EXHIBIT 10.41
FEDERAL REALTY INVESTMENT TRUST
PERFORMANCE SHARE AWARD AGREEMENT
This Performance Share Award Agreement (this "Agreement") is made as
of January 1, 1998 between Federal Realty Investment Trust, an unincorporated
business trust organized under the laws of the District of Columbia (the
"Trust"), and Xxx X. Xxxxxx, an individual employee of the Trust (the "Key
Employee").
WHEREAS, the Compensation Committee of the Board of Trustees of the
Trust (the "Board of Trustees") has authorized the award by the Trust to the Key
Employee of a Performance Share Award for a certain number of shares of
beneficial interest, no par value of the Trust (the "Shares");
WHEREAS, this Performance Share Award is not made under the Trust's
Amended and Restated 1993 Long-Term Incentive Plan (the "Amended Plan"); and
WHEREAS, the parties hereto desire to set forth in this Agreement
their respective rights and obligations with respect to such Shares.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. Award of Performance Shares.
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1.1. The Trust hereby grants to the Key Employee, as of January
1, 1998 (the "Award Date"), twelve thousand five hundred (12,500) Shares (the
"Performance Shares"), subject to the restrictions and other terms and
conditions set forth herein.
1.2. On or as soon as practicable after the Award Date, the Trust
shall cause one or more stock certificates representing the Performance Shares
to be registered in the name of the Key Employee. Such stock certificate or
certificates shall be subject to a stop-transfer order and such other
restrictions as the Board of Trustees or any committee thereof may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Shares are listed and
any applicable federal or state securities law, and the Trust may cause a legend
or legends to be placed on such certificate or certificates to make appropriate
reference to such restrictions.
1.3. The certificate or certificates representing the Performance
Shares shall be held in custody by the Chief Financial Officer of the Trust
until the Restriction
Period (as hereinafter defined in Paragraph 4) with respect thereto shall have
lapsed. Simultaneously with the execution and delivery of this Agreement, the
Key Employee shall deliver to the Trust one or more undated stock powers
endorsed in blank relating to the Performance Shares. The Trust shall deliver
or cause to be delivered to the Key Employee or, in the case of the Key
Employee's death, to the Key Employee's Beneficiary, one or more stock
certificates for the appropriate number of Shares, free of all such
restrictions, as to which the restrictions herein shall have expired. Upon
forfeiture, in accordance with Paragraph 4, of all or any portion of the
Performance Shares, the certificate or certificates representing the forfeited
Performance Shares shall be canceled.
2. Restrictions Applicable to Performance Shares.
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2.1. Beginning on the Award Date, the Key Employee shall have all
rights and privileges of a stockholder with respect to the Performance Shares,
except that the following restrictions shall apply:
(a) none of the Performance Shares may be assigned or
transferred (other than by will or the laws of descent and
distribution, or in the Committee's discretion, pursuant to a domestic
relations order within the meaning of Rule 16a-12 of the Securities
Exchange Act of 1934, as amended), pledged (subject to Paragraph 5) or
sold by the Key Employee during the Restriction Period (as hereinafter
defined in Paragraph 4);
(b) all or a portion of the Performance Shares may be
forfeited in accordance with Paragraph 4; and
(c) any Shares distributed as a dividend or otherwise with
respect to any Performance Shares as to which the restrictions have
not yet lapsed shall be subject to the same restrictions as such
Performance Shares and shall be represented by book entry and held in
the same manner as the Performance Shares with respect to which they
were distributed.
2.2. Any attempt to dispose of Performance Shares in a manner
contrary to the restrictions set forth in this Agreement shall be null, void and
ineffective.
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3. Performance Period.
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The Performance Period shall be the period beginning on January 1,
1998 and ending on December 31, 2005. Within the Performance Period there shall
be eight Award Periods, each such Award Period shall begin on January 1 and end
on December 31 of the same year.
4. Restriction Period.
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4.1. Subject to Paragraphs 4.2 through 4.8, the restrictions set
forth in Paragraph 2 shall apply for a period (the "Restriction Period") from
the Award Date until such Restriction Period lapses. The number of Performance
Shares as to which the Restriction Period shall lapse during the Performance
Period shall be determined by the Committee in accordance with this Paragraph 4.
4.2. (a) Promptly after the announcement or other publication by
the Trust of its final results of operations for each of the first through the
eighth Award Periods, the Committee shall determine the extent to which the
Performance Target (as defined in Paragraph 4.2(b) and as set forth in Appendix
A) has been met or exceeded by the Trust within such Award Period, and shall
determine, in accordance with this Performance Share Award Agreement, the number
of Performance Shares, if any, as to which the Restriction Period will lapse
with respect to such Award Period; provided, however, that the Restriction
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Period for any particular Performance Shares shall not lapse unless the Key
Employee tenders to the Trust (or the Trust otherwise withholds in accordance
with Paragraph 4.8) (i) the amount of any state and federal withholding tax
obligation which will be imposed on the Trust by reason of the lapsing of the
Restriction Period for such Performance Shares or (ii) an executed promissory
note evidencing the Key Employee's obligation to repay a Tax Loan (as
hereinafter defined in Paragraph 5) in the amount of any such tax obligation.
