("REIT") for federal income tax
purposes.
The Company was incorporated in the State of Maryland on December 2, 1993,
by the shareholders of JDN Enterprises, Inc. (the "Principals") and merged with
JDN Enterprises, Inc. ("Enterprises") on December 29, 1993 in order to continue
and expand the real estate businesses of the Principals and Enterprises. On
March 29, 1994, the Company completed an initial public offering of 6,785,000
shares of common stock at $22.00 per share (the "1994 Offering"). On July 26,
1995, the Company completed an offering of 2,479,600 shares of common stock at
$20.25 per share (the "1995 Offering"), and on February 27, 1996, the Company
completed an offering of 1,000,000 shares of common stock at $23.00 per share
(the "1996 Offering"). The net cash proceeds from the 1994 Offering along with
proceeds from a $75 million, seven year, 6.75% fixed-rate term loan (the "Term
Debt") were used primarily to purchase third party or the Principals' interests
in certain shopping centers and to repay all outstanding Company debt. Upon
completion of the 1994 Offering, the Company owned 33 shopping center
properties. The net proceeds from the 1995 Offering and the 1996 Offering were
used primarily to repay interim financing incurred in connection with the
Company's development, redevelopment, expansion and acquisition activities.
In December 1994, the Company participated in the organization of JDN
Development Company, Inc. ("Development Company") in order to enhance its
development flexibility. Development Company is structured such that the
Company owns 99% of the economic interest while J. Donald Nichols, the Company's
Chairman and Chief Executive Officer, owns the remaining 1% and controls
Development Company's operations and activities through his voting common stock
ownership. Current tax laws restrict the ability of REITs to engage in certain
activities, such as the sale of certain properties and third party fee
development; because it is not a REIT, Development Company may engage in real
estate development activities such as the sale of all or a portion of a
development project. As of June 30, 1996, the Company had invested $4.6 million
in Development Company in the form of equity capital, $29.0 million in the form
of secured notes receivable and $10.2 million in the form of unsecured advances.
RESULTS OF OPERATIONS
Comparison of the Three Months Ended June 30, 1996 to the Three Months Ended
June 30, 1995
Minimum and percentage rents increased $1.3 million or 20% to $8.0 million
for the three months ended June 30, 1996 as compared to the same period in 1995.
Of this increase, $1.1 million relates to newly developed and redeveloped
properties and $167,000 relates to the Goodlettsville, Tennessee acquisition.
The remaining increase is the result of the increased occupancy and increased
rentals at the remaining properties.
9
<PAGE>
Recoveries from tenants increased $48,000 or 6% to $876,000 between
periods. Of this increase, $17,000 relates to newly developed and redeveloped
properties and $23,000 relates to the Goodlettsville, Tennessee, acquisition.
The remaining increase relates to higher recovery rates at the remaining
properties.
Other revenue decreased $68,000 or 48% between periods. This decrease is
the result of a reduction in revenues associated with managing and leasing fewer
third party properties.
Operating and maintenance expenses decreased $30,000 or 5% between periods.
The decrease is net of $12,000 in additional expenses associated with newly
developed and redeveloped properties and is primarily the result of lower repair
and maintenance costs at the existing properties.
Real estate taxes decreased $3,000 or 1% to $502,000 for the three months
ended June 30, 1996 from $505,000 for the same period in 1995. This decrease
results from a decrease in property taxes at the existing properties, due
primarily to the separate tax platting of an anchor tenant tract, offset by an
increase in property taxes associated with newly developed and redeveloped
properties.
General and administrative expenses increased $147,000 or 21% between
periods. This increase primarily reflects higher salary expense associated with
managing and leasing the Company's growing real estate holdings and higher costs
of producing the annual report to shareholders and conducting the annual meeting
of shareholders.
Depreciation and amortization expense increased $268,000 or 16% to $1.9
million between periods. Of this increase, $231,000 relates to newly developed
and redeveloped properties and $35,000 relates to the Goodlettsville, Tennessee,
acquisition. The remaining increase relates primarily to amortization of tenant
improvements, tenant allowances and leasing commissions for new tenants.
Interest expense decreased $890,000 or 41% between periods due primarily to
the repayment of interim financing with the proceeds from the 1996 and 1995
Offerings.
Equity in net income of unconsolidated entities represents the Company's
share of the net income of Development Company and two joint ventures formed for
the purpose of developing shopping center properties. These entities were
either not formed or had no significant activity for the three-month period
ended June 30, 1995.
There was no gain or loss on real estate sales for the three months ended
June 30, 1996 compared to a net loss of $55,000 for the same period in 1995.
The 1995 loss represents costs incurred in connection with shopping centers sold
in previous periods.
Comparison of the Six Months Ended June 30, 1996 to the Six Months Ended June
30, 1995
Minimum and percentage rents increased $2.6 million or 20% to $15.7 million
for the six months ended June 30, 1996 as compared to the same period in 1995.
Of this increase, $2.2 million relates to newly developed and redeveloped
properties and $328,000 relates to the Goodlettsville, Tennessee, acquisition.
The remaining increase is the result of increased rentals and increased
occupancy at the remaining properties.
10
<PAGE>
Recoveries from tenants increased $127,000 or 8% between periods. Of this
increase, $39,000 relates to the newly developed and redeveloped properties and
$59,000 relates to the Goodlettsville, Tennessee, acquisition. The remaining
increase relates primarily to increased recoverable expenses at the remaining
properties.
Other revenue decreased $143,000 or 54% between periods. This decrease is
the result of a reduction in revenues associated with managing and leasing fewer
third party properties and a decrease in development fees earned by the Company.
Operating and maintenance expenses increased $113,000 or 10% between
periods. Of this increase, $77,000 relates to the operations of the newly
developed and redeveloped properties. The remaining increase relates to the
Goodlettsville, Tennessee, acquisition.
Real estate taxes decreased $44,000 or 4% for the six months ended June 30,
1996 as compared to June 30, 1995. This decrease results from a decrease in
property tax rates on the existing properties, due primarily to the separate tax
platting of an anchor tenant tract, offset by an increase in property taxes
associated with newly developed and redeveloped properties and the
Goodlettsville, Tennessee, acquisition.
General and administrative expenses increased $200,000 or 14% between
periods. The increase primarily reflects higher salary expense associated with
managing and leasing the Company's growing real estate holdings and higher costs
of producing the annual report to shareholders and conducting the annual meeting
of shareholders.
Depreciation and amortization expense increased $569,000 or 18% between
periods. Of this increase, $496,000 relates to the newly developed and
redeveloped properties and $69,000 relates to the Goodlettsville, Tennessee,
acquisition. The remaining increase relates primarily to amortization of tenant
improvements, tenant allowances and leasing commissions for new tenants.
Interest expense decreased $1.5 million or 36% to $2.8 million between
periods. This decrease is primarily attributable to the repayment of interim
financing with the proceeds from the 1996 and 1995 Offerings.
Equity in net income of unconsolidated entities represents the Company's
share of the net income of Development Company and two joint ventures formed for
the purpose of developing shopping center properties. These entities were
either not formed or had no significant activity for the six month period ended
June 30, 1995.
Net loss on real estate sales was $15,000 for the six months ended June 30,
1996 compared to a net loss of $55,000 for the same period in 1995. The 1996
loss resulted from additional expenses associated with the fourth quarter 1995
sale of a shopping center located in Hickory, North Carolina. The 1995 loss
represents additional costs incurred in conjunction with shopping centers sold
in previous periods.
