SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Maryland 52-0782497
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
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Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
Common Shares of Beneficial Interest New York Stock Exchange
Common Stock Purchase Rights New York Stock Exchange
7.95% Series A Cumulative Redeemable
Preferred Shares New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
6 5/8% Senior Notes 6.74% Medium-Term Notes
7.48% Senior Debentures 6.99% Medium-Term Notes
8 7/8% Senior Notes 6.82% Medium-Term Notes
8% Senior Notes 8.75% Notes
Subordinated Debt Securities*
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* None issued, registered pursuant to a shelf registration
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [x]
At March 14, 2000, the aggregate market value of Common Shares of Beneficial Interest of Federal Realty Investment Trust held by nonaffiliates was $746.6 million based upon the closing price of such Shares on the New York Stock Exchange.
Indicate the number of shares outstanding of each of the issuers' classes of common stock.
Class Outstanding at March 14, 2000 ----- ----------------------------- Common Shares of Beneficial Interest 39,557,553 |
Portions of the Trust's Proxy Statement in connection with its Annual Meeting to be held on May 3, 2000 (hereinafter called "2000 Proxy Statement"). Specifically, the Sections entitled "Summary Compensation Table", "Employment Agreements;Termination of Employment and Change in Control Arrangements", "Aggregated Option Exercises in 1999 and December 31, 1999 Option Values", and "Compensation Committee Interlocks and Insider Participation", "Ownership of Shares by Trustees and Officers", "Certain Transactions" and "Section 16(a) Beneficial Ownership Reporting Compliance" appearing in the 2000 Proxy Statement are incorporated herein by reference.
Federal Realty Investment Trust (the "Trust") is engaged in the ownership, management, development and redevelopment of prime retail properties. Founded in 1962, the Trust is a self-administered equity real estate investment trust. The Trust consolidates the financial statements of various entities which it controls. At December 31, 1999 the Trust owned 123 retail or mixed use properties and one apartment complex.
The Trust operates in a manner intended to enable it to qualify as a real estate investment trust (REIT) under Sections 856- 860 of the Internal Revenue Code. Under those sections, a REIT which distributes at least 95% of its real estate investment trust taxable income to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. Therefore, no provision for Federal income taxes is required.
An important part of the Trust's strategy has been to acquire older, well- located properties in prime, densely populated and affluent areas and to enhance their operating performance through a program of renovation, expansion, reconfiguration and retenanting. The Trust's traditional focus has been on community and neighborhood shopping centers that are anchored by supermarkets, drug stores or high volume, value oriented retailers that provide consumer necessities. Late in 1994, recognizing a trend of consumer shopping preferences and retailer expansion to main streets, the Trust expanded its investment strategy to include shopping centers and retail and mixed use buildings in prime established main street shopping areas. In addition, since 1997 the Trust has obtained control of various land parcels for the purpose of developing urban mixed-use projects that center around the retail component. The Trust believes that these mixed use developments are an important source of its growth in the future.
The Trust continually evaluates its properties for renovation, retenanting and expansion opportunities. Similarly, the Trust regularly reviews its portfolio and from time to time considers selling properties that no longer fit the Trust's investment criteria and therefore should be monetized or exchanged into other real estate assets. Proceeds from the sale of such properties may be used either to acquire other properties (including funding for development) or to help fund the Trust's share repurchase programs.
The Trust's portfolio of properties has grown from 54 as of January 1, 1995 to 124 at December 31, 1999. During this five year period the Trust acquired 76 retail properties for approximately $651 million. During this same period six
shopping centers were sold. Also during this period the Trust spent over $308 million to develop, renovate, expand, improve and retenant its properties. Although the Trust usually purchases a 100% fee interest in its acquisitions, on occasion, it has entered into leases as a means of acquiring properties. In addition, the Trust has purchased certain properties in partnership with others. Certain of the partnerships, known as "downreit partnerships", are a means of allowing property owners to make a tax deferred contribution of their property in exchange for partnership units, which receive the same distributions as Trust common shares and may be convertible into common shares of the Trust. The majority of acquisitions are funded with cash, but, on occasion, usually in connection with the partnerships, debt financing is used. Since a significant portion of cash provided by operating activities is distributed to common and preferred shareholders, capital outlays for acquisitions, developments and redevelopments require debt or equity funding.
The Trust's 124 properties are located in fifteen states and the District of Columbia. Twenty-six of the properties are located in the Washington, D.C. metropolitan area; twenty-four are in California; fourteen are in Connecticut; ten are in Pennsylvania, primarily in the Philadelphia area; ten are in New Jersey; twelve are in Texas; seven are in Illinois; three are in Virginia; four are in Massachusetts; seven are in New York; two are in Florida; two are in Arizona; and there is one in each of the following states: Michigan, North Carolina and Oregon. No single property accounts for over 10% of the Trust's revenues.
The Trust has traditionally operated its business as a single business segment. During the fourth quarter of 1998, however, the Trust completed a comprehensive restructuring program which, among other things, changed the Trust's operating structure from a functional hierarchy to an asset management model, where small focused teams are responsible for a portfolio of assets. As a result the Trust has divided its portfolio of properties into three operating regions: the Northeast, Mid-Atlantic and West. Each region is operated under the direction of a regional chief operating officer, with dedicated leasing, property management and financial staff and operates largely autonomously with respect to day to day operating decisions. (See "Segment Results" in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations for a further discussion of the segments and their results.)
The Trust has approximately 2,200 tenants, ranging from sole proprietors to major national retailers; no one tenant or corporate group of tenants accounts for 2% or more of revenue. The Trust's leases with these tenants are classified as operating leases and typically are structured to include minimum rents, percentage rents based on tenants' gross sales volumes and reimbursement of certain operating expenses and real estate taxes.
The Trust continues to seek older, well-located shopping centers and retail buildings to acquire, renovate, retenant and remerchandise, thereby enhancing their revenue potential. The Trust also continues to identify and secure additional sites for new development. During each of the years ended December 31, 1999, 1998 and 1997, retail or mixed-use properties have contributed 96% of the Trust's total revenue. The extent to which the Trust might mortgage or otherwise finance investments varies with the investment involved and the economic climate.
The success of the Trust depends upon, among other factors, the trends of the economy, access to capital, interest rates, construction costs, retailing trends, income tax laws, increases or decreases in operating expenses, governmental regulations, population trends, zoning laws, legislation and the ability of the Trust to keep its properties leased at profitable levels. The Trust competes for tenants with other real estate owners and the Trust's properties account for only a small fraction of the retail space available for lease. The Trust competes for investment opportunities and debt and equity capital with individuals, partnerships, corporations, financial institutions, life insurance companies, pension funds, trust funds and other real estate investment trusts.
Investments in real property create a potential for environmental liability on the part of the current and previous owners of, or any mortgage lender on, such real property. If hazardous substances are discovered on or emanating from any property, the owner or operator of the property may be held liable for costs and liabilities relating to such hazardous substances. The Trust has environmental insurance on many of its properties. Subject to certain exclusions and deductibles, the insurance provides coverage for unidentified, pre-existing conditions and for future contamination caused by tenants and third parties. The Trust's current policy is to require an environmental study on each property it seeks to acquire. On recent acquisitions, any substances identified prior to closing which are required, by applicable laws, to be remediated have been or are in the process of investigation and remediation. Costs related to the abatement of asbestos which increase the value of Trust properties are capitalized. Other costs are expensed. In 1999 and 1998 approximately $952,000 and $616,000, respectively, of which $654,000 and $453,000, respectively, was capitalized abatement costs, was spent on environmental matters. The Trust has budgeted approximately $650,000 in 2000 for environmental matters, a majority of which is projected for asbestos abatement.
In May 1999 the Trust, which had been founded as a District of Columbia business trust in 1962, reorganized as a Maryland real estate investment trust by amending and restating its declaration of trust and bylaws.
During 1999 while exploring strategic alternatives to maximize shareholder value, the Trust considered spinning off certain of its assets (primarily those related to the development and operation of its main street retail program) in a taxable transaction to shareholders. Shortly thereafter, the remaining assets of the Trust were to be merged with another publicly traded shopping center company in exchange for cash and stock consideration. On September 24, 1999, the Trust announced that merger negotiations were terminated and that the spin-off was being reevaluated.
In preparing for these transactions, the Trust incurred expenses of approximately $2.8 million related to legal, accounting, tax and other advisory services related to the proposed spin-off and the merger. Such costs have been expensed and are reflected as administrative expenses in the accompanying consolidated statement of operations. While management continues to evaluate alternatives to maximize shareholder value, there are currently no plans to consummate a spin-off or merger transaction.
In 1999, $26.4 million of real estate, consisting of three street retail properties, was acquired. Improvements to properties totalled $95.1 million, including $38.7 million on predevelopment and development projects in Bethesda, Maryland; Los Gatos, California; San Jose, California; San Antonio, Texas; and Arlington, Virginia. The Trust invested $2.3 million in mortgage notes receivable with an average weighted stated interest rate of 10%. Northeast Plaza in Atlanta, Georgia was sold in October 1999 for $19.6 million, resulting in a loss of $6.3 million.
The Trust utilized its unsecured line of credit to fund these acquisitions and capital expenditures. Repayments on the line of credit were made from the proceeds of the sale of Northeast Plaza as well as the issuance on November 30, 1999 of $175 million of 8.75% Senior Notes due December 1, 2009.
In December 1999 the Trustees authorized a share repurchase program of up to an aggregate of 4 million of the Trust's common shares. The repurchase program will end upon the earlier of December 31, 2000 or the date when the repurchase limit has been met. As of December 31, 1999, 140,400 shares had been repurchased, at a cost of $2.6 million. As of March 14, 2000, 1,048,600 shares at a cost of $20.0 million had been repurchased.
At December 31, 1999 the Trust had 192 full-time employees.
The Executive Officers at December 31, 1999 were:
Name Age Position with Trust
---- --- -------------------
Steven J. Guttman 53 President, Chief Executive
Officer and Trustee
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Howard S. Biel 52 Senior Vice President, Chief
Development Officer
Nancy J. Herman 36 Vice President, General Counsel
and Secretary
Ron D. Kaplan 36 Senior Vice President-Capital
Markets, Chief Investment Officer
Cecily A. Ward 53 Vice President-Controller and
Treasurer
Donald C. Wood 39 Senior Vice President - Chief
Operating Officer and Chief
Financial Officer
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Steven J. Guttman has been the Trust's President and Chief Executive Officer since April 1980. Mr. Guttman has been associated with the Trust since 1972, became Chief Operating Officer in 1975 and became a Managing Trustee in 1979.
Howard S. Biel joined the Trust in January 1998 as Senior Vice President-Chief Development Officer. From 1991 through 1997, Mr. Biel was Regional Partner for Faison where he was responsible for the development of over one million square feet of retail and entertainment space in the Mid-Atlantic and Northeast regions. From 1986 through 1990, Mr. Biel was Executive Vice President for Western Development Corporation (now the Mills Corporation) where he oversaw the development and management of over seven million square feet of value oriented super-regional shopping malls. From 1979 through 1985, he was Senior Vice President for Development at the Edward J. DeBartolo Corporation where he was responsible for the planning and development of ten regional malls and several urban mixed-use projects.
Nancy J. Herman became the Trust's Vice President, General Counsel and Secretary on December 21, 1998. In this position, Ms. Herman has overall responsibility for the Trust's legal affairs and human resources. Ms. Herman joined the Trust in 1990 as a staff attorney. Since that time, she has had responsibility for managing legal issues related to environmental matters, intellectual property and computers, insurance and other legal matters. Prior to joining the Trust in 1990, Ms. Herman practiced real estate law at Hogan & Hartson L.L.P.
Ron D. Kaplan joined the Trust in November 1992 as Vice President-Capital Markets. Mr. Kaplan was formerly a Vice President of Salomon Brothers Inc where he was responsible for capital raising and financial advisory services for public and private real estate companies. While at Salomon Brothers which he joined in 1985, he participated in two of the Trust's debt offerings.
Cecily A. Ward was appointed Vice President - Controller and Treasurer on December 16, 1999. On February 9, 2000 Ms. Ward was appointed Vice President - Chief Financial Officer and Treasurer. Ms. Ward joined the Trust in April 1987 as Controller. Prior to
joining the Trust, Ms. Ward, a certified public accountant, was employed by Grant Thornton LLP, the Trust's independent accountants at that time.
Donald C. Wood was appointed Senior Vice President - Chief Operating Officer and Chief Financial Officer on December 16, 1999. Mr. Wood joined the Trust in May 1998 as Senior Vice President, Chief Financial Officer and Treasurer. Prior to joining the Trust, Mr. Wood was Senior Vice-President and Chief Financial Officer for Caesars World, Inc., a wholly-owned subsidiary of ITT Corporation, where he was responsible for all aspects of finance throughout the company including strategic planning, process re-engineering, capital allocation and financial analysis. Prior to joining ITT in 1990, Mr. Wood was employed at Arthur Andersen & Co. from 1982 where he served in numerous positions including audit manager.
The following table sets forth information concerning each retail property in which the Trust owns an equity interest or has a leasehold interest as of December 31, 1999. Except as otherwise noted, retail properties are 100% owned in fee by the Trust.
Year Year Number of
NORTHEAST Completed Acquired Square Feet (2) Tenants
------------ ----------- ----------------- ----------
Allwood 1958 1988 52,000 8
Clifton, NJ 07013 (4)
Andorra 1953 1988 259,000 43
Philadelphia, PA 19128 (5)
Bala Cynwyd 1955 1993 278,000 22
Bala Cynwyd, PA 19004
Blue Star 1959 1988 394,000 33
Watchung, NJ 07060 (4)
Brick Plaza 1958 1989 402,000 35
Brick Township, NJ 08723 (4)
Bristol 1959 1995 296,000 32
Bristol, CT 06010
Brunswick 1957 1988 261,000 18
North Brunswick, NJ 08902 (4)
Clifton 1959 1988 80,000 12
Clifton, NJ 07013 (4)
Crossroads 1959 1993 173,000 24
Highland Park, IL 60035
Dedham 1959 1993 250,000 32
Dedham, MA 02026
Ellisburg Circle 1959 1992 258,000 35
Cherry Hill, NJ 08034
Feasterville 1958 1980 116,000 10
Feasterville, PA 19047
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Occupancy (1) Principal
NORTHEAST Acres (3) Overall / Economic Tenants
----------- -------------------- --------------------
Allwood 5 100% / 100% Grand Union
Clifton, NJ 07013 (4) Mandee Shop
Andorra 23 96% / 96% Acme Markets
Philadelphia, PA 19128 (5) Andorra Theater
Kohl's
Bala Cynwyd 22 100% / 84% Acme Markets
Bala Cynwyd, PA 19004 Lord & Taylor
Blue Star 55 99% / 88% Kohl's
Watchung, NJ 07060 (4) Shop Rite
Toys R Us
Brick Plaza 42 100% / 99% A&P Supermarket
Brick Township, NJ 08723 (4) Loews Theatre
Steinbach's
Bristol 22 86% / 86% Bradlees
Bristol, CT 06010 Super Stop & Shop
TJ Maxx
Brunswick 22 40% / 29% (11) A&P Supermarket
North Brunswick, NJ 08902 (4)
Clifton 8 91% / 91% Acme Markets
Clifton, NJ 07013 (4)
Crossroads 15 95% / 95% Comp USA
Highland Park, IL 60035 Binny's
Golfsmith
Dedham 18 93% / 93% Ames
Dedham, MA 02026 Cherry & Webb
Ellisburg Circle 27 90% / 90% Bed, Bath & Beyond
Cherry Hill, NJ 08034 Ross Dress For Less
Shop Rite
Feasterville 12 100% / 100% Office Max
Feasterville, PA 19047 Genuardi Markets
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Year Year Number of
Completed Acquired Square Feet (2) Tenants
------------ ----------- ----------------- ----------
Finley Square 1974 1995 313,000 16
Downers Grove, IL 60515
Flourtown 1957 1980 191,000 20
Flourtown, PA 19031
Fresh Meadows 1949 1997 410,000 70
Queens, NY 11365
Garden Market 1958 1994 134,000 20
Western Springs, IL 60558
Gratiot Plaza 1964 1973 218,000 10
Roseville, MI 48066
Hamilton 1961 1988 190,000 13
Hamilton, NJ 08690 (4)
Hauppauge 1963 1998 131,000 21
Hauppauge, NY 11788
Huntington 1962 1988 279,000 14
Huntington, NY 11746 (4)
Lancaster 1958 1980 107,000 15
Lancaster, PA 17601 (4)
Langhorne Square 1966 1985 209,000 27
Levittown, PA 19056
Lawrence Park 1972 1980 326,000 42
Broomall, PA 19008
Northeast 1959 1983 297,000 36
Philadelphia, PA 19114
North Lake Commons 1989 1994 129,000 20
Lake Zurich, IL 60047
Queen Anne Plaza 1967 1994 149,000 11
Norwell, MA 02061
Rutgers 1973 1988 216,000 18
Franklin, N.J. 08873 (4)
Saugus Plaza 1976 1996 171,000 7
Saugus, MA 01906
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Occupancy (1) Principal
Acres (3) Overall / Economic Tenants
----------- -------------------- --------------------
Finley Square 21 87% / 86% Bed, Bath & Beyond
Downers Grove, IL 60515 Service Merchandise
Flourtown 15 100% / 100% K Mart
Flourtown, PA 19031 Genuardi Markets
Fresh Meadows 147 98% / 98% Cineplex Odeon
Queens, NY 11365 Filene's
K Mart
Garden Market 12 88% / 88% Dominick's
Western Springs, IL 60558
Gratiot Plaza 20 100% / 100% Bed, Bath and Beyond
Roseville, MI 48066 Best Buy
Farmer Jack
Hamilton 18 100% / 99% Shop Rite
Hamilton, NJ 08690 (4) Steven's Furniture
A.C. Moore
Hauppauge 15 100% / 100% Shop Rite
Hauppauge, NY 11788 Office Max
Huntington 21 100% / 100% Bed, Bath and Beyond
Huntington, NY 11746 (4) Buy Buy Baby
Toys R Us
Lancaster 11 94% / 94% A.C. Moore
Lancaster, PA 17601 (4) Giant Eagle
Langhorne Square 21 96% / 96% Drug Emporium
Levittown, PA 19056 Marshalls
Lawrence Park 28 98% / 96% Acme Markets
Broomall, PA 19008 Jefferson Health Care
Northeast 19 91% / 91% Burlington Coat Factory
Philadelphia, PA 19114 Marshalls
North Lake Commons 14 99% / 98% Dominick's
Lake Zurich, IL 60047
Queen Anne Plaza 18 100% / 100% TJ Maxx
Norwell, MA 02061 Victory Supermarket
Rutgers 27 98% / 98% Edwards Super Food
Franklin, N.J. 08873 (4) K Mart
Saugus Plaza 19 100% / 100% K Mart
Saugus, MA 01906 Super Stop & Shop
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Year Year Number of
Completed Acquired Square Feet (2) Tenants
------------ ----------- ----------------- ----------
Troy 1966 1980 202,000 21
Parsippany-Troy, NJ 07054
Willow Grove 1953 1984 213,000 25
Willow Grove, PA 19090
Wynnewood 1948 1996 257,000 27
Wynnewood, PA 19096
Retail buildings
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Thirteen buildings in CT 1900 - 1991 1994 -1996 233,000 82
One building in MA 1930 1995 13,000 8
Four buildings in NY (21) 1937 - 1987 1997 92,000 16
One building in NJ 1940 1995 11,000 2
Three buildings in IL 1920 - 1927 1995 - 1997 24,000 3
MID ATLANTIC
Barracks Road 1958 1985 484,000 83
Charlottesville, VA 22905 (5)
Bethesda Row 1945 - 1991 1993 299,000 72
Bethesda, MD 20814 (4)
Congressional Plaza 1965 1965 341,000 47
Rockville, MD 20852 (6)
Courthouse Center 1970 1997 38,000 10
Rockville, MD 20852 (7)
Eastgate 1963 1986 159,000 32
Chapel Hill, NC 27514
Falls Plaza 1962 1967 69,000 10
Falls Church, VA 22046
Falls Plaza - East 1960 1972 71,000 19
Falls Church, VA 22046
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Occupancy (1) Principal
Acres (3) Overall / Economic Tenants
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Troy 19 100% / 100% Comp USA
Parsippany-Troy, NJ 07054 Pathmark
Toys R Us
Willow Grove 14 99% / 99% Barnes and Noble
Willow Grove, PA 19090 Marshalls
Toys R Us
Wynnewood 16 99% / 60% Bed, Bath and Beyond
Wynnewood, PA 19096 Borders Books and Music
Food Fare
Retail buildings
Thirteen buildings in CT - 98% / 97% Eddie Bauer
Pottery Barn
Saks Fifth Avenue
One building in MA - 100% / 100%
Four buildings in NY (5) - 97% / 97% (12) United Artists
One building in NJ - 100% / 100% Legg Mason
Three buildings in IL - 83% / 83% Foodstuffs
Gianni Versace
MID ATLANTIC
Barracks Road 39 97% / 97% Bed, Bath & Beyond
Charlottesville, VA 22905 Harris Teeter
Kroger
Old Navy
Bethesda Row 8 96% / 95% Barnes and Noble
Bethesda, MD 20814 (4) Giant Food
Congressional Plaza 22 97% / 97% Buy Buy Baby
Rockville, MD 20852 (6) Fresh Fields
Tower Records
Courthouse Center 1 86% / 86% Rockville Interiors
Rockville, MD 20852 (7)
Eastgate 17 100% / 94% Food Lion
Chapel Hill, NC 27514 Southern Season
Falls Plaza 6 100% / 77% Giant Food
Falls Church, VA 22046
Falls Plaza - East 5 100% / 100% CVS Pharmacy
Falls Church, VA 22046 Staples
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Year Year Number of
Completed Acquired Square Feet (2) Tenants
------------ ----------- ----------------- ----------
Federal Plaza 1970 1989 242,000 38
Rockville, MD 20852
Gaithersburg Square 1966 1993 208,000 35
Gaithersburg, MD 20878
Governor Plaza 1963 1985 252,000 23
Glen Burnie, MD 21961 (5)
Idylwood Plaza 1991 1994 73,000 16
Falls Church, VA 22030
Laurel Centre 1956 1986 385,000 52
Laurel, MD 20707
Leesburg Plaza 1967 1998 247,000 26
Leesburg, VA 20176 (7)
Loehmann's Plaza 1971 1983 242,000 55
Fairfax, VA 22042 (8)
Magruder's Center 1955 1997 109,000 23
Rockville, MD 20852 (7)
Mid-Pike Plaza 1963 1982 315,000 21
Rockville, MD 20852 (4)
Old Keene Mill 1968 1976 92,000 20
Springfield, VA 22152
Pan Am 1979 1993 218,000 30
Fairfax, VA 22031
Park & Shop 1930 1995 50,000 12
Washington, DC 20036
Perring Plaza 1963 1985 412,000 17
Baltimore, MD 21134 (5)
Pike 7 Plaza 1968 1997 163,000 25
Vienna, VA 22180 (7)
Quince Orchard 1975 1993 240,000 29
Gaithersburg, MD 20877 (9)
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Occupancy (1) Principal
Acres (3) Overall / Economic Tenants
----------- -------------------- --------------------
Federal Plaza 18 99% / 98% Comp USA
Rockville, MD 20852 Ross Dress For Less
TJ Maxx
Gaithersburg Square 17 94% / 94% Bed, Bath & Beyond
Gaithersburg, MD 20878 Borders Books and Music
Governor Plaza 26 100% / 100% Office Depot
Glen Burnie, MD 21961 (5) Syms
Idylwood Plaza 6 100% / 100% Fresh Fields
Falls Church, VA 22030
Laurel Centre 26 81% / 81% Giant Food
Laurel, MD 20707 Marshalls
Toys R Us
Leesburg Plaza 24 99% / 99% Giant Food
Leesburg, VA 20176 (7) K Mart
Peebles
Loehmann's Plaza 18 99% / 98% Linens N Things
Fairfax, VA 22042 (8) Loehmann's Dress Shop
Magruder's Center 5 100% / 100% Magruder's
Rockville, MD 20852 (7) Tuesday Morning
Mid-Pike Plaza 20 100% / 100% Bally Total Fitness
Rockville, MD 20852 (4) Filene's Basement
Toys R Us
Old Keene Mill 11 93% / 93% Fresh Fields
Springfield, VA 22152 One Stop Pet & Aquarium
Pan Am 25 91% / 91% Michaels
Fairfax, VA 22031 Micro Center
Safeway
Park & Shop 1 97% / 97% Petco
Washington, DC 20036 Pizzeria Uno
Perring Plaza 27 100% / 100% Burlington Coat Factory
Baltimore, MD 21134 (5) Home Depot
Metro Foods
Pike 7 Plaza 13 100% / 97% Staples
Vienna, VA 22180 (7) TJ Maxx
Quince Orchard 16 99% / 99% Circuit City
Gaithersburg, MD 20877 (9) Dyncorp
Staples
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Year Year Number of
Completed Acquired Square Feet (2) Tenants
------------ ----------- ----------------- ----------
Shirlington 1940 1995 212,000 43
Arlington, VA 22206
Tower Shopping Center 1960 1998 109,000 32
Springfield, VA 22150
Tysons Station 1954 1978 50,000 15
Falls Church, VA 22043
Wildwood 1958 1969 85,000 35
Bethesda, MD 20814
Williamsburg 1961 1986 251,000 29
Williamsburg, VA 23187
The Shops at Willow Lawn 1957 1983 448,000 101
Richmond, VA 23230
Development
-----------
Pentagon Row n/a 1999 n/a n/a
Arlington, VA 22202 (9)
Land in Bethesda, MD 20814 1997 - 1998
Retail buildings
----------------
Two buildings in FL 1920 1996 28,000 9
WEST COAST
Escondido Promenade 1987 1996 222,000 57
Escondido, CA 92029 (10)
King's Court 1960 1998 78,000 19
Los Gatos, CA 95032 (7) (9)
Peninsula Center 1962 1997 296,000 70
Palos Verdes, CA 90274
150 Post Street 1965 1997 99,000 28
San Francisco, CA 94108
Uptown Shopping Center Various 1997 100,000 69
Portland, OR 97210
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Occupancy (1) Principal
Acres (3) Overall / Economic Tenants
----------- -------------------- --------------------
Shirlington 16 89% / 89% Carlyle Grand Cafe
Arlington, VA 22206 Cineplex Odeon
Tower Shopping Center 12 96% / 96% Virginia Fine Wine
Springfield, VA 22150 Talbot's Outlet
Tysons Station 4 90% / 90% Trader Joe's
Falls Church, VA 22043
Wildwood 13 100% / 100% CVS Pharmacy
Bethesda, MD 20814 Sutton Place Gourmet
Williamsburg 21 96% / 96% Food Lion
Williamsburg, VA 23187 Peebles
Roses
The Shops at Willow Lawn 37 91% / 91% Dillards
Richmond, VA 23230 Hannaford Brothers
Development
-----------
Pentagon Row 18 n/a (14)
Arlington, VA 22202 (9)
Land in Bethesda, MD 20814 1.75
Retail buildings
----------------
Two buildings in FL - 90% / 90% Express
WEST COAST
Escondido Promenade 18 99% / 99% Toys R Us
Escondido, CA 92029 (10) TJ Maxx
King's Court 8 100% / 100% Lunardi's Supermarket
Los Gatos, CA 95032 (7) (9) Longs Drug
Peninsula Center 24 98% / 98% TJ Maxx
Palos Verdes, CA 90274 Vons Pavilion
150 Post Street 95% / 95% Brooks Brothers
San Francisco, CA 94108 Williams-Sonoma
Uptown Shopping Center 7 99% / 99% Elephant's Delicatessen
Portland, OR 97210
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Year Year Number of
Completed Acquired Square Feet (2) Tenants
------------ ----------- ----------------- ----------
Development
-----------
Old Town Center 1962 1997 101,000 14
Los Gatos, CA 95030 (10)
Santana Row 1962 1997 n/a 40
San Jose, CA 95128 (10)
Twelve buildings in San Antonio, TX 1890 - 1935 1998 - 1999 n/a 4
Retail buildings
Eight buildings in Santa Monica, CA (21) 1888 - 1995 1996 - 1998 153,000
Three buildings in Hollywood, CA (21) 1921 - 1991 1999 198,000 14
Five buildings in San Diego, CA (21) 1888 - 1995 1996 - 1997 67,000 15
Three buildings in CA (21) 1922 1996 - 1998 73,000 18
Two buildings in AZ (20) 1996 - 1998 1998 40,000 11
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Occupancy (1) Principal
Acres (3) Overall / Economic Tenants
----------- -------------------- --------------------
Development
-----------
Old Town Center 4 88% / 85% (13) Borders Books and Music
Los Gatos, CA 95030 (10) Gap Kids
Santana Row 39 n/a (14)
San Jose, CA 95128 (10)
Twelve buildings in San Antonio, TX - n/a (15)
Retail buildings
Eight buildings in Santa Monica, CA (22) - 100% / 100% (16) Abercrombie & Fitch
Banana Republic
J. Crew
Three buildings in Hollywood, CA (21) - 78% / 78% (17) General Cinema
Hollywood Entertainment Museum
Five buildings in San Diego, CA (21) - 100% / 100% (18) Urban Outfitters
Three buildings in CA (21) - 100% / 100% (19) Pottery Barn
Two buildings in AZ (20) - 100% / 100% Gordon Biersch Brewing Co.
