Exhibit 10(ii)
FEDERAL REALTY INVESTMENT TRUST
COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION
AGREEMENT FOR EMPLOYEES
AGREEMENT ("Agreement") dated this 28th day of February, 2002, by and
between FEDERAL REALTY INVESTMENT TRUST, a Maryland real estate investment trust
("Trust"), and LARRY E. FINGER, an employee of the Trust ("Optionee").
WHEREAS, the Trust desires to have Optionee continue in its employ and
to provide Optionee with an incentive by sharing in the success of the Trust;
WHEREAS, in order to provide such an incentive to its key employees,
the Trust has adopted the Amended and Restated Federal Realty Investment Trust
1993 Long-Term Incentive Plan ("Amended Plan");
WHEREAS, the Trust desires to grant, as set forth herein, to Optionee
under the Amended Plan (1) options that qualify as "Incentive Stock Options"
within the meaning of Section 422 or any successor provision of the Internal
Revenue Code of 1986, as amended ("Code"), and/or (2) options not intended to
qualify as Incentive Stock Options ("Non-Qualified Stock Options"); and
WHEREAS, unless otherwise provided herein, capitalized terms used in
this Agreement shall have the meaning given them in the Amended Plan;
NOW, THEREFORE, in consideration of the mutual covenants and
representations herein contained and intending to be legally bound, the parties
hereto agree as follows:
1. Number of Shares and Price. The Trust hereby grants to the Optionee
an option ("Option") to purchase the number of Shares set forth on the last page
of this Agreement. The exercise price per Share of the Option shall be as is set
forth on the last page of this Agreement, such price being the Fair Market Value
per Share on the Date of Grant of the Option. The portion of the Option
indicated on the last page of this Agreement as an Incentive Stock Option is
intended to be an Incentive Stock Option; provided, however, that to the extent,
but only to the extent, that the provisions of this Agreement or the nature of
any actions taken by the Optionee are inconsistent with the treatment of such
portion of the Option as an Incentive Stock Option, such portion of the Option
shall be deemed a Non-Qualified Stock Option. The other portion of the Option
indicated on the last page of this Agreement is a Non-Qualified Stock Option.
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2. Term and Exercise. The Option shall expire ten (10) years from the
date hereof, subject to earlier termination as set forth in Section 4. Subject
to the provisions of Sections 3 and 4, the Option shall become exercisable in
installments as set forth on the last page of this Agreement. Notwithstanding
the foregoing, the Option shall not be exercisable in whole, or in part, prior
to six months from the Date of Grant, except as provided in Section 3.
3. Change in Control. In the event of a Change in Control, the Option,
to the extent it is outstanding and unexercised on the date of such Change in
Control, shall become immediately and fully exercisable. The provisions of this
Section 3 shall not be applicable to the Option if such Change in Control
results from the Optionee's beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act) of Shares or Trust Voting Securities.
4. Exercise of Option Upon Termination of Employment.
(a) Exercise of Vested Option Upon Termination of Employment.
(i) Termination of Employment. Upon the Optionee's
Termination of Employment other than by reason of death, Disability, retirement
on or after the Optionee's Normal Retirement Date or following a Change in
Control, the Optionee may, within one year from the date of such Termination of
Employment, exercise all or any part of the Option to the extent it was
exercisable at the date of Termination of Employment; provided, however, if such
Termination of Employment is for Cause, the right of the Optionee to exercise
the Option shall terminate at the date of Termination of Employment. In no event
may the Option be exercised later than the expiration date described in Section
2.
(ii) Disability or Retirement. Upon the Optionee's Disability
Date or Termination of Employment by reason of retirement on or after the
Optionee's Normal Retirement Date, the Optionee may, within two years after such
Disability Date or Termination of Employment, as the case may be, exercise all
or a part of the Option to the extent that it was exercisable upon such
Disability Date or Termination of Employment. In no event, however, may the
Option be exercised later than the expiration date described in Section 2.
