AMENDED AND RESTATED CONTINGENT STOCK AGREEMENT
THIS AMENDED AND RESTATED CONTINGENT STOCK AGREEMENT (this "Agreement"),
dated as of ________ __, 1998 and, subject to stockholder approval as provided
in Section __, effective as of March 13, 1998 (the "Effective Date"), is made by
and between First Washington Realty Trust, Inc., a Maryland corporation (the
"Company"), and _____________, an officer of the Company (the "Employee").
RECITALS
WHEREAS, the Company and the Employee are parties to that certain
Contingent Stock Agreement, dated June 30, 1996 (the "Original Contingent Stock
Agreement") pursuant to which the Employee has been and may in the future be
granted shares of the Company's common stock, par value $0.01 per share (the
"Common Stock"), subject to the performance conditions specified in the Original
Contingent Stock Agreement and herein;
WHEREAS, in connection with the extension and amendment of the Employment
Agreement (as defined below), the Compensation Committee of the Company's Board
of Directors (the "Committee"), has determined that it would be to the advantage
and in the best interest of the Company and its stockholders to provide for the
issuance to the Employee of additional shares of Common Stock, subject to the
performance conditions set forth herein, and has advised the Company thereof;
WHEREAS, the Company desires to insure that compensation payable hereunder
(in the form of Contingent Stock) is deductible without limit under Section
162(m) of the Code (as defined below); and
WHEREAS, the Company and the Employee desire to amend the Original
Contingent Stock Agreement to reflect the foregoing and to amend such agreement
in certain other respects.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. "Annual Budget" for each of fiscal years 1998 and 1999 shall mean
those targeted performance criteria, which shall include, but not be limited to,
rental and other revenues and net operating income, which the Committee and
senior management of the Company shall mutually determine is appropriate. The
Annual Budget for each fiscal year 1998 and 1999 shall be presented to the
Committee during the first quarter of such fiscal year and shall be subject to
the review and approval of the Committee. In determining whether the Company has
materially met the Annual Budget for fiscal years 1998 and 1999, the Committee
shall make allowances for extraordinary items or events.
Section 1.2. "Board" shall mean the Board of Directors of the Company.
Section 1.3. "Committee" shall mean the Compensation Committee of the Board or
another committee appointed by and serving at the pleasure of the Board, and
shall consist of at least two members of the Board who shall each qualify as
both "outside directors" under Section 162(m) of the Code and as "non-employee
directors" as defined under Rule 16b-3 promulgated under the Exchange Act. The
Committee shall have the sole discretion and authority to administer and
interpret this Agreement.
Section 1.4. "Common Stock" shall mean the Company's common stock, par value
$0.01 per share.
Section 1.5. "Company" shall mean First Washington Realty Trust, Inc., a
Maryland corporation
Section 1.6. "Contingent Stock" shall mean Common Stock of the Company issued
under this Agreement..
Section 1.7. "Effective Date" shall mean March 13, 1998; provided; that this
Amended and Restated Stock Agreement shall be of no force and effect unless and
until approved by the stockholders of the Company as provided in Section 4.1.
Section 1.8. "Employee" shall mean ______________.
Section 1.9. "Employment Agreement" shall mean that certain Second Amended and
Restated Executive Employment Agreement between the Employee and the Company
dated as of _____ __, 1998.
Section 1.10. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
Section 1.11. "Original Contingent Stock Agreement" shall mean that certain
Contingent Stock Agreement, dated June 30, 1996.
Section 1.12. "Performance Goals" shall mean, with respect to any fiscal year
2000 through 2002, the Company performance objectives established by the
Committee pursuant to Section 3.2(a), which objectives shall relate to one or
more of the following performance criteria: funds from operations; total return
(measured as the sum of the annual dividend plus increases in the market price
of the Common Stock); portfolio growth (measured as increases in the aggregate
value of the real property in the Company's portfolio, based upon the original
cost of such property); stock price; operating income; cost reductions and
savings; and earnings before any one or more of the following: interest, taxes,
depreciation or amortization.
ARTICLE II.
SHARES AVAILABLE FOR ISSUANCE UNDER THIS AGREEMENT
Section 2.1. Shares of Common Stock Reserved for Issuance. As of the Effective
Date, the Company has issued to the Employee 5,000 shares of Contingent Stock.
The maximum number of shares of Contingent Stock that may be issued to Employee
after the Effective Date shall be 25,000 as specified in Section 3.1 (subject to
adjustment pursuant to Section 4.11); provided, that if the stockholders of the
Company approve this Agreement as contemplated in Section 4.1, the Company may
issue to the Employee up to 75,000 additional shares of Contingent Stock as
specified in Section 3.2 (subject to adjustment pursuant to Section 4.11).
ARTICLE III.