11
<PAGE>
Funds From Operations
"Funds from operations" is defined by the National Association of Real
Estate Investment Trusts, Inc. ("NAREIT") to mean net income, computed in
accordance with generally accepted accounting principles, excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships and joint
ventures. On March 3, 1995, NAREIT adopted the NAREIT White Paper on Funds From
Operations (the "NAREIT White Paper") which provided additional guidance on the
calculation of funds from operations. As a result, the Company has presented
below the revised calculation of funds from operations ("New FFO") and the
calculation previously used ("Old FFO"):
12
<PAGE>
<TABLE>
<CAPTION>
(Dollars in thousands except per share data) Three Months Ended June 30,
1996 1995
----------- ----------
<S> <C> <C>
Net income $4,155 $1,902
Depreciation of real estate assets 1,774 1,522
Amortization of tenant allowances and tenant improvements 30 26
Amortization of deferred leasing commissions 61 47
Net loss on real estate sales 0 55
Extraordinary items 0 0
Depreciation of real estate assets held in unconsolidated entities 16 0
----------- ----------
New FFO (1) 6,036 3,552
Amortization of deferred loan costs 306 408
Other depreciation and amortization 28 30
----------- ----------
Old FFO $6,370 $3,990
=========== ==========
New FFO per share (1) $0.55 $0.46
=========== ==========
Old FFO per share $0.58 $0.52
=========== ==========
Weighted average shares outstanding (in thousands) 11,012 7,733
=========== ==========
(Dollars in thousands except per share data) Six Months Ended June 30,
1996 1995
----------- ----------
Net income $7,773 $3,978
Depreciation of real estate assets 3,521 2,983
Amortization of tenant allowances and tenant improvements 59 51
Amortization of deferred leasing commissions 120 87
Net loss on real estate sales 15 55
Extraordinary items 0 0
Depreciation of real estate assets held in unconsolidated
entities 32 0
----------- ----------
New FFO (1) 11,520 7,154
Amortization of deferred loan costs 610 842
Other depreciation and amortization 50 60
----------- ----------
Old FFO $12,180 $8,056
========== =========
New FFO per share (1) $1.08 $0.94
========== =========
Old FFO per share $1.14 $1.06
========== =========
Weighted average shares outstanding (in thousands) 10,699 7,633
========== =========
</TABLE>
(1) Calculated in accordance with guidelines outlined in the NAREIT White
Paper.
13
<PAGE>
Occupancy
The Company's properties were 99.0% leased as of June 30, 1996 and 98.7%
leased as of June 30, 1995.
FORWARD-LOOKING STATEMENTS
Management has included below certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities and Exchange Act of 1934, as amended. When used, the
words "anticipate," "estimate," "should," "expect," "believe," "intend" and
similar expressions are intended to identify forward-looking statements. Such
statements are, by their nature, subject to certain risks and uncertainties.
Among the factors that could cause actual results to differ materially from
those projected are the following: business conditions and the general economy
as they affect interest rates; business conditions as they affect value-oriented
retailers in the Southeast; the federal, state and local regulatory environment;
availability of debt and equity capital with favorable terms and conditions;
availability of new development and acquisition opportunities; changes in the
financial condition or corporate strategy of the Company's primary retail
tenants and in particular Wal-Mart Stores, Inc. and Lowe's Companies, Inc.;
ability to complete and lease existing development projects on schedule and
within budget; and inability of the Company to maintain its qualification as a
REIT.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of funds are cash generated from operating
activities and proceeds from construction loans, a secured line of credit (the
"Bank Credit Facility") and equity offerings. The Company's primary uses of
funds are development, redevelopment, expansion and acquisition of shopping
center properties, distributions to shareholders, scheduled debt amortization,
and capital improvements to its existing shopping center properties. The
Company generally uses funds provided by operations to fund its distributions to
shareholders, capital improvements to existing properties and scheduled
amortization of its indebtedness. The Company uses proceeds from its
construction loans, the Bank Credit Facility, and equity offerings to fund its
development, redevelopment, expansion and acquisition activities.
14
<PAGE>
The Company's total indebtedness as of June 30, 1996 consisted of
the following:
<TABLE>
<CAPTION>
Effective Percent
Principal Interest Maturity of Total
Balance Rate Date Indebtedness
---------- ---------- ----------- ------------
(in thousands)
<S> <C> <C> <C> <C>
Fixed Rate
- ----------
Term Debt $72,232 8.62%(1) 29-Mar-01 49.9%
Mortgage note payable 6,616 6.88% 01-Dec-03 4.6%
---------- ---------- ----------
78,848 8.47%(5) 54.5%
Floating Rate
Bank Credit Facility 19,400 8.11%(2) 30-Jun-98 13.4%
Construction loan - Woodstock, Georgia 2,676 7.25%(3) 02-Aug-97 1.8%
Construction loan - Opelika, Alabama 1,552 7.22%(3) 05-Dec-97 1.1%
Construction loan - Greenville, North Carolina 7,041 7.00%(4) 23-Jan-99 4.8%
Construction loan - Cartersville, Georgia 17,563 7.50%(4) 28-Feb-98 12.1%
Construction loan - Newnan, Georgia 17,778 6.96%(4) 21-Aug-98 12.3%
---------- ---------- ----------
66,010 7.11% 45.5%
---------- ---------- ----------
$144,858 7.96%(6) 100.0%
========== ========== ==========
Weighted average interest rates at June 30, 1996:
Fixed rate 8.47%(5)
Floating rate 7.11%
Total 7.96%(6)
Weighted average months to maturity: 43
(1) 6.75% when the amortization of deferred loan costs is excluded
(2) 7.31% (30-day Eurodollar plus 1.50%) when the amortization of deferred loan costs is excluded.
(3) LIBOR plus 1.75%
(4) LIBOR plus 1.50%
(5) 6.76% when the amortization of deferred loan costs is excluded
(6) 6.92% when the amortization of deferred loan costs is excluded
</TABLE>
As of June 30, 1996, the Company had $11.7 million available under the
Bank Credit Facility and $12.1 million available under its construction loans.
During the second quarter of 1996, the Company negotiated a 50 basis
point reduction in the interest rate under its Bank Credit Facility. The new
interest rate is 150 basis points over the rate for 30-day Eurodollar deposits,
and the Company may borrow under the Facility through June 30, 1998.
On July 10, 1996, the Company and Morgan Guaranty Trust Company of New York
("Morgan") entered into a swap transaction as a hedge against increasing
interest rates on its floating rate debt. Under the terms of the agreement, the
Company will pay a fixed interest rate of 6.44% and will receive a variable
interest rate equal to the rate for the one-month LIBOR based on the following
notional amounts:
15
<PAGE>
<TABLE>
<CAPTION>
NOTIONAL AMOUNT PERIOD
- --------------- ------
<S> <C>
$50 million September 3, 1996 to September 30, 1996
$70 million October 1, 1996 to December 31, 1996
$80 million January 1, 1997 to January 2, 1998
</TABLE>
The swap transaction effectively converts the base rate on a portion of the
Company's construction loans and Bank Credit Facility from a floating LIBOR rate
to a fixed rate of 6.44%. The Company intends to continuously monitor and
actively manage interest costs on its variable rate debt portfolio and may
increase or decrease its swap position based on market fluctuations.
Accordingly, the cost of obtaining such protection in relation to the Company's
access to capital markets will continue to be evaluated.