(iii) Death. In the event of the death of the Optionee while
employed by the Trust or within the additional period of time from the date of
the Optionee's Disability Date or Termination of Employment by reason of
retirement and prior to the expiration of the Option as provided in Section
4(a)(ii), to the extent all or any part of the Option was exercisable as of (a)
the date of death while employed by the
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Trust or (b) the Disability Date or the date of Termination of Employment by
reason of retirement and did not expire during the applicable additional period
provided in Section 4(a)(ii) and prior to the Optionee's death, the right of the
Optionee's Beneficiary to exercise the Option shall expire upon the expiration
of two years from the date of the Optionee's death (but in no event more than
two years from the Optionee's Disability Date or the date of the Optionee's
Termination of Employment by reason of retirement, as the case may be) or, if
earlier, on the date of expiration of the Option determined pursuant to Section
2. In all other cases of death following the Optionee's Termination of
Employment, the Optionee's Beneficiary may exercise the Option within the
remaining time, if any, provided in Section 4(a)(i).
(iv) Change in Control. Upon the Optionee's Termination of
Employment following a Change in Control, each Option shall remain exercisable
for a period ending on the date which is the earlier of (A) the first
anniversary of the termination of the Optionee's employment or (B) the
expiration date described in Section 2.
(b) Exercise of Unvested Option Upon Termination of Employment.
Subject to Section 3, to the extent all or any part of the Option was not
exercisable as of the date of Termination of Employment, the unexercisable
portion of the Option shall expire at the date of such Termination of
Employment.
5. Exercise Procedures.
(a) Method of Exercise. The Option shall be exercisable by written
notice to the Trust, which must be received by the Secretary of the Trust not
later than 5:00 P.M. local time at the principal executive office of the Trust
on the expiration date of the Option. Such written notice shall set forth (a)
the number of Shares being purchased and whether those Shares are issuable as a
result of the exercise of the Incentive Stock Option portion of the Option or
the Non-Qualified Stock Option portion of the Option, (b) the total exercise
price for the Shares being purchased, (c) the exact name as it should appear on
the stock certificate(s) to be issued for the Shares being purchased, and (d)
the address to which the stock certificate(s) should be sent.
(b) Payment of Exercise Price. The exercise price of Shares
purchased upon exercise of the Option shall be paid in full (a) in cash, (b) by
delivery to the Trust of Shares (which may include Shares issued in connection
with the exercise of the Option or, with respect to the exercise of the portion
of the Option that is a Non-Qualified Stock Option, Restricted Shares, in each
case subject to such rules as the Committee deems
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appropriate), (c) in any combination of cash and Shares, or (d) by delivery of
such other consideration as the Committee deems appropriate and in compliance
with applicable law (including payment in accordance with a cashless exercise
program under which, if so instructed by the Optionee, Shares may be issued
directly to the Optionee's broker or dealer against receipt of the exercise
price in cash from the broker or dealer).
In the event that any Shares shall be transferred to the Trust to
satisfy all or any part of the exercise price, the part of the exercise price
deemed to have been satisfied by such transfer of Shares shall be equal to the
product derived by multiplying the Fair Market Value as of the date of exercise
times the number of Shares transferred to the Trust. The Optionee may not
transfer to the Trust in satisfaction of the exercise price any fraction of a
Share, and any portion of the exercise price that would represent less than a
full Share must be paid in cash by the Optionee. If payment in full or part is
to be made in the form of Restricted Shares, an equivalent number of Shares
issued on exercise of the Option shall be subject to the same restrictions and
conditions for the remainder of the Award Period applicable to the Restricted
Shares surrendered therefor.
(c) Delivery of Certificate. Subject to Section 9 hereof,
certificates for the purchased Shares will be issued and delivered to the
Optionee as soon as practicable after the receipt of payment of the exercise
price in accordance with Section 5(b) above; provided, however, that delivery of
any such Shares shall be deemed effected for all purposes when a stock transfer
agent of the Trust shall have deposited such certificates in the United States
mail, addressed to Optionee, at the address set forth on the last page of this
Agreement or to such other address as Optionee may from time to time designate
in a written notice to the Trust. The Optionee shall not be deemed for any
purpose to be a shareholder of the Trust in respect of any Shares as to which
the Option shall not have been exercised, as herein provided, until such Shares
have been issued to Optionee by the Trust hereunder.