The Trust will promptly notify the Key Employee (or the executors or
administrators of his estate) of its determinations under this Paragraph 4.2
(the "Determination Notice"). The Determination Notice shall specify the number
of Performance Shares as to which the Restriction Period has lapsed to the
extent that the Performance Target has been met by the Trust within the Award
Period. The Trust will file the Determination Notice with the minutes of the
Committee.
(b) The Performance Target will have been met or exceeded
based upon the application of an annual test, which requires the Funds from
Operations ("FFO") annual growth rate per Share to equal or exceed seven percent
(7%). If, in any Award Period, the Trust does not meet or exceed the Performance
Target (after taking
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into account the lapsing of Performance Shares resulting therefrom), the
Restriction Period will not lapse as to any Performance Shares allocable to such
Award Period.
4.3. If there are any Performance Shares as to which the
Restriction Period has not lapsed after the Committee has determined the number
of Performance Shares as to which the Restriction Period will lapse with respect
to the eighth Award Period (the "Remaining Shares"), for the period of time
beginning on the ninth anniversary of the Award Date until the thirteenth
anniversary of the Award Date, as of the first day of each year during such
period, the Restriction Period shall lapse with respect to one-fifth of the
number of Remaining Shares; provided, however, that the Restriction Period for
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any particular Performance Shares shall not lapse unless the Key Employee
tenders to the Trust (or the Trust otherwise withholds in accordance with
Paragraph 4.8) (i) the amount of any state and federal withholding tax
obligation which will be imposed on the Trust by reason of the lapsing of the
Restriction Period for such Performance Shares or (ii) an executed promissory
note evidencing the Key Employee's obligation to repay a Tax Loan (in accordance
with Paragraph 5) in the amount of any such tax obligation.
4.4. The Restriction Period shall lapse as to all Performance
Shares upon the occurrence of a Change in Control. In such event, if the Key
Employee tenders (or the Trust otherwise withholds in accordance with Paragraph
4.8) the amount of any state and federal withholding tax obligation which will
be imposed on the Trust by reason of the lapsing of the Restriction Period for
the Performance Shares, the Trust shall deliver or cause to be delivered to the
Key Employee, within ten (10) business days after the Change in Control, one or
more stock certificates representing those Performance Shares as to which the
Restriction Period shall have lapsed. In the event of a Change in Control, the
Trust shall make a payment to the Key Employee in the amount of federal and
state income taxes that he will incur as a result of the lapsing of the
Restriction Period with respect to all Performance Shares under this Paragraph
4.4 (the "Income Tax Payment"); provided, however, that the Trust shall withhold
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from such Income Tax Payment and pay to the applicable government taxing
authorities, any amounts required to be withheld with respect to the Income Tax
Payment under applicable law.
4.5. (a) The Restriction Period shall lapse as to all
Performance Shares in the event (i) of the termination of the Key Employee due
to Disability (as defined in Paragraph 4.5(b)) or (ii) the Key Employee is
terminated by the Trust without Cause (as defined in Paragraph 4.5(b)), if the
Key Employee or his legal representative tenders (or the Trust otherwise
withholds in accordance with Paragraph 4.8) (i) the amount of any state and
federal withholding tax obligation which will be imposed on the Trust by reason
of the lapsing of the Restriction Period for such Restricted Shares or (ii) an
executed
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promissory note evidencing the Key Employee's obligation to repay a Tax Loan (as
defined in Paragraph 4) in the amount of any such tax obligation.
(b) For purposes of this Agreement, the terms "Cause" and
"Disability" shall have the meanings assigned to them in the Severance Agreement
between the Trust and the Key Employee in effect from time to time.