As of June 30, 1996, the Company had development activities underway
totaling approximately 1.5 million square feet of gross leasable area which the
Company expects to own. This development activity includes projects undertaken
by the Company directly, through Development Company, or through joint ventures
in which either the Company or Development Company participates directly or
indirectly (the "Joint Ventures"). Management expects completion of these
projects to have a positive effect on cash generated by operating activities.
Additional funding required for these projects is estimated to be $38.4 million.
As of June 30, 1996, the Company, Development Company and the Joint Ventures had
construction loans in place which are expected to fund $22.6 million of these
costs. Management expects to fund the remaining costs of these projects and
costs of any future projects undertaken by the Company or Development Company
with construction loans from financial institutions and advances on its Bank
Credit Facility. If the Company is unable to fund future projects with
construction lending arrangements or advances on its Bank Credit Facility, it
expects to seek other sources of funding which may include, for example, joint
ventures, public or private placements of equity, or public or private
placements of debt. However, there can be no assurance that these sources will
be available.
In order for the Company to continue to qualify as a REIT, it must
annually distribute to shareholders at least 95% of its taxable income.
Management believes that the Company will meet this requirement in 1996 with
cash generated by operating activities. In addition, management believes that
cash generated by operating activities will be adequate to fund improvements to
the Company's shopping center properties, leasing costs and scheduled debt
amortization in 1996.
In order to meet the Company's long term liquidity requirements,
management anticipates that the Company's cash from operating activities will
continue to increase as a result of new developments, redevelopments,
expansions, acquisitions and improved operations at existing centers. These
activities should enable the Company to make its dividend payments to
shareholders, maintain and improve its properties, make scheduled debt payments,
and obtain debt or equity financing for its development, redevelopment and
acquisition projects. All of the Company's debt requires balloon payments in
the future. The Bank Credit Facility matures in 1998; the Term Debt matures in
2001; construction loans totaling $46.6 million mature in 1997, 1998 and 1999;
and a note payable of $6.6 million matures in 2003. Management intends to
refinance or repay these loans with proceeds from other sources of capital at or
prior to their respective maturities. Management will evaluate various
alternatives and select the best options based on market conditions at the time.
Management expects to seek additional equity financing when market conditions
16
<PAGE>
are favorable in order to maintain its debt to total market capitalization ratio
within acceptable limits. However, there can be no assurance that debt and
equity markets will be favorable in the future, and unfavorable markets could
limit the Company's ability to grow its business or repay or refinance maturing
debt.
INFLATION
The Company's leases generally contain provisions designed to mitigate
the adverse impact of inflation on net income. These provisions include clauses
enabling the Company to pass through to tenants certain operating costs,
including real estate taxes, common area maintenance, utilities and insurance,
thereby reducing the Company's exposure to increases in costs and operating
expenses resulting from inflation. Certain of the Company's leases contain
clauses enabling the Company to receive percentage rents based on tenants' gross
sales, which generally increase as prices rise, and, in certain cases,
escalation clauses, which generally increase rental rates during the terms of
the leases. In addition, many of the Company's non-anchor leases are for terms
of less than ten years, which permits the Company to seek increased rents upon
re-leasing at higher market rates.
17
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 15, 1996, the Company held its Annual Meeting of Shareholders.
The following were the results of the meeting:
(1) The shareholders elected Elizabeth L. Nichols and Haywood D.
Cochrane, Jr. as Class II directors until the annual meeting of
shareholders in 1999 or until their successors are elected and
shall have qualified.
<TABLE>
<CAPTION>
The votes were as follows:
Elizabeth L. Nichols Haywood D Cochrane, Jr.
-------------------------- -----------------------
<S> <C> <C>
Votes Cast For 7,997,045 7,997,045
Votes Case Against 500 500
Vote Withheld/Broker Non-Votes 27,524 27,524
</TABLE>
(2) The shareholders approved amendments to the JDN Realty
Corporation 1993 Incentive Stock Plan to (i) fix the number of
shares to be reserved for issuance under the Incentive Stock Plan
at 1,320,813; and (ii) enlarge the category of persons eligible to
receive non-qualified stock options under the Incentive Stock Plan.
The vote was as follows:
Votes Cast For 6,489,397
Votes Cast Against 1,485,181
Abstentions/Broker Non-Votes 50,491
(3) The shareholders approved the adoption of the JDN Realty
Corporation 1995 Employee Stock Purchase Plan.
Votes Cast For 7,889,318
Votes Cast Against 89,505
Abstensions/Broker Non-Votes 46,245
18
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(CONTINUED)
(4) The shareholders ratified the appointment of Ernst & Young LLP as
independent auditors of the Company for the year ending December
31, 1996.
<TABLE>
<CAPTION>
<S> <C>
Votes Cast For 7,987,556
Votes Cast Against 18,508
Abstentions/Broker Non-Votes 19,003
</TABLE>
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 First Amendment to Amended and Restated Revolving Credit
Agreement by and between Bankers Trust Company, as Agent, and the
Company, dated June 21, 1996
10.2 Employment Agreement by and between William J. Kerley and the
Company, dated May 1, 1996
27 Financial Data Schedule
(b) Reports on Form 8-K
None
19
<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.
August 13, 1996 /s/ J. Donald Nichols
- ------------------------ ------------------------------------
(Date) J. Donald Nichols
Chief Executive Officer
August 13, 1996 /s/ William J. Kerley
- ------------------------ -------------------------------------
(Date) William J. Kerley
Chief Financial Officer
20
<PAGE>
Exhibit 10.1
EXECUTION
JDN REALTY CORPORATION
FIRST AMENDMENT TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT
AGREEMENT (this ``AMENDMENT'') is dated as of June 21, 1996, and is entered into
by and among JDN REALTY CORPORATION, a Maryland corporation (the ``COMPANY''),
and the lenders specified on the signature pages hereof (the ``LENDERS'') and
BANKERS TRUST COMPANY (``BANKERS''), as agent for the Lenders (in such capacity,
the ``AGENT'').
R E C I T A L S
- - - - - - - -
WHEREAS, the Company, the Lenders and the Agent are parties to that
certain Amended and Restated Revolving Credit Agreement dated as of August 29,
1995 (the ``CREDIT AGREEMENT''); capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement;
WHEREAS, the Company has requested that the Agent and the Lenders
amend the Credit Agreement to, among other things, (i) reduce the interest rate
borne by Eurodollar Rate Loans, (ii) eliminate the quarterly reductions to the
Borrowing Base which were to begin on July 1, 1997, (iii) limit Investments by
the Company and its Subsidiaries in joint ventures to $30,000,000, and (iv)
limit the projects under development at any one time of JDN Development to
$120,000,000, in each case as more particularly set forth herein;
WHEREAS, the Agent and the Lenders are willing to amend the Credit
Agreement, but only on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the terms and
conditions herein contained, the Company, the Agent and the Lenders hereby agree
as follows:
1
<PAGE>
SECTION
1.