(d) Alternative Method of Exercise. If the Fair Market Value of the
Shares with respect to which the Option is being exercised exceeds the exercise
price of such Option, the Optionee may, instead of exercising an Option as
provided in Sections 5(a) and 5(b) above, make a request to the Secretary of the
Trust at least ninety (90) days in advance of the expiration of such Option
that, at the Committee's next regularly scheduled meeting, or in the event that
such Options would expire before such meeting, at a special meeting of the
Committee, the Committee authorize payment to the Optionee of the difference
between the Fair Market Value of part or all of the Shares which are the subject
of the Option and the exercise price of the Option, such difference to be
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determined as of the date prior to the date the Trust receives the request from
the Optionee. To the extent the Committee in its sole discretion grants such a
request from the Optionee with respect to part or all of the Shares as to which
the Option is then exercisable, the Committee shall direct the Trust to make
payment to the Optionee either in cash or in Shares or in any combination
thereof; provided, however, that payment in Shares shall be made based upon the
Fair Market Value of Shares as of the date the Trust received the request from
the Optionee. An Option shall be deemed to have been exercised and shall be
canceled to the extent that the Committee grants such a request.
6. Plan Provisions Control Option Terms; Modifications. The Option is
granted pursuant and subject to the terms and conditions of the Amended Plan,
the provisions of which are incorporated herein by reference. In the event any
provision of this Agreement shall conflict with any of the terms in the Amended
Plan as constituted on the Date of Grant, the terms of the Amended Plan as
constituted on the Date of Grant shall control. The Option shall not be modified
after the Date of Grant except by express written agreement between the Trust
and the Optionee; provided, however, that any such modification (a) shall not be
inconsistent with the terms of the Amended Plan, and (b) shall be approved by
the Committee. No modifications may be made to the Option while the Optionee is
subject to Section 16(b) of the Exchange Act except in compliance with Exchange
Act Rule 16b-3.
7. Limitations on Transfer. The Option may not be assigned or
transferred other than by will or the laws of descent and distribution or, if
the Committee determines in its sole discretion, pursuant to a domestic
relations order (within the meaning of Exchange Act Rule 16a-12). During the
lifetime of the Optionee, except as the preceding sentence provides, only the
Optionee personally may exercise rights under this Agreement. The Optionee's
Beneficiary may exercise the Optionee's rights hereunder only to the extent they
were exercisable under this Agreement at the date of the death of the Optionee
and are otherwise currently exercisable.
8. Taxes. The Trust shall be entitled to withhold (or secure payment
from the Optionee in lieu of withholding) the amount of any withholding or other
tax required by law to be withheld or paid by the Trust with respect to any
Shares issuable under this Agreement, or upon a disqualifying disposition of
Shares received pursuant to the exercise of the portion of the Option that is an
Incentive Stock Option, and the Trust may defer issuance of Shares upon the
exercise of the Option unless the Trust is indemnified to its satisfaction
against any liability for any such tax. The amount of such withholding
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or tax payment shall be determined by the Committee or its delegate and shall be
payable by the Optionee at such time as the Committee determines. The Optionee
may satisfy his or her tax withholding obligation by the payment of cash to the
Trust and/or by the withholding from the Option, at the appropriate time, of a
number of Shares sufficient, based upon the Fair Market Value of such Shares, to
satisfy such tax withholding requirements. The Committee shall be authorized, in
its sole discretion, to establish such rules and procedures relating to any such
withholding methods as it deems necessary or appropriate, including, without
limitation, rules and procedures relating to elections to have Shares withheld
upon exercise of the Option to meet such withholding obligations.
9. No Exercise in Violation of Law. Notwithstanding any of the
provisions of this Agreement, the Optionee hereby agrees that he or she will not
exercise the Option granted hereby, and that the Trust will not be obligated to
issue any Shares to the Optionee hereunder, if the exercise thereof or the
issuance of such Shares shall constitute a violation by the Optionee or the
Trust of any provision of any law or regulation of any governmental authority.
Any determination in this connection by the Committee shall be final, binding
and conclusive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
FEDERAL REALTY INVESTMENT TRUST
By: _____________________________________
Name:
Title: Chairman, Compensation Committee
WITNESS: OPTIONEE
________________________________ _________________________________________
Larry E. Finger
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