CONDITIONS AND ISSUANCE OF CONTINGENT STOCK
Section 3.1. Conditions and Issuance of Original Contingent Stock. Subject to
Section 3.3, shares of Contingent Stock shall be granted to the Employee on the
dates and in the amounts set forth below if the Committee determines that the
Company has materially met the Company's Annual Budget during the relevant
fiscal year as set forth below. Shares of Contingent Stock shall be granted to
the Employee as specified below notwithstanding termination of his employment
with the Company (i) by the Company pursuant to Section 2(c)(i) of the
Employment Agreement or (ii) by the Employee pursuant to (x) Section 2(d) of the
Employment Agreement, (y) Section 2(e) of the Employment Agreement or (z) the
Company's nonrenewal of the Employment Agreement.
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Number of Shares of Contingent
Date of Grant Fiscal Year Stock to be Granted
------------- ----------- ------------------------------
March 31, 1999 1/1/98 - 12/31/98 12,500
March 31, 2000 1/1/99 - 12/31/99 12,500
Section 3.2. Conditions and Issuance of New Contingent Stock.
(a) No later than ninety (90) days following the commencement of each
fiscal year 2000 through 2002, the Committee shall, in writing, establish a
formula for the award of Contingent Stock to the Employee based upon the
Company's attainment of the Performance Goals applicable to such fiscal year.
(b) Subject to Section 3.3, the Employee may receive on the date specified
below up to that number of shares of Contingent Stock as specified below based
upon the attainment of the Performance Goals established for each such fiscal
year. No Contingent Stock shall be granted to the Employee unless and until the
Committee makes a certification in writing with respect to the attainment of the
Performance Goals as required by Section 162(m) of the Code. Shares of
Contingent Stock shall be granted to the Employee as specified below
notwithstanding termination of his employment with the Company (i) by the
Company pursuant to Section 2(c)(i) of the Employment Agreement or (ii) by the
Employee pursuant to (x) Section 2(d) of the Employment Agreement, (y) Section
2(e) of the Employment Agreement or (z) the Company's nonrenewal of the
Employment Agreement. Although the Committee may, in its sole discretion, reduce
the number of shares of Contingent Stock awarded to the Employee pursuant to the
applicable Performance Goal formula for any fiscal year, the Committee shall
have no discretion to increase the number of shares of Contingent Stock as
determined under the applicable Performance Goal formula.
Maximum Number of Shares of Contingent
Date of Grant Fiscal Year Stock to be Granted
------------- ----------- --------------------------------------
March 31, 2001 1/1/00 - 12/31/00 25,000
March 31, 2002 1/1/01 - 12/31/01 25,000
March 31, 2003 1/1/02 - 12/31/02 25,000
Section 3.3. Forfeiture. Notwithstanding any other provision of this Agreement,
no shares of Contingent Stock shall be granted following termination of the
Employee's employment (a) by the Company pursuant to Section 2(c)(ii) of the
Employment Agreement or (b) by the Employee other than pursuant to (x) Section
2(d) of the Employment Agreement, (y) Section 2(e) of the Employment Agreement
or (z) the Company's nonrenewal of the Employment Agreement.
Section 3.4. Issuance of Certificates. Upon the granting of the shares of
Contingent Stock as provided in Sections 3.1 and 3.2, the Company shall cause
certificates with respect to such Contingent Stock to be issued and delivered to
the Employee or his legal representative.
Section 3.5. Legend; Additional Terms.
(a) Unless such shares shall have been registered pursuant to an effective
registration statement under the Securities Act of 1933, as amended,
certificates representing shares of Contingent Stock granted to the Employee
pursuant to this Agreement shall bear the following legend:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). NO SALE, HYPOTHECATION, TRANSFER OR OTHER
DISPOSITION OF THESE SECURITIES MAY BE MADE UNLESS EITHER (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (B) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT."
(b) The Committee, in its discretion, may impose such further provisions or
limitations on the Contingent Stock as it may deem equitable and in the best
interests of the Company.
ARTICLE IV.
MISCELLANEOUS
Section 4.1. Stockholder Approval; Effectiveness. This Agreement shall be of no
force or effect and no shares of Contingent Stock shall be granted pursuant to
Section 3.2 unless and until the Company's stockholders shall have approved this
Agreement and the Performance Goals as required by Section 162(m) of the Code.
Immediately upon stockholder approval of this Agreement as provided in this
Section 4.1, the Original Contingent Stock Agreement shall terminate and shall
not be of any further force or effect. So long as this Agreement shall have not
have been previously terminated by the Board, it shall be resubmitted for
approval by the Company's stockholders, to the extent required by Section 162(m)
of the Code, if it is amended in any way which materially modifies the
Performance Goals or increases the maximum number of shares of Contingent Stock
payable under Section 3.2.
Section 4.2. Administration. The Committee shall have the power to interpret
this Agreement and all other documents relating to Contingent Stock and to adopt
such rules for the administration, interpretation and application of this
Agreement as are consistent herewith and to interpret, amend or revoke any such
rules. All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon the Employee, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to Contingent Stock and all members of the Committee shall be
fully protected by the Company in respect to any such action, determination or
interpretation. The Board shall have no right to exercise any of the rights or
duties of the Committee under this Agreement.