4.6. In the event (i) of the Key Employee's death or (ii) the Key
Employee resigns from employment in all capacities with the Trust, the
Restriction Period shall lapse as to (x) the number of Performance Shares as to
which the Restriction Period was to lapse at the end of the Award Period during
which the Key Employee died or resigned from employment in all capacities with
the Trust, times (y) (A) the number of months the Key Employee was employed
during the Award Period (including, in the event of the Key Employee's death,
the month in which his death occurred, as a whole month) (in the event of the
Key Employee's resignation from employment in all capacities with the Trust, if
the Key Employee resigned before the 16/th/ day of a month, that month shall be
treated as a month in which he did not work) divided by (B) twelve; provided,
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however, that the Restriction Period will not lapse as to any Restricted Shares
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unless the Key Employee or his legal representative tenders (or the Trust
otherwise withholds in accordance with Paragraph 4.8) (i) the amount of any
state and federal withholding tax obligation which will be imposed on the Trust
by reason of the lapsing of the Restriction Period for such Performance Shares
or (ii) an executed promissory note evidencing the Key Employee's or his
estate's obligation to repay a Tax Loan (as defined in Paragraph 4) in the
amount of any such tax obligation. After the Restriction Period with respect to
this number of Performance Shares has lapsed, all rights of the Key Employee to
any and all then-remaining Performance Shares as to which the Restriction Period
has not lapsed shall terminate and be forfeited.
4.7. If the Key Employee is terminated by the Trust for Cause
during the Restriction Period, then all rights of the Key Employee to any and
all then-remaining Performance Shares as to which the Restriction Period has not
lapsed shall terminate and be forfeited.
4.8. In the event the Key Employee or his legal representative
(i) fails to promptly tender to the Trust any required tax withholding amount in
accordance with this Paragraph 4 or (ii) elects not to execute a promissory note
evidencing his obligation to repay a Tax Loan (in accordance with Paragraph 5)
in the amount of any required tax withholding amount, then the Trust shall
retain a portion of the Performance Shares sufficient to meet its tax
withholding obligation.
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5. Tax Loan. (a) The Trust shall extend loans to the Key Employee
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from time to time to provide him with funds to pay the federal and state taxes
that he will incur as a result of the lapsing of the Restriction Period with
respect to Performance Shares except with respect to federal and state taxes
incurred as a result of the lapsing of the Restriction Period with respect to
Performance Shares under Paragraph 4.4 ("Tax Loans"). The Key Employee will
execute promissory notes in the form attached to this Agreement to evidence his
obligation to repay such Tax Loans. The Key Employee hereby pledges the
Performance Shares awarded to him hereunder as to which the Restriction Period
has lapsed, and assigns to the Trust all quarterly cash or other dividends paid
on the Performance Shares awarded to him hereunder as collateral to secure his
obligation to repay any Tax Loans extended to him hereunder and any accrued but
unpaid Interest on such Tax Loans. As of each date a Tax Loan is extended to
the Key Employee, the dollar amount of such Tax Loan so issued to the Key
Employee hereunder shall not exceed 50% of the Fair Market Value of the Shares
awarded to the Key Employee hereunder as to which the Restriction Period has
then lapsed.
(b) In the event of a Change in Control, the Trust shall
extend a loan to the Key Employee to provide him with funds to pay the federal
and state income taxes that he will incur as a result of (i) the forgiveness of
any Tax Loans extended under Paragraph 5(a) and (ii) receipt of the Income Tax
Payment (in accordance with Paragraph 4.4) (the "Change in Control Tax Loan").
The Key Employee will execute a promissory note in the form attached to this
Agreement to evidence his obligation to repay such Change in Control Tax Loan.
6. Miscellaneous.
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6.1. Definitions; Application of Amended Plan. Although this
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Performance Share Award is not made under the Amended Plan, capitalized terms
used in this Agreement, unless otherwise defined herein, have the respective
meanings given to such terms in the Amended Plan. The terms of the Amended Plan
are incorporated by reference as if set forth herein in their entirety and,
except as specifically provided herein, shall govern the terms of this
Performance Share Award Agreement as if the Amended Plan applied hereto.
6.2. Notices. Any notice required or permitted to be given under
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this Agreement shall be in writing and shall be deemed to have been given when
delivered in person or when deposited in the U.S. mail, registered or certified,
postage prepaid, and mailed to the respective addresses set forth herein, unless
a party changes its address for receiving notices by giving notice in accordance
with this Paragraph, in which case, to the address specified in such notice.
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6.3. Continued Employment. This Agreement shall not confer upon
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the Key Employee any right with respect to continuance of employment by the
Trust.
6.4. Entire Agreement; Amendment. This Agreement constitutes the
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entire agreement of the parties with respect to the subject matter hereof and
shall supersede all prior agreements and understandings, oral or written,
between the parties with respect thereto. No provision of this Agreement may be
amended, modified or waived at any time unless such amendment, modification or
waiver shall be agreed to in writing and signed by both of the parties hereto.
6.5. Assignment. This Agreement shall be binding upon and
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inure to the benefit of the heirs and representatives of the Key Employee and
the assigns and successors of the Trust, but neither this Agreement nor any
rights hereunder, subject to Paragraph 2.1(a), shall be assignable or otherwise
subject to hypothecation by the Key Employee.