AMENDMENTS TO CREDIT AGREEMENT
On the basis of the representations and warranties contained in this
Amendment, and subject to the terms and conditions of this Amendment, the Agent
and Lenders agree, pursuant to Subsection 9.6 of the Credit Agreement, as
follows:
1. AMENDMENTS TO SECTION 1.
-----------------------
2. Subsection 1.1 of the Credit Agreement is hereby amended by
amending and restating the definition of ``Borrowing Base'' contained therein in
its entirety as follows:
```BORROWING BASE' means, (i) as at any date of determination and
as determined by Agent on a quarterly basis, the lesser of (a) 60% of
Property FMV and (b) 635% of Cash Available for Debt Service, as calculated
for the four most recent complete calendar quarters preceding such date of
determination as to which the Lenders have received the financial
statements required by subsection 5.1(i) in respect of such quarter (it
being understood and agreed that, with respect to any Property added to the
pool of Properties pursuant to subsection 2.10, Cash Available for Debt
Service for such Property shall be calculated (1) on a pro forma basis
based on historical financial statements (to the extent available) for such
four calendar quarter period, or (2) to the extent historical financial
statements are not available for such period, on a pro forma basis in
consultation with the Agent, which calculations pursuant to clauses (1) and
(2) shall be satisfactory to the Agent in its reasonable discretion);
provided, however, that the Borrowing Base is also subject to reduction
-------- -------
from time to time as provided in subsections 2.9A and 5.11E.''
3. Subsection 1.1 of the Credit Agreement is hereby further amended by
amending and restating the definition of ``Commitment Termination Date''
contained therein in its entirety as follows:
```COMMITMENT TERMINATION DATE' means the Maturity Date.''
4. AMENDMENTS TO SECTION 2.
-----------------------
Subsection 2.2A(ii) of the Credit Agreement is hereby amended and restated in
its entirety as follows:
``(ii) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus 1.50% per annum.''
----
2
<PAGE>
5. AMENDMENTS TO SECTION 6.
-----------------------
6. Subsection 6.2 of the Credit Agreement is hereby amended and restated in
its entirety as follows:
``6.2 INVESTMENTS AND ESCROW DEPOSITS.
-------------------------------
The Company shall not permit, the sum of the aggregate amount of
Investments of the Company and its Subsidiaries (excluding Investments in
JDN Development) plus the aggregate amount of Cash and Government
----
Securities deposited in escrows to se cure any letter of credit (excluding
letters of credit for the account of JDN Develop ment) to exceed
$30,000,000.''
7. AMENDMENTS TO SECTION 5.
-----------------------
8. Subsection 5.1(i) of the Credit Agreement is hereby amended by deleting
the phrase ``after the end of each calendar quarter of each calendar year,''
appearing therein and insert ing the phrase ``after the end of each of the four
calendar quarters of each calendar year,'' in its place.
9. Subsection 5.1(ii) of the Credit Agreement is hereby amended by deleting
the phrase ``after the end of each calendar quarter of each calendar year,''
appearing therein and inserting the phrase ``after the end of each of the four
calendar quarters of each calendar year,'' in its place.
10. Subsection 5.1(xi) of the Credit Agreement is hereby amended and restated
in its entirety as follows:
``(xi) Financial Plans: together with each delivery of financial
---------------
statements of the Company for the last calendar quarter of each calendar
year pursuant to subdivisions (i) and (ii) above, a projected statement of
Property Income and Property Expense for each Property for the next
succeeding year, together with an explanation of the assumptions on which
such forecasts are based, and such other information and projections as the
Lenders may reasonably request;''
11. Subsection 5.1(xii) of the Credit Agreement is hereby amended by deleting
the phrase ``as soon as available'' appearing therein and inserting the phrase
``together with each delivery of financial statements of the Company pursuant to
subdivision
(iii) above'' in its place.
12. Subsection 5.1(xv) of the Credit Agreement is hereby amended by deleting
the word ``fifteen'' appearing therein and inserting the number ``45'' in its
place.
3
<PAGE>
13. AMENDMENTS TO SECTION 6.
-----------------------
14. Subsection 6.10A of the Credit Agreement is hereby amended by amending
and restating the first sentence thereof in its entirety as follows:
``The Company and its Subsidiaries shall not (i) have projects under
development at any one time that exceed (a) an aggregate of 2,200,000
square feet of gross leasable area of retail space (``GLA'') and (b) an
aggregate cost of $154,000,000 or (ii) permit JDN Development to have
projects under development at any one time that exceed an aggregate cost of
$120,000,000; provided that the restrictions contained in clause (i) above
--------
shall not apply to development projects by non-consolidated joint ventures
(including partnerships and limited liability companies) in which the
Company or any Subsidiary is a joint venturer (including a partner or
member) or by non-consolidated Affiliates of the Company, in each case,
financed with Indebtedness which is non-recourse to the Company.''
15. Subsection 6.10A of the Credit Agreement is hereby further amended by
deleting the second paragraph thereof in its entirety.
SECTION 1.
REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this Amendment, the
Company hereby represents and warrants to the Agent and the Lenders that:
16. AUTHORIZATION; BINDING OBLIGATIONS. The Company has all requisite
----------------------------------
corporate power and authority to enter into this Amendment. The execution,
delivery and performance of this Amendment have been duly authorized by all
necessary corporate action by the Company. This Amendment has been duly
executed and delivered by the Company and is the legally valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally and subject to the availability of equitable remedies. The
Credit Agreement, as amended by this Amendment, is the legally valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally and subject to the availability of equitable remedies.
17. INCORPORATION OF REPRESENTATIONS. Each representation and warranty of
--------------------------------
the Company contained in each of the Loan Documents is true, correct and
complete in all material respects on and as of the Amendment Effective Date to
the same extent as though made on and as of the Amendment Effective Date.
4
<PAGE>
18. ABSENCE OF DEFAULTS. No event has occurred and is continuing or would
--------------------
result from the execution, delivery or performance of this Amendment that
constitutes or would constitute an Event of Default or a Potential Event of
Default after giving effect to this Amendment.
19. PERFORMANCE. The Company has performed in all material respects all
------------
agreements and satisfied all conditions which this Amendment provides shall be
performed by it on or before the date hereof.
20. CONSENT. No other consents are required under any Indebtedness or other
--------
agreement to which the Company is a party in order to consummate this Amendment.
SECTION 1.
MISCELLANEOUS
21. EFFECT OF AMENDMENT.
-------------------
Except as specifically provided herein, this Amendment does not in any way
waive, amend, modify, affect or impair the terms and conditions of the Credit
Agreement or the other Loan Documents, and all terms and conditions of the
Credit Agreement and the other Loan Documents are hereby ratified and confirmed
and shall remain in full force and effect unless otherwise specifically amended,
waived or changed pursuant to the terms and conditions of this Amendment.
On and after the Amendment Effective Date, each reference in the Credit
Agreement to ``this Agreement'', ``hereunder'', ``hereof'', ``herein'' or words
of like import referring to the Credit Agreement, and each reference in the
other Loan Documents to the ``Credit Agreement'', ``thereunder'', ``thereof'',
or words of like import referring to the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended by this Amendment.
22. FEES AND EXPENSES. The Company acknowledges that all costs, fees and
-----------------
expenses as described in subsection 9.2 of the Credit Agreement incurred by the
Agent and the Lenders and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of the
Company.
23. HEADINGS. Section and subsection headings in this Amendment are
---------
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
24. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
--------------
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
5
<PAGE>
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
25. COUNTERPARTS. This Amendment may be executed in any number of
------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
26. EFFECTIVENESS. This Amendment shall become effective (the
-------------
``AMENDMENT EFFECTIVE DATE'') upon the satisfaction of each of the following
conditions:
27. The Agent and each Lender shall have received counterparts hereof duly
executed by each of the Company, the Lenders and the Agent.