Section 4.3. Rights to Contingent Stock Not Transferable. No shares of
Contingent Stock or any interest or right therein or part thereof shall be
liable for the debts, contracts or engagements of the Employee or his successors
in interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy) and any attempted disposition thereof shall be null and
void and of no effect, unless and until such shares of Contingent Stock have
been granted to the Employee and all restrictions applicable thereto have
lapsed; provided, however, that this Section 4.3 shall not prevent transfers by
will or applicable laws of descent and distribution.
Section 4.4. Conditions to Issuance of Stock Certificates. The Company shall not
be required to issue or deliver any certificate or certificates for shares of
Contingent Stock pursuant to this Agreement prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed; and
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(b) The completion of any registration or other qualification of such
shares under any state or Federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Committee shall, in its discretion, deem necessary or advisable; and
(c) The obtaining of any approval or other clearance from any state or
Federal governmental agency which the Committee shall, in its discretion,
determine to be necessary or advisable; and
(d) The payment by the Employee of all amounts required to be withheld,
under federal, state and local tax laws, with respect to the issuance of
Contingent Stock; and
(e) The lapse of such reasonable period of time as the Committee may from
time to time establish for reasons of administrative convenience.
Section 4.5. Notices. Any notice to be given under the terms of this Agreement
to the Company shall be addressed to the Company in care of its secretary, and
any notice to be given to the Employee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
4.5, either party may hereafter designate a different address for notices to be
given to it or him. Any notice which is required to be given to the Employee
shall, if the Employee is then deceased, be given to the Employee's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 4.5. Any notice shall
have been deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service.
Section 4.6. Rights as Stockholder. Upon delivery of the shares of Contingent
Stock pursuant to Section 3.1 or 3.2, the Employee shall have all the rights of
a stockholder with respect to said shares, subject to the restrictions specified
herein (including the provisions of Section 4.10), including the right to vote
the shares and to receive all dividends or other distributions paid or made with
respect to such shares.
Section 4.7. Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Agreement.
Section 4.8. Conformity to Securities Laws. This Agreement is intended to
conform to the extent necessary with all provisions of the Securities Act of
1933, as amended, and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, including
without limitation Rule 16b-3 promulgated under the Exchange Act.
Notwithstanding anything herein to the contrary, this Agreement shall be
administered, and Contingent Stock shall be issued, only in such a manner as to
conform to such laws, rules and regulations. To the extent permitted by
applicable law, this Agreement and Contingent Stock issued hereunder shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.
Section 4.9. Amendment. This Agreement may be amended only by a writing executed
by the parties hereto which specifically states that it is amending this
Agreement. Any amendments to this Agreement shall require stockholder approval
only to the extent required by Section 162(m) of the Code.
Section 4.10. Tax Withholding. The Company's obligation (i) to issue or deliver
to the Employee any certificate or certificates for Contingent Stock and (ii) to
pay to the Employee any dividends or make any distributions with respect to
Contingent Stock is expressly conditioned upon receipt from the Employee, on or
prior to the date the same is required to be withheld, of:
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(a) Full payment (in cash or by check) of any amount that must be withheld
by the Company for federal, state and/or local tax purposes; or
(b) With the consent of the Committee, full payment by delivery to the
Company of unrestricted shares of Common Stock previously owned by the Employee
duly endorsed for transfer to the Company by the Employee with an aggregate fair
market value (as determined by the Committee) equal to the amount to be withheld
by the Company for federal, state and/or local tax purposes; or
(c) With the consent of the Committee, full payment by retention by the
Company of a portion of the shares of Contingent Stock to be granted to the
Employee as of such date with an aggregate Fair Market Value (determined as of
the Grant Date) equal to the amount that must be withheld by the Company for
federal, state and/or local tax purposes; or
(d) With the consent of the Committee, any combination of payments provided
for in the foregoing subsections (a), (b) or (c).
Section 4.11. Changes in Common Stock. In the event that the outstanding shares
of Common Stock of the Company are hereafter changed into or exchanged for a
different number or kind of shares or other securities of the Company, or of
another corporation, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, or the number of shares is increased or
decreased by reason of a stock split-up, stock dividend, combination of shares
or any other increase or decrease in the number of such shares of Common Stock
effected without receipt of consideration by the Company (provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration"), the Committee shall
make appropriate adjustments in the number and kind of shares of Contingent
Stock which may be issued.
Section 4.12. Governing Law. The laws of the State of Maryland shall govern the
interpretation, validity, administration, enforcement and performance of the
terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.
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IN WITNESS HEREOF, this Agreement has been executed and delivered by the
parties hereto.
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FIRST WASHINGTON REALTY TRUST, INC.
By_________________________________
Its________________________________
___________________________________
Employee
___________________________________
___________________________________
Address
