Edgar Filing: EASTGROUP PROPERTIES INC

DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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Exchange Act of 1934

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EASTGROUP PROPERTIES, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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LOGO

190 East Capitol Street, Suite 400

Jackson, Mississippi 39201

NOTICE OF 2014 ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders:

The 2014 Annual Meeting of Stockholders of EastGroup Properties, Inc. (the “Company”) will be held on Thursday, May 29, 2014 at 9:00 a.m., Central Daylight Time, at the Company’s offices, 190 East Capitol Street, Suite 400, Jackson, Mississippi. At the Meeting, stockholders will be asked to:

1. Elect nine directors to serve until the next Annual Meeting of Stockholders and until their successors are elected and qualified;

2. Cast an advisory vote to ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the 2014 fiscal year;

3. Cast an advisory vote on executive compensation; and

4. Transact other business properly presented at the Meeting or any adjournment or postponement thereof.

All stockholders of record at the close of business on April 4, 2014 are entitled to notice of and to vote at the Meeting or any adjournment thereof.

We are pleased to take advantage of the Securities and Exchange Commission rules that allow issuers to furnish proxy materials to their stockholders electronically. We believe these rules allow us to provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of the Meeting.

By Order of the Board of Directors

LOGO

N. KEITH MCKEY

Executive Vice President, Chief Financial Officer,

Treasurer and Secretary

DATED: April 17, 2014

TABLE OF CONTENTS


ABOUT THE 2014 ANNUAL MEETING			1
CORPORATE GOVERNANCE AND BOARD MATTERS			4
PROPOSALS TO BE VOTED ON			10
EXECUTIVE OFFICERS			11
COMPENSATION OF EXECUTIVE OFFICERS			12
CERTAIN TRANSACTIONS AND RELATIONSHIPS			26
OWNERSHIP OF COMPANY STOCK			27
AUDIT COMMITTEE MATTERS			29
OTHER MATTERS			31

Every shareholder’s vote is important. Please complete, sign, date, and return your proxy form, or authorize your proxy by phone or via the Internet.

LOGO

PROXY STATEMENT

The following information is furnished in connection with the Annual Meeting of Stockholders (the “Meeting”) of EastGroup Properties, Inc. (the “Company”), to be held on May 29, 2014 at 9:00 a.m., Central Daylight Time, at the Company’s offices, 190 East Capitol Street, Suite 400, Jackson, Mississippi. This Proxy Statement, Annual Report on Form 10-K, and Form of Proxy are first being made available, and a Notice Regarding the Availability of Proxy Materials is first being mailed, to stockholders on or about April 17, 2014.

ABOUT THE 2014 ANNUAL MEETING

What is the purpose of the Meeting?

At the Meeting, stockholders will be asked to elect nine directors of the Company, cast an advisory vote to ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the 2014 fiscal year and cast an advisory vote on executive compensation. In addition, management will report on the performance of the Company and respond to questions from stockholders.

Who is entitled to vote?

All stockholders of record as of the close of business on Friday, April 4, 2014 (the “Record Date”) are entitled to vote at the Meeting. As of the Record Date, 31,299,928 shares of Common Stock were issued and outstanding. Each share of Common Stock outstanding on the Record Date is entitled to one vote on each item submitted to you for consideration.

Why didn’t I automatically receive a paper copy of the Proxy Statement, Proxy Card and Annual Report?

The Securities and Exchange Commission (“SEC”) rules allow us to furnish proxy materials to our stockholders electronically. In an effort to lower the costs of delivery of proxy materials, as well as to reduce our use of paper, we have elected to take advantage of these rules by only mailing materials to those stockholders who specifically request a paper copy. On or around April 17, 2014, all stockholders were mailed a Notice Regarding the Availability of Proxy Materials that contained an overview of the proxy materials and explained several methods by which stockholders could view the proxy materials online or request to receive a copy of proxy materials via regular mail or email. There is NO charge for requesting a copy.

How can I get electronic access to the proxy materials?

The Notice Regarding the Availability of Proxy Materials includes a website address that will:

Provide you with instructions on how to view our proxy materials on the Internet; and

Enable you to notify us to send future proxy materials to you by email.

Choosing to receive future proxy materials by email will save us the cost of printing and mailing documents to you and will reduce the impact of our annual meetings on the environment. If you choose to receive future

proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it.

Can I find additional information on the Company’s website?

Yes. Our website is located at www.eastgroup.net. Although the information contained on our website is not part of this proxy statement, you can view additional information on the website, such as our Code of Conduct, Corporate Governance Guidelines, charters of Board committees and reports that we file with the SEC. A copy of our Code of Conduct, Corporate Governance Guidelines and each of the charters of our Board committees may be obtained free of charge by writing to EastGroup Properties, Inc., 190 East Capitol Street, Suite 400, Jackson, Mississippi 39201, Attention: Investor Relations.

How do I vote?

Voting in Person at the Meeting. If you are a stockholder of record and attend the annual meeting, you may vote in person at the meeting. If your shares of Common Stock are held in street name and you wish to vote in person at the meeting, you will need to obtain a “legal proxy” from the broker, bank or other nominee that holds your shares of Common Stock of record.

Voting by Proxy for Shares Registered Directly in the Name of the Stockholder. If you hold your shares of Common Stock in your own name as a holder of record with our transfer agent, Wells Fargo Shareowner Services, you may instruct the proxy holders named in the proxy card how to vote your shares of Common Stock in one of the following ways:

Vote online. You can access proxy materials and vote at www.proxyvote.com. To vote online, you must have a shareholder identification number provided in the Notice Regarding the Availability of Proxy Materials.

Vote by telephone. If you received printed materials, you also have the option to vote by telephone by following the “Vote by Phone” instructions on the proxy card.

Vote by regular mail. If you received printed materials and would like to vote by mail, then please mark, sign and date your proxy card and return it promptly in the postage-paid envelope provided.

Voting by Proxy for Shares Registered in Street Name. If your shares of Common Stock are held in street name, you will receive instructions from your broker, bank or other nominee that you must follow in order to have your shares voted.

Regardless of how you choose to vote, your vote is important to us and we encourage you to vote promptly.

What happens if I return my proxy card without voting on all proposals?

When you return a properly executed proxy card, the Company will vote the shares that the proxy card represents in accordance with your directions. If you return the signed proxy card with no direction on a proposal, the Company will vote your proxy FOR the Board’s nominees for Director, FOR the ratification of the independent registered public accounting firm and FOR the approval of our 2013 executive compensation.

Will there be any other items of business on the agenda?

Pursuant to the Company’s Bylaws and SEC rules, stockholder proposals must have been received by March 30, 2014 to be considered at the Annual Meeting. To date, we have received no stockholder proposals and we do not expect any other items of business. Nonetheless, in case there is an unforeseen need, your proxy gives discretionary authority to David H. Hoster II and N. Keith McKey with respect to any other matters that might be brought before the Annual Meeting. Those persons intend to vote that proxy in accordance with their best judgment.

How many votes are needed to hold the Meeting?

In order to conduct the Meeting, the presence, in person or by properly executed proxy, of the holders of shares of Common Stock entitled to cast a majority (i.e., greater than 50%) of all the votes entitled to be cast at the Meeting is necessary to constitute a quorum. Shares of Common Stock represented by a properly signed, dated and returned proxy card, or proxies submitted by telephone or online, including abstentions and broker non-votes, will be treated as present at the Meeting for purposes of determining a quorum.

How many votes are required to act on the proposals?

Proposal 1 concerns the election of nine directors of the Company. Pursuant to the Company’s Bylaws, provided that a quorum is present at the Meeting, directors will be elected by a plurality of all the votes cast at the Meeting with each share being voted for as many individuals as there are directors to be elected and for whose election the share is entitled to vote.

Proposal 2 concerns an advisory vote to ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the 2014 fiscal year. The affirmative vote by holders of at least a majority of the votes cast at the Meeting at which a quorum is present is required to ratify the appointment of KPMG LLP as our independent registered public accounting firm.

Proposal 3 concerns a non-binding advisory vote to approve the compensation for the Named Executive Officers disclosed in the section of this Proxy Statement entitled “Compensation of Executive Officers.” Stockholder “approval” of Proposal 3 occurs if the votes cast in its favor exceed votes cast against it.

How are votes counted?

For purposes of each proposal, abstentions and broker non-votes, if any, will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered present for the purpose of determining the presence of a quorum.

Can I change my vote after I have voted?

You can revoke your proxy and change your vote at any time before the polls close at the Meeting. You can do this by:

filing with the Secretary of the Company a written revocation or signing and submitting another proxy with a later date; or

attending the Meeting, withdrawing the proxy and voting in person.

How do I submit a proposal for the 2015 Annual Meeting?

If a stockholder wishes to have a proposal considered for inclusion in the Company’s proxy statement for the 2015 Annual Meeting of Stockholders, the stockholder must submit the proposal in writing to the Secretary of the Company at 190 East Capitol Street, Suite 400, Jackson, Mississippi 39201 so that the Company receives the proposal by December 18, 2014.

If the proposal is not intended to be included in the Company’s proxy statement, a qualified stockholder intending to introduce a proposal or nominate a director at the 2015 Annual Meeting of Stockholders should give written notice to the Company’s Secretary not later than March 30, 2015 and not earlier than February 28, 2015.

Stockholders also are advised to review the Company’s Bylaws, which contain additional advance notice requirements, including requirements with respect to advance notice of stockholder proposals and director nominations.

Will anyone contact me regarding this vote?

No arrangements or contracts have been made with any solicitors as of the date of this Proxy Statement, although we reserve the right to engage solicitors if we deem them necessary. Such solicitations may be made by mail, telephone, facsimile, e-mail or other electronic means or personal interviews. In addition, we reserve the right to solicit proxies through our Directors, officers and employees (who will receive no additional compensation for those services). We anticipate that banks, brokerage houses and other institutions, nominees or fiduciaries will be requested to forward the soliciting material to their principals and to obtain authorization for the execution of proxies. The Company may, upon request, reimburse banks, brokerage houses and other institutions, nominees and fiduciaries for their expenses in forwarding proxy material to their principals.

Who has paid for this proxy solicitation?

The Company has paid the entire expense of this proxy statement and any additional materials furnished to stockholders.

CORPORATE GOVERNANCE AND BOARD MATTERS

Director Qualifications and Biographical Information

The biography of each director nominee below contains information regarding that person’s principal occupation, tenure with the Company, business experience, other director positions currently held or held at any time during the past five years, and the specific experience, qualifications, attributes or skills that led to the conclusion by the Board of Directors that such person should serve as a Director of the Company.