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(1) Overall occupancy is expressed as a percentage of rentable square feet and
includes square feet covered by leases for stores not yet opened. Economic
occupancy is expressed as a percentage of rentable square feet, but only
includes leases currently generating rental income.
(2) Represents the physical square feet of the property, which may exceed the
rentable square feet used to express occupancy.
(3) Acreage on each individual main street building is not significant.
(4) The Trust has a leasehold interest in this property.
(5) The Trust owns a 99.99% general partnership interest in these properties.
(6) The Trust owns a 55.7% equity interest in this corner.
(7) The Trust owns this property in a "downreit" partnership.
(8) The Trust has a 1% general partnership interest and manages the
partnership. A 99% interest is held by a limited partner.
(9) The Trust owns this property subject to a ground lease.
(10) The Trust owns the controlling interest in this center. A minority owner
has an interest in the profits of the center.
(11) Under redevelopment.
(12) Occupancy is based on two occupied buildings. The other two buildings are
under redevelopment.
(13) 35,000 square feet is under development.
(14) Under development.
(15) The Trust plans to develop these buildings, most of which are currently
vacant.
(16) Occupancy is based on six occupied buildings. The other two buildings are
under redevelopment.
(17) Occupancy is based on one occupied buildings. The other two buildings are
under redevelopment.
(18) Occupancy is based on two occupied buildings. The other three buildings are
under redevelopment.
(19) Occupancy is based on one occupied buildings. The other two buildings are
under redevelopment.
(20) The Trust owns 100% of one building and an 85% partnership interest in the
second building.
(21) The Trust owns a 90% general partnership interest in these buildings.
(22) The Trust owns a 90% general partnership interest in seven of these
buildings and 100% of the eighth building.
The following table sets forth information concerning the Trust's apartment development as of December 31, 1999 which is 100% owned by the Trust in fee. This development is not subject to rent control.
Year Year
Property Completed Acquired Acres 1-BR 2-BR 3-BR Total Occupancy
--------------------------------------------------------------------------------------------------------------------------------
Rollingwood 1960 1971 14 59 163 61 283 98%
Silver Spring, MD
9 three-story buildings
|
None
None
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
------ ---------------------------------------------------------------------
Market Quotations
Dividends
Quarter ended High Low Paid
------------------ --------- -------- ----
December 31, 1999 $20 15/16 $17 $.45
September 30, 1999 24 20 .44
June 30, 1999 24 1/16 20 9/16 .44
March 31, 1999 24 7/8 20 1/4 .44
December 31, 1998 $24 1/2 $20 $.44
September 30, 1998 25 1/8 19 3/8 .43
June 30, 1998 25 7/8 23 1/2 .43
March 31, 1998 25 15/16 23 5/8 .43
|
The number of holders of record for Federal Realty's common shares of beneficial interest at March 14, 2000 was 6,663.
For the years ended December 31, 1999 and 1998, $.16 and $.31, respectively, of dividends paid on common shares represented a return of capital.
Dividends declared on common shares per quarter during the last two fiscal years were as follows:
Quarter Ended 1999 1998 ------------- ---- ---- March 31 $ .44 $ .43 June 30 .44 .43 September 30 .45 .44 December 31 .45 .44 |
The Trust's common shares of beneficial interest are listed on the New York Stock Exchange.
In thousands, except per share data
Year ended December 31,
1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------------------------------------------------
Operating Data
Rental Income $245,833 $222,186 $188,529 $164,887 $142,841
Income before
gain on sale
of real estate 55,493 44,960 40,129 28,754 23,655
Gain (loss) on
sale of real
estate (7,050) --- 6,375 (12) (545)
Net income 48,443 44,960 46,504 28,742 23,110
Net income
available for
common
shareholders 40,493 37,010 44,627 28,742 23,110
Net cash provided
by operating
activities(1) 102,183 90,427 72,170 65,648 65,117
Net cash used in
investing
activities(1) 99,313 187,646 279,343 161,819 134,360
Net cash (used)
provided by
financing
activities(1) (8,362) 97,406 213,175 96,691 75,769
Dividends
declared
on common shares 71,630 69,512 66,636 56,607 51,392
Weighted average
number of common
shares outstanding:
basic 39,574 39,174 38,475 33,175 31,481
diluted 40,638 40,080 38,988 33,573 31,860
Per share:
Earnings per
common share:
basic 1.02 .94 1.16 .87 .73
diluted 1.02 .94 1.14 .86 .72
Dividends declared
per common share 1.78 1.74 1.70 1.66 1.61
Other Data
---------------------------------------------------------------------------------------------------------------------------------
Funds from
operations (2) $96,795 $86,536 $79,733 $65,254 $57,034
======= ======= ======= ======= =======
|
Year ended December 31,
1999 1998 1997 1996 1995
--------------------------------------------------------------------------------
Balance Sheet Data
Real Estate
at cost $1,721,459 $1,642,136 $1,453,639 $1,147,865 $1,009,682
Total assets 1,534,048 1,484,317 1,316,573 1,035,306 886,154
Mortgage and
capital lease
obligations 172,573 173,480 221,573 229,189 222,317
Notes payable 162,768 263,159 119,028 66,106 49,980
Senior notes 510,000 335,000 255,000 215,00 165,000
Convertible
subordinated
debentures 75,289 75,289 75,289 75,289 75,289
Redeemable
Preferred Shares 100,000 100,000 100,000 --- ---
Shareholders'
equity 501,827 529,947 553,810 388,885 327,468
Number of
common shares
outstanding 40,201 40,080 39,148 35,886 32,160
|
(1) Determined in accordance with Financial Accounting Standards Board Statement No. 95, Statement of Cash Flows.
(2) Defined by the National Association of Real Estate Investment Trusts (NAREIT) as income available for common shareholders before depreciation and amortization of real estate assets and before extraordinary items and significant nonrecurring events less gains on sale of real estate. Effective January 1, 2000 funds from operation will no longer exclude significant nonrecurring events. Funds from operations differs from net cash provided by operating activities primarily because funds from operations does not include changes in operating assets and liabilities. Funds from operations is a supplemental measure of performance that does not replace net income as a measure of performance or net cash provided by operating activities as a measure of liquidity. Nevertheless, funds from operations, as presented by the Trust, may not be comparable to funds from operations as presented by other real estate investment trusts.
The calculation of funds from operations for the periods presented is reflected in the following table:
Year ended December 31,
1999 1998 1997 1996 1995
(in thousands)
Net income available for
common shareholders $40,493 $37,010 $44,627 $28,742 $23,110
Depreciation and
Amortization 45,388 41,792 37,281 34,128 30,986
Amortization of
initial direct
cost of leases 3,033 2,491 2,249 2,372 2,393
Loss (gain) on sale
of real estate 7,050 - (6,375) 12 545
Income attributable
to partnership units 831 578 - - -
Non-recurring items - 4,665 1,951 - -
------ ----- ------ ------ ------
Funds from
Operations $96,795 $86,536 $79,733 $65,254 $57,034
======= ======= ======= ======= =======
|
The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto of Federal Realty Investment Trust (the "Trust"). The Trust and its representatives may from time to time make written or oral statements that are "forward-looking", within the meaning of the Private Securities Litigation Reform Act of 1995, including statements contained in this report and other filings with the Securities and Exchange Commission and in reports to the Trust's shareholders. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual strategic initiatives, results, performance or achievements of the Trust to be materially different from the initiatives, results of operations or plans expressed or implied by such forward-looking statements. Such factors include, among others, changes in the Trust's business strategy, general economic and business conditions which will affect credit-worthiness of tenants, financing availability and cost, retailing trends and rental rates; risks of real estate development and acquisitions; governmental and environmental regulations; and competition with other real estate companies and technology.
The Trust is engaged in the ownership, management, development and redevelopment of prime retail properties. The Trust, which has traditionally invested in strip retail shopping centers, has expanded its investments to urban mixed used properties. Management continually evaluates the future prospects of its real estate portfolio, not only to identify expansion and renovation opportunities, but also to identify properties that no longer fit the Trust's investment criteria and therefore, should be monetized or exchanged into other real estate assets. At December 31, 1999 the Trust owned 123 retail properties and one apartment complex.
The Trust meets its liquidity requirements through net cash provided by operating activities, along with traditional debt and equity funding alternatives available to it. A significant portion of cash provided by operating activities is distributed to common and preferred shareholders in the form of dividends. Accordingly, capital outlays for property acquisitions, major renovation and development projects and balloon debt repayments require debt or equity funding. The Trust also expects proceeds from the sale of selected assets to provide an additional source of capital in 2000 and 2001.
Net cash provided by operating activities was $102.2 million in 1999, $90.4 million in 1998, and $72.2 million in 1997, of which $76.6 million, $74.3 million, and $62.6 million, respectively, was distributed to shareholders. Contributions from newly acquired properties and from retenanted and redeveloped properties, as more fully described below, were the primary sources of these increases.
Net cash used in investing activities was $99.3 million in 1999, $187.6 million in 1998, and $279.3 million in 1997. The Trust
acquired properties totaling $26.4 million in 1999, $120.4 million in 1998, and $275.2 million in 1997 requiring cash outlays of $25.3 million, $92.9 million, and $251.4 million. During these same three years the Trust expended an additional $90.8 million, $73.0 million, and $50.3 million in capital improvements to its properties, of which $38.7 million in 1999 and $25.0 million in 1998 related to new development (1997 amounts related to new development were insignificant). The Trust invested $2.3 million, $21.4 million, and $10.4 million in 1999, 1998, and 1997, respectively, in mortgage notes receivable, with an average weighted stated interest rate of 10%, 10% and 9%, respectively. Certain of these mortgages also participate in the gross revenues and appreciation and are convertible into ownership interests in the properties by which they are secured. Cash of $19.2 million in 1999 and $9.4 million in 1997 was received from the sale of properties.
During 1999 the Trust expended cash of $25.3 million to acquire real estate and an additional $90.8 million to improve, redevelop and develop its existing real estate. The Trust acquired a ninety percent interest in three buildings, valued at $26.4 million, in Hollywood, California for a total cash investment to the Trust of $23.7 million. The first two buildings have 122,000 and 64,000 leasable square feet, respectively. The third building is vacant pending redevelopment. In addition, the Trust increased by $1.6 million its partnership interest in Kings Court in Los Gatos, California.
Of the $90.8 million spent in 1999 on the Trust's existing real estate portfolio, approximately $38.7 million was invested in predevelopment and development projects in Bethesda, Maryland; Los Gatos, California; San Jose, California; San Antonio, Texas; and in Arlington, Virginia. The remaining $52.1 million of capital expenditures relates to improvements to common areas, tenant work and various redevelopments, including the renovation of Gratiot Plaza, the expansion and retenanting of Langhorne Square shopping center, the renovation of Blue Star shopping center, and the redevelopment of retail buildings in Forest Hills, New York.
Net cash provided by financing activities, before dividend payments, was $68.3 million in 1999, $171.7 million in 1998, and $275.8 million in 1997. The Trust utilized its unsecured line of credit to initially fund acquisitions, capital expenditures and balloon debt repayments.
In December 1998 the Trust obtained a four-year loan of $125 million from five institutional lenders. The loan, which bears interest at LIBOR plus 75 basis points, had an average weighted interest cost in 1999 of 6.1%. In addition, the loan requires fees and has the same covenants as the syndicated credit facility. Proceeds were used to repay amounts drawn on the syndicated credit facility.
In December 1997 the Trust replaced its unsecured medium-term revolving credit facilities with four banks with a five-year syndicated credit facility, thereby increasing the aggregate amount available from $135 million to $300 million and decreasing the interest rate from LIBOR plus 75 basis points to LIBOR plus 65 basis points. As did prior credit facilities, the syndicated facility
requires fees and has various covenants including the maintenance of a minimum shareholders' equity and a maximum ratio of debt to net worth. At December 31, 1999, 1998 and 1997, $34.0 million, $134.1 million, and $114.8 million, respectively, was borrowed under these facilities. The maximum amount borrowed during 1999, 1998, and 1997 was $205.0 million, $259.1 million, and $114.8 million. The weighted average interest rate on borrowings during 1999, 1998 and 1997 was 5.9%, 6.1%, and 6.5%, respectively. Repayments on the credit facilities were made from the following debt and equity issuances.
On November 30, 1999 the Trust issued $175 million of 8.75% Notes due December 1, 2009, netting cash proceeds of $172.2 million. The notes pay interest semi- annually on June 1 and December 1.
On March 5, 1998 the Trust issued $39.5 million of 6.74% Medium-Term Notes due 2004, netting approximately $39.3 million, and $40.5 million of 6.99% Medium- Term Notes due 2006, netting approximately $40.2 million. The notes pay interest semi-annually on March 30 and September 30.
In order to minimize the risk of changes in interest rates, from time to time in connection with the issuance of certain debt issues the Trust will enter into interest rate hedge agreements. In anticipation of the March 1998 Medium-Term Note issuance, the Trust purchased a Treasury Yield Hedge (notional amount of $50 million) on January 13, 1998 which was terminated on March 5, 1998 at a gain of $1.1 million. The gain is being recognized as a reduction in interest expense over the terms of the notes. There were no open hedge agreements at December 31, 1999 and 1998.
In December 1999 the Trustees authorized a share repurchase program of up to an aggregate of 4 million of the Trust's common shares. The repurchase program will end upon the earlier of December 31, 2000 or the date when the repurchase limit has been met. As of December 31, 1999, 140,500 shares had been repurchased at a cost of $2.6 million. As of March 14, 2000, 1,048,600 common shares at a cost of $20.0 million had been repurchased.
On February 4, 1997 the Trust sold three million common shares to an institutional investor for $28 per share, netting $83.9 million. On July 29, 1997 the Trust sold $40 million of 6.82% Medium-Term Notes, netting approximately $39.8 million. On October 6, 1997 the Trust issued four million 7.95% Series A Cumulative Redeemable Preferred Shares at $25 per share in a public offering, netting approximately $96.8 million.
Capital requirements in 2000 will depend upon acquisition opportunities, new development efforts, the level of improvements and redevelopments on existing properties, and the success of the share repurchase program. The Trust has budgeted approximately $150 million for 2000 for new development and $61 million for redevelopments, tenant work and improvements to the core portfolio.
The Trust's long term debt has varying maturity dates and in a number of instances includes balloon payments or other contractual provisions that could require significant repayments during a particular period. The Trust's $100 million of 8 7/8% Senior Notes matured on January 17, 2000 and were paid with borrowings on the
revolving credit facility. The next significant maturity is of $30.7 million of mortgage debt in 2001.
The Trust will need additional capital in order to fund acquisitions, expansions, developments, refinancings and its share repurchase program. Sources of this funding may be additional debt, both secured and unsecured; additional equity; proceeds from the sale of properties; and joint venture relationships. The timing and choice of capital sources will depend on the cost and availability of that capital, among other things. The cost of unsecured debt is partially dependent upon the Trust's debt ratings. Moody's Investors Service lowered its rating on the Trust's senior unsecured debt from Baa1 to Baa2 in November 1999 while Standard and Poor's affirmed its rating of BBB+. In January 2000 the Trust obtained a construction loan commitment for up to $24.5 million in connection with the Trust's Woodmont East development in Bethesda, Maryland. The Trust believes, based on past experience, that access to the capital needed to execute its business plan will be available to it.
The Trust is involved in various lawsuits and environmental matters arising in the normal course of business. Management believes that such matters will not have a material effect on the financial condition or results of operations of the Trust.
Pursuant to the provisions of the Congressional Plaza partnership agreement, in the event of the exercise of put options by another partner, the Trust would be required to purchase a 37.5% interest at Congressional Plaza at its then fair market value. Based on management's current estimate of fair market value, the Trust's estimated cash requirement upon exercise of the put option is approximately $27 million.
On January 1, 1999 the Loehmann's Plaza Limited Partnership Agreement was amended to extend the partnership to December 31, 2000 and to delete the put and call options. On January 1, 2000 the partnership agreement was again amended and restated. Under this amended and restated agreement, the limited partner was awarded 190,000 partnership units in exchange for a 98% partnership interest.