6.6. Severability. If, for any reason, any provision of this
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Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not so held invalid, and each such other provision shall to
the full extent consistent with law continue in full force and effect. If any
provision of this Agreement shall be held invalid in part, such invalidity shall
in no way affect the rest of such provision not held so invalid, and the rest of
such provision, together with all other provisions of this Agreement, shall to
the full extent consistent with law continue in full force and effect.
6.7. Governing Law. This Agreement and its validity,
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interpretation, performance and enforcement shall be governed by the laws of the
District of Columbia other than the conflict of laws provisions of such laws,
and shall be construed in accordance therewith.
6.8. Certain References. References to the Key Employee in any
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provision of this Agreement under circumstances where the provision should
logically be construed to apply to the Key Employee's executors or the
administrators, or the person or persons to whom all or any portion of the
Restricted Shares may be transferred by will or the laws of descent and
distribution, shall be deemed to include such person or persons.
6.9. Headings. The headings of Paragraphs hereof are included
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solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
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6.10. Source of Payments. Payments provided under this Agreement,
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if any, shall be paid in cash from the general funds of the Trust, and no
special or separate fund shall be established and no other segregation of assets
shall be made to assure payment.
6.11. Exculpatory Clause. Neither the Trust's shareholders nor
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the Trustees, officers, employees or agents of the Trust shall be liable under
this Agreement, and the Key Employee shall look solely to the Trust's estate for
the payment of any claim under or for performance of this Agreement. The Trust
is organized pursuant to a Third Amended and Restated Declaration of Trust dated
as of May 24, 1984.
6.12. Counterparts. This Agreement may be executed in multiple
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counterparts with the same effect as if each of the signing parties had signed
the same document. All counterparts shall be construed together and constitute
the same instrument.
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IN WITNESS WHEREOF, the Trust has caused this Agreement to be duly
executed and the Key Employee has hereunto set his hand effective as of the day
and year first above written.
FEDERAL REALTY INVESTMENT TRUST
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Chair, Compensation Committee
Address:
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
XXX X. XXXXXX
/s/ Xxx X. Xxxxxx
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Address:
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
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APPENDIX A
Promptly after the announcement or other publication by the Trust of
its final results of operations for each of the first through the eighth Award
Periods, the Committee shall determine the extent to which the Performance
Target (as defined below) has been met or exceeded by the Trust within such
Award Period, and shall determine, in accordance with this Performance Share
Award Agreement, the number of Performance Shares, if any, with respect to which
the Restriction Period will lapse. To meet or exceed the Performance Target
(the "Performance Target"), the Trust must meet or exceed the funds from
operations ("FFO") annual per Share growth rate set forth below, and the
determination of the number of Performance Shares with respect to which the
Restriction Period will lapse shall comply with the General Instructions below.
All figures are rounded to the nearest xxxxx.
Performance Target
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Funds From Operations/Annual Number of Performance Shares as to which
Per Share Growth Rate Restriction Period Lapses
Less than 7% None
Equal to or greater than 1,563 shares
7% but less than 9%
Equal to or greater than 9% 2,500 shares
General Instructions
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The FFO annual per Share growth rate shall be determined after taking into
account the impact of the Performance Shares proposed to be awarded.
If, in any Award Period, the Trust does not achieve the Performance Target, the
Restriction Period will not lapse as to any Performance Shares.
Set forth below is an example:
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Total Shares
Shares as as to which
FFO Annual Per Performance to Which Restriction
Share Growth Target Met or Restriction Period has
Award Period Rate Exceeded? Period Lapses Lapsed
1998 9% Yes 2,500 2,500
1999 6% No 0 2,500
2000 7% Yes 1,563 4,063
2001 9% Yes 2,500 6,563
2002 8% Yes 1,563 8,126
2003 8% Yes 1,563 9,689
2004 8% Yes 1,563 11,252
2005 6% No 0 11,252
2006 N/A N/A 250/1/ 11,502
2007 N/A N/A 250 11,752
2008 N/A N/A 250 12,002
2009 N/A N/A 250 12,252
2010 N/A N/A 248 12,500
Any Performance Shares as to which the Restriction Period has not lapsed
after the Committee has determined the number of Performance Shares as to which
the Restriction Period shall lapse with respect to the eighth Award Period
("Remaining Shares") shall be awarded automatically in equal installments for
each of the ninth through the thirteenth Award Periods. These awards of
Performance Shares will be made at January 1 of the following year (for example,
the Restriction Period for the number of Performance Shares awarded to the Key
Employee with respect to 2006 (the ninth Award Period) shall lapse on January 1,
2007). The previous example reflects this treatment.
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/1/ The Restriction Period as to the 1,248 Remaining Shares will lapse in
equal installments over the next five years.