28. On or before the Amendment Effective Date, the Agent, each Lender and
their respective counsel shall have received one or more favorable written
opinions of counsel for the Company, in form and substance reasonably
satisfactory to the Agent and its counsel, dated as of the Amendment Effective
Date and setting forth such matters as the Agent may reasonably request.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.
COMPANY:
JDN REALTY CORPORATION
By:
Title:
AGENT:
BANKERS TRUST COMPANY,
as Agent
By:
Title:
7
<PAGE>
LENDERS:
BANKERS TRUST COMPANY,
as a Lender
By:
Title:
BANK OF AMERICA ILLINOIS,
as a Lender
By:
Title:
8
<PAGE>
ORIX USA CORPORATION,
as a Lender
By:
Title:
THE BANK OF NOVA SCOTIA,
as a Lender
By:
Title:
9
<PAGE>
Exhibit 10.2
JDN REALTY CORPORATION
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of May 1, 1996 (the "Effective Date"), between
WILLIAM J. KERLEY (the "Employee") and JDN REALTY CORPORATION, a Maryland
corporation (the "Company").
WITNESSETH:
WHEREAS, the Employee desires to be employed by the Company, and the
Company desires to employ the Employee, on the terms, covenants and conditions
hereinafter set forth in this Agreement.
NOW, THEREFORE, for the reasons set forth above, and in consideration of
the mutual promises and agreements herein set forth, the Company and the
Employee agree as follows:
1. EMPLOYMENT.
----------
Subject to the terms and conditions set forth in this Agreement, the
Company, on and as of the Effective Date hereby employs and engages the Employee
to hold the titles of Chief Financial Officer, Secretary and Treasurer of the
Company and perform the duties of such positions as set forth in the Company's
Bylaws and as designated by the board of directors of the Company (the "Board of
Directors"). In such capacities, and subject to review by the Board of
Directors, the Employee shall also perform such duties and responsibilities as
may be assigned to him from time to time by the Board of Directors. The
Employee hereby accepts such employment and agrees to serve the Company as an
officer for the period of this Agreement.
2. TERM OF EMPLOYMENT.
------------------
Except as otherwise provided herein, the term of this Agreement shall be
for a term of two (2) years commencing on the Effective Date, and thereafter
renewing for successive one-year terms, such renewal terms to commence on the
successive anniversaries of the Effective Date unless either party gives one
hundred eighty (180) days' notice of intention to terminate prior to the
expiration of any such renewal term, and subject to earlier termination as
hereinafter provided.
3. DEVOTION TO DUTIES.
------------------
<PAGE>
The Employee agrees that during the period that he is employed hereunder,
he shall devote substantially all his business time and attention to the
business and affairs of the Company, shall use his best efforts to promote the
interests of the Company and shall not enter into any other corporate
affiliations without the prior written consent of the Company.
4. COMPENSATION OF EMPLOYEE.
------------------------
4.1. BASE SALARY. During the term of this Agreement, the Company shall
-----------
pay to the Employee as compensation for the services to be performed by the
Employee a base salary of One Hundred Forty Thousand Dollars ($140,000) per year
(the "Base Salary"). The Base Salary shall be payable in installments in
accordance with the Company's normal payroll practice. Commencing on January 1,
1997 and on January 1 of each year thereafter, or as soon as practicable
thereafter, the Compensation Committee of the Board of Directors (the
"Compensation Committee"), or the Board of Directors if the Compensation
Committee is not then in existence, shall review the Base Salary, and shall
authorize, in its discretion, an appropriate increase in the Base Salary;
provided, however, that such increase shall at a minimum be equal to the
cumulative cost-of-living increment on the Base Salary as reported in the
Consumer Price Index, Atlanta, Georgia, All Items, All Urban Consumers,
published by the United States Department of Labor, with January 1, 1996 being
the base date for computing such increment.
4.2. BONUS. In addition to the compensation set forth elsewhere in this
-----
section 4, for each year or portion thereof during the term of this Agreement
and any extensions thereof, the Employee shall be entitled to receive a bonus in
an amount to be determined by the Compensation Committee, or the Board of
Directors if the Compensation Committee is not then in existence, in its
discretion, based upon its evaluation of the Employee's performance during such
year or portion thereof.
4.3. BENEFITS. The Employee shall be entitled to participate, during the
--------
term he is employed hereunder, in all regular employee benefit and deferred
compensation plans established by the Company, including, without limitation,
any savings and profit sharing plan, incentive stock plan, dental and medical
plans, life insurance, and personal catastrophe and disability insurance. The
Employee shall be entitled during the period that he is employed to such paid
vacation as is provided in the policy adopted by the Board of Directors.
4.4. OFFICE AND SECRETARY. The Employee shall have a private office,
--------------------
secretarial assistance and such other facilities and services as are suitable to
his position and appropriate for the performance of his duties.
4.5. AUTOMOBILE. The Employee shall be provided with an automobile
----------
suitable to his position and appropriate for the performance of his duties. The
Company shall pay the operating expenses of such automobile.
2
<PAGE>
4.6. REIMBURSEMENT OF EXPENSES. The Company shall provide for the payment
-------------------------
or reimbursement of all reasonable and necessary expenses incurred by the
Employee in connection with the performance of his duties under this Agreement
in accordance with the Company's expense reimbursement policy, as such may
change from time to time.
5. TERMINATION OF EMPLOYMENT.
-------------------------
5.1. TERMINATION FOR CAUSE. "Termination For Cause", as hereinafter
---------------------
defined, may be effected by the Company at any time during the term of this
Agreement by written notification to the Employee. Upon Termination For Cause,
the Employee shall immediately be paid all accrued salary, bonus compensation to
the extent earned, vested deferred compensation (other than pension plan or
profit sharing plan benefits which will be paid in accordance with the
applicable plan), any benefits under any plans of the Company in which the
Employee is a participant to the full extent of the Employee's rights under such
plans, accrued vacation pay and any appropriate business expenses incurred by
the Employee in connection with his duties hereunder, all to the date of
termination, but the Employee shall not be paid any other compensation or
reimbursement of any kind, including without limitation, severance compensation.
"Termination For Cause" shall mean termination by the Company of the Employee's
employment by the Company by reason of the Employee's willful dishonesty
towards, fraud upon, or deliberate injury or attempted injury to the Company or
by reason of the Employee's willful material breach of this Agreement which has
resulted in material injury to the Company.
5.2. TERMINATION OTHER THAN FOR CAUSE. Notwithstanding any other
--------------------------------
provisions of this Agreement, the Company may effect a "Termination Other Than
For Cause", as hereinafter defined, at any time upon giving written notice to
the Employee of such termination. Upon any Termination Other Than for Cause, the
Employee shall immediately be paid all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than pension plan or profit
sharing plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of the Company in which the Employee is a
participant to the full extent of the Employee's rights under such plans,
accrued vacation pay and any appropriate business expenses incurred by the
Employee in connection with his duties hereunder, all to the date of
termination, and all severance compensation provided in subsection 6.2.
"Termination Other Than for Cause" shall mean termination by the Company of the
Employee's employment by the Company other than in a Termination For Cause, and
shall include constructive termination of the Employee's employment by reason of
material breach of this Agreement by the Company, such constructive termination
to be effective upon notice from the Employee to the Company of such
constructive termination.