Under the terms of certain other partnerships, if certain leasing and revenue levels are obtained for the properties owned by the partnerships, the limited partners may require the Trust to purchase their partnership interests at a formula price based upon net operating income. The purchase price may be paid in cash or common shares of the Trust, at the election of the limited partners. If the limited partners do not redeem their interest, the Trust may choose to purchase the limited partnership interests upon the same terms.
Under the terms of the Amended and Restated Loehmann's Plaza Limited Partnership Agreement and certain other partnerships, the partners may exchange their operating partnership units, totaling 1,004,589, into cash or the same number of common shares of the Trust, at the option of the Trust. During the third quarter of 1999 the Trust redeemed 64,952 operating units for cash of $1.6 million.
As of December 31, 1999 in connection with renovation and development projects, the Trust has contractual obligations of $59 million.
Net income and funds from operations have been affected by the Trust's recent acquisition, redevelopment and financing activities. The Trust has historically reported its funds from operations in addition to its net income and net cash provided by operating activities. Funds from operations is a supplemental measure of real estate companies' operating performance. The National Association of Real Estate Investment Trusts (NAREIT) defines funds from operations as follows: income available for common shareholders before depreciation and amortization of real estate assets and before extraordinary items and significant non-recurring events less gains on sale of real estate. Effective January 1, 2000 funds from operations will no longer exclude significant nonrecurring events. Funds from operations does not replace net income as a measure of performance or net cash provided by operating activities as a measure of liquidity. Rather, funds from operations has been adopted by real estate investment trusts to provide a consistent measure of operating performance in the industry. Nevertheless, funds from operations, as presented by the Trust, may not be comparable to funds from operations as presented by other real estate investment trusts.
The reconciliation of net income to funds from operations is as follows (in thousands):
Year ended December 31,
1999 1998 1997
----------------------------------------------------------------------------
Net income available for
common shareholders $40,493 $37,010 $44,627
Depreciation and amortization
of real estate assets 45,388 41,792 37,281
Amortization of initial direct
costs of leases 3,033 2,491 2,249
Income attributable to operating
Partnership units 831 578 -
Loss (gain) on sale of real estate 7,050 (6,375)
Non-recurring items - 4,665 1,951
------- ------- -------
Funds from operations for $96,795 $86,536 $79,733
common shareholders ======= ======= =======
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The Trust's retail leases generally provide for minimum rents with periodic increases. Most retail tenants pay a majority of on-site operating expenses and real estate taxes. Many leases also contain a percentage rent clause which calls for additional rents based on gross tenant sales. These features in the Trust leases reduce the Trust's exposure to higher costs caused by inflation and allow it to participate in improved tenant sales.
1999 vs. 1998
Rental income, which consists of minimum rent, percentage rent and cost recoveries, increased 11% from $222.2 million in 1998 to $245.8 million in 1999. If properties acquired and sold in 1999 and 1998 are excluded, rental income increased 6%,with the recently renovated and retenanted centers contributing heavily to the growth.
Other property income includes items, which, although recurring, tend to fluctuate from period to period, such as utility reimbursements, telephone income, merchant association dues, late fees, and temporary income. Also included are less regularly recurring items, such as lease termination fees. Other income increased 9% from $10.3 million in 1998 to $11.2 million in 1999. An increase of $650,000 in temporary tenant income, an area identified by the Trust as one with additional growth opportunity, and an increase of $550,000 in lease termination fees surpassed decreases in telephone income and decreases in marketing dues, as the Trust discontinued marketing funds at certain shopping centers in 1999.
Rental expenses increased 8% from $49.5 million in 1998 to $53.7 million in 1999. If properties acquired and sold in 1999 and 1998 are excluded, rental expenses increased 5%. A $1.2 million increase in the write off of tenant work and lease costs associated with bankrupt or terminated leases coupled with a $975,000 increase in snow removal costs offset the decrease in marketing expenses, consistent with the decrease in marketing dues.
Real estate taxes increased 7% from $23.3 million in 1998 to $25.0 million in 1999. If properties acquired and sold in 1999 and 1998 are excluded, real estate taxes increased 4%, primarily due to increased taxes on recently redeveloped properties.
Depreciation and amortization expense increased 9% from $46.0 million in 1998 to $50.0 million in 1999. If properties acquired and sold in 1999 and 1998 are excluded, depreciation and amortization expense increased 7% due to the impact of recent tenant work and redevelopments.
Interest income increased 29% from $5.9 million in 1998 to $7.6 million in 1999 due primarily to the issuance of approximately $24 million of mortgage notes receivable in 1999 and 1998.
In 1999 the Trust incurred interest expense of $68.4 million, of which $6.9 million was capitalized, as compared to 1998's $60.2 million, of which $5.1 million was capitalized. The increase in interest expense reflects the additional debt issued to help fund the Trust's 1999 real estate acquisitions and capital improvements of approximately $116 million. The weighted average interest rate was 7.6% in 1999 compared with 8% in 1998. The ratio of earnings to combined fixed charges and preferred dividends was 1.52x in 1999 and 1.46x in 1998. The ratio of earnings to fixed charges was 1.70x in 1999 and 1.65x in 1998. The ratio of funds from operations to combined fixed charges and preferred dividends was 2.40x in 1999 and
2.46x in 1998. The combination of higher leverage with low interest rates has positively impacted the Trust's net income and funds from operations, on a per share basis.
Administrative expenses decreased from $16.5 million in 1998 to $15.1 million in 1999. Both years contained unusual expenses. During the third quarter of 1998, the Trust recorded a $4.7 million charge related to a comprehensive restructuring program. During the third quarter of 1999, the Trust, in exploring strategic alternatives to maximize shareholder value, considered spinning off certain of its assets and merging the remaining assets with another publicly traded shopping center company. The Trust incurred expenses of approximately $2.8 million in connection with this proposed merger and spin-off which were not consummated. In addition, costs related to abandoned acquisition and development projects increased approximately $1.5 million in 1999 over 1998.
Investors' share of operations represents the minority interest in the income of certain properties. One third of the increase from $3.1 million in 1998 to $3.9 million in 1999 is due to the income attributable to the operating partnership units issued upon the acquisition of Kings Court and Leesburg Plaza in the second half of 1998. The majority of the remaining increase represents the minority partners' share of the increased earnings in the southern California street retail assets, many of which have been redeveloped during 1998 and 1999.
As a result of the foregoing items, net income before loss on the sale of real estate increased from $48.1 million in 1998 to $59.4 million in 1999, reflecting both the contribution to net income from the Trust's acquisitions and the contribution from the core portfolio, primarily the recently redeveloped and retenanted properties.
During the second quarter of 1999, the Trust recorded a $7.1 million charge, representing the estimated loss on the potential sale of certain assets, principally Northeast Plaza in Atlanta, Georgia. On October 18, 1999 the Trust sold Northeast Plaza for $19.6 million, realizing a loss of $6.3 million. Consequently, net income increased from $45.0 million in 1998 to $48.4 million in 1999 with net income available for common shareholders increasing from $37.0 million in 1998 to $40.5 million in 1999.
While the Trust expects growth in 2000 in funds from operations, the growth may be less than in 1999. Growth in 1999 was fueled by contributions from 1998 acquisitions, by higher leverage combined with low interest rates, by savings from the 1998 restructuring and by growth in the core portfolio. There were no significant income producing acquisitions in 1999 to fuel 2000 growth; there will be no significant contribution in 2000 from the Trust's development projects and the savings from the 1998 restructuring have already been realized. Consequently, the growth in 2000 is primarily dependent on contributions from the core portfolio. Growth of net income from the core portfolio is, in part, dependent on controlling expenses, some of which are beyond the complete control of the Trust, such as snow removal and trends in the retailing environment, such as the evolution of the Internet and demand for retail space.
The Trust currently expects that demand for its retail space should remain at levels similar to those in 1999. A weakening of the retail environment could, however, adversely impact the Trust by increasing vacancies and decreasing rents. In past weak retail and real estate environments, the Trust has been able to replace weak and bankrupt tenants with stronger tenants; management believes that due to the quality of the Trust's properties there will continue to be demand for its space.
Growth in net income is also dependent on the amount of leverage and interest rates. The Trust is currently exploring various options for financing its development pipeline and other capital needs. This recapitalization will result in interest rates higher than the Trust's current rates. In addition, the Trust will continue to have exposure to changes in market interest rates. As interest rates increase, net income and funds from operations, as well as the ultimate cost of the Trust's development projects will be negatively impacted due to the variable interest rates on the Trust's revolving credit facilities.
1998 vs. 1997
Rental income, which consists of minimum rent, percentage rent and cost recoveries, increased 18% from $188.5 million in 1997 to $222.2 million in 1998. If properties acquired and sold in 1998 and 1997 are excluded, rental income increased 5%, due primarily to the favorable impact of redeveloped and retenanted centers and to higher percentage rent.
Other property income includes items which, although recurring, tend to fluctuate from period to period, such as utility reimbursements, telephone income, merchant association dues, late fees, and temporary tenant income. Also included are less regularly recurring items, such as lease termination fees. Other income increased 6% from $9.7 million in 1997 to $10.3 million in 1998 due to contributions from the 1998 and 1997 acquisitions, which were partly offset by a $1.3 million decrease in lease termination fees.
Rental expenses increased 16% from $42.8 million in 1997 to $49.5 million in 1998, due to the 1998 and 1997 acquisitions. If rental expenses are adjusted for properties acquired and sold in 1998 and 1997, rental expenses are constant at $40.6 million. Decreases in environmental expenses and common area expenses such as snow removal were offset by increases in bad debt expense which had been unusually low in 1997 due to the recovery in 1997 of amounts written off in prior years.
Real estate taxes increased 19% from $19.5 million in 1997 to $23.3 million in 1998, due to the 1998 and 1997 acquisitions. If real estate taxes are adjusted for properties acquired and sold in 1998 and 1997, real estate taxes increased 5% due primarily to increased taxes on recently redeveloped properties.
Depreciation and amortization expenses increased 11% from $41.4 million in 1997 to $46.0 million in 1998 reflecting the impact of properties acquired in 1998 and 1997 and of recent tenant work and property improvements.
In 1998 the Trust incurred interest expense of $60.2 million, of which $5.1 million was capitalized, as compared to 1997's $50.9 million, of which $3.6 million was capitalized. The increase in interest expense reflects the additional debt issued to fund the Trust's approximately $200 million of real estate investments made in 1998. The weighted average interest rate was 8% in 1998 compared with 8.5% in 1997. The ratio of earnings to combined fixed charges and preferred dividends was 1.46x in 1998 and 1.64x in 1997. The ratio of earnings to fixed charges was 1.65x in 1998 and 1.70x in 1997. The ratio of funds from operations to combined fixed charges and preferred dividends was 2.46x in 1998 and 2.50x in 1997.
Administrative expenses in 1998 reflect the adoption of the Emerging Issues Task Force ("EITF") Issue 97-11, which requires the expensing of internal costs of acquisition activities beginning in late March 1998. Prior to this date, such costs were capitalized as a component of the basis of the acquired asset. The increase in administrative expenses from $9.8 million in 1997 to $11.8 million in 1998 is substantially due to its adoption.
Administrative expenses in 1998 included reorganization expenses of $4.7 million representing a one time charge recorded in the third quarter related to a comprehensive restructuring program. The charge included a provision for employee severance and related costs, office closing and downsizing expenses, as well as legal and consulting fees related to the restructuring program. The Trust's workforce was reduced by approximately 15% including several vice presidents and other senior personnel. The foundation of the restructuring effort focused on a change in the Trust's operating model from a functional hierarchy to an asset management discipline where small focused teams are responsible for and compensated based on the operating performance of a portfolio of assets. In addition, the restructuring effort included a significant downsizing of the Trust's acquisition department, in response to changing market conditions and business emphasis. In 1997 the Trust incurred $2.0 million of costs associated with severance and other expenses related to changes in the Trust's executive management.
Investors' share of operations represents the minority interest in the income of certain properties. The increase from $1.3 million in 1997 to $3.1 million in 1998 was primarily due to the income attributable to the operating partnership units issued upon the acquisition of Courthouse, Magruder's, Kings Court and Leesburg Plaza shopping centers in late 1997 and 1998 and due to the minority partners' share of the increased earnings in Congressional Plaza.
As a result of the foregoing items, net income before gain on sale of real estate increased from $40.1 million in 1997 to $45.0 million in 1998, reflecting not only the contribution to net income from the Trust's acquisitions, but also the contribution from improved results of the core portfolio. Net income, including gain on sale of real estate, decreased from $46.5 million in 1997 to $45.0 million in 1998. In 1997 three shopping centers were sold at a net gain of $6.4 million. Net income available for common shareholders decreased from $44.6 million in 1997 to $37.0 million in 1998, due to a full year of preferred dividends in 1998 of $8.0 million compared with a partial year in 1997 of $1.9 million since
the $100 million of 7.95% Series A Cumulative Redeemable Preferred Shares were issued in October 1997.
The Trust has traditionally operated its business as a single business segment. During the fourth quarter of 1998, however, the Trust completed a comprehensive restructuring program which, among other things, changed the Trust's operating structure from a functional hierarchy to an asset management model, where small focused teams are responsible for a portfolio of assets. As a result the Trust has divided its portfolio of properties into three geographic operating regions: Northeast, Mid-Atlantic and West. Each region is operated under the direction of a chief operating officer, with dedicated leasing, property management and financial staff and operates largely autonomously with respect to day to day operating decisions. Incentive compensation, throughout the regional teams, is tied to the net operating income of the respective portfolios. In 1999 there was a minor reorganization of the regions which moved the Illinois and Michigan properties to the Northeast region from the Western region.
Historical operating results for the three regions are as follows (in thousands):
1999 1998 1997
--------------------------------------------------------------------------
Rental income
Northeast $102,452 $ 93,632 $ 80,309
Mid-Atlantic 111,624 103,676 96,818
West 31,757 24,878 11,402
-------- -------- --------
Total $245,833 $222,186 $188,529
======== ======== ========
Net operating income
Northeast $ 74,276 $ 66,396 $ 56,782
Mid-Atlantic 81,425 76,065 71,298
West 22,665 17,311 7,785
-------- -------- --------
Total $178,366 $159,772 $135,865
======== ======== ========
|
The Northeast
The Northeast region is comprised of 53 assets, extending from suburban Philadelphia north to New York and its suburbs into New England and west to Illinois and Michigan. A significant portion of this portfolio has been held by the Trust for many years although acquisitions, redevelopment and retenanting remain major components to the current and future performance of the region. Several redevelopment projects are currently underway which are expected to add to revenues and net operating income in 2000 and future years.
When comparing 1999 with 1998, rental income increased 9% from
$93.6 million in 1998 to $102.5 million in 1999. Excluding properties acquired during the two periods, rental income increased 7%, driven by increases at the recently redeveloped and retenanted Brick, Feasterville, Gratiot, Huntington, and Wynnewood shopping centers.
Net operating income increased 12% from $66.4 million in 1998 to $74.3 million in 1999. Excluding properties acquired in 1998 and 1999, net operating income increased 9%, primarily due to increases at the recently redeveloped and retenanted Brick, Feasterville, Gratiot, Huntington, and Wynnewood shopping centers.
When comparing 1998 with 1997, rental income increased 17% from $80.3 million in 1997 to $93.6 million in 1998. Excluding properties acquired and sold in 1998 and 1997, rental income increased 5%, driven by increases at the recently redeveloped and retenanted Brick, Crossroads, Gratiot, Troy and Wynnewood shopping centers.
Net operating income increased 17% from $56.8 million in 1997 to $66.4 million in 1998. Excluding properties acquired in 1998 and 1997, net operating income increased 8%, primarily due to increases at the recently redeveloped and retenanted Brick, Crossroads, Gratiot, Troy and Wynnewood shopping centers.
The Mid-Atlantic
The Mid-Atlantic region is comprised of 31 assets, extending from Baltimore south to metropolitan Washington D.C. and further south through Virginia and North Carolina into Florida. As with the Northeast region, a significant portion of this portfolio has been held by the Trust for many years although acquisitions, redevelopment and retenanting remain major components to its current and future performance. One redevelopment project is currently underway in this region and two of the Trust's major new development projects, Pentagon Row and additional phases of Bethesda Row, will be managed by this regional operating team upon their completion.
When comparing 1999 with 1998, rental income increased 8% from $103.7 million in 1998 to $111.6 million in 1999. Excluding properties acquired and sold in 1999 and 1998, rental income increased 5%. Net operating income increased 7% from $76.1 million in 1998 to $81.2 million in 1999. Excluding properties acquired and sold in 1999 and 1998, net operating income increased 3%.
When comparing 1998 with 1997, rental income increased 7% from $96.8 million in 1997 to $103.7 million in 1998. Excluding properties acquired and sold in 1998 and 1997, rental income increased 4%, in large part due to increases at Bethesda Row and new anchors at Barracks Road and Mid-Pike Plaza shopping centers.
Net operating income increased 7% from $71.3 million in 1997 to $76.1 million in 1998. Excluding properties acquired and sold in 1998 and 1997, net operating income increased 3%.
The West
The Western region is comprised of 39 assets, extending from Texas to the West Coast. Unlike the Northeast and Mid-Atlantic regions, this portfolio is relatively new to the Trust and is part of a deliberate expansion west over the past several years. This region is the fastest growing at the Trust and such major new development projects as Santana Row in San Jose and Houston Street in San Antonio will be managed by this regional operating team upon their completion. Several redevelopment projects are currently underway, particularly in southern California, which are expected to add to revenues and net operating income in 2000 and future years.
When comparing 1999 with 1998, rental income increased 28% from $24.9 million in 1998 to $31.8 million in 1999. Excluding properties acquired in 1999 and 1998, rental income increased 11%, driven by the recent redevelopment of Old Town in Los Gatos and several street retail buildings in southern California.
Net operating income increased 31% from $17.3 million in 1998 to $22.7 million in 1999. Excluding properties acquired in 1999 and 1998, net operating income increased 14%, driven by the recent redevelopment of Old Town in Los Gatos and several street retail buildings in southern California.
When comparing 1998 with 1997, rental income increased 118% from $11.4 million in 1997 to $24.9 million in 1998. Excluding properties acquired in 1998 and 1997, rental income increased 30%, driven by the redevelopment and retenanting of several street retail buildings in southern California.
Net operating income increased 122% from $7.8 million in 1997 to $17.3 million in 1998. Excluding properties acquired and sold, net operating income increased 27% from $3.6 million in 1997 to $4.6 million in 1998. This increase resulted from the redevelopment and retenanting of several street retail buildings in southern California.
On May 5, 1999, the Trust appointed the accounting firm of Arthur Andersen LLP as independent public accountants to replace Grant Thornton LLP, which was dismissed effective the same date. The Trust's Board of Trustees approved the decision to change independent public accountants upon the recommendation of the Trust's Audit Committee. During the Trust's fiscal years ended December 31, 1998 and 1997 and interim period through March 31, 1999 there were no disagreements with Grant Thornton LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure. The reports issued by Grant Thornton LLP on the financial statements for the years ended December 31, 1998 and 1997 contained no adverse opinion or disclaimer of opinion, and were not qualified as to uncertainty, audit scope or accounting principles.
During the Trust's fiscal years ended December 31, 1998 and 1997 and interim period through March 31, 1999, the Trust has not
consulted with Arthur Andersen LLP regarding the application of accounting principles to a specified transaction, the type of audit opinion that might be rendered on the Trust's financial statements, or any matter that was either the subject of a disagreement or a reportable event.
The Trust's primary financial market risk is the fluctuation in interest rates. At December 31, 1999, the Trust had $168.4 million of variable rate debt. Based upon this balance of variable debt, if interest rates increased 1%, the Trust's earnings and cash flows would decrease by $1.7 million. If interest rates decreased 1%, the Trust's earnings and cash flows would increase by $1.7 million. The Trust believes that the change in the fair value of its financial instruments resulting from a forseeable fluctuation in interest rates would be immaterial to its total assets and total liabilities.
Included in Item 14.
None.
(a) The schedule identifying Trustees under the caption "Election of Trustees" of the 2000 Proxy Statement is incorporated herein by reference thereto.
The information required by this item is included in this report at Item 1 under the caption "Executive Officers of the Registrant".
The sections entitled "Summary Compensation Table" and "Aggregated Option Exercises in 1999 and December 31, 1999 Option Values" of the 2000 Proxy Statement are incorporated herein by reference thereto.
The section entitled "Ownership of Shares by Trustees and Officers" of the 2000 Proxy Statement is incorporated herein by reference thereto.
The section entitled "Certain Transactions" of the 2000 Proxy Statement is incorporated herein by reference thereto.
Part IV
-------
Item 14. Exhibits, Financial Statement Page No.
-------- ----------------------------- --------
Schedules, and Reports on
-------------------------
Form 8-K
--------
(a) 1. Financial Statements
--------------------
Reports of Independent
Public Accountants F-1 - F-2
Consolidated Balance Sheets-
December 31, 1999 and 1998 F-3
Consolidated Statements of Common
Operations - years ended
December 31, 1999, 1998
and 1997 F-4
Consolidated Statements of Common
Shareholders' Equity - years
ended December 31, 1999, 1998
and 1997
F-5
Consolidated Statements of
Cash Flows - years ended
December 31, 1999, 1998 and
1997 F-6
Notes to Consolidated
Financial Statements
(Including Selected Quarterly
Data) F-7 - F24
2. Financial Statement Schedules
-----------------------------
Schedule III - Summary of Real Estate
and Accumulated Depreciation..................... F25 - F28
Schedule IV - Mortgage Loans on Real
Estate .......................................... F29 - F30
|
(3) (i) Articles of Amendment and Restatement of Declaration of Trust of Federal Realty Investment Trust and Declaration of Trust of Federal Realty Investment Trust dated May 5, 1999 filed with the Commission on May 25, 1999 as an exhibit to the Trust's Current Report on Form 8-K is incorporated herein by reference thereto.
(ii) Bylaws of the Trust dated May 5, 1999 filed with the Commission on May 25, 1999 as an exhibit to the Trust's Current Report on Form 8-K is incorporated herein by reference thereto.
(4) (i) A description of a Common Share of Beneficial Interest certificate is being filed as an exhibit hereto.
(ii) A description of a 7.95% Series A Cumulative Redeemable Preferred Share certificate is being filed as an exhibit hereto.
(iii) Statement of Designation for Shares, filed on Form 8-K with the Commission on October 3, 1997, is incorporated herein by reference thereto.
(iv) The 5 1/4% Convertible Subordinated Debenture due 2002 as described in Amendment No. 1 to Form S-3 (File No. 33-15264), filed with the Commission on August 4, 1987 is incorporated herein by reference thereto.
(v) Amended and Restated Rights Agreement, dated March 11, 1999, between the Trust and American Stock Transfer & Trust Company, filed as an exhibit to the Trust's Form 8-A/A filed with the Commission on March 11, 1999, is incorporated herein by reference thereto.
