EXHIBIT 10.39
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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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"), three hundred thousand (300,000) 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 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.
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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 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
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respect to one-fifth of the number of Remaining Shares; provided, however, that
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the Restriction 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 (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 Amended and
Restated Employment 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
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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,
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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 Loans. (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
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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. Capitalized terms
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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
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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.
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
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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.
6.10. Source of Payments. Payments provided under this
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Agreement, if any, shall be paid in cash from the general funds of the Trust,
and no special or separate
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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.
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/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chair, Compensation Committee
Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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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 ▇▇▇▇▇.
Performance Target
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Funds From Operations/Annual Number of Performance Shares as to
Per Share Growth Rate which Restriction Period Lapses
Less than 7% None
Equal to or greater than 7% 37,500 shares
but less than 9% 60,000 shares
Equal to or greater than 9%
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 Restriction Period has
Award Period Rate or Exceeded? Period Lapses Lapsed
1998 9% Yes 60,000 60,000
1999 6% No 0 60,000
2000 7% Yes 37,500 97,500
2001 9% Yes 60,000 157,500
2002 8% Yes 37,500 195,000
2003 8% Yes 37,500 232,500
2004 8% Yes 37,500 270,000
2005 6% ▇▇ ▇ ▇▇▇,▇▇▇
▇▇▇▇ ▇/▇ ▇/▇ 6,000/1/ 276,000
2007 N/A N/A 6,000 282,000
2008 N/A N/A 6,000 288,000
2009 N/A N/A 6,000 294,000
2010 N/A N/A 6,000 300,000
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.
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/1/ The Restriction Period as to the 30,000 Remaining Shares will lapse in
equal installments over the next five years.
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