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FEDERAL REALTY INVESTMENT TRUST
PERFORMANCE SHARE AWARD AGREEMENT
This Performance Share Award Agreement (this "Agreement") is made as
of January 1, 1998 between Federal Realty Investment Trust, an unincorporated
business trust organized under the laws of the District of Columbia (the
"Trust"), and Xxx X. Xxxxxx, an individual employee of the Trust (the "Key
Employee").
WHEREAS, the Compensation Committee of the Board of Trustees of the
Trust (the "Board of Trustees") has authorized the award by the Trust to the Key
Employee under the Trust's Amended and Restated 1993 Long-Term Incentive Plan
(the "Amended Plan") of a Performance Share Award for a certain number of shares
of beneficial interest, no par value of the Trust (the "Shares"); and
WHEREAS, the parties hereto desire to set forth in this Agreement
their respective rights and obligations with respect to such Shares.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. Award of Performance Shares.
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1.1. The Trust hereby grants to the Key Employee, as of January
1, 1998 (the "Award Date"), fifty thousand (50,000) Shares (the "Performance
Shares"), subject to the restrictions and other terms and conditions set forth
herein and in the Amended Plan.
1.2. On or as soon as practicable after the Award Date, the Trust
shall cause one or more stock certificates representing the Performance Shares
to be registered in the name of the Key Employee. Such stock certificate or
certificates shall be subject to a stop-transfer order and such other
restrictions as the Board of Trustees or any committee thereof may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Shares are listed and
any applicable federal or state securities law, and the Trust may cause a legend
or legends to be placed on such certificate or certificates to make appropriate
reference to such restrictions.
1.3. The certificate or certificates representing the Performance
Shares shall be held in custody by the Chief Financial Officer of the Trust
until the Restriction Period (as hereinafter defined in Paragraph 4) with
respect thereto shall have lapsed.
Simultaneously with the execution and delivery of this Agreement, the Key
Employee shall deliver to the Trust one or more undated stock powers endorsed in
blank relating to the Performance Shares. The Trust shall deliver or cause to be
delivered to the Key Employee or, in the case of the Key Employee's death, to
the Key Employee's Beneficiary, one or more stock certificates for the
appropriate number of Shares, free of all such restrictions, as to which the
restrictions herein shall have expired. Upon forfeiture, in accordance with
Paragraph 4, of all or any portion of the Performance Shares, the certificate or
certificates representing the forfeited Performance Shares shall be canceled.
2. Restrictions Applicable to Performance Shares.
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2.1. Beginning on the Award Date, the Key Employee shall have all
rights and privileges of a stockholder with respect to the Performance Shares,
except that the following restrictions shall apply:
(a) none of the Performance Shares may be assigned or
transferred (other than by will or the laws of descent and
distribution, or in the Committee's discretion, pursuant to a
domestic relations order within the meaning of Rule 16a-12 of the
Securities Exchange Act of 1934, as amended), pledged (subject to
Paragraph 5) or sold by the Key Employee during the Restriction
Period (as hereinafter defined in Paragraph 4);
(b) all or a portion of the Performance Shares may be
forfeited in accordance with Paragraph 4; and
(c) any Shares distributed as a dividend or otherwise with
respect to any Performance Shares as to which the restrictions
have not yet lapsed shall be subject to the same restrictions as
such Performance Shares and shall be represented by book entry and
held in the same manner as the Performance Shares with respect to
which they were distributed.
2.2. Any attempt to dispose of Performance Shares in a manner
contrary to the restrictions set forth in this Agreement shall be null, void and
ineffective.
3. Performance Period.
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The Performance Period shall be the period beginning on January 1,
1998
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and ending on December 31, 2005. Within the Performance Period there shall be
eight Award Periods, each such Award Period shall begin on January 1 and end on
December 31 of the same year.
4. Restriction Period.
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4.1. Subject to Paragraphs 4.2 through 4.8, the restrictions set
forth in Paragraph 2 shall apply for a period (the "Restriction Period") from
the Award Date until such Restriction Period lapses. The number of Performance
Shares as to which the Restriction Period shall lapse during the Performance
Period shall be determined by the Committee in accordance with this Paragraph 4.
4.2. (a) Promptly after the announcement or other publication by
the Trust of its final results of operations for each of the first through the
eighth Award Periods, the Committee shall determine the extent to which the
Performance Target (as defined in Paragraph 4.2(b) and as set forth in Appendix
A) has been met or exceeded by the Trust within such Award Period, and shall
determine, in accordance with this Performance Share Award Agreement, the number
of Performance Shares, if any, as to which the Restriction Period will lapse
with respect to such Award Period; provided, however, that the Restriction
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Period for any particular Performance Shares shall not lapse unless the Key
Employee tenders to the Trust (or the Trust otherwise withholds in accordance
with Paragraph 4.8) (i) the amount of any state and federal withholding tax
obligation which will be imposed on the Trust by reason of the lapsing of the
Restriction Period for such Performance Shares or (ii) an executed promissory
note evidencing the Key Employee's obligation to repay a Tax Loan (as
hereinafter defined in Paragraph 5) in the amount of any such tax obligation.