(vi) Indenture dated December 13, 1993, related to the Trust's 7.48% Debentures due August 15, 2026; 8 7/8% Senior Notes due January 15, 2000; 8% Notes due April 21, 2002; 6 5/8% Notes due 2005; 6.82% Medium Term Notes due August 1, 2027; 6.74% Medium Term Notes due March 10, 2004; and 6.99% Medium Term Notes due March 10, 2006, filed with the commission on December 13, 1993 as exhibit 4(a) to the Trust's Registration Statement on Form S-3, (File No. 33-51029) and amended on Form S-3 (File No. 33-63687, effective December 4, 1995 is incorporated herein by reference thereto.
(vii) Indenture dated September 1, 1998 related to the Trust's 8.75% Notes due December 1, 2009 filed as exhibit 4(a) to the Trust's Registration Statement on Form S-3 (File No. 333-63619) is incorporated herein by reference thereto.
(viii) Dividend Reinvestment and Share Purchase Plan, dated November 3, 1995, filed with the Commission on Form S-3 on November 3, 1995 (File No. 33-63955) is
incorporated herein by reference thereto.
(10) (i) Consultancy Agreement with Samuel J. Gorlitz, as amended, filed with the Commission as Exhibit 10 (v) to the Trust's Annual Report on Form 10-K for the year ended December 31, 1983, is incorporated herein by reference thereto.
(ii) The Trust's 1983 Stock Option Plan adopted May 12, 1983, filed with the Commission as Exhibit 10 (vi) to the Trust's Annual Report on Form 10-K for the year ended December 31, 1983, is incorporated herein by reference.
(iii) Deferred Compensation Agreement with Steven J. Guttman dated December 13, 1978, filed with the Commission as Exhibit 10 (iv) to the Trust's Annual Report on Form 10-K for the year ended December 31, 1980 is incorporated herein by reference thereto.
(iv) The Trust's 1985 Non-Qualified Stock Option Plan, adopted on September 13, 1985, filed with the Commission as a portion of Exhibit 10 to the Trust's Annual Report on Form 10-K for the year ended December 31, 1985 is incorporated herein by reference thereto.
(v) Amendment No. 3 to Consultancy Agreement with Samuel J. Gorlitz, filed as a portion of Exhibit 10 to the Trust's Annual Report on Form 10-K for the year ended December 31, 1988 is incorporated herein by reference thereto.
(vi) The 1991 Share Purchase Plan, dated January 31, 1991, filed with the Commission as a portion of Exhibit 10 to the Trust's Annual Report on Form 10-K for the year ended December 31, 1990 is incorporated herein by reference thereto.
(vii) Amendment No. 4 to Consultancy Agreement with Samuel J. Gorlitz, filed with the Commission as an exhibit to the Trust's Annual Report on Form 10-K for the year ended December 31, 1992 is incorporated herein by reference thereto.
(viii) Employment and Relocation Agreement between the Trust and Ron D. Kaplan, dated September 30, 1992, filed as an exhibit to the Trust's Annual Report on Form 10-K for the year ended December 31, 1992 is incorporated herein by reference thereto.
(ix) Amendment dated October 1, 1992, to Voting Trust Agreement dated as of March 3, 1989 by and between I. Wolford Berman and Dennis L. Berman filed as an exhibit to the Trust's Annual Report on Form 10- K for the year ended December 31, 1992 is incorporated herein by reference thereto.
(x) Federal Realty Investment Trust Amended and
Restated 1993 Long-Term Incentive Plan, as amended on October 6, 1997 and further amended on May 6, 1998 , filed with the Commission as portions of Item 10 to the Trust's Annual Report on Form 10K for the year ended December 31, 1998, is incorporated herein by reference thereto.
The following documents, filed with the Commission as portions of Item 6 to the Trust's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993 are incorporated herein by reference thereto:
(xi) Consulting Agreement between Misner Development and Federal Realty Investment Trust.
(xii) Fiscal Agency Agreement dated as of October 28, 1993 between Federal Realty Investment Trust and Citibank, N.A.
(xiii) Other Share Award and Purchase Note between Federal Realty Investment Trust and Ron D. Kaplan, dated January 1, 1994, filed with the Commission as a portion of Item 6 to the Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994 is incorporated herein by reference thereto.
(xiv) Amended and Restated 1983 Stock Option Plan of Federal Realty Investment Trust and 1985 Non-Qualified Stock Option Plan of Federal Realty Investment Trust, filed with the Commission on August 17, 1994 on Form S-8, (File No. 33-55111) is incorporated herein by reference thereto.
(xv) Form of Severance Agreement between Federal Realty Investment Trust and Certain of its Officers dated December 31, 1994, filed with the Commission as a portion of Exhibit 10 to the Trust's Annual Report on Form 10-K for the year ended December 31, 1994, is incorporated herein by reference thereto.
The following filed with the Commission as portions of Exhibit 10 to the Trust's Annual Report on Form 10-K for the year ended December 31, 1997, are incorporated herein by reference thereto:
(xvi) Credit Agreement Dated as of December 19, 1997 by and among Federal Realty Investment Trust, as Borrower, The Financial Institutions Party Thereto and Their Assignees Under Section 13.5.(a), as Lenders, Corestates Bank, N.A., as Syndication Agent, First Union National Bank, as Administrative Agent and as Arranger, and Wells Fargo Bank, as Documentation Agent and as Co- Arranger.
(xvii) Performance Share Award Agreement between Federal Realty Investment Trust and Steven J. Guttman, as of January 1, 1998.
(xviii) Form of Amended and Restated Restricted Share Award Agreements between Federal Realty Investment Trust and Steven J. Guttman for the years 1998 through 2002.
(xix) Performance Share Award Agreements between Federal Realty Investment Trust and Ron D. Kaplan, as of January 1, 1998.
(xx) Restricted Share Award Agreements between Federal Realty Investment Trust and Ron D. Kaplan, as of January 1, 1998.
(xxi) Amended and Restated Employment Agreement between the Trust and Steven J. Guttman as of March 6, 1998.
(xxii) Amended and Restated Executive Agreement between the Trust and Steven J. Guttman as of March 6, 1998.
(xxiii) Executive Agreement between the Trust and Ron D.Kaplan as of March 6, 1998.
(xxiv) Amended and Restated Severance Agreement between the Trust and Ron D. Kaplan as of March 6, 1998.
(xxv) Severance Agreement between the Trust and Catherine R. Mack as of March 6, 1998.
The following filed with the Commission as portions of Exhibit 10 to the Trust's Annual Report on Form 10-K for the year ended December 31, 1998, is incorporated herein by reference thereto:
(xxvi) Term Loan Agreement, dated as of December 22, 1998 by and among Federal Realty Investment Trust, as Borrower, the Financial Institutions Party Thereto and Their Assignees Under Section 13.5.(d), as Lenders, Commerzbank Aktiengesellschaft, New York Branch as Syndication Agent, PNC, National Association, as Administrative Agent and Fleet National Bank as documentation agent.
The following are filed as exhibits hereto:
(xxvii) Amended and Restated Severance Agreement between the Trust and Nancy J. Herman as of December 27, 1999.
(xxviii) Performance Share Award Agreement dated as of February 9, 2000 between the Trust and Donald C. Wood.
(xxix) Restricted Share Award Agreement dated as of February 9, 2000 between the Trust and Donald C. Wood.
(xxx) Amendment to Performance Share Award Agreement dated as of February 25, 2000 between Federal Realty Investment Trust and Steven J. Guttman.
(xxxi) Amendments to Performance Share Award Agreements dated as of February 25, 2000 between Federal Realty Investment Trust and Ron D. Kaplan.
(12) Statements regarding computation of ratios.......
(21) Subsidiaries of the registrant....................
(xxxvii) Articles of Incorporation of Street Retail, Inc., a Maryland corporation, filed with the Commission as a portion of Exhibit 21 to the Trust's Annual Report on Form 10-K for the year ended December 31, 1994 is incorporated herein by reference thereto.
(xxxviii) By-Laws of Street Retail, Inc. filed with the Commission as a portion of Exhibit 21 to the Trust's Annual Report on Form 10-K for the year ended December 31, 1994 is incorporated herein by reference thereto.
(23) Consent of Grant Thornton LLP....................
(27) Financial Data Schedule..........................+
(b) Reports on Form 8-K Filed during the Last Quarter
-------------------------------------------------
|
A Form 8-K, dated November 23, 1999, was filed in response to Item 5. A Form 8-K, dated November 3, 1999, was filed in response to Item 5.
+ For Edgar filing only.
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FEDERAL REALTY INVESTMENT TRUST
Date: March 21, 2000 By:Steven J. Guttman
-----------------
Steven J. Guttman
President
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
President and
Trustee (Chief
Steven J. Guttman Executive Officer) March 21, 2000
------------------ --------------
Steven J. Guttman
Senior Vice-President,
Donald C. Wood Chief Operating Officer March 21, 2000
------------------ --------------
Donald C. Wood
Vice-President,
Chief Financial Officer
And Treasurer (Chief
Cecily A. Ward Accounting Officer) March 21, 2000
------------------ --------------
Cecily A. Ward
Dennis L. Berman Trustee March 21, 2000
------------------ --------------
Dennis L. Berman
Kenneth D. Brody Trustee March 21, 2000
------------------ --------------
Kenneth D. Brody
A. Cornet de Ways Ruart Trustee March 21, 2000
----------------------- --------------
Cornet de Ways Ruart
Kristin Gamble Trustee March 21, 2000
------------------ --------------
Kristin Gamble
Walter F. Loeb Trustee March 21, 2000
------------------ --------------
Walter F. Loeb
Mark S. Ordan Trustee March 21, 2000
------------------ --------------
Mark S. Ordan
|
FINANCIAL STATEMENTS AND
SCHEDULES
REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
To the Trustees and Shareholders
Federal Realty Investment Trust:
We have audited the accompanying consolidated balance sheet of Federal Realty Investment Trust (a Maryland real estate investment trust) and subsidiaries as of December 31, 1999 and the related consolidated statements of operations, common shareholders' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Federal Realty Investment Trust and subsidiaries as of December 31, 1999 and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States.
Our audit was made for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The financial statement schedules included on pages F-25 through F-30 of the Form 10-K are presented for purposes of complying with the Securities and Exchange Commission's rules and are not a required part of the basic consolidated financial statements. These schedules have been subjected to the auditing procedures applied in our audit of the basic consolidated financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole.
Arthur Andersen LLP
Vienna, Virginia
February 14, 2000
REPORT OF INDEPENDENT
CERTIFIED ACCOUNTANTS
Trustees and Shareholders
Federal Realty Investment Trust
We have audited the accompanying consolidated balance sheet of Federal Realty Investment Trust as of December 31, 1998 and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the two years in the period ended December 31, 1998. These financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Federal Realty Investment Trust as of December 31, 1998 and the consolidated results of its operations and its consolidated cash flows for each of the two years in the period ended December 31, 1998 in conformity with generally accepted accounting principles.
In connection with our audits of the consolidated financial statements referred to above, we have also audited Schedules III and IV as of December 31, 1998 and for each of the two years then ended. In our opinion, these schedules present fairly, in all material respects, the information required to be set forth therein.
Grant Thornton LLP
Washington, D.C.
February 8, 1999
Federal Realty Investment Trust
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
1999 1998
----------- ------------
(in thousands)
ASSETS
Investments
Real estate, at cost $1,721,459 $1,642,136
Less accumulated depreciation and amortization (317,921) (286,053)
---------- ----------
1,403,538 1,356,083
Mortgage notes receivable 53,495 51,154
---------- ----------
1,457,033 1,407,237
Other Assets
Cash 11,738 17,230
Accounts and notes receivable 23,130 17,873
Prepaid expenses and other assets, principally
property taxes and lease commissions 36,807 38,502
Debt issue costs 5,340 3,475
---------- ----------
$1,534,048 $1,484,317
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Obligations under capital leases $122,026 $122,401
Mortgages payable 50,547 51,079
Notes payable 162,768 263,159
Accounts payable and accrued expenses 34,974 34,073
Dividends payable 19,431 18,972
Security deposits 5,068 5,214
Prepaid rents 6,788 3,641
Senior notes and debentures 510,000 335,000
5 1/4% Convertible subordinated debentures 75,289 75,289
Investors' interest in consolidated assets 45,330 45,542
Commitments and contingencies
Shareholders' equity
Preferred stock, authorized 15,000,000 shares, $.01 par
7.95% Series A Cumulative Redeemable Preferred Shares, (stated at
liquidation preference $25 per share), 4,000,000 shares issued in 1997 100,000 100,000
Common shares of beneficial interest, no par or stated value,
unlimited authorization, 40,139,675 shares issued - 707,724
Common shares of beneficial interest, $.01 par , 100,000,000 shares
authorized, 40,418,766 issued 404 -
Additional paid in capital 713,354 -
Accumulated dividends in excess of Trust net income (286,348) (255,211)
---------- ----------
527,410 552,513
Less: 217,644 and 59,425 common shares in treasury - at cost, respectively, (4,334) (1,376)
Deferred compensation on restricted shares (15,219) (14,892)
Notes receivable from employee stock plans (6,030) (6,298)
---------- ----------
501,827 529,947
---------- ----------
$1,534,048 $1,484,317
========= ==========
|
The accompanying notes are an integral part of these consolidated statements.
Federal Realty Investment Trust
CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended December 31,
1999 1998 1997
-------- -------- --------
(In thousands, except per share data)
Revenue
Rental income $245,833 $222,186 $188,529
Interest and other income 7,649 5,945 6,037
Other property income 11,231 10,347 9,705
-------- -------- --------
264,713 238,478 204,271
Expenses
Rental 53,677 49,490 42,844
Real estate taxes 25,021 23,271 19,525
Interest 61,492 55,125 47,288
Administrative 15,120 16,461 11,744
Depreciation and amortization 50,011 46,047 41,399
-------- -------- --------
205,321 190,394 162,800
-------- -------- --------
Operating income before investors' share
of operations and (loss) gain on sale of real estate 59,392 48,084 41,471
Investors' share of operations (3,899) (3,124) (1,342)
-------- -------- --------
Income before (loss) gain on sale of real estate 55,493 44,960 40,129
(Loss) gain on sale of real estate (7,050) - 6,375
-------- -------- --------
Net income 48,443 44,960 46,504
Dividends on preferred stock (7,950) (7,950) (1,877)
-------- -------- --------
Net income available for common shareholders $40,493 $37,010 $44,627
======== ======== ========
Earnings per common share, basic
Income before (loss) gain on sale of real estate $1.20 $0.94 $0.99
(Loss) gain on sale of real estate (0.18) - 0.17
-------- -------- --------
$1.02 $0.94 $1.16
======== ======== ========
Weighted average number of common shares, basic 39,574 39,174 38,475
======== ======== ========
Earnings per common share, diluted
Income before (loss) gain on sale of real estate $1.19 $0.94 $0.98
(Loss) gain on sale of real estate (0.17) - 0.16
-------- -------- --------
$1.02 $0.94 $1.14
======== ======== ========
Weighted average number of common shares, diluted 40,638 40,080 38,988
======== ======== ========
|
The accompanying notes are an integral part of these consolidated statements.
Federal Realty Investment Trust
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
Year ended December 31,
1999 1998
---------------------------------------- ----------------------------------------
(In thousands, except per share data) Shares Amount Additional Shares Amount Additional
Paid-in Capital Paid-in Capital
Common Shares of Beneficial Interest
Balance, beginning of year 40,139,675 $707,724 - 39,200,201 $684,823 -
Adjustment to refect change in par value - ($707,323) 707,323 - - -
Exercise of stock options 52,667 - 1,092 230,908 4,880 -
Shares issued under dividend
reinvestment plan 165,770 2 3,566 167,511 3,990 -
Performance and Restricted Shares granted,
net of Restricted Shares retired 60,654 1 1,373 541,055 14,031 -
Net proceeds from sale of shares - - - - - -
Cost of 7.95% Series A Cumulative
Preferred Shares - - - - - -
---------- --------- -------- ----------- -------- --------
Balance, end of year 40,418,766 $404 $713,354 40,139,675 $707,724 -
========== ========= ======== ========== ======== ========
Accumulated Dividends in Excess
of Trust Net Income
Balance, beginning of year ($255,211) ($222,709)
Net income 48,443 44,960
Dividends declared to common shareholders (71,630) (69,512)
Dividends declared to preferred shareholders (7,950) (7,950)
--------- -----------
Balance, end of year ($286,348) ($255,211)
======== ========
Common Shares of Beneficial Interest
in Treasury
Balance, beginning of year (59,425) ($1,376) (52,386) ($1,002)
Performance and Restricted Shares issued - - 35,000 649
Performance and Restricted Shares forfeited (17,719) (393) (42,039) (1,023)
Purchase of treasury shares (140,500) (2,565) - -
---------- --------- ------------ -----------
Balance, end of year (217,644) ($4,334) (59,425) ($1,376)
======= ======= ======= =======
Deferred Compensation on Restricted Shares
Balance, beginning of year (582,910) ($14,892) (22,000) ($621)
Performance and Restricted Shares issued,
net of forfeitures (31,660) (730) (576,055) (14,679)
Vesting of Performance and Restricted Shares 15,143 403 15,145 408
---------- --------- ------------ -----------
Balance, end of year (599,427) ($15,219) (582,910) ($14,892)
======= ======= ======= =======
Subscriptions receivable from employee
stock plans
Balance, beginning of year (337,111) ($6,298) (382,725) ($6,681)
Subscription loans issued (9,083) (190) (111,114) (2,378)
Subscription loans paid 28,588 458 156,728 2,761
---------- --------- ------------ -----------
Balance, end of year (317,606) ($6,030) (337,111) ($6,298)
======= ======= ======= =======
Year ended December 31,
1997
-------------------------------------
(In thousands, except per share data) Shares Amount Additional
Paid-in Capital
Common Shares of Beneficial Interest
Balance, beginning of year 35,948,044 $597,917 -
Adjustment to refect change in par value - - -
Exercise of stock options 76,184 1,604 -
Shares issued under dividend
reinvestment plan 153,973 4,115 -
Performance and Restricted Shares granted,
net of Restricted Shares retired 22,000 686 -
Net proceeds from sale of shares 3,000,000 83,925 -
Cost of 7.95% Series A Cumulative
Preferred Shares - (3,424) -
----------- --------- ------
Balance, end of year 39,200,201 $684,823 -
=========== ========= ======
Accumulated Dividends in Excess
of Trust Net Income
Balance, beginning of year ($200,700)
Net income 46,504
Dividends declared to common shareholders (66,636)
Dividends declared to preferred shareholders (1,877)
----------
Balance, end of year ($222,709)
=========
Common Shares of Beneficial Interest
in Treasury
Balance, beginning of year (62,386) ($1,186)
Performance and Restricted Shares issued 10,000 184
Performance and Restricted Shares forfeited - -
Purchase of treasury shares - -
----------- ----------
Balance, end of year (52,386) ($1,002)
======== ======
Deferred Compensation on Restricted Shares
Balance, beginning of year - $ -
Performance and Restricted Shares issued,
net of forfeitures (22,000) (621)
Vesting of Performance and Restricted Shares - -
----------- ----------
Balance, end of year (22,000) ($621)
======== ======
Subscriptions receivable from employee
stock plans
Balance, beginning of year (417,434) ($7,146)
Subscription loans issued (16,166) (340)
Subscription loans paid 50,875 805
----------- ----------
Balance, end of year (382,725) ($6,681)
======== ======
|
The accompanying notes are an integral part of these consolidated statements.
Federal Realty Investment Trust
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31,
1999 1998 1997
--------- --------- ----------
(In thousands)
OPERATING ACTIVITIES
Net income $48,443 $44,960 $46,504
Items not requiring cash outlays
Depreciation and amortization 50,011 46,047 41,399
Loss (gain) on sale of real estate 7,050 - (6,375)
Other, net 2,395 2,301 818
Changes in assets and liabilities
(Increase) decrease in accounts receivable (5,257) 878 (1,493)
Increase in prepaid expenses and other
assets before depreciation and amortization (2,183) (9,571) (11,263)
(Decrease) increase in operating accounts payable,
security deposits and prepaid rent (1,202) 2,148 (287)
Increase in accrued expenses 2,926 3,664 2,867
------- ------- --------
Net cash provided by operating activities 102,183 90,427 72,170
INVESTING ACTIVITIES
Acquisition of real estate (25,337) (92,946) (251,351)
Capital expenditures (90,796) (73,030) (50,349)
Application of deposit on purchase of real estate - - 23,447
Issuance of mortgage notes receivable, net (2,341) (21,375) (10,447)
Proceeds from sale of real estate 19,161 - 9,364
Other, net - (295) (7)
------- -------- --------
Net cash used in investing activities (99,313) (187,646) (279,343)
FINANCING ACTIVITIES
(Repayment) borrowing of short-term debt, net (100,147) 144,357 55,391
Issuance of senior notes, net of costs 172,193 79,540 39,750
Issuance of common shares 2,243 5,310 86,893
Issuance of preferred shares - - 96,576
Common shares repurchased (2,565)
Payments on mortgages, capital leases and notes payable, including
prepayment fees (1,151) (55,248) (3,712)
Dividends paid (76,617) (74,284) (62,621)
(Decrease) increase in minority interest, net (2,318) (2,269) 898
------- ------- --------
Net cash (used in) provided by financing activities (8,362) 97,406 213,175
------- ------- --------
(Decrease) increase in cash (5,492) 187 6,002
Cash at beginning of year 17,230 17,043 11,041
------- ------- --------
Cash at end of year $11,738 $17,230 $17,043
======= ======= ========
|
The accompanying notes are an integral part of these consolidated statements.
Federal Realty Investment Trust
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999, 1998, and 1997
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Federal Realty Investment Trust (the "Trust") invests in income-producing retail real estate, primarily community and neighborhood shopping centers and main street retail properties, retail buildings and shopping centers in densely developed urban and suburban areas. In addition, the Trust has various land parcels under its control for the purpose of developing mixed-use projects that center around the retail component.
The Trust operates in a manner intended to enable it to qualify as a real estate investment trust under Sections 856-860 of the Internal Revenue Code (the "Code"). Under those sections, a trust which distributes at least 95% of its real estate trust taxable income to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. Therefore, no provision for Federal income taxes is required.
The consolidated financial statements of the Trust include the accounts of the Trust, its wholly owned corporate subsidiaries, several corporations where the Trust has a majority ownership, numerous partnerships and a joint venture, all of which it controls. The equity interests of other investors are reflected as investors' interest in consolidated assets. All significant intercompany transactions and balances are eliminated in consolidation.