D. Pike Aloian, age 59 — Mr. Aloian has served as a director of the Company since 1999. His financial and investment experience, knowledge of capital markets and experience on other public and private company boards prepare him to give the Board his views on real estate investment markets and financial matters. He is a partner of Almanac Realty Investors, LLC (formerly known as Rothschild Realty Managers, LLC), a real estate advisory and investment management firm based in New York that specializes in providing growth capital to public and private real estate companies. At Almanac, Mr. Aloian is responsible for originating investment opportunities, for negotiating and structuring transactions and for monitoring the investments over their respective lives. Mr. Aloian served on the Board of Directors of Brandywine Realty Trust from 1999 to 2012 and was most recently a member of its Audit, Corporate Governance and Executive Committees. He graduated from Harvard College and received an MBA from Columbia University.

H.C. Bailey, Jr., age 74 — Mr. Bailey has served as a director of the Company since 1980. He provides valuable insight to the Board with respect to the historical and future direction of the Company based on his many years of experience on the Board together with his decades of experience in the real estate, finance and real estate development areas. He is Chairman and President of H.C. Bailey Company and its affiliated companies and has been employed in various capacities with that company since 1962. The companies’ primary areas of activity have been in real estate investments, development, property management, mortgage banking, financial institutions, lumber and supply company, and general insurance. The companies presently own or have previously owned and/or operated office buildings, hotels, shopping centers, and commercial and residential developments. He is a graduate of the University of Mississippi with a BA degree and a graduate of the School of Mortgage Banking, Northwestern University, Chicago, Illinois, in cooperation with the Mortgage Bankers Association of America.

H. Eric Bolton, Jr., age 57 — Mr. Bolton was appointed a director of the Company in December 2013. He brings extensive business and real estate operating experience to the Board. Mr. Bolton has been Chief Executive Officer of Mid-America Apartment Communities, Inc. (“MAA”) since October 2001 and Chairman of the Board of Directors of MAA since September 2002. He joined MAA in 1994 as Vice President of Development and was named Chief Operating Officer in February 1996 and promoted to President in December 1996. Prior to that time, he was Executive Vice President and Chief Financial Officer of Trammell Crow Realty Advisors. Mr. Bolton served on the Board of Directors of Interstate Hotels and Resorts, Inc. from 2008 to 2010. He received a BBA in Accounting from the University of Memphis and an MBA with a concentration in Finance and Real Estate from the University of North Texas.

Hayden C. Eaves III, age 68 — Mr. Eaves has served as a director of the Company since 2002. Mr. Eaves’ leadership and experience in the real estate, real estate development and real estate operations business, particularly in the California and Arizona real estate markets, are valuable to the Board. Mr. Eaves has more than 40 years of experience in the real estate industry. He was President and Chief Executive Officer of the Western Region of Trammell Crow Company until 1995, where he was responsible for 52 million square feet of industrial, office and retail space in California, Oregon, Washington, Arizona and Nevada. He is currently President of Hayden Holdings, Inc., a family investment management company and an advisor to IDS Real Estate Group where he served as a Managing Director until 2006. He is also on the Board of Directors of Watson Land Company, a private developer, owner, and manager of industrial properties located in Southern California. Mr. Eaves received a BS in Accounting from California State University of Los Angeles.

Fredric H. Gould, age 78 — Mr. Gould has served as a director of the Company since 1998. He has extensive experience in commercial real estate lending and operations, including as the chief executive of a public real estate company, and he provides the Board with perspective on financial, operational and strategic matters. Mr. Gould is a member of the Board of Directors of BRT Realty Trust and Vice-Chairman of One Liberty Properties, Inc. He is also the Chairman of the General Partner of Gould Investors L.P., a limited partnership engaged in real estate ownership. He previously served on the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT) as well as the Board of Directors of the Real Estate Board of New York where he was also a member of its Finance Committee. Mr. Gould received a BBA from Lehigh University and an LLB, cum laude, from New York Law School.

David H. Hoster II, age 68 — Mr. Hoster is the Chief Executive Officer of the Company and has served in that capacity since 1997. He has served as President of the Company and as a director since 1993. His leadership experience and Company and industry knowledge, including more than 38 years involvement with publicly held REITs and extensive experience with industrial real estate provide valuable insight to the Board of Directors in formulating and executing the Company’s strategy. Mr. Hoster previously served on the NAREIT Board of

Governors and he serves on the Board of Directors of Trustmark National Bank and Trustmark Corporation. He received a BA degree from Princeton University and an MBA from Stanford University.

Mary E. McCormick, age 56 — Ms. McCormick has served as a director of the Company since 2005. She has extensive experience in real estate, capital markets, board governance and process and brings that expertise to Board discussions. Ms. McCormick is a Senior Advisor with Almanac Realty Investors, LLC (formerly known as Rothschild Realty Managers, LLC), where she helps source and analyze potential real estate investment opportunities and provides guidance and consultative services to companies. She served the Ohio Public Employees Retirement System from 1989 through 2005, where she was most recently responsible for directing the $64 billion fund’s real estate investments including large-scale initiatives in a variety of property types and transaction structures as well as oversight of a $1.3 billion internally managed REIT portfolio. Ms. McCormick has held a number of leadership positions on a variety of national and regional real estate associations, including Chair of the Pension Real Estate Association, Chair of the Portfolio Management Committee of the National Council of Real Estate Investment Fiduciaries, Vice Chair of the Urban Land Institute Council and a member of the NAREIT Board of Governors. Ms. McCormick currently serves on the Board of Directors of Broadstone Net Lease (a private REIT) and BSR Properties (a private real estate company) and on the advisory Board of White Oak Partners (a registered investment advisor). She was a director of Mid-America Apartment Communities, Inc. from 2006 to 2010. Ms. McCormick is a member of the Urban Land Institute and has a BS and MBA from The Ohio State University.

David M. Osnos, age 82 — Mr. Osnos has served as a director of the Company since 1993 and his decades of experience as a counselor to real estate interests and broad based legal expertise are important to the Board of Directors. Mr. Osnos is Of Counsel to (and, until December 31, 2002, was a partner in) the law firm of Arent Fox LLP. He has more than 50 years of legal practice in securities, real estate and tax and provides corporate legal knowledge and expertise in the negotiation, documentation and closing of corporate and real estate transactions. Mr. Osnos serves on the Board of Directors of VSE Corporation. Mr. Osnos was a director of Washington Real Estate Investment Trust until May of 2007. Mr. Osnos received an AB (summa cum laude) from Harvard College and a JD (cum laude) from Harvard Law School.

Leland R. Speed, age 81 — Mr. Speed has served as the Chairman of the Board of the Company since 1983 and a Director since 1978. He brings extensive knowledge of the Company, experience in commercial real estate and real estate development as well as his current experience as an active member of public and charitable boards. He served as Chief Executive Officer of the Company and Parkway Properties, Inc. until 1997, as Chairman of the Board of Parkway from 1980 until 2011 and as Chairman Emeritus of Parkway until 2012. From 2004 to 2006 and from March 2011 to January 2012, Mr. Speed served as the Executive Director of the Mississippi Development Authority, the State of Mississippi’s lead economic development agency. He has served in various capacities at NAREIT, including the Board of Governors and was the recipient of the 2008 Industry Leadership Award. He received his BS in Industrial Management from Georgia Institute of Technology and MBA from Harvard Business School.

Independent Directors

Under the NYSE listing standards, at least a majority of the Company’s directors and all of the members of the Company’s Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee must meet the test of “independence” as defined by the NYSE. The NYSE standards provide that, to qualify as an “independent” director, in addition to satisfying certain bright-line criteria, the Board of Directors must affirmatively determine that a director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). The Board of

Directors has determined that each current director, other than Mr. Speed, the Company’s Chairman, and Mr. Hoster, the Company’s President and Chief Executive Officer, satisfies the bright-line criteria and that none has a relationship with the Company that would interfere with such person’s ability to exercise independent judgment as a member of the Company’s Board.

Stockholder Communication With the Board

The Board of Directors has appointed David M. Osnos as “Lead Independent Director.” In that capacity, he presides over the meetings of the non-management directors of the Company. Stockholders and other parties interested in communicating directly with the Lead Independent Director or with the non-management directors as a group may do so by writing to David M. Osnos, Lead Independent Director, EastGroup Properties, Inc., 190 East Capitol Street, Suite 400, Jackson, Mississippi 39201. Correspondence so addressed will be forwarded directly to Mr. Osnos.

Leadership Structure

Our current leadership structure is comprised of the Chairman of the Board, a separate Chief Executive Officer, an independent director serving as Lead Independent Director who presides over the non-management directors, and strong active independent directors. As Chief Executive Officer, Mr. Hoster is responsible for setting the strategic direction of the Company and for the day to day leadership and management of the Company, while Mr. Speed, Chairman of the Board, provides oversight, direction and leadership to the Board.

Another component of our leadership structure is the active role played by our independent directors in overseeing the Company’s business, both at the Board and Committee level. Seven of the current nine Directors are considered independent under the NYSE listing standards. All of our Directors are free to suggest the inclusion of items on the agenda for meetings of our Board of Directors or raise subjects that are not on the agenda for that meeting. In addition, our Board of Directors and each committee have complete and open access to any member of management and the authority to retain independent legal, financial and other advisors as they deem appropriate without consulting or obtaining the approval of any member of management. Our Board of Directors also holds regularly scheduled executive sessions of only non-management Directors, led by the Lead Independent Director, in order to promote discussion among the non-management Directors and assure independent oversight of management. Moreover, our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, all of which are comprised entirely of independent Directors, also perform oversight functions independent of management.

Board Oversight of Risk Management

The Company believes that its leadership structure allows the Directors to provide effective oversight of the Company’s risk management function by receiving and discussing regular reports prepared by the Company’s senior management on areas of material risk to the Company, including market conditions, tenant concentrations and credit worthiness, leasing activity and expirations, compliance with debt covenants, management of debt maturities, access to debt and equity capital markets, existing and potential legal claims against the Company and various other matters relating to the Company’s business. Additionally, the Board of Directors administers its risk oversight function through (i) the required approval by the Board of Directors (or a committee thereof) of significant transactions and other decisions, including, among others, development and acquisitions of properties, new borrowings and the appointment and retention of the Company’s senior management, (ii) the coordination of the direct oversight of specific areas of the Company’s business by the Compensation, Audit and Nominating and Corporate Governance Committees, and (iii) periodic reports from the Company’s auditors and other outside

consultants regarding various areas of potential risk, including, among others, those relating to the qualification of the Company as a REIT for tax purposes and the Company’s internal control over financial reporting. In furtherance of its risk oversight function, the Board of Directors had adopted policies that (i) prohibit directors and officers from engaging in certain hedging or monetization transactions, and (ii) require “claw back” of any annual incentive payment or long term incentive payment to an executive officer which payment was predicated on the attainment of financial results that are later the subject of a substantial restatement.