5.3. TERMINATION BY REASON OF DISABILITY. If, during the term of this
-----------------------------------
Agreement, the Employee, in the reasonable judgment of the Board of Directors,
3
<PAGE>
has failed to perform his duties under this Agreement on account of illness or
physical or mental incapacity, and such illness or incapacity continues for a
period of more than twelve (12) consecutive months, the Company shall have the
right to terminate the Employee's employment hereunder by written notification
to the Employee and payment to the Employee of all accrued salary, bonus
compensation to the extent earned, vested deferred compensation (other than
pension plan or profit sharing plan benefits which will be paid in accordance
with the applicable plans), any benefits under any plans of the Company in which
the Employee is a participant to the full extent of the Employee's rights under
such plans, accrued vacation pay and any appropriate business expenses incurred
by the Employee in connection with his duties hereunder, all to the date of
termination, with the exception of medical and dental benefits which shall
continue through the expiration of this Agreement, but the Employee shall not be
paid any other compensation or reimbursement of any kind, including without
limitation, severance compensation.
5.4. DEATH. In the event of the Employee's death during the term of this
-----
Agreement, the Employee's employment shall be deemed to have terminated as of
the last day of the month during which his death occurs and the Company shall
pay to his estate or such beneficiaries as the Employee may from time to time
designate all accrued salary, bonus compensation to the extent earned, vested
deferred compensation (other than pension plan or profit sharing plan benefits
which will be paid in accordance with the applicable plan), any benefits under
any plans of the Company in which the Employee is a participant to the full
extent of Employee's rights under such plans, accrued vacation pay and any
appropriate business expenses incurred by the Employee in connection with his
duties hereunder, all to the date of termination, but the Employee's estate
shall not be paid any other compensation or reimbursement of any kind, including
without limitation, severance compensation.
5.5. VOLUNTARY TERMINATION. In the event of a "Voluntary Termination,"
---------------------
as hereinafter defined, the Company shall immediately pay all accrued salary,
bonus compensation to the extent earned, vested deferred compensation (other
than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plans), any benefits under any plans of the
Company in which the Employee is a participant to the full extent of the
Employee's rights under such plans, accrued vacation pay and any appropriate
business expenses incurred by the Employee in connection with his duties
hereunder, all to the date of termination, but no other compensation or
reimbursement of any kind, including without limitation, severance compensation.
"Voluntary Termination" shall mean termination by the Employee of Employee's
employment by the Company other than (i) constructive termination as described
in subsection 5.2, (ii) termination by reason of the Employee's disability as
described in subsection 5.3, (iii) termination by reason of the Employee's death
as described in subsection 5.4, and (iv) Termination Upon a Change in Control as
described in subsection 5.6.
5.7. TERMINATION UPON A CHANGE IN CONTROL. In the event of a "Termination
------------------------------------
Upon a Change in Control," as hereinafter defined, the Employee shall
immediately be paid all accrued salary, bonus compensation to the extent earned,
4
<PAGE>
vested deferred compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable plans), any
benefits under any plans of the Company in which Employee is a participant to
the full extent of the Employee's rights under such plans, accrued vacation pay
and any appropriate business expenses incurred by the Employee in connection
with his duties hereunder, all to the date of termination, and all severance
compensation provided in subsection 6.1. "Termination Upon a Change in Control"
shall mean a termination by the Employee of the Employee's employment with the
Company following a "Change in Control," as hereinafter defined. "Change in
Control" shall mean (i) the date on which the Company first determines that any
person and all other persons which constitute a group, within the meaning of
Section 13(d)(3) of the Exchange Act, have acquired direct or indirect
beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act,
of twenty percent (20%) or more of the Company's outstanding securities, unless
a majority of the "Continuing Directors", as hereinafter defined, approves the
acquisition not later than ten (10) business days after the Company makes that
determination, or (ii) the first day on which a majority of the members of the
Board of Directors are not Continuing Directors. "Continuing Directors" shall
mean, as of any date of determination, any member of the Board of Directors who
(i) was a member of the Board of Directors on December 31, 1993, (ii) has been a
member of the Board of Directors for the two years immediately preceding such
date of determination, or (iii) was nominated for election or elected to the
Board of Directors with the affirmative vote of the greater of (A) a majority of
the Continuing Directors who were members of the Board of Directors at the time
of such nomination or election or (B) at least four Continuing Directors.
5.8. NOTICE OF TERMINATION. The Company or the Employee may effect a
---------------------
termination of this Agreement pursuant to the provisions of this section 5 upon
giving thirty (30) days' written notice to the other party of such termination.
6. SEVERANCE COMPENSATION
----------------------
6.1. TERMINATION UPON CHANGE IN CONTROL. In the event the Employee's
----------------------------------------
employment is terminated in a Termination Upon a Change in Control, the Employee
shall be paid as severance compensation the Base Salary (at the rate payable at
the time of such termination) through the remaining term of this Agreement and
for an additional one year period thereafter, on the dates specified in
subsection 4.1; provided, however, that if the Employee obtains other employment
during such period, the severance compensation payable to the Employee during
such period shall be reduced by the amount of compensation that the Employee is
receiving from such other employment. The Employee is under no obligation to
mitigate the amount due to the Employee pursuant to this subsection 6.1 by
seeking other employment or otherwise. Notwithstanding any provision in this
subsection 6.1 to the contrary, the Employee may, in the Employee's sole
discretion, by delivery of a notice to the Company within thirty (30) days
following a Termination Upon a Change in Control, elect to receive from the
Company a lump sum severance payment by bank cashier's check equal to the
present value of the flow of cash payments that would otherwise be paid to the
5
<PAGE>
Employee pursuant to this subsection 6.1. Such present value shall be
determined as of the date of delivery of the notice of election by the Employee
and shall be based on a discount rate equal to the interest rate on 90-day
United States Treasury bills, as reported in the Wall Street Journal, or similar
publication, on the date of delivery of the election notice. If the Employee
elects to receive a lump sum severance payment, the Company shall make such
payment to the Employee within ten (10) days following the date on which the
Employee notifies the Company of the Employee's election. In addition to the
severance payment payable under this subsection 6.1, the Employee shall be paid
an amount equal to the average annual bonus earned by the Employee in the two
(2) years immediately preceding the date of termination. The Employee shall
also be entitled to an accelerated vesting of any awards granted to Employee
under the Company's Incentive Stock Plan. The Employee shall continue to accrue
retirement benefits and shall continue to enjoy any benefits under any plans of
the Company in which the Employee is a participant to the full extent of the
Employee's rights under such plans, including any perquisites provided under
this Agreement, through the remaining term of this Agreement; provided, however,
that the benefits under any such plans of the Company in which the Employee is a
participant, including any such perquisites, shall cease upon the Employee's
obtaining other employment. Notwithstanding any other provisions of this
Agreement, solely in the event of a Termination Upon a Change in Control
pursuant to subsection 5.8, the amount of severance compensation paid to the
Employee under this subsection 6.1 or otherwise, but exclusive of any payments
to the Employee in respect of any stock options then held by the Employee (or
any compensation deemed to be received by the Employee in connection with the
exercise of any stock options at any time) or by virtue of the Employee's
exercise of a limited right under the Company's Non-Employee Director Stock
Option Plan upon a Change in Control, shall not include any amount that the
Company is prohibited from deducting for federal income tax purposes by virtue
of Section 280G of the Internal Revenue Code of 1986, as amended, or any
successor provision.