The Trust will promptly notify the Key Employee (or the executors or
administrators of his estate) of its determinations under this Paragraph 4.2
(the "Determination Notice"). The Determination Notice shall specify the number
of Performance Shares as to which the Restriction Period has lapsed to the
extent that the Performance Target has been met by the Trust within the Award
Period. The Trust will file the Determination Notice with the minutes of the
Committee.
(b) The Performance Target will have been met or exceeded
based upon the application of an annual test, which requires the Funds from
Operations ("FFO") annual growth rate per Share to equal or exceed seven percent
(7%). If, in any Award Period, the Trust does not meet or exceed the Performance
Target (after taking into account the lapsing of Performance Shares resulting
therefrom), the Restriction Period will not lapse as to any Performance Shares
allocable to such Award Period.
4.3. If there are any Performance Shares as to which the
Restriction Period has not lapsed after the Committee has determined the number
of Performance
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Shares as to which the Restriction Period will lapse with respect to the eighth
Award Period (the "Remaining Shares"), for the period of time beginning on the
ninth anniversary of the Award Date until the thirteenth anniversary of the
Award Date, as of the first day of each year during such period, the Restriction
Period shall lapse with respect to one-fifth of the number of Remaining Shares;
provided, however, that the Restriction Period for any particular Performance
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Shares shall not lapse unless the Key Employee tenders to the Trust (or the
Trust otherwise withholds in accordance with Paragraph 4.8) (i) the amount of
any state and federal withholding tax obligation which will be imposed on the
Trust by reason of the lapsing of the Restriction Period for such Performance
Shares or (ii) an executed promissory note evidencing the Key Employee's
obligation to repay a Tax Loan (in accordance with Paragraph 5) in the amount of
any such tax obligation.
4.4. The Restriction Period shall lapse as to all Performance Shares
upon the occurrence of a Change in Control. In such event, if the Key Employee
tenders (or the Trust otherwise withholds in accordance with Paragraph 4.8) the
amount of any state and federal withholding tax obligation which will be imposed
on the Trust by reason of the lapsing of the Restriction Period for the
Performance Shares, the Trust shall deliver or cause to be delivered to the Key
Employee, within ten (10) business days after the Change in Control, one or more
stock certificates representing those Performance Shares as to which the
Restriction Period shall have lapsed. In the event of a Change in Control, the
Trust shall make a payment to the Key Employee in the amount of federal and
state income taxes that he will incur as a result of the lapsing of the
Restriction Period with respect to all Performance Shares under this Paragraph
4.4 (the "Income Tax Payment"); provided, however, that the Trust shall withhold
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from such Income Tax Payment and pay to the applicable government taxing
authorities, any amounts required to be withheld with respect to the Income Tax
Payment under applicable law.
4.5. (a) The Restriction Period shall lapse as to all Performance
Shares in the event (i) of the termination of the Key Employee due to Disability
(as defined in Paragraph 4.5(b)) or (ii) the Key Employee is terminated by the
Trust without Cause (as defined in Paragraph 4.5(b)), if the Key Employee or his
legal representative tenders (or the Trust otherwise withholds in accordance
with Paragraph 4.8) (i) the amount of any state and federal withholding tax
obligation which will be imposed on the Trust by reason of the lapsing of the
Restriction Period for such Restricted Shares or (ii) an executed promissory
note evidencing the Key Employee's obligation to repay a Tax Loan (as defined in
Paragraph 4) in the amount of any such tax obligation.
(b) For purposes of this Agreement, the terms "Cause" and
"Disability" shall have the meanings assigned to them in the Severance Agreement
between the Trust and the Key Employee in effect from time to time.
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4.6. In the event (i) of the Key Employee's death or (ii) the Key
Employee resigns from employment in all capacities with the Trust, the
Restriction Period shall lapse as to (x) the number of Performance Shares as to
which the Restriction Period was to lapse at the end of the Award Period during
which the Key Employee died or resigned from employment in all capacities with
the Trust, times (y) (A) the number of months the Key Employee was employed
during the Award Period (including, in the event of the Key Employee's death,
the month in which his death occurred, as a whole month) (in the event of the
Key Employee's resignation from employment in all capacities with the Trust, if
the Key Employee resigned before the 16/th/ day of a month, that month shall be
treated as a month in which he did not work) divided by (B) twelve; provided,
--------
however, that the Restriction Period will not lapse as to any Restricted Shares
-------
unless the Key Employee or his legal representative tenders (or the Trust
otherwise withholds in accordance with Paragraph 4.8) (i) the amount of any
state and federal withholding tax obligation which will be imposed on the Trust
by reason of the lapsing of the Restriction Period for such Performance Shares
or (ii) an executed promissory note evidencing the Key Employee's or his
estate's obligation to repay a Tax Loan (as defined in Paragraph 4) in the
amount of any such tax obligation. After the Restriction Period with respect to
this number of Performance Shares has lapsed, all rights of the Key Employee to
any and all then-remaining Performance Shares as to which the Restriction Period
has not lapsed shall terminate and be forfeited.