Committees and Meeting Data

The Board of Directors has a standing Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. Each member of each of these committees is “independent” as that term is defined in the NYSE listing standards. The Board has adopted a written charter for each of these committees, which is available on our website at www.eastgroup.net.

The Audit Committee consists of Messrs. Aloian, Bolton and Osnos and Ms. McCormick. Mr. Bolton was appointed to the Audit Committee in February 2014. The Audit Committee met six times during the Company’s 2013 fiscal year. The Audit Committee oversees the financial reporting of the Company, including the audit by the Company’s independent registered public accounting firm. Messrs. Aloian and Bolton and Ms. McCormick have been designated as the Company’s “Audit Committee financial experts” in accordance with the SEC rules and regulations, and the Board has determined that they have accounting and related financial management expertise within the meaning of the listing standards of the New York Stock Exchange. See “Report of the Audit Committee” below.

The Compensation Committee consists of Messrs. Bailey, Eaves and Gould. The Compensation Committee’s function is to review and recommend to the Board of Directors appropriate executive compensation policy and compensation of the Company’s directors and executive officers. The Compensation Committee also reviews and makes recommendations with respect to executive and employee benefit plans and programs. The Compensation Committee met three times during the Company’s 2013 fiscal year.

The Nominating and Corporate Governance Committee currently consists of Messrs. Aloian and Eaves and Ms. McCormick. The Nominating and Corporate Governance Committee met six times during the Company’s 2013 fiscal year. The responsibilities of the Nominating and Corporate Governance Committee include assessing Board membership needs and identifying, screening, recruiting, presenting director candidates to the Board, implementing policies regarding corporate governance matters, making recommendations regarding committee memberships and sponsoring and overseeing performance evaluations for the Board as a whole and the directors.

Nominating Procedures

In identifying suitable candidates for nomination as a director, the Nominating and Corporate Governance Committee considers the needs of the Board and the range of skills and characteristics required for effective functioning of the Board. Although the Company does not have a formal policy or guidelines regarding diversity, the Company’s Corporate Governance Guidelines recognize the value of having a Board that encompasses a broad range of skills, expertise, contacts, industry knowledge and diversity of opinion. In evaluating such skills and characteristics, the Committee may take into consideration such factors as it deems appropriate, including those included in the Corporate Governance Guidelines. Current members of the Board with skills and experience that are relevant to the Company’s business and who are willing to continue in service are considered for re-nomination. In addition, the Nominating and Corporate Governance Committee will consider nominees suggested by incumbent Board members, management, stockholders and, in certain circumstances, outside search

firms; as such, stockholders may influence the composition of the Board. Under this principle, the Nominating and Corporate Governance Committee will consider written recommendations for potential nominees suggested by stockholders. Any such person will be evaluated in the same manner as any other potential nominee for director. Any suggestion for a nominee for director by a stockholder should be sent to the Company’s Secretary at 190 East Capitol Street, Suite 400, Jackson, Mississippi 39201, within the time periods set forth under the heading “About the Meeting — How do I submit a proposal for the 2015 Annual Meeting?”.

Board Attendance at Meetings

The Board of Directors held seven meetings during the Company’s 2013 fiscal year. Each director attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and meetings held by all committees of the Board of Directors on which he or she served. The Company’s Corporate Governance Guidelines provide that all directors are expected to regularly attend all meetings of the Board and the Board committees on which he or she serves. In addition, each director is expected to attend the Annual Meeting of Stockholders. In 2013, the Annual Meeting of Stockholders was attended by all of the directors then in office.

Compensation Committee Interlocks

As noted above, the Compensation Committee is comprised of three independent Directors: Messrs. Bailey, Eaves and Gould. No member of the Compensation Committee is or was formerly an officer or an employee of the Company. No executive officer of the Company serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of the Company’s Board of Directors, nor has such interlocking relationship existed in the past.

Compensation of Directors

Under the Company’s director compensation program, each non-employee director is paid an annual cash retainer of $30,000 payable ratably on a monthly basis. The chairperson of the Audit Committee and Compensation Committee receive an additional annual cash retainer in the amount of $15,000 and $10,000, respectively. All other committee chairpersons receive an additional annual $7,500 cash retainer and the Lead Independent Director receives an additional annual $10,000 cash retainer.

The director compensation program provides that each non-employee director is paid $1,500 for each Board meeting attended. Non-employee directors serving as members of Board committees are paid $1,000 for each meeting attended. In each case, the non-employee director is also reimbursed for his or her expenses in connection with attendance at each meeting.

Pursuant to the Independent Director Compensation Policy under the Company’s 2013 Equity Incentive Plan, non-employee directors receive an annual award in connection with their election to the Board at the annual meeting of stockholders. The annual award consists of shares of the Company’s common stock with a value of $70,000 as of the date of grant. A director who is appointed to the Board outside of the annual meeting of stockholders will receive a prorated amount of the annual award.

The Independent Director Compensation Policy also provides that each new non-employee director appointed or elected will receive an automatic award of restricted shares of Common Stock on the effective date of election or appointment equal to $25,000 divided by the fair market value of the Company’s Common Stock on such date. These restricted shares will vest over a four-year period upon the performance of future service as a director, subject to certain exceptions.

Messrs. Speed and Hoster, as officers of the Company, do not receive any compensation for serving the Company as members of the Board of Directors or any of its committees. In 2013, Mr. Speed received cash compensation of $250,000 for his service as Chairman of the Board of Directors. The Company’s non-employee directors received the following aggregate amounts of compensation for the year ended December 31, 2013:


Name	Fees Earned or Paid in Cash		Stock Awards (1)		Total
D. Pike Aloian	$	52,500	$	70,053	$	122,553
H.C. Bailey, Jr.	$	51,500	$	70,053	$	121,553
H. Eric Bolton, Jr.	$	2,500	$	58,411	$	60,911
Hayden C. Eaves III	$	59,500	$	70,053	$	129,553
Fredric H. Gould	$	41,000	$	70,053	$	111,053
Mary E. McCormick	$	60,000	$	70,053	$	130,053
David M. Osnos	$	71,500	$	70,053	$	141,553

(1)	Represents the grant date fair value of the award determined in accordance with FASB ASC Topic 718.

PROPOSALS TO BE VOTED ON

Proposal 1 — Election of Directors

In accordance with our Bylaws, the Board of Directors has by resolution fixed the number of directors to be elected at the Meeting at nine. All nine positions on the Board are to be filled by the vote of the stockholders at the Meeting. Each person so elected shall serve until the next Annual Meeting of Stockholders and until his or her successor is elected and qualified.

The nominees for Director are: D. Pike Aloian, H.C. Bailey, Jr., H. Eric Bolton, Jr., Hayden C. Eaves III, Fredric H. Gould, David H. Hoster II, Mary E. McCormick, David M. Osnos, and Leland R. Speed. All nominees are currently serving as directors of the Company and were elected at the 2013 Annual Meeting of Stockholders with the exception of Mr. Bolton who was appointed to the Board on December 6, 2013.

Unless instructed otherwise, proxies will be voted “FOR” the nominees listed above. Although the directors do not contemplate that any of the nominees will be unable to serve prior to the Meeting, if such a situation arises, your proxy will be voted in accordance with the best judgment of the person or persons voting the proxy.

Information regarding the director nominees can be found under “Corporate Governance and Board Matters — Director Qualifications and Biographical Information.”

The Board of Directors unanimously recommends that shareholders vote “FOR” the election of each of the nominees.

Proposal 2 — Advisory Vote on the Ratification of Independent Registered Public Accounting Firm

The Audit Committee is responsible for the appointment of the independent registered public accounting firm engaged by the Company. The Audit Committee has appointed KPMG LLP as independent auditors for 2014. The Board is asking stockholders to approve this appointment. KPMG LLP audited the Company’s financial statements and internal controls over financial reporting for 2013. A representative of that firm will be present at the Meeting and will have an opportunity to make a statement and answer questions.

The “Audit Committee Matters” section of this Proxy Statement contains additional information regarding the independent auditors, including a description of the Audit Committee’s Policy for Pre-Approval of Audit and Permitted Non-Audit Services and a summary of Auditor Fees and Services.

The Board of Directors recommends that you vote “FOR” the appointment of KPMG LLP, an independent registered public accounting firm, to serve as the Company’s independent auditors for the 2014 fiscal year.

Proposal 3 — Advisory Vote on Executive Compensation

As required by SEC rules, we are asking our stockholders to provide an advisory, nonbinding vote to approve the compensation awarded to our Named Executive Officers, as we have described it in the “Compensation of Executive Officers” section of this Proxy Statement.

As described in detail under the heading “Compensation Discussion and Analysis,” we seek to closely align the interests of our named executive officers with the interests of our stockholders. Our compensation programs are designed to reward our named executive officers for the achievement of short-term and long-term strategic and operational goals and the achievement of increased total stockholder return, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking.

You may vote for or against the following resolution, or you may abstain. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the philosophy, policies and procedures described in this Proxy Statement.

Accordingly, we ask our stockholders to vote on the following resolution at the Meeting:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation awarded to the Company’s Named Executive Officers for 2013, as disclosed under SEC rules, including the Compensation Discussion and Analysis, the compensation tables and related material included in this Proxy Statement.”

While this vote is advisory and not binding on our Company, the Board and the Compensation Committee expect to consider the outcome of the vote, along with other relevant factors, when considering future executive compensation decisions.

The Board of Directors recommends that you vote “FOR” the approval of the foregoing resolution.

EXECUTIVE OFFICERS

The following provides certain information regarding our executive officers. Each individual’s name and position with the Company is indicated. In addition, the principal occupation and business experience for the past five years is provided for each officer and, unless otherwise stated, each person has held the position indicated for at least the past five years. There are no family relationships between any of the directors or executive officers of the Company.

Leland R. Speed, age 81 — Mr. Speed has served as the Chairman of the Board of the Company since 1983 and a director since 1978. He served as Chief Executive Officer of the Company and Parkway Properties, Inc. until 1997, as Chairman of the Board of Parkway from 1980 until 2011 and as Chairman Emeritus of Parkway until 2012. From 2004 until 2006 and from March 2011 to January 2012, Mr. Speed served as the Executive Director of the Mississippi Development Authority, the State of Mississippi’s lead economic development agency.

N. Keith McKey, CPA, age 63 — Mr. McKey has served as the Company’s Executive Vice President since 1993, Chief Financial Officer and Secretary since 1992 and Treasurer since 1997.