Revenue Recognition. Leases with tenants are classified as operating leases and are recognized on a straight line basis. Minimum rents are recognized on an accrual basis over the terms of the related leases with appropriate valuation adjustments recorded to consider credit and other business risk. Percentage rents, which represent additional rents based on gross tenant sales, are recognized at the end of the lease year or other period in which tenant sales' volumes have been reached and the percentage rents are due. Real estate tax and other cost reimbursements are recognized on an accrual basis over the periods in which the expenditures occurred.
Real Estate. Land, buildings and real estate under development are recorded at cost. Depreciation is computed using the straight-line method. Estimated useful lives range from three to 25 years on apartment buildings and improvements, and from three to 35 years on retail properties and improvements. Maintenance and repair costs are charged to operations as incurred. Major improvements are capitalized and depreciated over their estimated useful life. The gain or loss resulting from the sale of properties is included in net income at the time of sale. The Trust evaluates the carrying value of its long-lived assets in accordance with Statement of Financial Accounting Standard
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". In cases where particular assets are being held for sale, impairment is based on whether the fair value (estimated sales price less costs of disposal) of each individual property to be sold is less than the net book value. Otherwise, impairment is based on whether it is probable that undiscounted future cash flows from each property will be less than its net book value. If a property is impaired, its basis is adjusted to its fair market value. During the second quarter of 1999, the Trust recorded a $7.1 million charge, representing the estimated loss on a potential sale of certain assets, principally Northeast Plaza in Atlanta, Georgia, thereby valuing the assets at their estimated fair value less estimated costs to sell. On October 18, 1999 the Trust sold Northeast Plaza for $19.6 million, realizing a loss of $6.3 million.
The Trust, when applicable as lessee, classifies its leases of land and buildings as operating or capital leases in accordance with the provisions of SFAS No. 13, "Accounting for Leases".
Certain external and internal costs directly related to the development, redevelopment and leasing of real estate including applicable salaries and their related indirect costs are capitalized. The capitalized costs associated with developments, redevelopments and leasing are depreciated or amortized over the life of the improvement and lease, respectively. Through March 1998, internal costs of preacquisition activities incurred in connection with the acquisition of an operating property were capitalized. On March 19, 1998 the Emerging Issues Task Force ("EITF") of the Financial Accounting Standards Board reached a consensus opinion on issue #97-11, "Accounting for Internal Costs Relating to Real Estate Property Acquisitions" which requires that the internal costs of preacquisition activities incurred in connection with the acquisition of an operating property be expensed as incurred. Consequently, the Trust has been expensing these costs since March 1998.
Interest costs on developments and major redevelopments are capitalized as part of the development and redevelopment.
Debt Issue Costs. Costs related to the issuance of debt instruments are capitalized and are amortized as interest expense over the life of the related issue using the effective interest method. Upon conversion or in the event of redemption, applicable unamortized costs are charged to shareholders' equity or to operations, respectively.
Cash and Cash Equivalents. The Trust defines cash as cash on hand, demand deposits with financial institutions and short term liquid investments with an initial maturity under three months. Cash balances in individual banks may exceed insurable amounts from time to time.
Risk Management. In June 1998, SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" was issued. This statement established accounting and reporting standards for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge of the exposure to certain risks. SFAS No. 137, "Deferral of Effective Date of SFAS No. 133 was issued and delayed the effective date of SFAS No. 133 to all fiscal quarters of fiscal years beginning after June 2000. The Trust occasionally enters into derivative contracts prior to a scheduled financing or refinancing in order to minimize the risk of changes in interest rates. The derivative contracts are designated as hedges when acquired. The cost or gain on these transactions is recognized as a component of interest expense over the life of the financing. The Trust does not use derivative financial instruments for trading or speculative purposes. There were no open derivative contracts at December 31, 1999 or 1998.
Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates are prepared using management's best judgment, after considering past and current events. Actual results could differ from these estimates.
Comprehensive Income. The Trust has no comprehensive income and therefore does not require separate reporting in the accompanying consolidated statements of operations.
Earnings Per Share. In 1997 the Financial Accounting Standards Board issued SFAS No. 128 - "Earnings Per Share". Statement 128 replaces the presentation of primary and fully diluted earnings per share ("EPS") pursuant to Accounting Principles Board Opinion No. 15 with the presentation of basic and diluted EPS. Basic EPS excludes dilution and is computed by dividing net income available for common shareholders by the weighted number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares and then shared in the earnings of the Trust.
The following table sets forth the reconciliation between basic and diluted EPS (in thousands):
1999 1998 1997
------------------------------------------------------------------------------
Numerator
---------
Net income available for common
shareholders - basic $40,493 $37,010 $44,627
Income attributable to
operating partnership units 831 578 32
------ ------- -------
Net income available for common
shareholders - diluted $41,324 $37,588 $44,659
======= ======= =======
Denominator
-----------
Denominator for basic EPS-
weighted average shares 39,574 39,174 38,475
Effect of dilutive securities
Stock options and awards 214 292 494
Operating partnership units 850 614 19
------- ------- ------
Weighted average shares - diluted 40,638 40,080 38,988
======= ======= ======
|
Stock options are accounted for in accordance with APB 25, whereby if options are priced at fair market value or above at the date of grant, no compensation expense is recognized.
NOTE 1: REAL ESTATE AND ENCUMBRANCES
A summary of the Trust's properties at December 31, 1999 and 1998 is as follows (in thousands):
Accumulated
depreciation and
1999 Cost amortization Encumbrances
---------- ---------------- ------------
Retail properties $1,506,684 $251,946 $ 50,547
Retail properties
under capital leases 208,135 60,487 122,026
Apartments 6,640 5,488 -
---------- -------- ------------
$1,721,459 $317,921 $172,573
========== ======== ========
1998
Retail properties $1,436,949 $227,728 $ 51,079
Retail properties
under capital leases 198,567 53,088 122,401
Apartments 6,620 5,237 -
---------- -------- ------------
$1,642,136 $286,053 $173,480
========== ======== ============
|
During 1999, the Trust expended cash of $25.3 million to acquire real estate and an additional $90.8 million to improve, redevelop and develop its existing real estate. The Trust acquired a ninety percent interest in three buildings, valued at $26.4 million, in Hollywood, California for a total cash investment to the Trust of $23.7 million. The first two buildings have 122,000 and 64,000 leasable square feet, respectively. The third building is vacant pending redevelopment. In addition, the Trust increased by $1.6 million its partnership interest in Kings Court in Los Gatos, California.
Of the $90.8 million spent in 1999 on the Trust's existing real estate portfolio, approximately $38.7 million was invested in predevelopment and development projects in Bethesda, Maryland; Los Gatos, California; San Jose, California; San Antonio, Texas; and in Arlington, Virginia. The remaining $52.1 million of capital expenditures relates to improvements to common areas, tenant work and various redevelopments, including the renovation of Gratiot Plaza, the expansion and retenanting of Langhorne Square shopping center, the renovation of Blue Star shopping center, and the redevelopment of street retail assets in Forest Hills, New York.
The Trust's 123 retail properties at December 31, 1999 are located in 15 states and the District of Columbia. There are approximately 2,200 tenants providing a wide range of retail products and services. These tenants range from sole proprietorships to national retailers; no one tenant or corporate group of tenants account for 2% or more of revenue.
Mortgage notes receivable of $53.5 million are due over various terms from March 2000 to May 2021 and have an average weighted interest rate of 10%. Under the terms of certain of these mortgages, the Trust will receive additional interest based upon the gross income of the secured properties and, upon sale of the properties, the Trust will share in the appreciation of the properties.
During the second quarter of 1999,the Trust recorded a $7.1 million charge, representing the estimated loss on the potential sale of certain assets, principally Northeast Plaza in Atlanta, Georgia. On October 18, 1999 the Trust sold Northeast Plaza for $19.6 million, realizing a loss of $6.3 million.
On May 13, 1997 the Trust sold Town & Country Shopping Center in Springfield, Illinois for $7.5 million, resulting in a gain of $5.3 million. On May 30, 1997 Shillington Shopping Center in Shillington, Pennsylvania was sold for $4.6 million, resulting in a gain of $1.7 million. On September 25, 1997 the Trust sold Brainerd Village Shopping Center in Chattanooga, Tennessee for $10.2 million, resulting in a loss of $659,000.
Mortgages payable and capital lease obligations are due in installments over various terms extending to 2016 and 2060, respectively, with interest rates ranging from 4.8% to 11.25%. Certain of the mortgage and capital lease obligations require additional interest payments based upon property performance.
There were no maturing mortgages in 1999. In 1998 and 1997 the Trust paid off maturing mortgages totaling $53.5 million and $1.5 million, respectively.
Aggregate mortgage principal payments due during the next two years are $583,000, and $30.7 million, respectively. There are no further mortgage principal payments due until 2005 when principal payments begin on the Leesburg mortgage.
Future minimum lease payments and their present value for property under capital leases as of December 31, 1999, are as follows (in thousands):
Year ending December 31,
2000 $ 11,736
2001 11,736
2002 11,527
2003 11,458
2004 11,673
Thereafter 514,043
---------
572,173
Less amount representing interest (450,147)
---------
Present value $ 122,026
=========
|
The Trust's leases with retail property and apartment tenants are classified as operating leases. Leases on apartments are generally for a period of one year, whereas retail property leases generally range from three to 10 years (certain leases with anchor tenants may be longer), and usually provide for contingent rentals based on sales and sharing of certain operating costs.
The components of rental income are as follows (in thousands):
Year ended December 31,
1999 1998 1997
-------- -------- --------
Retail properties
Minimum rents $197,299 $178,936 $147,147
Cost reimbursements 39,574 34,897 34,089
Percentage rent 6,277 5,766 4,801
Apartments - rents 2,683 2,587 2,492
-------- -------- --------
$245,833 $222,186 $188,529
======== ======== ========
|
The components of rental expense are as follows (in thousands):
Year ended December 31,
1999 1998 1997
-------- -------- --------
Repairs and maintenance $ 15,347 $ 13,942 $ 12,634
Management fees and costs 10,635 9,510 8,452
Utilities 7,120 7,625 5,957
Payroll - properties 4,440 3,775 3,432
Ground rent 2,933 2,829 2,602
Insurance 2,774 2,610 2,227
Other operating 10,428 9,199 7,540
-------- -------- --------
$ 53,677 $ 49,490 $ 42,844
======== ======== ========
|
Minimum future retail property rentals on noncancelable operating leases on operating properties as of December 31, 1999 are as follows (in thousands):
Year ending December 31,
2000 $ 193,581
2001 178,766
2002 160,101
2003 140,736
2004 117,855
Thereafter 696,801
----------
$1,487,840
==========
|
The following disclosure of estimated fair value was determined by the Trust, using available market information and appropriate valuation methods. Considerable judgment is necessary to develop estimates of fair value. The estimates presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments.
The Trust estimates the fair value of its financial instruments using the
following methods and assumptions: (1) quoted market prices, when available, are
used to estimate the fair value of investments in marketable debt and equity
securities; (2) quoted market prices are used to estimate the fair value of the
Trust's marketable convertible subordinated debentures; (3) discounted cash flow
analyses are used to estimate the fair value of long term notes receivable and
payable, using the Trust's estimate of current interest rates for similar notes;
(4) carrying amounts in the balance sheet approximate fair value for cash and
short term borrowings. Notes receivable from officers are excluded from fair
value estimation since they have been issued in connection with employee stock
ownership programs.
December 31, 1999 December 31, 1998
(in thousands) Carrying Fair Carrying Fair
Value Value Value Value
-------- -------- -------- --------
Cash & equivalents $ 11,738 $ 11,738 $ 17,230 $ 17,230
Investments 2,403 2,403 1,661 1,661
Mortgage notes
receivable 53,495 54,174 51,154 52,433
Mortgages and notes
payable 213,315 213,579 314,238 316,722
Convertible
debentures 75,289 71,058 75,289 71,901
Senior notes 510,000 488,355 355,000 364,269
|
The Trust's notes consist of the following (in thousands):
1999 1998
--------- --------
Revolving credit facilities $ 34,000 $134,147
Term note with banks 125,000 125,000
Other 3,768 4,012
-------- --------
$162,768 $263,159
======== ========
|
In December 1997 the Trust obtained a five year syndicated credit facility for $300 million which currently bears interest at LIBOR plus 65 basis points and matures December 2002. The syndicated facility requires fees and has various covenants including the maintenance of a minimum shareholders' equity and a maximum ratio of debt to net worth.
In December 1998 the Trust obtained a four year loan of $125 million from five institutional lenders. The loan, which bears interest only at LIBOR plus 75 basis points and matures in December 2002, requires fees and has the same covenants as the syndicated credit facility. The Trust is in compliance with all covenants.
The maximum drawn under these facilities during 1999, 1998 and 1997 was $330.0 million, $259.1 million and $114.8 million, respectively. In 1999, 1998 and 1997 the weighted average interest rate on borrowings was 5.9%, 6.1% and 6.5%, respectively, and the average amount outstanding was $296.4 million, $163.6 million and $59.9 million, respectively.
In October 1993 the Trust issued $75.0 million of 5 1/4% convertible subordinated debentures, realizing cash proceeds of approximately $73.0 million. The debentures were not registered under the Securities Act of 1933, and were not publicly distributed within the United States. The debentures, which mature in 2003, are convertible into shares of beneficial interest at $36 per share. The debentures are redeemable by the Trust, in whole, at any time after October 28, 1998 at 100% of the principal amount plus accrued interest.
At December 1999 and 1998 the Trust had outstanding $289,000 of 5 1/4% convertible subordinated debentures due 2002. The debentures which are convertible into shares of beneficial interest at $30.625 were not registered under the Securities Act of 1933 and were not publicly distributed within the United States.
1999 1998
-------- --------
8.875% Notes due January 15, 2000 $100,000 $100,000
8% Notes due April 21, 2002 25,000 25,000
6.74% Medium-Term Notes due March 10, 2004 39,500 39,500
6.625% Notes due December 1, 2005 40,000 40,000
6.99% Medium-Term Notes due March 10, 2006 40,500 40,500
6.82% Medium-Term Notes due August 1, 2027,
redeemable at par by holder August 1, 2007 40,000 40,000
7.48% Debentures due August 15, 2026,
redeemable at par by holder August 15, 2008 50,000 50,000
8.75% Notes due December 1, 2009 175,000 -
-------- -------
$510,000 $335,000
======== ========
|
The 8.875% Notes were paid in full in January 2000; see Note 14. The loan agreements contain various covenants, including limitations on the amount of debt and minimum debt service coverage ratios. The Trust is in compliance with all covenants.
In anticipation of the March 1998 Medium-Term Note issuance, on January 13, 1998 the Trust purchased a Treasury Yield Hedge (notional amount of $50 million) to minimize the risk of changes in interest rates. The hedge was terminated on March 5, 1998 at a gain of $1.1 million which is being recognized as a reduction in interest expense over the term of the notes. There were no open hedge agreements at December 31, 1999 or 1998.
In September 1998 the Trust filed a $500 million shelf registration statement with the Securities and Exchange Commission which allows the issuance of debt securities, preferred shares and common shares. As of December 31, 1999, $325 million is available under the shelf registration.
On November 4, 1999 the Trustees declared a quarterly cash dividend of $.45 per common share, payable January 14, 2000 to common shareholders of record January 3, 2000. For the years ended December 31, 1999, 1998 and 1997, $.16, $.31, and $.19 of dividends paid per common share, respectively, represented a return of capital.
On November 4, 1999 the Trustees declared a quarterly cash dividend of $.49687 per share on its Series A Cumulative Redeemable Preferred Shares, payable on January 31, 2000 to shareholders of record on January 14, 2000.
The Trust is involved in various lawsuits and environmental matters arising in the normal course of business. Management believes that such matters will not have a material effect on the financial condition or results of operations of the Trust.
Pursuant to the provisions of the Congressional Plaza partnership agreement, in the event of the exercise of put options by another partner, the Trust would be required to purchase a 37.5% interest at Congressional Plaza at its then fair market value. Based on management's current estimate of fair market value, the Trust's estimated liability upon exercise of the put option is approximately $27 million.
On January 1, 1999 the Loehmann's Plaza Limited Partnership Agreement was amended to extend the partnership to December 31, 2000 and to delete the put and call options. On January 1, 2000 the partnership agreement was again amended and restated. Under this amended and restated agreement, the limited partner was awarded 190,000 partnership units in exchange for a 98% partnership interest.
Under the terms of certain other partnerships, if certain leasing and revenue levels are obtained for the properties owned by the partnerships, the limited partners may require the Trust to purchase their partnership interests at a formula price based upon net operating income. The purchase price may be paid in cash or common shares of the Trust, at the election of the limited partners. If the limited partners do not redeem their interest, the Trust may choose to purchase the limited partnership interests upon the same terms.
Under the terms of the Amended and Restated Loehmann's Plaza Limited Partnership Agreement and certain other partnerships, the partners may exchange their operating partnership units, totaling 1,004,589, into cash or the same number of common shares of the Trust, at the option of the Trust. During the third quarter of 1999 the Trust redeemed 64,952 operating units for cash of $1.6 million.
As of December 31, 1999 in connection with renovation and development projects, the Trust has contractual obligations of $59 million.
The Trust is obligated under ground lease agreements on several shopping centers requiring minimum annual payments as follows (in thousands):
2000 $3,757
2001 4,095
2002 4,321
2003 4,398
2004 4,409
Thereafter 283,971
--------
$304,951
========
|
In May 1999, the Trust reorganized as a Maryland real estate investment trust by amending and restating its declaration of trust and bylaws. The Amended Declaration of Trust changed the number of authorized shares of common and preferred shares from unlimited to 100,000,000 and 15,000,000, respectively. In addition, all common shares of beneficial interest, no par value, which were issued and outstanding were changed to common shares of beneficial interest, $0.01 par value per share and all Series A Cumulative Redeemable Preferred Shares of beneficial interest, no par value, which were issued and outstanding were changed to Series A Cumulative Redeemable Preferred Shares of beneficial interest, $0.01 par value per share.
On February 4, 1997 the Trust sold three million common shares to an institutional investor for $28 per share, netting $83.9 million.
On October 6, 1997 the Trust issued four million 7.95% Series A Cumulative Redeemable Preferred Shares at $25 per share in a public offering, realizing cash proceeds of approximately $96.6 million after costs of $3.4 million. The Series A Preferred Shares are not redeemable prior to October 6, 2002. On or after that date, the Preferred Shares may be redeemed, in whole or in part, at the option of the Trust, at a redemption price of $25 per share plus all accrued and unpaid dividends. The redemption price is payable solely out of proceeds from the sale of other capital shares of the Trust. Dividends on the Preferred Shares will be payable quarterly in arrears on the last day of January, April, July and October.
The Trust has a Dividend Reinvestment Plan, whereby shareholders may use their dividends and make optional cash payments to purchase shares. In 1999, 1998, and 1997, 165,770 shares, 167,511 shares, and 153,973 shares, respectively, were issued under the Plan.
In December 1999 the Trustees authorized a share repurchase program of up to an aggregate of 4 million of the Trust's common shares. The repurchase program will end upon the earlier of December 31, 2000 or the date when the repurchase limit has been met. As of December 31, 1999, 140,500 shares had been repurchased at a cost of $2.6 million.
In 1999, 65,660 common shares were awarded, and 5,006 shares were forfeited and retired, to the Trust's president and other key employees under various incentive compensation programs. Fifteen thousand shares vested upon award, and the balance vest over terms from 5 to 13 years.
In 1998, 576,055 common shares, of which 35,000 were issued from treasury shares, were awarded to the Trust's president and certain other officers under various programs designed to directly link a significant portion of their long term compensation to the
prosperity of the Trust and its shareholders. Ten thousand shares vested upon award, 491,055 shares vest over terms from 5 to 13 years, and 75,000 shares vest upon the obtainment of certain performance criteria.
On January 31, 1997, 22,000 restricted shares were granted to an officer and two employees of the Trust. The shares vest over three years. On September 26, 1997, 10,000 restricted common shares were granted to an officer; the shares, which were fully vested upon grant, were issued from treasury shares.
In January 1994 under the terms of the 1993 Long Term Incentive Plan, an officer of the Trust purchased 40,000 common shares at $25 per share with the assistance of a $1.0 million loan from the Trust. The loan, which has a term of 12 years and a current balance of $625,500, bears interest at 6.24%. Forgiveness of up to 75% of the loan is subject to the future performance of the Trust. One eighth of the loan was forgiven on January 31, 1995 and an additional one sixteenth has been forgiven each January 31 since then as certain performance criteria of the Trust were met.
In January 1991 the Trustees adopted the Federal Realty Investment Trust Share Purchase Plan. Under the terms of this plan, officers and certain employees of the Trust purchased 446,000 common shares at $15.125 per share with the assistance of loans of $6.7 million from the Trust. Originally, the Plan called for one sixteenth of the loan to be forgiven each year for eight years, as long as the participant was still employed by the Trust. The loans for all participants, but two, were modified in 1994 to extend the term an additional four years and to tie forgiveness in 1995 and thereafter to certain performance criteria of the Trust. One sixteenth of the loan has been forgiven during each year of the plan. At December 31, 1999 the Trust has outstanding purchase loans to participants of $1.8 million. The purchase loans bear interest at 9.39%. The shares purchased under the plan may not be sold, pledged or assigned until both the purchase and tax loans associated with the plan are satisfied and the term has expired, without the consent of the Compensation Committee of the Board of Trustees.
Tax loans with a balance of $1.3 million in 1999 and $1.1 million in 1998 have been made in connection with restricted share grants to the Trust's President and Chief Investment Officer and in connection with the Share Purchase Plans.
On April 13, 1999, the Shareholder Rights Plan adopted in 1989 expired. On March 11, 1999 the Trust entered into an Amended and Restated Rights Agreement with American Stock Transfer and Trust Company, pursuant to which (i)the expiration date of the Trust's shareholder rights plan was extended for an additional ten years to April 24, 2009, (ii)the beneficial ownership percentage at which a person becomes an "Acquiring Person" under the plan was reduced from 20% to 15%, and (iii)certain other amendments were made.
The 1993 Long Term Incentive Plan ("Plan") has been amended to authorize the grant of options and other stock based awards for up to 5.5 million shares. Options granted under the Plan have ten year terms and vest in one to five years. Under the Plan, on each annual meeting date during the term of the Plan, each nonemployee Trustee will be awarded 2,500 options.
The option price to acquire shares under the 1993 Plan and previous plans is required to be at least the fair market value at the date of grant. As a result of the exercise of options, the Trust had outstanding from its officers and employees notes for $3.6 million and $3.4 million at December 31, 1999 and 1998, respectively. The notes issued under the 1993 Plan bear interest at the dividend rate on the date of exercise divided by the purchase price of such shares. The notes issued under the previous plans bear interest at the lesser of (i) the Trust's borrowing rate or (ii) the current indicated annual dividend rate on the shares acquired pursuant to the option, divided by the purchase price of such shares. The notes are collateralized by the shares and are with recourse. The loans have a term extending to the employee's or officer's retirement date.