4.7. If the Key Employee is terminated by the Trust for Cause during
the Restriction Period, then all rights of the Key Employee to any and all then-
remaining Performance Shares as to which the Restriction Period has not lapsed
shall terminate and be forfeited.
4.8. In the event the Key Employee or his legal representative (i)
fails to promptly tender to the Trust any required tax withholding amount in
accordance with this Paragraph 4 or (ii) elects not to execute a promissory note
evidencing his obligation to repay a Tax Loan (in accordance with Paragraph 5)
in the amount of any required tax withholding amount, then the Trust shall
retain a portion of the Performance Shares sufficient to meet its tax
withholding obligation.
5. Tax Loan. (a) The Trust shall extend loans to the Key Employee
--------
from time to time to provide him with funds to pay the federal and state taxes
that he will incur as a result of the lapsing of the Restriction Period with
respect to Performance Shares except with respect to federal and state taxes
incurred as a result of the lapsing of the Restriction Period with respect to
Performance Shares under Paragraph 4.4 ("Tax Loans"). The Key Employee will
execute promissory notes in the form attached to this Agreement to evidence his
obligation to repay such Tax Loans. The Key Employee
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hereby pledges the Performance Shares awarded to him hereunder as to which the
Restriction Period has lapsed, and assigns to the Trust all quarterly cash or
other dividends paid on the Performance Shares awarded to him hereunder as
collateral to secure his obligation to repay any Tax Loans extended to him
hereunder and any accrued but unpaid Interest on such Tax Loans. As of each
date a Tax Loan is extended to the Key Employee, the dollar amount of such Tax
Loan so issued to the Key Employee hereunder shall not exceed 50% of the Fair
Market Value of the Shares awarded to the Key Employee hereunder as to which the
Restriction Period has then lapsed.
(b) In the event of a Change in Control, the Trust shall extend
a loan to the Key Employee to provide him with funds to pay the federal and
state income taxes that he will incur as a result of (i) the forgiveness of any
Tax Loans extended under Paragraph 5(a) and (ii) receipt of the Income Tax
Payment (in accordance with Paragraph 4.4) (the "Change in Control Tax Loan").
The Key Employee will execute a promissory note in the form attached to this
Agreement to evidence his obligation to repay such Change in Control Tax Loan.
6. Miscellaneous.
-------------
6.1. Definitions; Application of Amended Plan. Capitalized terms
----------------------------------------
used in this Agreement, unless otherwise defined herein, have the respective
meanings given to such terms in the Amended Plan. The terms of the Amended Plan
are incorporated by reference as if set forth herein in their entirety and,
except as specifically provided herein, shall govern the terms of this
Performance Share Award Agreement.
6.2. Notices. Any notice required or permitted to be given under
-------
this Agreement shall be in writing and shall be deemed to have been given when
delivered in person or when deposited in the U.S. mail, registered or certified,
postage prepaid, and mailed to the respective addresses set forth herein, unless
a party changes its address for receiving notices by giving notice in accordance
with this Paragraph, in which case, to the address specified in such notice.
6.3. Continued Employment. This Agreement shall not confer upon
--------------------
the Key Employee any right with respect to continuance of employment by the
Trust.
6.4. Entire Agreement; Amendment. This Agreement constitutes the
---------------------------
entire agreement of the parties with respect to the subject matter hereof and
shall supersede all prior agreements and understandings, oral or written,
between the parties with respect thereto. No provision of this Agreement may be
amended, modified or waived at any time unless such amendment, modification or
waiver shall be agreed to in writing and signed by both of the parties hereto.
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6.5. Assignment. This Agreement shall be binding upon and inure to
----------
the benefit of the heirs and representatives of the Key Employee and the assigns
and successors of the Trust, but neither this Agreement nor any rights
hereunder, subject to Paragraph 2.1(a), shall be assignable or otherwise subject
to hypothecation by the Key Employee.