John F. Coleman, age 54 — Mr. Coleman has been a Senior Vice President of the Company since 2001. From 1994 until 2001, he was a Senior Vice President of Weeks Corporation and its successor Duke Realty Corporation (an industrial/office real estate investment trust).

Bruce Corkern, CPA, age 52 — Mr. Corkern has served as Chief Accounting Officer since 2005 and has been a Senior Vice President and Controller of the Company since 2000. From 1990 until 2000, he was the Vice President of Finance of Time Warner Cable (Jackson/Monroe Division).

William D. Petsas, age 56 — Mr. Petsas has been a Senior Vice President of the Company since 2000. From 1994 until 2000, he was a Vice President of Prologis (an industrial real estate investment trust).

Brent W. Wood, age 44 — Mr. Wood has been a Senior Vice President of the Company since 2003. He was a Vice President of the Company from 2000 to 2003, a Senior Asset Manager of the Company from 1997 to 1999 and Assistant Controller from 1996 to 1997.

COMPENSATION OF EXECUTIVE OFFICERS

Compensation Discussion and Analysis

Executive Summary. The Company has a long track record of creating value for its shareholders. Total return to shareholders and growth in funds from operations are the primary metrics considered by the Company in judging company-wide performance.

EastGroup has outperformed the NAREIT Industrial Index, the best measure of the Company’s relative performance, in total shareholder return for one, three, five and ten years. EastGroup has also outperformed the broader NAREIT Equity Index for one, three and ten years. Listed below are the shareholder returns for various periods.


Company/Index	1 Year			3 Years			5 Years			10 Years
EastGroup Properties, Inc.		11.7	%		15.9	%		15.9	%		11.2	%
NAREIT Industrial Index		7.4	%		10.2	%		12.3	%		1.5	%
NAREIT Equity Index		2.5	%		9.4	%		16.5	%		8.4	%
Russell 2000		38.8	%		15.7	%		20.1	%		9.1	%

Growth in funds from operations is a primary operating metric. The last three years have recorded growth of 3.5% in 2011, 4.1% in 2012, and 4.9% in 2013.

General Philosophy. The Compensation Committee compensates our senior management through a mix of base salary, bonus and equity compensation designed to be competitive with comparable employers and to align management’s incentives with the long-term interests of our stockholders. The compensation setting process consists of establishing targeted overall compensation for each executive officer and then allocating that compensation among base salary, cash incentive/bonus and equity incentive compensation. The Committee designs the incentive compensation to reward company-wide performance through the use of performance metrics based primarily on growth in funds from operations and total return to stockholders.

Consideration of Most Recent Say on Pay Vote. At the annual meeting of shareholders on May 29, 2013, over 98% of the shares voted were voted in support of the compensation of our Named Officers, as discussed and disclosed in the 2013 proxy statement. In considering the results of this most recent advisory vote on executive compensation, the Committee concluded that the compensation paid to our executive officers and the Company’s overall pay practices have strong shareholder support and no significant changes were necessary.

The Committee recognizes that executive pay practices and notions of sound governance principles continue to evolve. Consequently, the Committee intends to continue paying close attention to the advice and counsel of its independent compensation advisors and invites our shareholders to communicate any concerns or opinions on executive pay directly to the Committee or the Board. Please refer to “Stockholder Communication with the Board” above for information about communicating with the Board.

Also at the annual meeting of shareholders on May 25, 2011, our shareholders expressed a preference that advisory votes on executive compensation occur every year. Consistent with this preference, the Board determined to implement an advisory vote on executive compensation every year until the next required vote on the frequency of shareholder votes on the compensation of executives, which will occur no later than the 2017 annual meeting.

Engagement of Compensation Consultant. In 2013 the Compensation Committee again retained FPL Associates, L.P., a nationally recognized compensation consulting firm specializing in the real estate industry that was first engaged by the Compensation Committee in 2003. Neither the Compensation Committee nor the Company has any other professional relationship with FPL. The Compensation Committee directed FPL to, among other things: (1) assist the Compensation Committee in applying our compensation philosophy for our executive officers, including the determination of the portion of total compensation awarded in the form of salary, annual cash incentive and equity-based compensation, as well as selecting the appropriate performance metrics and levels of performance (e.g., threshold, target, high); (2) analyze current compensation conditions among the Company’s peers, and assess the competitiveness and appropriateness of compensation levels for our executive officers; (3) recommend to the Compensation Committee any modifications or additions to the Company’s existing compensation programs that it deems advisable; and (4) make specific recommendations to the Compensation Committee for base salary, annual cash incentive and equity-based awards for our executive officers. The Company paid $27,100 to FPL during 2013 for these services. FPL did not provide any other services to the Compensation Committee, the Company, or any of its affiliates during 2013.

Peer Group Analysis. The Compensation Committee, with the help of FPL, periodically reviews the composition of our peer groups and the criteria and data used in compiling our peer group lists, and considers modifications to this group. In 2013, the Compensation Committee reviewed data provided by FPL regarding the appropriate companies to include in the peer group and the effect any change in the peer group would have on our standing within the peer groups. The peer groups recommended by FPL and used by the Compensation Committee are all public real estate companies and are divided into two groups based on industry sector (asset-based peer group) and equity market capitalization, geographic location and historical performance (size, geography and performance-based peer group). The asset-based peer group was unchanged from 2012 with the exception of the removal of First Potomac Realty Trust as a result of its announcement to sell its industrial portfolio and the addition of STAG Industrial, Inc. The size, performance and geography-based peer group was unchanged from 2012 with the exception of the removal of American Campus Communities, Inc. and Federal Realty Investment Trust and the addition of First Potomac Realty Trust, Associated Estates Realty Corporation and Hudson Pacific Properties, Inc. FPL’s compensation review was based on information contained in FPL’s proprietary database, which includes proxy data from fiscal 2012 and other public and non-public sources. In addition, the Compensation Committee reviewed copies of NAREIT’s annual compensation survey. This survey

was produced by FPL or its affiliates and had 110 participating companies, both public and private. The data was broken down by property sector classification, including industrial real estate, company size by capitalization and company size by number of employees. The survey results described base salary, total annual cash compensation, long-term incentive values and total compensation by position.

The asset-based peer group consists of the following six public REITs that invest in industrial properties: DCT Industrial Trust Inc., Duke Realty Corporation, First Industrial Realty Trust, Inc., Liberty Property Trust, PS Business Parks, Inc. and STAG Industrial, Inc. Although we believe that Prologis is a competitor given that it is one of the few other REITs solely focused on industrial properties, we have intentionally excluded it from this peer group because it is significantly larger than us and all other industrial REITs.

The size, performance and geography based peer group consists of 12 public REITs, which (i) operate across multiple asset classes and are similar in size to the Company in terms of market capitalization, (ii) are similar in performance to the Company in terms of 3-year annualized total shareholder return (“TSR”) and/or (iii) are headquartered in the Sunbelt region of the United States. The companies included in the size, performance and geography based peer group are as follows: Acadia Realty Trust, Associated Estates Realty Corporation, Cousins Properties Incorporated, DCT Industrial Trust Inc., First Potomac Realty Trust, Hudson Pacific Properties, Inc., Medical Properties Trust, Inc., National Retail Properties, Inc., PS Business Parks, Inc., Sovran Self Storage, Inc., Tanger Factory Outlet Centers, Inc., and Washington Real Estate Investment Trust.

The overall results of the FPL study produced the starting point for the Compensation Committee’s analysis. The Committee compared the Company’s actual 2012 compensation for executive officers (including the discretionary restricted stock awards made in 2013 with respect to 2012 performance) with the actual 2012 total compensation of each of the peer groups. The study showed that the total compensation, on an aggregate basis for all executive officers, was in line with the market median for the asset-based peer group and between the average and 75^th percentile of the size, performance and geography based peer group.

The Committee then used the peer group data, survey information and other relevant factors to establish the 2013 compensation program for our executive officers. While the Compensation Committee evaluates and discusses compensation data provided by FPL to help inform its decision making process, the Compensation Committee does not set compensation levels at any specific level or percentile against the peer group data (i.e., the Compensation Committee does not “benchmark” the Company’s executive compensation levels, particularly on an individual basis). As described below, the peer group data is only a reference point taken into account by the Compensation Committee in determining compensation decisions.

The Committee believes the executive compensation program, in total, reflects the competitive market practices of the asset-based and size, performance and geography based peer groups described above and provides the opportunities for executives to earn incentive-based compensation driven by the accomplishment of performance expectations. The Compensation Committee bases its targeted overall compensation to executives on a number of factors, including the executive’s position with the Company and total compensation package, the executive’s performance of his or her individual responsibilities, the equity participation levels of comparable executives at companies in our compensation peer group, and the executive’s contribution to the success of the Company’s financial performance. In the case of Mr. Hoster, the Committee also considered (i) the performance of the Company during the period in which he has been Chief Executive Officer and (ii) the anticipated level of difficulty in replacing him with someone of comparable experience and skill.

Targeted Overall Compensation. Based upon this analysis, the Compensation Committee established the targeted overall compensation of our Chief Executive Officer for 2013 at $2,354,000. When compared to the peer group information, which was based on 2012 actual compensation, this amount was in line with the 25^th percen-

tile of the overall compensation for the asset-based peer group and between the 25^th and median of the overall compensation for the size, performance and geography-based peer group.

The Compensation Committee followed a similar process with respect to establishing targeted overall compensation for our Chief Financial Officer and senior vice presidents. Based upon this analysis, the Committee set the overall targeted compensation for our Chief Financial Officer at $1,229,000 for 2013, which was between the median and 75^th percentile of the 2012 overall compensation for both the asset-based peer group and the size, performance and geography-based peer group. With regard to the other Named Officers, the individual targeted range of overall compensation was $876,000 to $901,000 for 2013, which were below the 25^th percentile of the 2012 overall compensation for the asset-based peer group, and between the 25^th percentile and median of the overall compensation for the size, performance and geography-based peer group.

Allocation among Components. Under the Company’s targeted compensation structure, the approximate mix of base salary, annual cash incentive and equity compensation varies depending upon management level:


	Base Salary			Annual Cash Incentive Target			Equity Target
Chief Executive Officer		25	%		25	%		50	%
Chief Financial Officer		28	%		24	%		48	%
Senior Vice Presidents		38	%		21	%		41	%

In allocating compensation among these elements, the Committee believes that the compensation of our executive officers, specifically our Chief Executive Officer, should be predominately performance-based. In making this allocation, the Committee relied in part upon the advice of FPL. In 2013, FPL performed a study of the compensation practices of the Company and the peer group comparable companies in terms of how each component of compensation is weighted across the percentage of total pay comprised of base salary, annual cash incentive, and long-term equity value. Although each of the companies has a different compensation structure, all appear to provide their senior management with base salaries of approximately 17% to 34% of overall compensation, bonus opportunities of approximately 20% to 27% of overall compensation and equity compensation of approximately 43% to 60% of overall compensation. The Committee selected allocations that it believes are consistent with the Company’s overall compensation philosophy as described above, and in all cases the Company’s target compensation included a significant portion allocated to equity awards.