6.2. TERMINATION OTHER THAN FOR CAUSE. In the event the Employee's
--------------------------------
employment is terminated in a Termination Other Than for Cause, the Employee
shall be paid as severance compensation his Base Salary, at the rate payable at
the time of such termination, through the remaining term of this Agreement and
for an additional one (1) year period thereafter, on the dates specified in
subsection 4.1; provided, however, that if the Employee obtains other employment
during such period, the severance compensation payable to the Employee during
such period will be reduced by the amount of compensation that the Employee is
receiving from such other employment. Notwithstanding any provision in this
subsection 6.2 to the contrary, the Employee may, in the Employee's sole
discretion, by delivery of a notice to the Company within thirty (30) days
following a Termination Other Than for Cause, elect to receive from the Company
a lump sum severance payment by bank cashier's check equal to the present value
of the flow of cash payments that would otherwise be paid to the Employee
pursuant to this subsection 6.2. Such present value shall be determined as of
the date of delivery of the notice of election by the Employee and shall be
6
<PAGE>
based on a discount rate equal to the interest rate on 90-day United States
Treasury bills, as reported in the Wall Street Journal, or similar publication,
on the date of delivery of the election notice. If the Employee elects to
receive a lump sum severance payment, the Company shall make such payment to the
Employee within ten (10) days following the date on which the Employee notifies
the Company of the Company's election. In addition to the severance payment
payable under this subsection 6.2, the Employee shall be paid an amount equal to
the average annual bonus earned by Employee in the two (2) years immediately
preceding the date of termination and the Company shall be entitled to an
accelerated vesting of any awards granted to the Employee under the Company's
Incentive Stock Plan.
6.3. TERMINATION UPON ANY OTHER EVENT. In the event of a Voluntary
--------------------------------
Termination, Termination For Cause, termination by reason of the Employee's
disability pursuant to subsection 5.5 or termination by reason of the Employee's
death pursuant to subsection 5.6, the Employee or his estate shall not be paid
any severance compensation.
7. OBLIGATIONS CONTINGENT ON PERFORMANCE.
-------------------------------------
The obligations of the Company under this Agreement, including its
obligation to pay the compensation provided for herein, shall be contingent upon
the Employee's performance of his obligations under this Agreement.
8. CONFIDENTIALITY.
---------------
The Employee agrees to hold in strict confidence all information concerning
any matters affecting or relating to the business of the Company, including
without limiting the generality of the foregoing its manner of operation, plans,
protocols, processes, computer programs, tenant lists, client lists, marketing
information and analyses, or other data, without regard to whether all of the
foregoing matters will be deemed confidential or material. The Employee agrees
that he will not, directly or indirectly, use any such information for the
benefit of others than the Company or disclose or communicate any of such
information in any manner whatsoever other than to the directors, officers,
employees, agents and representatives of the Company who need to know such
information, who shall be informed by the Employee of the confidential nature of
such information and directed by the Employee to treat such information
confidentially. Upon the Company's request, the Employee shall return all
information furnished to him related to the business of the Company. The above
limitations on use and disclosure shall not apply to information which the
Employee can demonstrate: (a) was known to the Employee before receipt thereof
from the Company; (b) is learned by the Employee from a third party entitled to
disclose it; or (c) becomes known publicly other than through the Employee. The
parties hereto stipulate that all such information is material and confidential
and gravely affects the effective and successful conduct of the business of the
Company and the Company's goodwill, and that any breach of the terms of this
section 8 shall be a material breach of this Agreement. The terms of this
section 8 shall remain in effect following the termination of this Agreement.
9. USE OF PROPRIETARY INFORMATION.
------------------------------
7
<PAGE>
The Employee recognizes that the Company possesses a proprietary interest
in all of the information described in section 8 and has the exclusive right and
privilege to use, protect by copyright, patent or trademark, manufacture or
otherwise exploit the processes, ideas and concepts described therein to the
exclusion of the Employee, except as otherwise agreed between the Company and
the Employee in writing. The Employee expressly agrees that any products,
inventions, discoveries or improvements made by the Employee, his agents or
affiliates, during the term of this Agreement, based on or arising out of the
information described in section 8 shall be the property of and inure to the
exclusive benefit of the Company. The Employee further agrees that any and all
products, inventions, discoveries or improvements developed by the Employee
(whether or not able to be protected by copyright, patent or trademark) during
the course of his employment, or involving the use of the Company's time,
materials or other resources, shall be promptly disclosed to the Company and
shall become the exclusive property of the Company.
10. NON-COMPETITION AGREEMENT.
-------------------------
10.1. NON-COMPETITION. The Employee agrees that, during the period that
---------------
he is employed hereunder and, in addition, the period, if any, during which the
Employee shall be entitled to severance compensation pursuant to section 6
(notwithstanding an election by the Employee to receive a lump sum severance
payment for such period), he shall not, without the prior written consent of the
Company, directly or indirectly, own, manage, operate, control, be connected
with as an officer, employee, partner, consultant or otherwise, or otherwise
engage or participate in, except as an employee of the Company, or any
corporation directly or indirectly controlled by it, any corporation or other
business entity engaged in any activity competitive with the Company, including
the business of owning, developing, leasing or managing shopping center
properties. Notwithstanding the foregoing, the ownership by the Employee of
less than 2% of any class of the outstanding capital stock of any corporation
conducting such a competitive business which is regularly traded on a national
securities exchange or in the over-the-counter market shall not be a violation
of the foregoing covenant.
10.2. NON-SOLICITATION. During the period that he is employed hereunder
----------------
and, in addition, the period, if any, during which the Employee shall be
entitled to severance compensation pursuant to section 6 (notwithstanding an
election by the Employee to receive a lump sum severance payment for such
period), the Employee shall not contact or solicit, directly or indirectly, any
customer, client, tenant or account whose identity the Employee obtained through
association with the Company, regardless of the geographical location of such
customer, client, tenant or account, nor shall the Employee, directly or
indirectly, entice or induce, or attempt to entice or induce, any employee of
the Company to leave such employ, nor shall the Employee employ any such person
in any business similar to or in competition with that of the Company during the
term of this Agreement or the period, if any, during which the Employee shall be
entitled to severance compensation pursuant to section 6. The Employee hereby
8
<PAGE>
acknowledges and agrees that the provisions set forth in this subsection 10.2
constitute a reasonable restriction on his ability to compete with the Company.
10.3. SAVING PROVISION. The parties hereto agree that, in the event a
----------------
court of competent jurisdiction shall determine that the geographical or
durational elements of this covenant are unenforceable, such determination shall
not render the entire covenant unenforceable. Rather, the excessive aspects of
the covenant shall be reduced to the threshold which is enforceable, and the
remaining aspects shall not be affected thereby.
10.4. EQUITABLE RELIEF. The Employee acknowledges that the extent of
----------------
damages to the Company from a breach of sections 8, 9 and 10 of this Agreement
would not be readily quantifiable or ascertainable, that monetary damages would
be inadequate to make the Company whole in case of such a breach, and that there
is not and would not be an adequate remedy at law for such a breach. Therefore,
the Employee specifically agrees that the Company is entitled to injunctive or
other equitable relief from a breach of sections 8, 9 and 10 of this Agreement,
and hereby waives and covenants not to assert against a prayer for such relief
that there exists an adequate remedy at law, in monetary damages or otherwise.