6.6. Severability. If, for any reason, any provision of this
------------
Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not so held invalid, and each such other provision shall to
the full extent consistent with law continue in full force and effect. If any
provision of this Agreement shall be held invalid in part, such invalidity shall
in no way affect the rest of such provision not held so invalid, and the rest of
such provision, together with all other provisions of this Agreement, shall to
the full extent consistent with law continue in full force and effect.
6.7. Governing Law. This Agreement and its validity, interpretation,
-------------
performance and enforcement shall be governed by the laws of the District of
Columbia other than the conflict of laws provisions of such laws, and shall be
construed in accordance therewith.
6.8. Certain References. References to the Key Employee in any
------------------
provision of this Agreement under circumstances where the provision should
logically be construed to apply to the Key Employee's executors or the
administrators, or the person or persons to whom all or any portion of the
Restricted Shares may be transferred by will or the laws of descent and
distribution, shall be deemed to include such person or persons.
6.9. Headings. The headings of Paragraphs hereof are included solely
--------
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.
6.10. Source of Payments. Payments provided under this Agreement, if
------------------
any, shall be paid in cash from the general funds of the Trust, and no special
or separate fund shall be established and no other segregation of assets shall
be made to assure payment.
6.11. Exculpatory Clause. Neither the Trust's shareholders nor the
------------------
Trustees, officers, employees or agents of the Trust shall be liable under this
Agreement, and the Key Employee shall look solely to the Trust's estate for the
payment of any claim under or for performance of this Agreement. The Trust is
organized pursuant to a Third Amended and Restated Declaration of Trust dated as
of May 24, 1984.
-7-
6.12. Counterparts. This Agreement may be executed in multiple
------------
counterparts with the same effect as if each of the signing parties had signed
the same document. All counterparts shall be construed together and constitute
the same instrument.
-8-
IN WITNESS WHEREOF, the Trust has caused this Agreement to be duly
executed and the Key Employee has hereunto set his hand effective as of the day
and year first above written.
FEDERAL REALTY INVESTMENT TRUST
By: /s/ Xxxxxxx Xxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxx
Title: Chair, Compensation Committee
Address:
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
XXX X. XXXXXX
/s/ Xxx X. Xxxxxx
-------------------------------
Address:
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
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APPENDIX A
Promptly after the announcement or other publication by the Trust of its
final results of operations for each of the first through the eighth Award
Periods, the Committee shall determine the extent to which the Performance
Target (as defined below) has been met or exceeded by the Trust within such
Award Period, and shall determine, in accordance with this Performance Share
Award Agreement, the number of Performance Shares, if any, with respect to which
the Restriction Period will lapse. To meet or exceed the Performance Target (the
"Performance Target"), the Trust must meet or exceed the funds from operations
("FFO") annual per Share growth rate set forth below, and the determination of
the number of Performance Shares with respect to which the Restriction Period
will lapse shall comply with the General Instructions below. All figures are
rounded to the nearest xxxxx.
Performance Target
------------------
Funds From Operations/Annual Number of Performance Shares as to which
Per Share Growth Rate Restriction Period Lapses
Less than 7% None
Equal to or greater than 7% but less than 9% 6,250 shares
Equal to or greater than 9% 10,000 shares
General Instructions
--------------------
The FFO annual per Share growth rate shall be determined after taking into
account the impact of the Performance Shares proposed to be awarded.
If, in any Award Period, the Trust does not achieve the Performance Target, the
Restriction Period will not lapse as to any Performance Shares.
Set forth below is an example:
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Example 1
FFO Annual Per Performance Shares as to Total Shares as to
Share Growth Target Met or Which Restriction which Restriction
Award Period Rate Exceeded Period Lapses Period has
Lapsed
1998 9% Yes 10,000 10,000
1999 6% No 0 10,000
2000 7% Yes 6,250 16,250
2001 9% Yes 10,000 26,250
2002 8% Yes 6,250 32,500
2003 8% Yes 6,250 38,750
2004 8% Yes 6,250 45,000
2005 6% No 0 45,000
2006 N/A N/A 1,000/1/ 46,000
2007 N/A N/A 1,000 47,000
2008 N/A N/A 1,000 48,000
2009 N/A N/A 1,000 49,000
2010 N/A N/A 1,000 50,000
Any Performance Shares as to which the Restriction Period has not lapsed
after the Committee has determined the number of Performance Shares as to which
the Restriction Period shall lapse with respect to the eighth Award Period
("Remaining Shares") shall be awarded automatically in equal installments for
each of the ninth through the thirteenth Award Periods. These awards of
Performance Shares will be made at January 1 of the following year (for example,
the Restriction Period for the number of Performance Shares awarded to the Key
Employee with respect to 2006 (the ninth Award Period) shall lapse on January 1,
2007). The previous example reflects this treatment.
------------------------
/1/ The Restriction Period as to the 5,000 Remaining Shares will lapse in
equal installments over the next five years.
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