Base Salaries. The Committee seeks to provide our executive officers with a level of assured cash compensation in the form of base salary that is commensurate with their professional status, accomplishments and geographic location. The base salaries are reviewed annually by the Compensation Committee and are adjusted from time to time to recognize competitive market data, the officer’s level of responsibility, outstanding individual performance, promotions and internal equity considerations. At the senior vice president level, we have a significant level of competition for employees in our market areas. As a result, the Committee provides a slightly larger portion of the compensation to our senior vice presidents in the form of base salary in order to improve our competitiveness in these areas. Based on this review and the state of the economy, base salaries for 2013 were increased between 2.0% to 4.0% from 2012 levels.

Annual Cash and Equity Incentive Compensation. The 2013 annual incentive awards, which were paid one-half in cash and one-half in equity, were based on the Compensation Committee’s analysis of the Company’s funds from operations (FFO) per share, same property change, total shareholder return and certain Company-wide strategic objectives as discussed below.


Criteria	Internal Guideline or Budget	2013 Actual Results
FFO Per Share (1)	$3.15	$3.23
Increase in Same Property Net Operating Income	0.5%	1.3%
Total Stockholder Return	10%	11.7%
G&A Costs	$11.66 million	$11.7 million
Average Occupancy	93.0%	94.4%
Debt to Total Market Capitalization	Less than 40%	33.3%
Bank Debt	Less than $150 million	$89 million at December 31, 2013
Fixed Charge Coverage	Greater than 2.8 to 1.0	3.8 to 1.0
Bank Covenants	In compliance	In compliance each quarter

(1)

FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts. NAREIT defines FFO as net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of depreciable real estate property and impairment losses, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We believe that FFO is an appropriate measure of performance for equity real estate investment trusts and that excluding depreciation and amortization in the calculation of FFO is appropriate since real estate values have historically increased or decreased based on market conditions.

In performing this analysis, the Compensation Committee considered the Company’s financial and other performance, both on an absolute and relative basis, as well as general economic conditions in the Company’s markets and factors such as property acquisitions, dispositions, equity issuances, and debt financings during the year. The Compensation Committee used a peer group consisting of DCT Industrial Trust Inc., Duke Realty Corporation, First Industrial Realty Trust, Inc., Liberty Property Trust, PS Business Parks, Inc. and STAG Industrial, Inc. for purposes of reviewing relative financial and other performance as discussed below. This group was used as these companies focus on industrial properties, which causes their performance to be most closely correlated with ours.


Criteria	Peer Group Range		2013 Actual Company Results
Change in FFO Per Share, excluding impairment charges and acquisition costs		(1.2)% to 19.6%		4.9	%
Same Property Change (Industrial Assets):
GAAP basis		1.3% to 2.3%		1.3	%
Cash basis		(2.2)% to 5.5%		1.5	%
Total Stockholder Return		(0.3)% to 26.6%		11.7	%
Year-End Occupancy		91.3% to 95.8%		95.5	%

Based on the Compensation Committee’s analysis of all of the foregoing criteria the Compensation Committee determined that actual Company results exceeded target performance and awarded annual cash incentive compensation to each Named Officer equal to 137% of the target award as set forth in the Summary Compensation Table under the heading “Non-Equity Incentive Plan Compensation.” In March 2013, the Compensation Committee also awarded the following number of shares of restricted stock to the Named Officers as annual equity incentive compensation with respect to 2013 performance: Mr. Hoster 15,025 shares; Mr. McKey 7,410 shares; Mr. Coleman 4,785 shares; Mr. Petsas 4,651 shares; and Mr. Wood 4,785 shares. The award represented approximately 137% of the target amount set by the Compensation Committee for each executive officer. These performance-based shares vested 20% on the date of grant and generally will vest 20% on each of January 1, 2015, 2016, 2017 and 2018. Dividends on the annual equity incentive awards accumulate beginning January 1, 2013 and are paid if and when the restricted stock vests. Since these awards were discretionary and based on a review of the 2013 performance period, the Compensation Committee did not establish and approve the awards until March 2014. Accordingly, these performance-based equity awards are not reflected in the Summary Compensation Table and other compensation tables in this proxy statement, rather these awards will be reflected as 2014 compensation.

Long-Term Equity Incentive Compensation. Restricted stock awards are provided based on performance and the recipient also must remain employed by the Company for an additional period following the performance period in order for the restricted stock to vest.

In May 2013, the Compensation Committee adopted a long-term equity incentive award that was based solely on a review by the Compensation Committee of the Company’s relative and absolute performance during 2013 as well as a comparison of the Company’s total return to the NAREIT Industrial Index, NAREIT Equity Index and the Russell 2000 Index over the five-year period ended December 31, 2013. Similar to the annual incentive compensation, the Compensation Committee reviewed and analyzed the Company’s long-term incentive performance on a subjective basis rather than applying any bright-line tests or formulas. The Company’s total stockholder return for 2013 was 11.7% compared to an internal target goal of 10.0%. The annualized total return for the Company and the comparative indexes for the five-year period ended December 31, 2013 were:


Company/Index	Annualized Total Stockholder Return
EastGroup Properties, Inc.		15.9	%
NAREIT Industrial Index		12.3	%
NAREIT Equity Index		16.5	%
Russell 2000 Index		20.1	%

Other factors were also considered by the Compensation Committee in connection with the long-term equity incentive compensation. The Company maintained or increased its annual cash dividends paid over the performance period while other REITs that faced capital challenges during the economic recession reduced the amount of their dividends and/or paid the dividends in stock. Additionally, the Compensation Committee observed that the indices selected to measure relative performance had significant losses in 2008 leading into the five-year performance period. In 2008, the total stockholder returns for the NAREIT Industrial Index, Equity Index and Russell 2000 Index were -67.5%, -37.7% and -33.8%, respectively, while the Company’s total stockholder return was -10.8% that year thus providing a much lower starting point for measuring annualized total stockholder return over the five-year performance period.

Additionally, the Compensation Committee considered the strength of the Company’s balance sheet over that five-year period which allowed the Company to carry out its business plans and manage its debt maturity schedule without resorting to dilutive stock issuances. Based on the foregoing, the Compensation Committee determined that actual Company results exceeded target performance and awarded shares equal to 107.5% of the target awards. The following number of shares of restricted stock were awarded in March 2014 as long-term equity incentive compensation with respect to 2013 performance: Mr. Hoster 11,747 shares; Mr. McKey 5,975 shares; Mr. Coleman 3,737 shares; Mr. Petsas 3,636 shares; and Mr. Wood 3,737 shares. These shares vested 25% on the date of grant and will vest 25% on each of January 1, 2015, 2016 and 2017. Dividends on the awards accumulate beginning January 1, 2013 and are paid if and when the restricted stock vests. Since these awards were discretionary and based on a review of the five-year performance period ended December 31, 2013, the Compensation Committee did not establish and approve the awards until March 2014. Accordingly, these performance-based equity awards are not reflected in the Summary Compensation Table and other compensation tables in this proxy statement, rather these awards will be reflected as 2014 compensation in accordance with the rules of the Securities and Exchange Commission.

Retention Grants. On March 4, 2010, the Compensation Committee awarded 20,000 shares of restricted stock as a retention bonus to each of Messrs. Coleman, Petsas and Wood. Each of these Senior Vice Presidents is a seasoned real estate executive whose departure would disrupt the operations of the Company in the region for which that person is responsible. The Compensation Committee discussed various ways in which to mitigate the risk that one or more of these individuals could be enticed away. The restricted stock awards vest as follows, provided that the applicable officer remains in the employ of the Company as of such date:

1,400 shares on January 10, 2016

2,600 shares on January 10, 2017

4,000 shares on January 10, 2018

5,400 shares on January 10, 2019

6,600 shares on January 10, 2020

In the event the officer’s employment terminates for reasons other than death or permanent disability, the officer will forfeit all of his interest in shares that have not vested as of the date of termination. If employment terminates as a result of death or permanent disability, the officer or his estate will receive a pro rata number of restricted shares based on the number of full months elapsed since January 1, 2010 to the date of termination of employment compared to the full vesting period. The Compensation Committee believes these restricted stock awards will give the executive officers incentive to remain with the Company over the long term.

Retirement Plans. We have a 401(k) Plan pursuant to which the Company makes matching and discretionary contributions for eligible employees. When the Compensation Committee calculates targeted overall compensation for our senior management, it factors in the benefits expected to be received under the 401(k) Plan.

Perquisites and Other Benefits. The Compensation Committee annually reviews the perquisites that senior management receives. The primary perquisites for executive officers are the Company’s contribution to a 401(k) Plan, life insurance of 2.5 times base salary up to a maximum of $400,000, and long-term care insurance. Executive officers also participate in the Company’s medical insurance plans on the same terms as other employees. We do not provide our executives automobiles or reimbursement for country clubs, financial planning or things of a similar nature.

Severance Benefits. In order to recruit executives and encourage retention of employees, we believe it is appropriate and necessary to provide assurance of certain severance payments if the Company terminates the individual’s employment without cause. Pursuant to our Severance and Change in Control Agreements, in the event an executive officer is terminated involuntarily by the Company without cause, as defined in the agreement, and provided the employee executes a full release of claims, in a form satisfactory to the Company,

promptly following termination, the employee will be entitled to receive certain severance benefits discussed below under the heading “Potential Payments upon Termination or Change in Control.” We believe that the size of the severance package is consistent with severance offered by other companies of our size or in our industry.

Change in Control. Our senior management and other employees have built the Company into a successful real estate investment trust and the Board of Directors believes that it is important to protect them in the event of a change in control. Further, it is the Board’s belief that the interests of stockholders will be best served if the interests of our senior management are aligned with them, and providing change in control benefits should eliminate, or at least reduce, the reluctance of senior management to pursue potential change in control transactions that may be in the best interests of shareholders. Relative to the overall value of the Company, these potential change in control benefits are relatively minor. See “Potential Payments upon Termination or Change in Control” for additional information.