11. INDEMNIFICATION.
---------------
11.1. RIGHT TO INDEMNIFICATION. The Company shall indemnify, and on
------------------------
request shall advance expenses to, the Employee for expenses (including
attorneys' fees), judgments, penalties, fines and amounts paid in settlement if
the Employee becomes a party to, or is threatened to be made a party to, any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or otherwise, by reason of the fact that
the Employee (a) is or was an employee of the Company, or (b) is or was serving
at the request of the Company as a director, officer, partner, trustee, employee
or agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, in the manner and to the fullest extent
permitted by applicable law; provided, however, that the Company shall not
indemnify the Employee (a) in any proceeding by or in the right of the Company
against such Employee wherein the Employee shall have been adjudged to be liable
to the Company; (b) in any proceeding charging improper personal benefit to the
Employee, whether or not involving action in the Employee's official capacity,,
in which the Employee was adjudged to be liable on the basis that personal
benefit was improperly received; or (c) it is established that (i) the act or
omission of the Employee was material to the matter giving rise to the
proceeding and the act or omission was committed in bad faith or was the result
of active and deliberate dishonesty, (ii) the indemnitee actually received an
improper personal benefit in money, property or services, or (iii) in the case
of any criminal proceeding, the Employee had reasonable cause to believe the act
or omission was unlawful. If applicable law is hereafter amended, any such
amendment shall apply to this Agreement only to the extent mandated by law and
only as to the activities of the Employee subject to indemnification pursuant to
this subsection 11.1 which occur subsequent to the effective date of such
amendment.
9
<PAGE>
11.2. RIGHT OF CLAIMANT TO ENFORCE RIGHTS. Any indemnification or
-----------------------------------
advancement of expenses required under this section 11 shall be made promptly,
and in any event within thirty (30) days of the written request of the Employee.
If a determination by the Company that the Employee is entitled to
indemnification pursuant to this section 11 is required, and the Company fails
to respond within thirty (30) days to a written request for indemnity, the
Company shall be deemed to have approved such request. If the Company denies a
written request for indemnity or advancement of expenses, in whole or in part,
or if payment in full pursuant to such request is not made within thirty (30)
days, the right to indemnification and advancement of expenses as granted by
this section 11 shall be enforceable by the Employee in any court of competent
jurisdiction. The Employee's costs and expenses incurred in connection with
successfully establishing the Employee's right to indemnification, in whole or
in part, in any such action or proceeding shall also be indemnified by the
Company. Neither the failure of the Company (including the Board of Directors,
independent legal counsel or the stockholders of the Company) to have made a
determination prior to the commencement of such action that indemnification of
the Employee is proper in the circumstances because the Employee has met the
applicable standard of conduct set forth in the General Corporation Law of the
State of Maryland, nor the fact that there has been an actual determination by
the Company (including the Board of Directors, independent legal counsel or the
shareholders of the Company) that the Employee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that the Employee has not met the applicable standard of conduct.
11.3. NON-EXCLUSIVITY OF RIGHTS. The indemnification and advancement of
-------------------------
expenses provided by, or granted pursuant to, this section 11 shall not be
deemed exclusive of any other rights to which the Employee may be entitled by
law, the Company's Articles of Incorporation or Bylaws, an agreement with the
Company, or a resolution of the Board of Directors or of the Company's
shareholders. Any repeal or modification of the provisions of this section 11
shall be prospective only and shall not adversely affect any right or protection
set forth herein in favor of the Employee at the time of such repeal or
modification.
11.4. INSURANCE. The Company may, to the fullest extent permitted by law,
---------
purchase and maintain insurance, at its expense, to protect itself and the
Employee against any liability asserted against the Employee and incurred by the
Employee in any such capacity, or arising out of the Employee's duties
hereunder, whether or not the Company would have the power to indemnify the
Employee against such liability under the provisions of this section 11, the
General Corporation Law of the State of Maryland or otherwise.
11.5. SAVING PROVISION. If this section 11 or any portion thereof shall
----------------
be invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify the Employee as to expenses (including
attorneys' fees), judgments, fines, penalties and amounts paid in settlement
with respect to any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative, investigative or otherwise, to the fullest
extent permitted by any applicable portion of this section 11 which shall not
10
<PAGE>
have been invalidated, by the General Corporation Law of the State of Maryland
or by any other applicable law.
12. ENTIRE AGREEMENT.
----------------
This Agreement contains the complete agreement concerning the employment
arrangement between the parties and shall, as of the Effective Date, supersede
all other agreements or arrangements between the parties with regard to the
subject matter hereof.
13. BINDING AGREEMENT.
-----------------
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, legal representatives, successors and
assigns. The obligations of the Company under this Agreement shall not be
terminated by reason of any liquidation, dissolution, bankruptcy, cessation of
business or similar event relating to the Company. This Agreement shall not be
terminated by reason of any merger, consolidation or reorganization of the
Company, but shall be binding upon and inure to the benefit of the surviving or
resulting entity.
14. MODIFICATION.
------------
No waiver or modification of this Agreement or of any covenant, condition,
or limitation herein contained shall be valid unless in writing and duly
executed by the party to be charged therewith and no evidence of any waiver or
modification shall be offered or received in evidence of any proceeding,
arbitration, or litigation between the parties hereto arising out of or
affecting this Agreement, or the rights or obligations of the parties
thereunder, unless such waiver or modification is in writing, duly executed as
aforesaid.
15. SEVERABILITY.
------------
All agreements and covenants contained herein are severable, and in the
event any of them shall be held to be invalid or unenforceable by any court of
competent jurisdiction, this Agreement shall be interpreted as if such invalid
agreements or covenants were not contained herein.
16. MANNER OF GIVING NOTICE.
-----------------------
All notices, requests and demands to or upon the respective parties hereto
shall be sent by hand, certified mail, overnight air courier service, or
telecopier (if within a reasonable time a permanent copy is given by any of the
other methods described above), in each case with all applicable charges paid or
11
<PAGE>
otherwise provided for, addressed as follows, or to such other address as may
hereafter be designated in writing by the respective parties hereto:
To Company:
----------
JDN Realty Corporation
3340 Peachtree Road NE
Suite 1530
Atlanta, Georgia 30326
Telephone: (404) 262-3252
Facsimile: (404) 364-6446
To Employee:
-----------
William J. Kerley
3340 Peachtree Road NE
Suite 1530
Atlanta, Georgia 30326
Telephone: (404) 262-3252
Facsimile: (404) 364-6446
Such notices, requests and demands shall be deemed to have been given or made on
the date of delivery if delivered by hand or by telecopy and on the next
following date if sent by mail or by air courier service.
17. REMEDIES.
--------
In the event of a breach of this Agreement, the non-breaching party shall
be entitled to such legal and equitable relief as may be provided by law, and
shall further be entitled to recover all costs and expenses, including
reasonable attorneys' fees, incurred in enforcing the non-breaching party's
rights hereunder.
18. HEADINGS.
--------
The headings have been inserted for convenience only and shall not be
deemed to limit or otherwise affect any of the provisions of this Agreement.
19. CHOICE OF LAW.
-------------
It is the intention of the parties hereto that this Agreement and the
performance hereunder be construed in accordance with, under and pursuant to the
12
<PAGE>
laws of the State of Maryland without regard to the jurisdiction in which any
action or special proceeding may be instituted.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first stated above.
JDN REALTY CORPORATION
By: /s/ J. Donald Nichols
--------------------------
J. Donald Nichols
Chief Executive Officer
/s/ William J. Kerley
--------------------------
WILLIAM J.KERLEY
13
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<PERIOD-START> APR-01-1996 JAN-01-1996
<PERIOD-END> JUN-30-1996 JUN-30-1996
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