SFAS Statement No. 123, "Accounting for Stock-Based Compensation" requires pro forma information regarding net income and earnings per share as if the Trust accounted for its stock options under the fair value method of that Statement. The fair value for options issued in 1999, 1998, and 1997 has been estimated as $434,000, $2.6 million, and $4.0 million, respectively, as of the date of grant, using a binomial model with the following weighted-average assumptions for 1999, 1998 and 1997, respectively: risk-free interest rates of 5.4%, 5.7%,and 6.5%; volatility factors of the expected market price of the Trust's shares of 15%, 19%, and 19%; and a weighted average expected life of the option of 6.6 years, 6.3 years, and 6.6 years.
Because option valuation models require the input of highly subjective assumptions, such as the expected stock price volatility, and because changes in these subjective input assumptions can materially affect the fair value estimate, the existing model may not necessarily provide a reliable single measure of the fair value of its stock options.
For purposes of pro forma disclosures, the estimated fair value of the options are amortized to expense over the options' vesting period. The pro forma information is as follows (in thousands except for earnings per share):
1999 1998 1997
----------- -------------- -------
Pro forma net income $ 46,368 $43,179 $45,214
Pro forma earnings per share, basic $.97 $ .90 $ 1.13
Pro forma earnings per share, diluted $.97 $ .88 $ 1.11
|
A summary of the Trust's stock option activity for the years ended December 31, is as follows:
Shares Weighted
Under Average
Option Exercise Price
---------- --------------
January 1, 1997 1,433,729 $ 22.74
Options granted 1,611,500 26.43
Options exercised (75,884) 21.05
Options forfeited (121,003) 25.99
----------
December 31, 1997 2,848,342 24.73
Options granted 1,293,500 25.06
Options exercised (228,908) 21.14
Options forfeited (304,118) 25.62
----------
December 31, 1998 3,608,816 25.00
Options granted 720,000 21.12
Options exercised (52,667) 20.73
Options forfeited (380,635) 25.29
----------
December 31, 1999 3,895,514 24.31
========== =======
|
At December 31, 1999 and 1998, options for 1.9 million and 1.5 million shares, respectively, were exercisable. The average remaining contractual life of options outstanding at December 31, 1999 and 1998 was 6.7 years and 7.1 years, respectively. The weighted average grant date fair value per option for options granted in 1999 and 1998 was $.65 and $2.00, respectively. The exercise price of options outstanding at December 31, 1999 ranged from $17.25 per share to $27.13 per share.
The Trust has a savings and retirement plan in accordance with the provisions of Section 401(k) of the Internal Revenue Code. Employees' contributions range, at the discretion of each employee, from 1% to 17% of compensation up to a maximum of $10,000. Under the plan, the Trust, out of its current net income, contributes 50% of each employee's first 5% of contributions. In addition, the Trust may make discretionary contributions within the limits of deductibility set forth by the Code. Employees of the Trust, who work over 1,000 hours annually, are eligible to become plan participants. The Trust's expense for the years ended December 31, 1999, 1998 and 1997 was $223,000, $218,000 and $210,000, respectively.
A nonqualified deferred compensation plan for Trust officers was established in 1994. The plan allows the officers to defer future income until the earlier of age 65 or termination of employment with the Trust. As of December 31, 1999, the Trust is liable to participants for approximately $2.4 million under this plan. Although this is an unfunded plan, the Trust has purchased certain investments with which to match this obligation.
The Trust incurred interest expense totaling $68.4 million, $60.2 million and $50.9 million in 1999, 1998 and 1997, respectively, of which $6.9 million, $5.1 million, and $3.6 million respectively, was capitalized. Interest paid was $67.0 million in 1999, $57.8 million in 1998, and $49.4 million in 1997.
During 1999 while exploring strategic alternatives to maximize shareholder value, the Trust considered spinning off certain of its assets (primarily those related to the development and operation of its main street retail program) in a taxable transaction to shareholders. Shortly thereafter, the remaining assets of the Trust were to be merged with another publicly traded shopping center company in exchange for cash and stock consideration. On September 24, 1999, the Trust announced that merger negotiations were terminated and that the spin- off was being reevaluated.
In preparing for these transactions, the Trust incurred expenses of approximately $2.8 million related to legal, accounting, tax and other advisory services related to the spin-off and the merger. Such costs have been expensed and are reflected as administrative expenses in the accompanying consolidated statement of operations. While management continues to evaluate alternatives to maximize shareholder value, there are currently no plans to consummate a spin- off or merger transaction.
At September 30, 1998 the Trust recorded a $4.7 million charge related to a comprehensive restructuring program, the implementation of which was begun during the fourth quarter of 1998. As of December 31, 1999 cash payments of $3.9 million had been made against the reserve with most of the remaining cash to be paid during 2000 in connection with severance agreements.
During 1999 the Trust continued to focus on ways to minimize the risk of disruption from the "Year 2000 Issue" which generally refers to the inability of systems hardware and software to correctly identify two-digit references to specific calendar years, beginning with 2000. The Year 2000 Issue could affect the Trust directly by impairing its internal data-based operations or processing and indirectly by impairing its suppliers' and tenants' data-based operations or processing. The Trust identified and remediated all accounting systems and other internal systems of high priority. In addition the Trust requested information concerning and reviewed the equipment at its properties, including the use of embedded chips in machinery. The Trust also communicated with its major banks, tenants and suppliers to determine their Year 2000 compliance. Expenditures for Year 2000 remediation were approximately $75,000. To date the operations and financial condition of the Trust had not been adversely impacted by any Year 2000 failures
and the Trust does not believe that there is any material risk to the Trust in these areas in the future.
Under a Restricted Share Agreement designed to link his compensation with the prosperity of the shareholders, the Trust's President elected to accept stock in lieu of cash for both his 1999 bonus and his 2000 salary. As a result, in 2000, 35,349 common shares were awarded to the president in lieu of his 2000 cash salary and 22,222 shares were awarded in lieu of his 1999 cash bonus. The shares vest at the end of five years if the president is still employed by the Trust.
Pursuant to the 1999 Incentive Bonus Plan, vice presidents and certain key employees receive part of their 1999 bonus in Federal Realty shares which vest over three years. Consequently, on February 9, 2000, 24,038 shares were awarded under this plan. In addition, 144,700 shares were awarded to certain vice presidents of the Trust in accordance with programs to link their current and long-term compensation to the prosperity of the Trust. The shares have vesting schedules from five to eight years.
On January 5, 2000 the Trust purchased the 75,000 square foot Greenlawn Shopping Center in Greenlawn, New York for $6.0 million, with plans to renovate and expand the center by 35,000 square feet.
On January 17, 2000 the Trust's $100 million of 8.875% Notes matured and were paid with borrowings on the Trust's revolving credit facilities. In January 2000 the Trust obtained a construction loan commitment for up to $24.5 million in connection with the Trust's Woodmont East development in Bethesda, Maryland. The loan, which has a floating interest rate of the greater of prime or the Federal Funds Rate plus .5% or a fixed rate option of LIBOR plus 1.5%, has an initial term of 24 months with two one year extension options.
From January 1, 2000 through March 14, 2000, the Trust repurchased 908,100 common shares at a cost of $17.4 million, in connection with its share repurchase program.
The Trust traditionally operated its business as a single business segment. During the fourth quarter of 1998, however, the Trust completed a comprehensive restructuring program which, among other things, divided its portfolio of assets into three geographic operating regions: Northeast, Mid-Atlantic and West. During 1999 there was a minor reorganization of the regions which moved the Illinois and Michigan properties to the Northeast region from the Western region.
A summary of the Trust's operations by geographic region is presented below (in thousands):
North Mid
1999 East Atlantic West Other Consolidated
----------------------------------------------------------------------------------------------------
Rental income $102,452 $111,624 $ 31,757 - $ 245,833
Other income 5,672 3,903 1,656 - 11,231
Rental expense (20,702) (25,096) (7,879) - (53,677)
Real estate tax (13,146) (9,006) (2,869) - (25,021)
-------- -------- -------- ----------
Net operating income 74,276 81,425 22,665 178,366
Interest income - - - 7,649 7,649
Interest expense - - - (61,492) (61,492)
Administrative expense - - - (15,120) (15,120)
Depreciation and
Amortization (22,648) (22,473) (4,101) (789) (50,011)
-------- -------- -------- -------- ----------
Income before investors'
share of operations and
Loss on sale of real
Estate $ 51,628 $ 58,952 $ 18,564 ($69,752) $ 59,392
======== ======== ======== ======== ==========
Capital expenditures $ 32,547 $ 26,444 $ 62,512 - $ 121,503
======== ======== ======== ==========
Real estate assets $715,772 $663,019 $342,668 - $1,721,459
======== ======== ======== ==========
North Mid
1998 East Atlantic West Other Consolidated
----------------------------------------------------------------------------------------------------
Rental income $ 93,632 $103,676 $ 24,878 - $ 222,186
Other income 5,768 3,637 942 - 10,347
Rental expense (20,259) (22,826) (6,405) - (49,490)
Real estate tax (12,745) (8,422) (2,104) - (23,271)
-------- -------- -------- ----------
Net operating income 66,396 76,065 17,311 159,772
Interest income - - - 5,945 5,945
Interest expense - - - (55,125) (55,125)
Administrative expense - - - (11,796) (11,796)
Reorganization expense - - - (4,665) (4,665)
Depreciation and
Amortization (20,224) (22,218) (2,650) (955) (46,047)
-------- -------- -------- -------- ----------
Income before investors'
share of operations and
gain on sale of real
estate $ 46,172 $ 53,847 $ 14,661 ($66,596) $ 48,084
======== ======== ======== ======== ==========
Capital expenditures $ 56,629 $ 60,687 $ 76,414 - $ 193,730
======== ======== ======== ==========
Real estate assets $684,318 $676,842 $280,976 - $1,642,136
======== ======== ======== ==========
North Mid
East Atlantic West Other Consolidated
1997
----------------------------------------------------------------------------------------------------
Rental income $ 80,309 $ 96,818 $ 11,402 - $ 188,529
Other income 4,618 4,867 220 - 9,705
Rental expense (18,072) (22,387) (2,385) - (42,844)
Real estate tax (10,073) (8,000) (1,452) - (19,525)
-------- -------- -------- ----------
Net operating income 56,782 71,298 7,785 135,865
Interest income - - - 6,037 6,037
Interest expense - - - (47,288) (47,288)
Administrative expense - - - (9,793) (9,793)
Reorganization expense - - - (1,951) (1,951)
Depreciation and
Amortization (17,674) (21,690) (1,001) (1,034) (41,399)
-------- -------- -------- -------- ----------
Income before investors'
share of operations and
gain on sale of real
estate $ 39,108 $ 49,608 $ 6,784 ($54,029) $ 41,471
======== ======== ======== ======== ==========
Capital expenditures $113,265 $ 69,704 $152,207 - $ 335,176
======== ======== ======== ==========
Real estate assets $630,105 $618,971 $204,563 - $1,453,639
======== ======== ======== ==========
|
There are no transactions between geographic areas.
The following summary represents the results of operations for each quarter in 1999 and 1998 (in thousands, except per share data):
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- -------- ------- ---------
1999
Revenue $63,583 $64,195 $67,255 $69,680
Net income available
for common shares 11,566 4,828 (1) 12,198 11,901
Earnings per common
share -basic $ .29 $ .12 $ .31 $ .30
Earnings per common
share -diluted (3) .29 .12 .30 .30
1998
Revenue $56,177 $58,402 $59,003 $64,896
Net income available
for common shares 10,706 9,976 5,532 (2) 10,796
Earnings per common
share -basic $ .27 $ .26 $ .14 $ .27
Earnings per common
share -diluted .27 .26 .14 .27
|
(1) Net income includes a $7.1 million loss on sale of real estate ($.18 loss
per share - basic and $.17 loss per share - diluted).
(2) Net income includes a $4.7 million charge for reorganization expenses.
(3) The sum of quarterly earnings per common share - diluted, $1.01 differs from
the annual earnings per common share - diluted, $1.02 due to rounding.
FEDERAL REALTY INVESTMENT TRUST
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
COLUMN A COLUMN B COLUMN C COLUMN D
-------- -------- -------- --------
Initial cost to company
Cost Capitalized
Building and Subsequent to
Descriptions Encumbrance Land Improvements Acquisition
------------ ----------- ---- ------------ -----------
ALLWOOD (New Jersey) $3,542,000 $ $3,920,000 $251,000
ANDORRA (Pennsylvania) 2,432,000 12,346,000 3,374,000
ARIZONA BUILDINGS (2) 1,334,000 9,104,000 355,000
BALA CYNWYD (Pennsylvania) 3,565,000 14,466,000 4,077,000
BARRACKS ROAD (Virginia) 4,363,000 16,459,000 17,048,000
BETHESDA ROW (Maryland) 12,576,000 2,157,000 20,821,000 19,824,000
BLUESTAR (New Jersey) 27,031,000 29,922,000 7,025,000
BRICK PLAZA (New Jersey) 21,362,000 24,715,000 25,035,000
BRISTOL (Connecticut) 3,856,000 15,959,000 899,000
BRUNSWICK (New Jersey) 11,253,000 12,456,000 2,796,000
CALIFORNIA RETAIL BUILDINGS
SANTA MONICA (8) 20,055,000 12,709,000 16,972,000
SAN DIEGO (5) 3,844,000 1,352,000 4,265,000
150 POST STREET (San Francisco) 11,685,000 9,181,000 3,310,000
OTHER (6) 15,563,000 21,462,000 4,656,000
CLIFTON (New Jersey) 3,294,000 3,646,000 952,000
CONGRESSIONAL PLAZA (Maryland) 2,793,000 7,424,000 35,400,000
CONNECTICUT RETAIL BUILDINGS (13) 25,061,000 27,739,000 2,212,000
COURTHOUSE CENTER (Maryland) 1,750,000 1,869,000 38,000
CROSSROADS (Illinois) 4,635,000 11,611,000 5,169,000
DEDHAM PLAZA (Massachusetts) 12,369,000 12,918,000 1,600,000
EASTGATE (North Carolina) 1,608,000 5,775,000 4,688,000
ESCONDIDO PROMENADE (California) 9,400,000 11,505,000 12,147,000 656,000
ELLISBURG CIRCLE (New Jersey) 4,028,000 11,309,000 9,528,000
FALLS PLAZA (Virginia) 1,260,000 735,000 6,188,000
FALLS PLAZA - East (Virginia) 538,000 535,000 2,271,000
FEASTERVILLE (Pennsylvania) 1,431,000 1,600,000 8,383,000
FEDERAL PLAZA (Maryland) 27,179,000 10,216,000 17,895,000 32,358,000
FINLEY SQUARE (Illinois) 9,252,000 9,544,000 6,396,000
FLORIDA RETAIL BUILDINGS (2) 5,206,000 1,631,000 17,000
FLOURTOWN (Pennsylvania) 1,345,000 3,943,000 3,140,000
FRESH MEADOWS (New York) 24,625,000 25,255,000 3,446,000
GAITHERSBURG SQUARE (Maryland) 7,701,000 5,271,000 10,145,000
GARDEN MARKET (Illinois) 2,677,000 4,829,000 727,000
GOVERNOR PLAZA (Maryland) 2,068,000 4,905,000 10,190,000
GRATIOT PLAZA (Michigan) 525,000 1,601,000 14,462,000
HAMILTON (New Jersey) 4,882,000 5,405,000 2,146,000
HAUPPAUGE (New York) 8,791,000 15,262,000 1,735,000
HUNTINGTON (New York) 14,461,000 16,008,000 5,691,000
IDYLWOOD PLAZA (Virginia) 4,308,000 10,026,000 672,000
ILLINOIS RETAIL BUILDINGS (3) 2,694,000 2,325,000 3,375,000
KINGS COURT (California) 10,714,000 (57,000)
LANCASTER (Pennsylvania) 549,000 2,103,000 2,532,000
LANGHORNE SQUARE (Pennsylvania) 720,000 2,974,000 13,662,000
LAUREL (Maryland) 7,458,000 22,525,000 14,161,000
LAWRENCE PARK (Pennsylvania) 5,723,000 7,160,000 10,050,000
LEESBURG PLAZA (Virginia) 9,900,000 8,184,000 10,722,000 819,000
LOEHMANN'S PLAZA (Virginia) 1,237,000 15,096,000 5,630,000
COLUMN A COLUMN E COLUMN F COLUMN G
-------- -------- -------- --------
Gross amount at which
carried at close of period Accumulated Date
Building and Depreciation and of
Descriptions Land Improvements Total Amortization Construction
------------ ---- ------------ ----- ------------ ------------
ALLWOOD (New Jersey) $ $4,171,000 $4,171,000 $1,380,000 1958
ANDORRA (Pennsylvania) 2,432,000 15,720,000 18,152,000 5,438,000 1953
ARIZONA BUILDINGS (2) 1,334,000 9,459,000 10,793,000 390,000 1995-1998
BALA CYNWYD (Pennsylvania) 3,565,000 18,543,000 22,108,000 3,438,000 1955
BARRACKS ROAD (Virginia) 4,363,000 33,507,000 37,870,000 14,112,000 1958
BETHESDA ROW (Maryland) 2,171,000 40,645,000 42,816,000 4,934,000 1945-1999
BLUESTAR (New Jersey) 36,947,000 36,947,000 10,195,000 1959
BRICK PLAZA (New Jersey) 49,750,000 49,750,000 12,288,000 1958
BRISTOL (Connecticut) 3,856,000 16,858,000 20,714,000 2,082,000 1959
BRUNSWICK (New Jersey) 15,252,000 15,252,000 4,704,000 1957
CALIFORNIA RETAIL BUILDINGS
SANTA MONICA (8) 20,055,000 29,681,000 49,736,000 1,833,000 1888-1995
SAN DIEGO (5) 3,844,000 5,617,000 9,461,000 40,000 1888-1995
150 POST STREET (San Francisco) 11,685,000 12,491,000 24,176,000 602,000 1908
OTHER (6) 15,563,000 26,118,000 41,681,000 467,000 var
CLIFTON (New Jersey) 4,598,000 4,598,000 1,319,000 1959
CONGRESSIONAL PLAZA (Maryland) 2,793,000 42,824,000 45,617,000 15,878,000 1965
CONNECTICUT RETAIL BUILDINGS (13) 25,061,000 29,951,000 55,012,000 3,736,000 1900-1991
COURTHOUSE CENTER (Maryland) 1,750,000 1,907,000 3,657,000 112,000 1975
CROSSROADS (Illinois) 4,635,000 16,780,000 21,415,000 3,100,000 1959
DEDHAM PLAZA (Massachusetts) 12,369,000 14,518,000 26,887,000 2,728,000 1959
EASTGATE (North Carolina) 1,608,000 10,463,000 12,071,000 5,233,000 1963
ESCONDIDO PROMENADE (California) 11,505,000 12,803,000 24,308,000 1,070,000 1987
ELLISBURG CIRCLE (New Jersey) 4,028,000 20,837,000 24,865,000 6,490,000 1959
FALLS PLAZA (Virginia) 1,260,000 6,923,000 8,183,000 1,767,000 1962
FALLS PLAZA - East (Virginia) 559,000 2,785,000 3,344,000 2,396,000 1960
FEASTERVILLE (Pennsylvania) 1,431,000 9,983,000 11,414,000 3,610,000 1958
FEDERAL PLAZA (Maryland) 10,216,000 50,253,000 60,469,000 13,383,000 1970
FINLEY SQUARE (Illinois) 9,252,000 15,940,000 25,192,000 2,618,000 1974
FLORIDA RETAIL BUILDINGS (2) 5,206,000 1,648,000 6,854,000 183,000 1920
FLOURTOWN (Pennsylvania) 1,345,000 7,083,000 8,428,000 2,422,000 1957
FRESH MEADOWS (New York) 24,625,000 28,701,000 53,326,000 1,631,000 1946-1949
GAITHERSBURG SQUARE (Maryland) 6,012,000 17,105,000 23,117,000 3,810,000 1966
GARDEN MARKET (Illinois) 2,677,000 5,556,000 8,233,000 1,049,000 1958
GOVERNOR PLAZA (Maryland) 2,068,000 15,095,000 17,163,000 7,971,000 1963
GRATIOT PLAZA (Michigan) 525,000 16,063,000 16,588,000 2,593,000 1964
HAMILTON (New Jersey) 7,551,000 7,551,000 2,892,000 1961
HAUPPAUGE (New York) 8,791,000 16,997,000 25,788,000 541,000 1963
HUNTINGTON (New York) 21,699,000 21,699,000 6,977,000 1962
IDYLWOOD PLAZA (Virginia) 4,308,000 10,698,000 15,006,000 1,959,000 1991
ILLINOIS RETAIL BUILDINGS (3) 2,694,000 5,700,000 8,394,000 570,000 1900-1927
KINGS COURT (California) 10,657,000 10,657,000 492,000 1960
LANCASTER (Pennsylvania) 4,635,000 4,635,000 3,626,000 1958
LANGHORNE SQUARE (Pennsylvania) 720,000 16,636,000 17,356,000 4,852,000 1966