Board Process. The Compensation Committee of the Board of Directors approves all compensation and awards to our Chief Executive Officer and makes a recommendation to the Board of Directors for our other executive officers. Generally, on its own initiative, the Compensation Committee reviews the performance and compensation of our Chief Executive Officer and, following discussions with him and, where it deems appropriate, FPL or other appropriate advisors, establishes his compensation level. For the remaining executive officers, the Chief Executive Officer, with consultation from FPL, makes recommendations to the Compensation Committee that, sometimes with minor adjustments, are recommended to the Board of Directors for approval.

Report of the Compensation Committee

The following Report of the Compensation Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 except to the extent the Company specifically incorporates this Report by reference therein.

The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Submitted by the Compensation Committee:

Hayden C. Eaves III, Chair

H.C. Bailey, Jr.

Fredric H. Gould

Summary Compensation Table

The following table summarizes, for the fiscal years ended December 31, 2013, 2012 and 2011, the amount of compensation paid by the Company to its Chief Executive Officer, Chief Financial Officer and its three other most highly compensated executive officers (the “Named Officers”) as of December 31, 2013.


Name and Principal Position	Year		Salary		Non-Equity Incentive Plan Compensation		Stock Awards (1)(2)		All Other Compensation (3)		Total
David H. Hoster II		2013	$	590,000	$	808,399	$	1,917,079	$	17,894	$	3,333,372
President and Chief		2012		569,000		611,675		1,671,549		17,766		2,869,990
Executive Officer		2011		546,000		723,450		1,265,409		18,732		2,553,591
N. Keith McKey		2013	$	350,000	$	397,753	$	979,606	$	18,188	$	1,745,547
Executive Vice President,		2012		343,000		304,763		842,672		18,085		1,508,520
Chief Financial Officer and Secretary		2011		330,000		361,063		638,133		18,732		1,347,928
John F. Coleman		2013	$	340,000	$	257,431	$	618,256	$	18,188	$	1,233,875
Senior Vice President		2012		332,500		196,725		534,883		18,085		1,082,193
		2011		320,000		233,200		423,695		18,732		995,627
William D. Petsas		2013	$	330,000	$	250,077	$	595,249	$	18,188	$	1,193,514
Senior Vice President		2012		320,000		189,738		515,853		18,085		1,043,676
		2011		308,250		225,250		425,587		18,732		977,819
Brent W. Wood		2013	$	340,000	$	266,431	$	610,072	$	15,438	$	1,231,941
Senior Vice President		2012		327,000		193,500		515,853		15,335		1,051,688
		2011		308,250		225,250		415,226		15,982		964,708

(1)

The amounts in this column reflect restricted stock awards granted to the Named Officers during 2011, 2012 and 2013 and are disclosed as the aggregate grant date fair value of the awards, computed in accordance with FASB ASC Topic 718 (formerly FAS 123R) assuming, in the case of performance-based awards, that the target performance is achieved, and excluding the impact of estimated forfeitures. The assumptions used in determining the grant date fair values of these awards are set forth in the notes to the Company’s consolidated financial statements, which are included in our Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the SEC.

(2)

For 2013, the amounts in this column do not reflect the restricted shares awarded by the Compensation Committee with respect to 2013 performance since the awards were discretionary and were granted in March 2014. Under the SEC disclosure rules, these awards will be reflected as 2014 compensation. See the previous discussion in the Compensation Discussion and Analysis under the heading “Equity Compensation”.

(3)

The amount shown in this column represents the Company’s discretionary contribution and matching contribution to its 401(k) Plan for the Named Officer’s benefit and the amount of premium paid by the Company for group term life insurance on the Named Officer’s life. The value of perquisites and other personal benefits are not shown in the table because the aggregate amount of such compensation, if any, is less than $10,000 for each Named Officer.

Grants of Plan-Based Awards in 2013


Name	Grant Date	Estimated Possible Payouts Under Non-Equity Incentive Plan Awards						All Other Stock Awards (#)		Grant Date Fair Value of Stock Awards (3)
Name	Grant Date	Threshold		Target		Maximum		All Other Stock Awards (#)		Grant Date Fair Value of Stock Awards (3)
David H. Hoster II	05/24/2013 (1)	$	294,000	$	588,000	$	882,000
	03/07/2013 (2)								33,698	$	1,917,079
N. Keith McKey	05/24/2013 (1)	$	145,000	$	290,000	$	434,000
	03/08/2013 (2)								17,117	$	979,606
John F. Coleman	05/24/2013 (1)	$	94,000	$	187,000	$	281,000
	03/08/2013 (2)								10,803	$	618,256
William D. Petsas	05/24/2013 (1)	$	91,000	$	182,000	$	273,000
	03/08/2013 (2))								10,401	$	595,249
Brent W. Wood	05/24/2013 (1)	$	94,000	$	187,000	$	281,000
	03/08/2013 (2)								10,660	$	610,072

(1)

Represents the possible payouts under the Company’s 2013 non-equity incentive plan discussed in further detail above under the heading “Compensation Discussion and Analysis — Annual Cash and Equity Incentive Compensation.” The actual amount earned by each Named Officer in 2013 is reported under the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table.

(2)

Represents actual restricted stock awarded on March 8, 2013 in connection with the Compensation Committee’s discretionary review of the 2012 annual long-term incentive compensation and supplemental annual long-term incentive compensation as discussed under the headings “Compensation Discussion and Analysis — Annual Cash and Equity Incentive Compensation” and “— Long-Term Equity Incentive Compensation” of the Company’s proxy statement for the 2013 Annual Meeting of Stockholders.

(3)

Represents the grant date fair value of the award determined in accordance with FASB ASC Topic 718 disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions. The grant date fair value is calculated by multiplying the number of restricted shares granted by the closing price of the Company’s Common Stock on the date of grant.

Outstanding Equity Awards at 2013 Fiscal Year-End


Name	Stock Awards (1)
Name	Number of Shares of Restricted Stock That Have Not Vested (#)			Market Value of Shares of Restricted Stock That Have Not Vested (2) ($)
David H. Hoster II		71,503	(3)	$	4,142,169
N. Keith McKey		36,782	(4)	$	2,130,781
John F. Coleman		44,010	(5)	$	2,549,499
William D. Petsas		43,446	(6)	$	2,516,827
Brent W. Wood		43,194	(7)	$	2,502,228

(1)	This table does not include restricted stock awards made in March 2014 reflecting performance in 2013 because they were not outstanding at the end of 2013. Such grants are described above under “Compensation Discussion and Analysis.”

(2)	The market value of such holdings is based on the closing price of the Company’s Common Stock ($57.93) on December 31, 2013.

(3)

Mr. Hoster’s restricted stock holdings as of December 31, 2013 vest as follows provided that he remains employed by the Company on such dates: 26,286 shares on January 1, 2014; 23,502 shares on January 1, 2015 and 21,715 shares on January 1, 2016. The Compensation Committee has approved a special vesting provision for restricted stock awards to Mr. Hoster based on a projected January 1, 2016 retirement date.

(4)

Mr. McKey’s restricted stock holdings as of December 31, 2013 vest as follows provided that he remains employed by the Company on such dates: 13,456 shares on January 1, 2014; 12,126 shares on January 1, 2015; 8,299 shares on January 1, 2016 and 2,901 shares on April 6, 2016. The Compensation Committee has approved a special vesting provision for restricted stock awards to Mr. McKey based on a projected April 6, 2016 retirement date.

(5)

Mr. Coleman’s restricted stock holdings as of December 31, 2013 vest as follows provided that he remains employed by the Company on such dates: 8,750 shares on January 1, 2014; 7,863 shares on January 1, 2015; 5,448 shares on January 1, 2016; 1,400 shares on January 10, 2016; 1,949 shares on January 1, 2017; 2,600 shares on January 10, 2017; 4,000 shares on January 10, 2018; 5,400 shares on January 10, 2019 and 6,600 shares on January 10, 2020.

(6)

Mr. Petsas’ restricted stock holdings as of December 31, 2013 vest as follows provided that he remains employed by the Company on such dates: 8,552 shares on January 1, 2014; 7,666 shares on January 1, 2015; 5,301 shares on January 1, 2016; 1,400 shares on January 10, 2016; 1,927 shares on January 1, 2017; 2,600 shares on January 10, 2017; 4,000 shares on January 10, 2018; 5,400 shares on January 10, 2019 and 6,600 shares on January 10, 2020.

(7)

Mr. Wood’s restricted stock holdings as of December 31, 2013 vest as follows provided that he remains employed by the Company on such dates: 8,482 shares on January 1, 2014; 7,594 shares on January 1, 2015; 5,230 shares on January 1, 2016; 1,400 shares on January 10, 2016; 1,888 shares on January 1, 2017; 2,600 shares on January 10, 2017; 4,000 shares on January 10, 2018; 5,400 shares on January 10, 2019 and 6,600 shares on January 10, 2020.

Option Exercises and Stock Vested in 2013

The following table provides information regarding restricted stock awards that vested during 2013 for each of the Named Officers. No options were exercised by the Named Officers in 2013.


Name	Stock Awards
Name	Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ($)
David H. Hoster II		7,722	$	439,305
N. Keith McKey		3,929	$	224,857
John F. Coleman		2,475	$	141,644
William D. Petsas		2,383	$	136,379
Brent W. Wood		2,443	$	139,813

Potential Payments upon Termination or Change in Control

The Company has entered into Severance and Change in Control Agreements and maintains certain plans that will require the Company to provide compensation to executive officers of the Company in the event of a termination of employment or a change in control of the Company. The following table shows potential payouts assuming that the employment of the Named Officer was terminated in each situation listed in the table and that termination occurred on the last business day of 2013.


	Lump Sum Cash Severance Payment		Healthcare and Other Insurance Benefits		Value of Unvested Restricted Shares		Total
David H. Hoster II
Voluntary Resignation or Involuntary Termination with Cause		—		—		—		—
Involuntary Termination without Cause	$	2,436,050		—	$	4,613,160	$	7,049,210
Voluntary Resignation with Good Reason following a Change in Control	$	3,654,075	$	50,000	$	4,613,160	$	8,317,235
Involuntary Termination without Breach of Duty following a Change in Control	$	3,654,075	$	50,000	$	4,613,160	$	8,317,235
Death	$	1,218,025		—	$	4,613,160	$	5,831,185
N. Keith McKey
Voluntary Resignation or Involuntary Termination with Cause		—		—		—		—
Involuntary Termination without Cause	$	1,323,818		—	$	2,375,137	$	3,698,955
Voluntary Resignation with Good Reason following a Change in Control	$	1,985,727	$	50,000	$	2,375,137	$	4,410,864
Involuntary Termination without Breach of Duty following a Change in Control	$	1,985,727	$	50,000	$	2,375,137	$	4,410,864
Death	$	661,909		—	$	2,375,137	$	3,037,046
John F. Coleman
Voluntary Resignation or Involuntary Termination with Cause		—		—		—		—
Involuntary Termination without Cause	$	799,398		—	$	2,878,969	$	3,678,367
Voluntary Resignation with Good Reason following a Change in Control	$	799,398	$	37,500	$	2,878,969	$	3,715,867
Involuntary Termination without Breach of Duty following a Change in Control	$	799,398	$	37,500	$	2,878,969	$	3,715,867
Death	$	532,932		—	$	2,083,009	$	2,615,941
William D. Petsas
Voluntary Resignation or Involuntary Termination with Cause		—		—		—		—
Involuntary Termination without Cause	$	770,649		—	$	2,843,123	$	3,613,772
Voluntary Resignation with Good Reason following a Change in Control	$	770,649	$	37,500	$	2,843,123	$	3,651,272
Involuntary Termination without Breach of Duty following a Change in Control	$	770,649	$	37,500	$	2,843,123	$	3,651,272
Death	$	513,7660		—	$	2,047,163	$	2,560,929


	Lump Sum Cash Severance Payment		Healthcare and Other Insurance Benefits		Value of Unvested Restricted Shares		Total
Brent W. Wood
Voluntary Resignation or Involuntary Termination with Cause		—		—		—		—
Involuntary Termination without Cause	$	781,467		—	$	2,825,120	$	3,606,587
Voluntary Resignation with Good Reason following a Change in Control	$	781,467	$	37,500	$	2,825,120	$	3,644,087
Involuntary Termination without Breach of Duty following a Change in Control	$	781,467	$	37,500	$	2,825,120	$	3,644,087
Death	$	520,978		—	$	2,029,160	$	2,550,138

Below is a description of the definitions and assumptions that were used in creating the table above.

Definitions. A “change of control” means any of the following: (i) any change in control of a nature that would be required to be reported under the Exchange Act proxy rules; (ii) the acquisition by a person or group of beneficial ownership of 30% of the Company’s outstanding voting securities; (iii) a change in the composition of the Board of Directors such that the incumbent directors cease to constitute at least a majority of the Board (including, for purposes of computing a majority, those persons nominated for election by a two-thirds majority of the then incumbent directors who had been similarly nominated); (iv) the security holders of the Company approve a merger or consolidation of the Company, with certain exceptions; or (v) approval by the Company’s stockholders of a complete liquidation of the Company or disposition of all or substantially all of the Company’s assets.

“Average annual compensation” means an amount equal to the annual average of the sum of (i) the executive’s annual base salary from the Company plus (ii) the amount of cash bonus paid by the Company to the executive, in each case for the average of the three calendar years that ended immediately before (or, if applicable, coincident with) a specified date.

A termination is for “cause” if it is for any of the following reasons: (i) the continued failure by the executive to perform his material responsibilities and duties toward the Company (other than any such failure resulting from the executive’s incapacity due to physical or mental illness); (ii) the executive engaging in willful or reckless conduct that is demonstrably injurious to the Company monetarily or otherwise; (iii) the executive’s conviction, entry of a plea of no contest, or admission of guilt, for any felony or any lesser crime if such lesser crime involves fraud or dishonesty, moral turpitude, or any conduct that adversely affects the business or reputation of the Company; (iv) the commission or omission of any act by the executive that constitutes on the part of the executive fraud, dishonesty, or malfeasance, misfeasance, or nonfeasance of duty toward the Company; or (v) any other action or conduct by the executive that is injurious to the Company, its business, or its reputation.

A “breach of duty” means (i) the executive’s willful misconduct in the performance of his duties toward the Company; or (ii) the commission or omission of any act by the executive that constitutes on the part of the executive fraud or dishonesty toward the Company.

A termination is for “good reason” if it is for any of the following reasons: (i) a material diminution in the executive’s duties, responsibilities or authority; (ii) a material reduction in the executive’s base salary; (iii) a material reduction in the executive’s annual or long-term bonus and equity incentive opportunities; (iv) the Company’s material relocation of the executive without the executive’s consent; and (v) the failure by the

Company to obtain the assumption of the obligations contained in the Severance and Change in Control Agreement by any successor entity.

Cash Severance Payment. Cash severance payments following a change in control are paid upon an involuntary termination without breach of duty and upon a voluntary termination by the executive for good reason. Additionally, cash severance payments not in connection with a change in control are paid upon an involuntary termination without cause. In each case, the cash severance payments are paid lump-sum and are based upon average annual compensation as follows:


	Involuntary Termination Without Cause		Involuntary Termination Without Breach of Duty or Voluntary Resignation With Good Reason, Each Following a Change in Control
Chief Executive and Chief Financial Officers		2 times		3 times
Senior Vice Presidents		1.5 times		1.5 times

As a condition of the receipt of the cash severance payment not in connection with a change in control, the executive must execute a waiver and release agreement, in a form satisfactory to the Company, that releases the Company and all affiliates from any and all claims of any nature whatsoever, including, without limit, any and all statutory claims, and may not revoke the waiver and release within any revocation period required by law or permitted by the Company.

Benefits. Upon an involuntary termination without breach of duty or a voluntary termination by the executive for good reason, each following a change in control, the Company will provide each executive officer with life insurance coverage and health plan coverage substantially comparable to the coverage the executive was receiving from the Company immediately before termination of employment. In each case, these benefits will continue for a period of 24 months (18 months for the Company’s Senior Vice Presidents) following the date of termination.

The value of the benefits set forth in the above table is based on an estimate of the Company’s cost to provide such benefits to an executive officer upon termination following a change in control equal to $25,000 per year.

Equity Acceleration. The Incentive Restricted Share Agreements issued to executive officers in connection with equity awards granted pursuant to the Company’s 2004 Equity Incentive Plan and the Company’s 2013 Equity Incentive Plan generally provide that an executive’s interest in all of the incentive restricted shares shall become vested as of the date of his death or termination by reason of his permanent disability, provided, however, the agreements for the restricted stock awarded as a retention bonus to certain executive officers in 2010 provide that the number of shares to vest will be prorated upon such officer’s death or permanent disability. In addition, a restricted share agreement may also provide that the incentive restricted shares covered by the agreement shall vest upon involuntary termination by the Company without cause.

The Company’s 2004 Equity Incentive Plan provides that upon the occurrence of a change in control, whether or not the executive’s employment is terminated, the executive’s interest in all of the restricted shares that are no longer subject to performance criteria shall become vested and the vesting of restricted shares subject to performance criteria shall be accelerated and the executive shall receive a pro rata number of shares based

upon (i) an assumed achievement of all relevant performance objectives at target levels and (ii) the length of time within the performance period elapsed before the effective date of the change in control.

The Company’s 2013 Equity Incentive Plan provides that upon the occurrence of a change in control if the awards are not continued, assumed or replaced by the successor corporation, the executive’s interest in all of the restricted shares that are no longer subject to performance criteria shall become vested and the executive’s interest in any restricted shares subject to performance criteria shall be deemed to have been achieved at the target performance level and shall become vested.

The Company accrues dividends on all incentive restricted shares beginning with the first day of the applicable performance period. The accrued dividends are delivered to the executive officer when the incentive restricted shares vest. The value of the unvested restricted stock in the above table includes the actual value of the dividends accrued with respect to each restricted share award that is no longer subject to performance criteria.

Excise Tax Gross-Up. Upon a change in control of the Company, the executive may be subject to certain excise taxes pursuant to Section 4999 of the Internal Revenue Code. The Company has agreed to reimburse the executive for all excise taxes that are imposed on the executive under Section 4999 and any income and excise taxes that are payable by the executive as a result of any reimbursements for Section 4999 excise taxes. The Company determined that no excise taxes would have been imposed upon the Named Officers assuming that the termination occurred on the last business day of 2013.

CERTAIN TRANSACTIONS AND RELATIONSHIPS

Change in Control Agreement

The Company has entered into a change in control agreement with each of the Company’s executive officers. See “Potential Payments Upon Change in Control” above.

Related-Party Transactions Policies and Procedures.

In March 2007, the Board of Directors adopted the written “Statement of Policy with respect to Related Party Transactions” that states that the Company’s Audit Committee is responsible for the review, approval and ratification of transactions between the Company or any of its subsidiaries and a senior officer or director of the Company, members of their immediate family, a shareholder owning in excess of five percent of the Company or an entity which is owned or controlled by one of the foregoing.

The policy requires that any related party transaction, other than transactions available to all employees generally or transactions involving less than $5,000 when aggregated with all similar transactions, shall be consummated or shall continue only if (i) the Audit Committee pre-approves or ratifies such transaction, (ii) the transaction is approved by the disinterested members of the Board of Directors, or (iii) the transaction involves compensation approved by the Compensation Committee.

OWNERSHIP OF COMPANY STOCK

Security Ownership of Certain Beneficial Owners

To the best of the Company’s knowledge, no person or group (as those terms are used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) beneficially owned, as of April 4, 2014, more than five percent of the shares of Common Stock outstanding, except as set forth in the following table.


Name and Address of Beneficial Owner	Amount of Common Stock Beneficially Owned			Percent of Common Stock (1)
The Vanguard Group, Inc.
Vanguard REIT Index Fund		3,869,013	(2)		12.4	%
100 Vanguard Boulevard Malvern, Pennsylvania 19355
BlackRock, Inc.		3,411,954	(3)		10.9	%
40 East 52^nd Street
New York, New York 10022
T. Rowe Price Associates, Inc.		2,831,561	(4)		9.0	%
100 East Pratt Street
Baltimore, Maryland 21202
Invesco Ltd.		2,373,120	(5)		7.6	%
1555 Peachtree Street NE
Atlanta, Georgia 30309

(1)	Based on the number of shares of Common Stock outstanding as of April 4, 2014 which was 31,299,928 shares of Common Stock.

(2)

Based upon an amended Statement on Schedule 13G filed with the SEC by The Vanguard Group (“Vanguard”) and an amended Statement on Schedule 13G filed with the SEC by Vanguard REIT Index Fund (“REIT Fund”), a client of Vanguard. As reported, Vanguard has sole voting power with respect to 80,521 shares of Common Stock, shared voting power with respect to 19,300 shares of Common Stock, sole dispositive power with respect to 3,802,170 shares of Common Stock, which includes shares owned by REIT Fund, and shared dispositive power with respect to 66,843 shares of Common Stock. As reported, REIT Fund has sole voting power with respect to 2,058,222 shares of Common Stock.

(3)	Based upon an amended Statement on Schedule 13G filed with the SEC that indicated that BlackRock, Inc. has sole dispositive power with respect to 3,411,954 shares of Common Stock and sole voting power with respect to 3,321,267 shares of Common Stock.