LAUREL (Maryland) 7,458,000 36,686,000 44,144,000 14,481,000 1956
LAWRENCE PARK (Pennsylvania) 5,734,000 17,210,000 22,944,000 11,369,000 1972
LEESBURG PLAZA (Virginia) 8,184,000 11,541,000 19,725,000 399,000 1967
LOEHMANN'S PLAZA (Virginia) 1,248,000 20,715,000 21,963,000 10,427,000 1971
COLUMN A COLUMN H COLUMN I
-------- -------- --------
Life on which
depreciation in latest
Date income statements
Descriptions Acquired is computed
------------ -------- -----------
ALLWOOD (New Jersey) 12/12/88 35 years
ANDORRA (Pennsylvania) 01/12/88 35 years
ARIZONA BUILDINGS (2) 05/07/98 35 years
BALA CYNWYD (Pennsylvania) 09/22/93 35 years
BARRACKS ROAD (Virginia) 12/31/85 35 years
BETHESDA ROW (Maryland) 12/31/93 35 years
BLUESTAR (New Jersey) 12/12/88 35 years
BRICK PLAZA (New Jersey) 12/28/89 35 years
BRISTOL (Connecticut) 9/22/95 35 years
BRUNSWICK (New Jersey) 12/12/88 35 years
CALIFORNIA RETAIL BUILDINGS
SANTA MONICA (8) 1996-1998 35 years
SAN DIEGO (5) 1996-1997 35 years
150 POST STREET (San Francisco) 10/23/97 35 years
OTHER (6) 1996-1999 35 years
CLIFTON (New Jersey) 12/12/88 35 years
CONGRESSIONAL PLAZA (Maryland) 04/01/65 35 years
CONNECTICUT RETAIL BUILDINGS (13) 1994-1996 35 years
COURTHOUSE CENTER (Maryland) 12/17/97 35 years
CROSSROADS (Illinois) 07/19/93 35 years
DEDHAM PLAZA (Massachusetts) 12/31/93 35 years
EASTGATE (North Carolina) 12/18/86 35 years
ESCONDIDO PROMENADE (California) 12/31/96 35 years
ELLISBURG CIRCLE (New Jersey) 10/16/92 35 years
FALLS PLAZA (Virginia) 09/30/67 22 3/4 years
FALLS PLAZA - East (Virginia) 10/05/72 25 years
FEASTERVILLE (Pennsylvania) 07/23/80 20 years
FEDERAL PLAZA (Maryland) 06/29/89 35 years
FINLEY SQUARE (Illinois) 04/27/95 35 years
FLORIDA RETAIL BUILDINGS (2) 02/28/96 35 years
FLOURTOWN (Pennsylvania) 04/25/80 35 years
FRESH MEADOWS (New York) 12/05/97 35 years
GAITHERSBURG SQUARE (Maryland) 04/22/93 35 years
GARDEN MARKET (Illinois) 07/28/94 35 years
GOVERNOR PLAZA (Maryland) 10/01/85 35 years
GRATIOT PLAZA (Michigan) 03/29/73 25 3/4 years
HAMILTON (New Jersey) 12/12/88 35 years
HAUPPAUGE (New York) 08/06/98 35 years
HUNTINGTON (New York) 12/12/88 35 years
IDYLWOOD PLAZA (Virginia) 04/15/94 35 years
ILLINOIS RETAIL BUILDINGS (3) 1995-1997 35 years
KINGS COURT (California) 08/24/98 26 years
LANCASTER (Pennsylvania) 04/24/80 22 years
LANGHORNE SQUARE (Pennsylvania) 01/31/85 35 years
LAUREL (Maryland) 08/15/86 35 years
LAWRENCE PARK (Pennsylvania) 07/23/80 22 years
LEESBURG PLAZA (Virginia) 09/15/98 35 years
LOEHMANN'S PLAZA (Virginia) 07/21/83 35 years
|
COLUMN A COLUMN B COLUMN C COLUMN D
-------- -------- -------- --------
Initial cost to company
Cost Capitalized
Building and Subsequent to
Descriptions Encumbrance Land Improvements Acquisition
------------ ----------- ---- ------------ -----------
MAGRUDERS (Maryland) 4,554,000 4,859,000 338,000
MASSACHUSETTS RETAIL BLDG (1) 1,873,000 1,884,000 231,000
MID PIKE PLAZA (Maryland) 10,041,000 10,335,000 5,918,000
NEW JERSEY RETAIL BUILDING (1) 737,000 1,466,000 1,056,000
NEW YORK RETAIL BUILDINGS (4) 7,541,000 7,912,000 6,259,000
NORTHEAST (Pennsylvania) 1,152,000 10,596,000 9,138,000
NORTH LAKE COMMONS (Illinois) 2,782,000 8,604,000 1,485,000
OLD KEENE MILL (Virginia) 638,000 998,000 3,316,000
OLD TOWN CENTER (California) 3,420,000 2,765,000 22,595,000
PAN AM SHOPPING CENTER (Virginia) 8,694,000 12,929,000 2,601,000
PARK & SHOP (District of Columbia) 4,840,000 6,319,000 520,000
PENINSULA (California) 20,880,000 23,288,000 695,000
PERRING PLAZA (Maryland) 2,800,000 6,461,000 14,634,000
PIKE 7 (Virginia) 9,709,000 22,799,000 415,000
QUEEN ANNE PLAZA (Massachusetts) 3,319,000 8,457,000 2,427,000
QUINCE ORCHARD PLAZA (Maryland) 3,197,000 7,949,000 6,004,000
ROLLINGWOOD APTS. (Maryland) 552,000 2,246,000 3,842,000
RUTGERS (New Jersey) 13,035,000 14,429,000 1,328,000
SAUGUS (Massachusetts) 4,383,000 8,291,000 290,000
SHIRLINGTON (Virginia) 9,761,000 14,808,000 4,186,000
TOWER (Virginia) 7,170,000 10,518,000 125,000
TROY (New Jersey) 3,126,000 5,193,000 11,922,000
TYSONS STATION (Virginia) 4,068,000 388,000 453,000 2,538,000
UPTOWN (Oregon) 10,257,000 5,846,000 266,000
WILDWOOD (Maryland) 9,111,000 1,061,000 5,293,000
WILLIAMSBURG (Virginia) 2,758,000 7,160,000 3,412,000
WILLOW GROVE (Pennsylvania) 1,499,000 6,643,000 16,945,000
WILLOW LAWN (Virginia) 3,192,000 7,723,000 43,656,000
WYNNEWOOD (Pennsylvania) 8,055,000 13,759,000 11,571,000
DEVELOPMENT PROJECTS:
PENTAGON ROW (Virginia) 2,955,000 6,130,000
WOODMONT EAST (Bethesda, MD) 6,494,000 4,660,000
TOWN & COUNTRY (California) 41,969,000 1,161,000 17,238,000
TEXAS RETAIL BUILDINGS (12) 13,783,000 1,976,000 5,718,000
TOTALS $172,573,000 $437,196,000 $739,217,000 $545,021,000
============ ============== ============== ==============
COLUMN A COLUMN E COLUMN F COLUMN G
-------- -------- -------- --------
Gross amount at which
carried at close of period Accumulated Date
Building and Depreciation and of
Descriptions Land Improvements Total Amortization Construction
------------ ---- ------------ ----- ------------ ------------
MAGRUDERS (Maryland) 4,554,000 5,197,000 9,751,000 295,000 1955
MASSACHUSETTS RETAIL BLDG (1) 1,873,000 2,115,000 3,988,000 302,000 1930
MID PIKE PLAZA (Maryland) 16,253,000 16,253,000 7,768,000 1963
NEW JERSEY RETAIL BUILDING (1) 737,000 2,522,000 3,259,000 324,000 1940
NEW YORK RETAIL BUILDINGS (4) 7,541,000 14,171,000 21,712,000 566,000 1937-1987
NORTHEAST (Pennsylvania) 1,153,000 19,733,000 20,886,000 8,410,000 1959
NORTH LAKE COMMONS (Illinois) 2,782,000 10,089,000 12,871,000 1,600,000 1989
OLD KEENE MILL (Virginia) 638,000 4,314,000 4,952,000 2,546,000 1968
OLD TOWN CENTER (California) 3,420,000 25,360,000 28,780,000 323,000 1997-1998
PAN AM SHOPPING CENTER (Virginia) 8,694,000 15,530,000 24,224,000 4,244,000 1979
PARK & SHOP (District of Columbia) 4,840,000 6,839,000 11,679,000 876,000 1930
PENINSULA (California) 20,880,000 23,983,000 44,863,000 1,279,000 1960
PERRING PLAZA (Maryland) 2,800,000 21,095,000 23,895,000 8,613,000 1963
PIKE 7 (Virginia) 9,709,000 23,214,000 32,923,000 1,897,000 1968
QUEEN ANNE PLAZA (Massachusetts) 3,319,000 10,884,000 14,203,000 2,177,000 1967
QUINCE ORCHARD PLAZA (Maryland) 2,928,000 14,222,000 17,150,000 4,436,000 1975
ROLLINGWOOD APTS. (Maryland) 572,000 6,068,000 6,640,000 5,488,000 1960
RUTGERS (New Jersey) 15,757,000 15,757,000 4,823,000 1973
SAUGUS (Massachusetts) 4,383,000 8,581,000 12,964,000 804,000 1976
SHIRLINGTON (Virginia) 9,816,000 18,939,000 28,755,000 2,040,000 1940
TOWER (Virginia) 7,170,000 10,643,000 17,813,000 415,000 1953-1960
TROY (New Jersey) 3,126,000 17,115,000 20,241,000 8,740,000 1966
TYSONS STATION (Virginia) 475,000 2,904,000 3,379,000 2,404,000 1954
UPTOWN (Oregon) 10,257,000 6,112,000 16,369,000 401,000 1913- 1959
WILDWOOD (Maryland) 9,111,000 6,354,000 15,465,000 5,480,000 1958
WILLIAMSBURG (Virginia) 2,758,000 10,572,000 13,330,000 4,645,000 1961
WILLOW GROVE (Pennsylvania) 1,499,000 23,588,000 25,087,000 9,409,000 1953
WILLOW LAWN (Virginia) 7,790,000 46,781,000 54,571,000 21,559,000 1957
WYNNEWOOD (Pennsylvania) 8,055,000 25,330,000 33,385,000 1,881,000 1948
DEVELOPMENT PROJECTS:
PENTAGON ROW (Virginia) 9,085,000 9,085,000
WOODMONT EAST (Bethesda, MD) 6,494,000 4,660,000 11,154,000
TOWN & COUNTRY (California) 41,969,000 18,399,000 60,368,000 589,000 1960-1962
TEXAS RETAIL BUILDINGS (12) 13,783,000 7,694,000 21,477,000 var
TOTALS $440,056,000 $1,281,403,000 $1,721,459,000 $317,921,000
============ ============== ============== ============
COLUMN A COLUMN H COLUMN I
-------- -------- --------
Life on which
depreciation in latest
Date income statements
Descriptions Acquired is computed
------------ -------- -----------
MAGRUDERS (Maryland) 12/17/97 35 years
MASSACHUSETTS RETAIL BLDG (1) 09/07/95 35 years
MID PIKE PLAZA (Maryland) 05/18/82 35 years
NEW JERSEY RETAIL BUILDING (1) 08/16/95 35 years
NEW YORK RETAIL BUILDINGS (4) 12/16/97 35 years
NORTHEAST (Pennsylvania) 08/30/83 35 years
NORTH LAKE COMMONS (Illinois) 04/27/94 35 years
OLD KEENE MILL (Virginia) 06/15/76 33 1/3 years
OLD TOWN CENTER (California) 10/22/97 35 years
PAN AM SHOPPING CENTER (Virginia) 02/05/93 35 years
PARK & SHOP (District of Columbia) 12/01/95 35 years
PENINSULA (California) 12/19/97 35 years
PERRING PLAZA (Maryland) 10/01/85 35 years
PIKE 7 (Virginia) 03/31/97 35 years
QUEEN ANNE PLAZA (Massachusetts) 12/23/94 35 years
QUINCE ORCHARD PLAZA (Maryland) 04/22/93 35 years
ROLLINGWOOD APTS. (Maryland) 01/15/71 25 years
RUTGERS (New Jersey) 12/12/88 35 years
SAUGUS (Massachusetts) 10/01/96 35 years
SHIRLINGTON (Virginia) 12/21/95 35 years
TOWER (Virginia) 08/24/98 35 years
TROY (New Jersey) 07/23/80 22 years
TYSONS STATION (Virginia) 01/17/78 17 years
UPTOWN (Oregon) 09/26/97 35 years
WILDWOOD (Maryland) 05/05/69 33 1/3 years
WILLIAMSBURG (Virginia) 04/30/86 35 years
WILLOW GROVE (Pennsylvania) 11/20/84 35 years
WILLOW LAWN (Virginia) 12/05/83 35 years
WYNNEWOOD (Pennsylvania) 10/29/96 35 years
DEVELOPMENT PROJECTS:
PENTAGON ROW (Virginia) 1998
WOODMONT EAST (Bethesda, MD) 06/03/97
TOWN & COUNTRY (California) 03/05/97 35 years
TEXAS RETAIL BUILDINGS (12) 1998-1999 35 years
TOTALS
|
FEDERAL REALTY INVESTMENT TRUST
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED
DEPRECIATION - CONTINUED
Three Years Ended December 31, 1999
Balance, January 1, 1997 $1,147,865,000
Additions during period
Acquisitions 275,207,000
Improvements 59,969,000
Deduction during period - disposition
of property and miscellaneous retirements (29,402,000)
---------------
Balance, December 31, 1997 1,453,639,000
Additions during period
Acquisitions 120,434,000
Improvements 73,296,000
Deduction during period - disposition
of property and miscellaneous retirements (5,233,000)
---------------
Balance, December 31, 1998 1,642,136,000
Additions during period
Acquisitions 26,355,000
Improvements 95,148,000
Deduction during period - disposition
of property and miscellaneous retirements and impairments (42,180,000)
---------------
$1,721,459,000
===============
Balance, December 31, 1999
|
(A) For Federal tax purposes, the aggregate cost basis is approximately $1,537,033,000 as of December 31, 1999.
FEDERAL REALTY INVESTMENT TRUST
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED
DEPRECIATION - CONTINUED
Three Years Ended December 31, 1999
Balance, January 1, 1997 $223,553,000
Additions during period
Depreciation and amortization expense 38,053,000
Deductions during period - disposition of
property and miscellaneous retirements (14,109,000)
--------------
Balance, December 31, 1997 247,497,000
Additions during period
Depreciation and amortization expense 42,542,000
Deductions during period - disposition of
property and miscellaneous retirements (3,986,000)
--------------
Balance, December 31, 1998 286,053,000
Additions during period
Depreciation and amortization expense 46,133,000
Deductions during period - disposition of
property and miscellaneous retirements (14,265,000)
--------------
Balance, December 31, 1999 $317,921,000
==============
|
FEDERAL REALTY INVESTMENT TRUST
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE
Year Ended December 31, 1999
Column A Column B Column C Column D
---------------------------- -------------------------- -------------------------- --------------------------------
Periodic Payment
Description of Lien Interest Rate Maturity Date Terms
---------------------------- -------------------------- -------------------------- --------------------------------
Leasehold mortgage 10% December 2003 Interest only
on shopping monthly; $10,000,000
center in New Jersey balloon payment due
at maturity
Mortgages on retail 10% September 2000 Interest only monthly;
buildings in Florida balloon payment due
and Pennsylvania at maturity
Land in San Jose, 10% December 2003 Interest only monthly;
California balloon payment due
at maturity
Mortgage on 10% March 2000 Interest only
shopping center monthly; balloon
in New Jersey payment due at maturity
Mortgage on retail Greater of prime plus May 2021 Interest only
buildings in Philadelphia 2% or 10% monthly; balloon payment
due at maturity
Mortgage on retail 10% plus participation May 2021 Interest only; balloon
buildings in Philadelphia payment due at maturity
Mortgage on land in 10% plus participation May 2007 None. Balloon and
Santa Monica, California accrued interest due at
maturity
Mortgage on land in 10% plus participation July 2001 None. Balloon and
Santa Monica, California accrued interest due at
maturity
|
Column A Column E Column F Column G
---------------------------- -------------- -------------- ----------------
Carrying
Face Amount Amount of
Description of Lien Prior Liens of Mortgages Mortgages (1)
---------------------------- -------------- -------------- ----------------
Leasehold mortgage --- $10,000,000 $10,000,000 (2)
on shopping
center in New Jersey
Mortgages on retail 11,548,000 11,548,000
buildings in Florida
and Pennsylvania
Land in San Jose, 4,250,000 4,250,000
California
Mortgage on --- 4,020,000 3,208,000 (3)
shopping center
in New Jersey
Mortgage on retail 25,000,000 7,817,000 (4)
buildings in Philadelphia
Mortgage on retail 9,250,000 9,250,000
buildings in Philadelphia
Mortgage on land in 2,272,000 4,155,000
Santa Monica, California plus accrued
interest and
development cost
Mortgage on land in 2,569,000 3,267,000
Santa Monica, California plus accrued
interest and
development cost
-------------- -------------- ----------------
--- $68,909,000 $53,495,000
============== ============== ================
|
1) For Federal tax purposes, the aggregate tax basis is approximately
$53,495,000 as of December 31, 1999. No payments are delinquent on these
mortgages.
2) This mortgage is extendable for up to 45 years with interest increasing to a
maximum of 11%. 3) This mortgage is available for up to $4,020,000. At
December 31, 1999, $3,208,000 was outstanding.
4) This mortgage is available for up to $25,000,000.
FEDERAL REALTY INVESTMENT TRUST
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE - CONTINUED
Three Years Ended December 31, 1999
Balance, January 1, 1997 $27,913,000
Additions during period
Issuance of loan 14,072,000
Deductions during period
Collection of loan (3,625,000)
------------
Balance, December 31, 1997 38,360,000
Additions during period
Issuance of loan 21,375,000
Deductions during period
Collection of loan (8,581,000)
------------
Balance, December 31, 1998 51,154,000
Additions during period
Issuance of loans 2,516,000
Deductions during period
Collection of loan (175,000)
------------
Balance, December 31, 1999 $53,495,000
============
|
EXHIBIT 4 (I)
THE TRUST BY AMENDMENT AND
RESTATEMENT OF ITS DECLARATION SEE REVERSE FOR IMPORTANT NOTICE ON
OF TRUST HAS CHANGED ITS GOVERNING TRANSFER RESTRICTIONS AND OTHER INFORMATION
LAW TO THE STATE OF MARYLAND. SEE
REVERSE FOR IMPORTANT NOTICE [PHOTO]
REGARDING GOVERNING DOCUMENTS AND
PAR VALUE PER SHARE.
-------- --------
NUMBER SHARES
-------- --------
CUSIP 313747 20 6
FEDERAL REALTY INVESTMENT TRUST
A BUSINESS TRUST ORGANIZED UNDER THE LAWS OF THE DISTRICT OF COLUMBIA
(GOVERNING LAW CHANGED TO THE STATE OF MARYLAND)
This certifies that
is the owner of
FULLY PAID AND NON-ASSESSABLE COMMON SHARES OF BENEFICIAL INTEREST, NO PAR
VALUE, IN
Federal Realty Investment Trust, transferable on the books of the Trust in person or by attorney duly authorized in writing upon
surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be held
subject to all provisions of the Trust's Declaration of Trust and any amendments thereof, copies of which are on file with the
transfer agent, to all the provisions of which the holder hereof by acceptance of this certificate assents. This certificate is not
valid until countersigned and registered by the transfer agent and registrar. Witness the facsimile Seal of the Trust and the
facsimile signatures of its Trustees or officers.
[SEAL]
Dated:
Countersigned and Registered:
AMERICAN STOCK TRANSFER & TRUST COMPANY
(New York, N.Y.) Transfer Agent
and Registrar,
Authorized Signature.
By: /s/ Steven J. Guttman By: /s/ Nancy J. Herman
PRESIDENT SECRETARY
|
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM- as tenants in common UNIF GIFT MIN ACT-D...................Custodian ......................
TEN ENT- as tenants by the entireties (Cust) (Minor)
JT TEN- as joint tenants with right under Uniform Gifts to Minors
of survivorship and not as tenants Act............................................
in common (State)
|
Additional abbreviations may also be used though not in the above list.
For Value received,____________________ hereby sell, assign and transfer unto
__________________________________________________________________ Common Shares
of Beneficial Interest represented by the within Certificate, and do hereby irrevocably constitute and appoint _____________________________________________ Attorney to transfer the said Shares on the books of the within-named Trust with full power of substitution in the premises.
Dated,________________
(Sign here)_______________________________________
SIGNATURE(S) GUARANTEED:______________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCK-BROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.
THE TRUST WILL FURNISH TO ANY SHAREHOLDER, ON REQUEST AND WITHOUT CHARGE, A FULL STATEMENT OF THE INFORMATION REQUIRED BY SECTION 8-203(d) OF THE CORPORATIONS AND ASSOCIATIONS ARTICLE OF THE ANNOTATED CODE OF MARYLAND WITH RESPECT TO THE DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS AND OTHER DISTRIBUTIONS, QUALIFICATIONS, AND TERMS AND CONDITIONS OF REDEMPTION OF THE SHARES OF EACH CLASS OF BENEFICIAL INTEREST WHICH THE TRUST HAS AUTHORITY TO ISSUE AND, IF THE TRUST IS AUTHORIZED TO ISSUE ANY PREFERRED OR SPECIAL CLASS IN SERIES, (i) THE DIFFERENCES IN THE RELATIVE RIGHTS AND PREFERENCES BETWEEN THE SHARES OF EACH SERIES TO THE EXTENT SET, AND (ii) THE AUTHORITY OF THE BOARD OF TRUSTEES TO SET SUCH RIGHTS AND PREFERENCES OF SUBSEQUENT SERIES. THE FOREGOING SUMMARY DOES NOT PURPORT TO BE COMPLETE AND IS SUBJECT TO AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE DECLARATION OF TRUST OF THE TRUST, A COPY OF WHICH WILL BE SENT WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS. SUCH REQUEST MUST BE MADE TO THE SECRETARY OF THE TRUST AT ITS PRINCIPAL OFFICE OR TO THE TRANSFER AGENT.
THE TRUST WILL FURNISH A FULL STATEMENT OF THE RESTRICTIONS ON TRANSFERABILITY TO ANY SHAREHOLDER OF THE TRUST ON REQUEST AND WITHOUT CHARGE. SUCH REQUEST MUST BE MADE TO THE SECRETARY OF THE TRUST AT ITS PRINCIPAL OFFICE OR TO THE TRANSFER AGENT.
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN
RIGHTS AS SET FORTH IN AN AMENDED AND RESTATED RIGHTS AGREEMENT BETWEEN FEDERAL
REALTY INVESTMENT TRUST AND AMERICAN STOCK TRANSFER & TRUST COMPANY (THE "RIGHTS
AGENT") DATED AS OF MARCH 11, 1999 (THE "RIGHTS AGREEMENT"), THE TERMS OF WHICH
ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT
THE PRINCIPAL OFFICES OF FEDERAL REALTY INVESTMENT TRUST. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS MAY BE
REDEEMED, MAY EXPIRE, OR MAY BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO
LONGER BE EVIDENCED BY THIS CERTIFICATE. FEDERAL REALTY INVESTMENT TRUST WILL
MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT
CHARGE WITHIN FIVE DAYS AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS ISSUED TO ACQUIRING PERSONS (AS DEFINED IN THE
RIGHTS AGREEMENT) OR CERTAIN RELATED PERSONS AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID WITH RESPECT TO CERTAIN RIGHTS SET FORTH IN
SECTION 11(a)(ii) AND SECTION 13(a) OF THE RIGHTS AGREEMENT.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR DESTROYED, THE TRUST WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE
ISSUANCE OF A REPLACEMENT CERTIFICATE.