(4)

Based upon an amended Statement on Schedule 13G filed with the SEC by T. Rowe Price Associates, Inc. (“Price Associates”) that indicated that Price Associates has sole dispositive power with respect to 2,831,561 shares of Common Stock and sole voting power with respect to 253,720 shares of Common Stock. These shares of Common Stock are owned by various individual and institutional investors which Price Associates serves as investment adviser with power to direct investments and/or sole power to vote the securities. For purposes of the reporting requirements of the Exchange Act, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such securities.

(5)

Based upon a Statement on Schedule 13G filed with the SEC that indicated that Invesco Ltd. has sole voting power with respect to 1,140,790 shares of Common Stock, shared voting power with respect to 9,888 shares of Common Stock, sole dispositive power with respect to 2,358,964 shares of Common Stock and shared dispositive power with respect to 14,156 shares of Common Stock.

Security Ownership of Management and Directors

The following table sets forth certain information available to the Company with respect to shares of Common Stock owned by each director, each nominee for director, each executive officer and all directors, nominees and executive officers as a group, as of April 4, 2014:


	Amount and Nature of Beneficial Ownership
Name	Common Stock			Unvested Restricted Stock		Total Beneficial Ownership		Percent of Common Stock (1)
D. Pike Aloian		21,924	(2)		—		21,924		*
H.C. Bailey, Jr.		7,639			—		7,639		*
H. Eric Bolton, Jr.		557			417		974		*
Hayden C. Eaves III		15,250	(3)		—		15,250		*
Fredric H. Gould		4,674			—		4,674		*
Mary E. McCormick		10,329			—		10,329		*
David M. Osnos		46,324			—		46,324		*
Leland R. Speed		211,206	(4)		—		211,206		*
David H. Hoster II		225,044	(5)		66,047		291,091		*
N. Keith McKey		118,407			33,736		152,143		*
John F. Coleman		76,070			41,890		117,960		*
Bruce Corkern		37,190			16,269		53,459		*
William D. Petsas		80,183	(6)		41,341		121,524		*
Brent W. Wood		59,513			41,342		100,855		*
All directors, nominees and executive officers as a group		914,310			241,042		1,155,352		3.7	%

*	Less than 1.0%.

(1)	Based on the number of shares of Common Stock outstanding as of April 4, 2014 which was 31,299,928 shares of Common Stock.

(2)	Does not include 2,500 shares of Common Stock beneficially owned by Mr. Aloian’s spouse, as to which he disclaims beneficial ownership.

(3)	Includes (i) 11,750 shares of Common Stock owned by Mr. Eaves and his spouse as co-trustees for the Eaves Living Trust; (ii) 1,000 shares of Common Stock owned by a family foundation of which Mr. Eaves is President; and (iii) 500 shares of Common Stock owned by Mr. Eaves as trustee.

(4)	Does not include 27,288 shares of Common Stock beneficially owned by Mr. Speed’s spouse, as to which he disclaims beneficial ownership.

(5)

Includes 50,000 shares of Common Stock owned by a family trust for the benefit of Mr. Hoster’s children. Mr. Hoster’s spouse is trustee of the family trust. Does not include 2,430 shares of Common Stock beneficially owned by Mr. Hoster’s spouse, as to which he disclaims beneficial ownership. Mr. Hoster has pledged 75,575 shares of Common Stock as security for a line of credit. As of April 4, 2014, there was no balance outstanding on the line of credit.

(6)	Includes 80,183 shares of Common Stock owned by Mr. Petsas and his spouse as co-trustees for the Petsas Revocable Trust.

Ownership Guidelines for Directors and Officers

In order to enhance the alignment of the interests of the directors and management with stockholders, the Company has instituted ownership guidelines for directors and officers. Each director who has served for at least five years should own shares of Common Stock with a market value of a minimum of three times the annual cash retainer fee payable to a director. Within five years of their election, officers of the Company are required to own shares of Common Stock having a market value equal to or greater than the following multiples of their base salary: (1) President and Chief Executive Officer: five times annual base salary; (2) Executive Vice President: three times annual base salary; and (3) Senior Vice Presidents: two times annual base salary. Each director and executive officer is currently in compliance with the applicable ownership guideline.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires that directors, officers and more than 10 percent stockholders of the Company file reports with the SEC to report a change in ownership within two business days following the day on which the transaction occurs. During 2013 no officer or director of the Company was late in filing a report under Section 16(a).

AUDIT COMMITTEE MATTERS

Report of the Audit Committee

The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 except to the extent the Company specifically incorporates this Report by reference therein.

The Audit Committee of the Company is composed of four directors, each of whom meets the current independence and experience requirements of the NYSE and the SEC. The Audit Committee operates under a written charter which was amended and restated on August 29, 2013. A complete copy of the Audit Committee charter is available on the Company’s website at www.eastgroup.net. The Board has determined that D. Pike Aloian, H. Eric Bolton, Jr. and Mary E. McCormick are “Audit Committee financial experts” as defined in the current rules of the SEC.

Management is primarily responsible for the Company’s financial statements and reporting process. The Company’s independent registered public accounting firm, KPMG LLP, is responsible for performing an independent audit of the Company’s financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) and for issuing a report on those statements. The Audit Committee’s responsibilities include oversight of the Company’s independent registered public accounting firm and internal audit department, as well as oversight of the Company’s financial reporting process on behalf of the full Board of Directors. It is not the duty or the responsibility of the Audit Committee to conduct auditing or accounting reviews or related procedures.

The Audit Committee meets at least quarterly and at such other times as it deems necessary or appropriate to carry out its responsibilities. Those meetings include, whenever appropriate, executive sessions with KPMG without management being present. The Committee met six times during 2013, including two executive sessions with KPMG. In the course of fulfilling its oversight responsibilities, the Audit Committee met with management, internal audit personnel and KPMG to review and discuss all annual financial statements and quarterly operating results prior to their issuance. Management advised the Audit Committee that the financial statements in the

Company’s Annual Report on Form 10-K were prepared in accordance with GAAP. The Audit Committee also discussed with KPMG matters required to be discussed, pursuant to Auditing Standard No. 16, Communication with Audit Committees, issued by the PCAOB, including the reasonableness of judgments and the clarity and completeness of financial disclosures. In addition, the Audit Committee discussed with KPMG matters relating to its independence and has received from KPMG the written disclosures and letter required by the Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees.

On the basis of the reviews and discussions the Audit Committee has had with KPMG and management, the Audit Committee recommended to the Board of Directors that the Board approve the inclusion of the Company’s audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, for filing with the SEC.

Submitted by the Audit Committee:

David M. Osnos, Chair

D. Pike Aloian

H. Eric Bolton, Jr.

Mary E. McCormick

Policy For Pre-Approval of Audit and Permitted Non-Audit Services

The Audit Committee of the Board has adopted policies and procedures providing for the pre-approval of audit and non-audit services performed by the Company’s independent registered public accounting firm. Pre-approval may be given as part of the Audit Committee’s approval on the engagement of the independent auditor or on an individual case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services may be delegated to the Audit Committee chairman, but the decision is subsequently reported to the full Audit Committee.

Auditor Fees and Services

In connection with the audit of the 2013 financial statements, the Company entered into an engagement agreement with KPMG LLP which set forth the terms by which KPMG LLP will perform audit services for the Company.

The following table shows the fees paid or accrued by the Company for the audit and other services provided by KPMG LLP for fiscal years 2013 and 2012.


	2013		2012
Audit Fees (1)	$	564,700	$	555,900
Audit-Related Fees (2)		2,900		5,500
Tax Fees		—		—
All Other Fees		—		—

Total	$	567,600	$	561,400

(1)

Audit fees include amounts related to professional services rendered in connection with the audits of our annual financial statements and reviews of our quarterly financial statements, the audit of internal control over financial reporting and other services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements. For 2013 and 2012, this includes $110,700 and $112,900,

respectively, for comfort letter procedures, auditor consents and work on registration statements in connection with the issuance of Common Stock.

(2)	Audit-related fees includes consultations and research regarding the Company’s interest rate swap arrangements.

OTHER MATTERS

The management of the Company does not know of any other matters to come before the Annual Meeting. However, if any other matters come before the Annual Meeting, it is the intention of the persons designated as proxies to vote in accordance with their judgment on such matters.

BY ORDER OF THE BOARD OF DIRECTORS

LOGO

N. KEITH McKEY

Executive Vice President, Chief Financial Officer,

Treasurer and Secretary

EASTGROUP PROPERTIES, INC.

190 E. CAPITOL STREET

SUITE 400

JACKSON, MS 39201

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For All

Except

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

The Board of Directors recommends you vote FOR all the nominees listed in proposal 1:

Election of Directors

Nominees:

01)

D. Pike Aloian 06) David H. Hoster II

02)

H.C. Bailey, Jr. 07) Mary E. McCormick

03)

H. Eric Bolton, Jr. 08) David M. Osnos

04)

Hayden C. Eaves, III 09) Leland R. Speed

05)

Fredric H. Gould

The Board of Directors recommends you vote FOR the following proposals:

For

Against

Abstain

Advisory vote to ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the 2014 fiscal year.

Advisory vote on executive compensation.

NOTE: In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment or postponement thereof.

For address changes/comments, mark here.

(see reverse for instructions)

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com.

M73085-P50666


		EASTGROUP PROPERTIES, INC. Annual Meeting of Stockholders May 29, 2014 9:00 AM This proxy is solicited by the Board of Directors The undersigned hereby appoints DAVID H. HOSTER II and N. KEITH McKEY, or either of them, Proxies for the undersigned, each with full power of substitution, and hereby authorizes them to represent and to vote all shares of common stock, $0.0001 par value per share, of EastGroup Properties, Inc. (the “Company”), which the undersigned would be entitled to vote at the Annual Meeting of Stockholders (the “Meeting”) to be held at the Company’s offices, 190 East Capitol Street, Suite 400, Jackson, Mississippi, on Thursday, May 29, 2014, at 9:00 a.m., Central Daylight Time, or any adjournment or postponement thereof, and directs that the shares represented by this Proxy shall be voted as indicated on the reverse. This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder. The Board of Directors favors a vote FOR Proposals 1, 2 and 3. If no direction is made, this Proxy will be voted FOR Proposals 1, 2 and 3, and will be voted in the discretion of the Proxies named herein with respect to any additional matter as may properly come before the Meeting or any adjournment or postponement thereof. You are encouraged to specify your choices by marking the appropriate boxes, but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’ recommendations. The Proxies cannot vote the shares unless you sign and return this card.
				Address Changes/Comments:




				(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) Continued and to be signed on reverse side

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