EXHIBIT 4 (II)
SERIES A SERIES A
CUMULATIVE REDEEMABLE CUMULATIVE REDEEMABLE
PREFERRED SHARES PREFERRED SHARES
$0.01 PAR VALUE PER SHARE [PHOTO] $0.01 PAR VALUE PER SHARE
LIQUIDATION PREFERENCE LIQUIDATION PREFERENCE
$25.00 PER SHARE $25.00 PER SHARE
-------- --------
NUMBER SHARES
P 1168
-------- --------
THE TRUST BY AMENDMENT AND
RESTATEMENT OF ITS DECLARATION
OF TRUST HAS CHANGED ITS GOVERNING CUSIP 313747 40 4
LAW TO THE STATE OF MARYLAND. SEE
REVERSE FOR IMPORTANT NOTICE SEE REVERSE FOR IMPORTANT NOTICE ON
REGARDING GOVERNING DOCUMENTS. TRANSFER RESTRICTIONS AND OTHER INFORMATION
FEDERAL REALTY INVESTMENT TRUST
A BUSINESS TRUST ORGANIZED UNDER THE LAWS OF THE DISTRICT OF COLUMBIA
(GOVERNING LAW CHANGED TO THE STATE OF MARYLAND)
This certifies that
is the owner of
FULLY PAID AND NON-ASSESSABLE SERIES A CUMULATIVE REDEEMABLE PREFERRED SHARES, $0.01 PAR VALUE PER SHARE, IN
Federal Realty Investment Trust, transferable on the books of the Trust in person or by attorney duly authorized in
writing upon surrender of this certificate properly endorsed. This certificate and the shares represented hereby are
issued and shall be held subject to all provisions of the Trust's Declaration of Trust and any amendments thereof, copies
of which are on file with the transfer agent, to all the provisions of which the holder hereof by acceptance of this
certificate assents. This certificate is not valid until countersigned and registered by the transfer agent and registrar.
Witness the facsimile Seal of the Trust and the facsimile signatures of its duly authorized officers.
[SEAL]
Dated: Countersigned and Registered:
AMERICAN STOCK TRANSFER & TRUST COMPANY
(New York, N.Y.) Transfer Agent
and Registrar
By:
/s/ Steven J. Guttman /s/ Nancy J. Herman
PRESIDENT SECRETARY Authorized Signature
|
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM-D - as tenants in common UNIF GIFT MIN ACT-D.................... Custodian ....................
TEN ENT-D - as tenants by the entireties (Cust) (Minor)
JT TEN-D - as joint tenants with right under Uniform Gifts to Minors
of survivorship and not as tenants Act...................................
in common (State)
|
Additional abbreviations may also be used though not in the above list.
For Value received,___________________________ hereby sell, assign and transfer unto
_____________________________________________________ Series A Cumulative Preferred Shares, $0.01 par value, represented by the within Certificate, and do hereby irrevocably constitute and appoint ______________________________________
Dated, _____________________________
(Sign here)_______________________________________
SIGNATURE(S) GUARANTEED: ______________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR DESTROYED, THE TRUST WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE.
EXHIBIT 10(x)(x)(v)(i)(i)
THIS AMENDED AND RESTATED SEVERANCE AGREEMENT ("Amended and Restated Severance Agreement"), made and entered into as of this 27th day of December, 1999 by and between FEDERAL REALTY INVESTMENT TRUST, a Maryland real estate investment trust ("Employer"), and NANCY J. HERMAN ("Employee").
WHEREAS, Employee and Employer entered into a Severance Agreement ("Severance Agreement") dated as of August 25, 1999; and
WHEREAS, Employee and Employer wish to amend and restate that Severance Agreement as set forth herein;
NOW THEREFORE, in consideration of the foregoing, of the mutual promises herein contained and of other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
(a) by Employer other than with Cause (as "Cause" is defined in
Section 5 hereof);
(b) by Employee within six (6) months following the occurrence of one or more of the following events:
(i) the nature of Employee's duties or the scope of Employee's
responsibilities or authority as of the date first written
above are materially modified by Employer without
Employee's written consent where such material
modification constitutes an actual or constructive
demotion of Employee; provided, however, that a change in
the position(s) to whom Employee reports shall not by
itself constitute a material modification of Employee's
responsibilities; provided, further, that if Employee
voluntarily becomes an employee of an affiliate of the
Employer in connection with a Spin-off (as defined in
Section 17) of that affiliate, the nature of Employee's
duties and the scope of responsibilities and authority
referred to above in this paragraph (i) shall mean those
as in effect as of the first day of employment with the
affiliate following the Spin-off and not those in effect
with the Employer as of the date first written above;
(ii) Employer changes the location of its principal office to outside a fifty (50) mile radius of Washington, D.C.;
(iii) Employer's setting of Employee's base salary for any year at an amount which is less than ninety percent (90%) of the greater of (A) Employee's base salary for 1999, or (B) Employee's highest base salary during the three (3) then most recent calendar years (including the year of termination), regardless of whether such salary reduction occurs in one year or over the course of years; and
(iv) this Amended and Restated Severance Agreement is not expressly assumed by any successor (directly or indirectly, whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Employer.
3(d), "salary" shall be an amount equal to (i) the greater of (A) Employee's highest annual base salary paid during the previous three (3) years or (B) Employee's annual base salary in the year of termination, plus (ii) the greatest annual aggregate amount of any cash and/or stock bonus paid to Employee in respect of any of the three (3) fiscal years immediately preceding such termination (it being understood and agreed that such amount shall not include compensation paid pursuant to performance share awards). For purposes of the preceding sentence: (i) a stock bonus will be considered to have been paid in respect of a particular year if (A) in the case of a bonus paid under Employer's 1999 Incentive Bonus Plan (as the same may be amended from time or time, or any successor plan, the "Bonus Plan"), the stock bonus was awarded in respect of that year, even if it did not vest in that year, or (B) in the case of any other stock bonus, the shares vested in that year (other than as a result of the Termination Without Cause); and (ii) a stock bonus will be valued (A) in the case of a bonus paid under the Bonus Plan, at a figure equal to the number of shares awarded, multiplied by the per-share value (closing price) on the date on which the bonus was approved by the Compensation Committee of Employer's Board of Trustees, and (B) in the case of any other stock bonus, at a figure equal to the number of shares that vested, multiplied by the per-share value (closing price) on the date on which they vested. Payment also will be made for vacation time that has accrued, but is unused as of the date of termination.
benefit of Employee and pays the annual premiums associated therewith, subject to the limitations of the policy; and (iv) pays the annual premiums associated with Employee's continued participation, at not less than Employee's highest levels of coverage prior to Termination Without Cause, under Employer's group long-term disability policy for a period of one (1) year following Termination Without Cause, subject to the limitations of the policy. Notwithstanding the foregoing, Employee shall be required to pay the premiums and any other costs of such Full Benefits in the same dollar amount that Employee was required to pay for such costs immediately prior to Termination Without Cause.
Employer, Employee shall give sixty (60) days' written notice to Employer of such termination, or (ii) if Employee is an executive officer of Employer, Employee shall give ninety (90) days' written notice to Employer of such termination.
(j) Notwithstanding the foregoing provisions of this Agreement, it shall not be considered a Termination Without Cause in the event that the Employee voluntarily becomes an employee of an affiliate of the Employer in connection with a Spin-off of that affiliate if the Employer has assigned this Agreement to the affiliate as contemplated in Section 17 and the affiliate has assumed the obligations hereunder.
(a) failure (other than failure due to disability) to substantially perform his or her duties with Employer or an affiliate thereof; which failure remains uncured after written notice thereof and the expiration of a reasonable period of time thereafter in which Employee is diligently pursuing cure ("Failure to Perform");
(b) willful conduct which is demonstrably and materially injurious to Employer or an affiliate thereof, monetarily or otherwise;
(c) breach of fiduciary duty involving personal profit; or
(d) willful violation in the course of performing his or her duties for Employer of any law, rule or regulation (other than traffic violations or misdemeanor offenses). No act or failure to act shall be considered willful unless done or omitted to be done in bad faith and without reasonable belief that the action or omission was in the best interest of Employer.
employment. No payment shall be made for bonus or other compensation. Payment also will be made for accrued, but unused vacation time.
(i) An acquisition in one or more transactions (other than directly from Employer or pursuant to options granted by Employer) of any voting securities of Employer (the "Voting Securities") by any "Person" (as the term is used for purposes of Section 13(d) or 14(d) of the Securities Act of 1934, as amended (the "Exchange Act")) immediately after which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the combined voting power of Employer's then outstanding Voting Securities; provided, however, in determining whether a Change in Control has occurred, Voting Securities which are acquired in a "Non- Control Acquisition" (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A "Non-Control Acquisition" shall mean an acquisition by (A) an employee benefit plan (or a trust forming a part thereof) maintained by (1) Employer or (2) any corporation or other Person of which a majority of its voting power or its equity securities or equity interest is owned directly or indirectly by Employer (a "Subsidiary"), (B) Employer or any Subsidiary, or (C) any Person in connection with a "Non-Control Transaction" (as hereinafter defined);
(ii) The individuals who, as of the date of this Amended and Restated Severance Agreement, are members of the Board of Trustees (the "Incumbent Trustees"), cease for any reason to constitute at least two-thirds of the Board; provided, however, that if the election, or nomination for election by Employer's shareholders, of any new member was approved by a vote of at least two-thirds of the Incumbent Trustees, such new member shall, for purposes of this Amended and Restated Severance Agreement, be considered as a member of the Incumbent Trustees; provided, further, however, that no individual shall be considered a member of the Incumbent Trustees if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Trustees (a "Proxy Contest") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or
(iii) Approval by shareholders of Employer of
(A) A merger, consolidation or reorganization involving Employer, unless:
(1) the shareholders of Employer, immediately before such merger, consolidation or reorganization, own, directly or indirectly immediately following such merger, consolidation or reorganization, at least a majority of the combined voting power of the outstanding voting securities of the Person resulting from such merger or consolidation or reorganization (the "Surviving Person") in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation or reorganization,
(2) the individuals who were members of the Incumbent Trustees immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least two-thirds of the members of the board of directors of the Surviving Person,
(3) no Person (other than Employer or any Subsidiary, any employee benefit plan (or any trust forming a part thereof) maintained by Employer, or any Subsidiary, or any Person which, immediately prior to such merger, consolidation or reorganization had Beneficial Ownership of 20% or more of the then outstanding Voting Securities) has Beneficial Ownership of 20% or more of the combined voting power of the Surviving Person's then outstanding voting securities, and
(4) a transaction described in clauses (1) through
(3) shall herein be referred to as a "Non-Control Transaction;"
(B) A complete liquidation or dissolution of Employer; or
(C) An agreement for the sale or other disposition of all or substantially all of the assets of Employer to any Person (other than a transfer to a Subsidiary).
(iv) Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) solely because any Person (the "Subject Person") acquired Beneficial Ownership of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by Employer which, by reducing the number of Voting Securities outstanding, increases the proportional number of Voting Securities Beneficially Owned by the Subject Person; provided, however, that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by Employer, and after such share acquisition by Employer, the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then a Change in Control shall occur; or (B) if Employer (1) establishes a wholly-owned subsidiary ("Holding Company"), (2) causes the Holding Company to establish a wholly-owned subsidiary ("Merger Sub"), and (3) merges with Merger Sub, with Employer as the surviving entity (such transactions
collectively are referred as the "Reorganization"). Immediately following the completion of the Reorganization, all references to the Voting Securities shall be deemed to refer to the voting securities of the Holding Company.
(v) Notwithstanding anything contained in this Amended and Restated Severance Agreement to the contrary, if Employee's employment is terminated while this Amended and Restated Severance Agreement is in effect and Employee reasonably demonstrates that such termination (A) was at the request of a third party who has indicated an intention or taken steps reasonably calculated to effect a Change in Control and who effectuates a Change in Control (a "Third Party") or (B) otherwise occurred in connection with, or in anticipation of, a Change in Control which actually occurs, then for all purposes of this Amended and Restated Severance Agreement, the date of a Change in Control with respect to Employee shall mean the date immediately prior to the date of such termination of Employee's employment.
(i) Employer shall pay to Employee a single cash payment equal to the amount described in Section 3(d) above (without giving effect to any accelerated vesting which may have occurred as a result of the Change in Control). If Employee's employment is terminated by Employee by a written notice which specifies a Termination Date at least five (5) business days later than the date of such notice, the payment shall be made on the Termination Date. If Employee gives less than five (5)
business days notice, then such payment shall be made within five (5) business days of the date of such notice;
(ii) Employee shall receive Full Benefits for one (1) year following the Termination Date;
(iii) Employer, to the extent legally permissible, shall continue to provide to Employee all other officer perquisites, allowances, accommodations of employment, and benefits on the same terms and conditions as such are from time to time made available generally to the other officers of Employer but in no event less than the highest level of the perquisites, allowances, accommodations of employment and benefits that were available to Employee during the last twelve (12) months of Employee's employment prior to the Change in Control for a period of one (1) year following the Termination Date;
(iv) For the purposes of this Section 8(c), Employee's right to receive officer perquisites, allowances and accommodations of employment is intended to include (A) Employee's right to have Employer provide Employee for a period not to exceed six (6) months from Employee's Termination Date with a telephone number assigned to Employee at Employer's offices, telephone mail and a secretary to answer the telephone; provided, however, such benefits described in this Section 8(c)(iv)(A) shall not include an office or physical access to Employer's offices and will cease upon the commencement by Employee of employment with another employer, and (B) Employee's right to have Employer make available at Employer's expense to Employee at Employee's option the services of an employment search/outplacement agency selected by Employee for a period not to exceed six (6) months.
(v) Upon the occurrence of a Change in Control, all restrictions on the receipt of any option to acquire or grant of Voting Securities to Employee shall lapse and such option shall become immediately and fully exercisable. Notwithstanding any applicable restrictions or any agreement to the contrary, Employee may exercise any options to acquire Voting Securities as of the Change in Control by delivery to Employer of a written notice dated on or prior to the expiration of the stated term of the option.
(i) Except as provided in subsection (ii) below, Employer shall within five (5) business days of receipt of written notice from Employee given at any time after the occurrence of a Change in Control but prior to the latest stated expiration date of any option held by Employee on the date of the Change in Control, redeem any Voting Securities held by Employee (whether acquired by exercise of any such option or grant or otherwise), at a price equal to the average closing price of Voting Securities as quoted on the New York Stock Exchange, or if such Voting Securities are not listed
thereon, then the average of the closing "bid" and "ask" prices per share in the over-the-counter securities market for the fifteen (15) trading days prior to the date of such notice;
(ii) If, during the fifteen (15) day trading period, Voting Securities are not listed, quoted or reported on any publicly traded securities market for at least two-thirds (2/3) of the days included in such period, then the redemption price shall be determined as follows: (A) Employee shall designate in a written notice to Employer an appraiser to appraise the value of the Voting Securities to be redeemed; (B) within ten (10) business days of receipt of such notice Employer shall designate an appraiser to appraise the value of the Voting Securities to be redeemed, (C) such designated appraisers shall together designate, within ten (10) business days of the date the appraiser is designated by Employer, a third appraiser to appraise the value of such Voting Securities, (D) each appraiser shall value such Voting Securities within twenty (20) business days of the designation of the third appraiser using generally accepted appraisal methods for valuing such securities based upon the value of all of Employer's assets less all of its liabilities without giving effect for any costs of liquidation or distress sale, if otherwise applicable, and (E) the average of the three (3) values determined by the three (3) appraisers shall constitute the price at which Employer must redeem the Voting Securities covered by Employee's written notice within five (5) business days of the completion of this appraisal process. All costs and expenses associated with any appraisal prepared pursuant to this Section 8(d)(ii) shall be borne entirely by Employer.
(i) In the event that any payment or benefit (within the meaning of Section 280G(b)(2) of the Code) that is provided for hereunder (other than the payment provided for in this Section 8(e)(i)) to be paid to or for the benefit of Employee (including, without limitation, the payments or benefits provided for under any provision of this Section 8) or payments or benefits under any other plan, agreements or arrangement between Employee and Employer (a "Payment" or "Payments"), be determined or alleged to be subject to an excise or similar purpose tax pursuant to Section 4999 of the Code or any successor or other comparable federal, state, or local tax laws or any interest or penalties incurred by Employee with respect to such excise or similar purpose tax (such excise tax, together with any such interest and penalties, hereinafter collectively referred to as the "Excise Tax") Employer shall pay to Employee such additional compensation as is necessary (after taking into account all federal, state and local taxes (including any interest and penalties imposed with respect to such taxes), including any income or Excise Tax, payable by Employee as a result of the receipt of such additional compensation) (a "Gross- Up Payment") to place Employee in the same after-tax position (including federal, state and local taxes) Employee would have been in had no such Excise Tax been paid or incurred.
(ii) All mathematical determinations, and all determinations as
to whether any of the Total Payments are "parachute payments" (within the
meaning of Section 280G of the Code), that are required to be made under this
Section 8(e), including determinations as to whether a Gross-Up Payment is
required, and the amount of such Gross-Up Payment, shall be made by an
independent accounting firm selected by the Employee from among the six (6)
largest accounting firms in the United States (the "Accounting Firm"), which
shall provide its determination (the "Determination"), together with detailed
supporting calculations regarding the amount of any Gross-Up Payment and any
other relevant matter, both to Employer and the Employee by no later than ten
(10) days following the Termination Date, if applicable, or such earlier time as
is requested by Employer or the Employee (if the Employee reasonably believes
that any of the Payments may be subject to the Excise Tax). If the Accounting
Firm determines that no Excise Tax is payable by the Employee, it shall furnish
the Employee and Employer with a written statement that such Accounting Firm has
concluded that no Excise Tax is payable (including the reasons therefor) and
that the Employee has substantial authority not to report any Excise Tax on her
federal income tax return. If a Gross-Up Payment is determined to be payable, it
shall be paid to the Employee within twenty (20) days after the Determination
(and all accompanying calculations and other material supporting the
Determination) is delivered to Employer by the Accounting Firm. The cost of
obtaining the Determination shall be borne by Employer, any determination by the
Accounting Firm shall be binding upon Employer and the Employee, absent manifest
error. Without limiting the obligation of Employer hereunder, Employee agrees,
in the event that Employer makes a Gross-Up Payment to cover any Excise Tax, to
negotiate with Employer in good faith with respect to procedures reasonably
requested by Employer which would afford Employer the ability to contest the
imposition of such Excise Tax; provided, however, that Employee will not be
required to afford Employer any right to contest the applicability of any such
Excise Tax to the extent that Employee reasonably determines (based upon the
opinion of the Accounting Firm) that such contest is inconsistent with the
overall tax interest of Employee.
(iii) As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that a Gross-Up Payment (or a portion thereof) will be paid which should not have been paid (an "Excess Payment") or a Gross-Up Payment (or a portion thereof) which should have been paid will not have been paid (an "Underpayment"). An Underpayment shall be deemed to have occurred (A) upon notice (formal or informal) to Employee from any governmental taxing authority that Employee's tax liability (whether in respect of Employee's current taxable year or in respect of any prior taxable year) may be increased by reason of the imposition of the Excise Tax on a Payment or Payments with respect to which Employer has failed to make a sufficient Gross-Up Payment, (B) upon determination by a court, (C) by reason of determination by Employer (which shall include the position taken by Employer, together with its consolidated group, on its federal income tax return) or (D) upon the resolution of the Dispute to Employee's satisfaction. If an Underpayment occurs, Employee shall
promptly notify Employer and Employer shall promptly, but in any event, at least five (5) days prior to the date on which the applicable governmental taxing authority has requested payment, pay to Employee an additional Gross-Up Payment equal to the amount of the Underpayment plus any interest and penalties (other than interest and penalties imposed by reason of Employee's failure to file a timely tax return or pay taxes shown due on Employee's return where such failure is not due to Employer's actions or omissions) imposed on the Underpayment. An Excess Payment shall be deemed to have occurred upon a "Final Determination" (as hereinafter defined) that the Excise Tax shall not be imposed upon a Payment or Payments (or a portion thereof) with respect to which Employee had previously received a Gross-Up Payment. A "Final Determination" shall be deemed to have occurred when Employee has received from the applicable governmental taxing authority a refund of taxes or other reduction in Employee's tax liability by reason of the Excess Payment and upon either (x) the date a determination is made by, or an agreement is entered into with, the applicable governmental taxing authority which finally and conclusively binds Employee and such taxing authority, or in the event that a claim is brought before a court of competent jurisdiction, the date upon which a final determination has been made by such court and either all appeals have been taken and finally resolved or the time for all appeals has expired or (y) the statute of limitations with respect to Employee's applicable tax return has expired. If an Excess Payment is determined to have been made, the amount of the Excess Payment shall be treated as a loan by Employer to Employee and Employee shall pay to Employer on demand (but not less than ten (10) days after the determination of such Excess Payment and written notice has been delivered to Employee) the amount of the Excess Payment plus interest at an annual rate equal to the Applicable Federal Rate provided for in Section 1274(d) of the Code from the date the Gross-Up Payment (to which the Excess Payment relates) was paid to Employee until date of repayment of the Excess Payment to Employer.
(iv) Notwithstanding anything contained in this Section 8 to the contrary, in the event that, according to the Final Determination, an Excise Tax will be imposed on any Payment or Payments, Employer shall pay to the applicable governmental taxing authorities as Excise Tax withholding, the amount of the Excise Tax that Employer has actually withheld from the Payment or Payments.
policy or arrangement with Employer) are not so paid promptly at the times provided herein or therein, such amounts shall accrue interest, compounded daily at the annual percentage rate which is three percentage points (3%) above the interest rate which is announced by The Riggs National Bank (Washington, D.C.) from time to time as its prime lending rate, from the date such amounts were required or determined to have been paid or payable or reimbursed or reimbursable to Employee until such amounts and any interest accrued thereon are finally and fully paid; provided, however, that in no event shall the amount of interest contracted for, charged or received hereunder exceed the maximum non- usurious amount of interest allowed by applicable law.
(a) Any controversy, claim or dispute arising out of or relating to this Amended and Restated Severance Agreement or the breach thereof shall be settled by arbitration in accordance with the then existing Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The parties irrevocably consent to the jurisdiction of the federal and state courts located in Maryland for this purpose. Each such arbitration proceeding shall be located in Maryland.
(b) The arbitrator(s) may, in the course of the proceedings, order any provisional remedy or conservatory measure (including, without limitation, attachment, preliminary injunction or the deposit of specified security) that the arbitrator(s) consider to be necessary, just and equitable. The failure of a party to comply with such an interim order may, after due notice and opportunity to cure with such noncompliance, be treated by the arbitrator(s) as a default, and some or all of the claims or defenses of the defaulting party may be stricken and partial or final award entered against such party, or the arbitrator(s) may impose such lesser sanctions as the arbitrator(s) may deem appropriate. A request for interim or provisional relief by a party to a court shall not be deemed incompatible with the agreement to arbitrate or a waiver of that agreement.
(c) The parties acknowledge that any remedy at law for breach of this Amended and Restated Severance Agreement may be inadequate, and that, in the event of a breach by Employee of Sections 10 or 16, any remedy at law would be inadequate in that such breach would cause irreparable competitive harm to Employer. Consequently, in addition to any other relief that may be available, the arbitrator(s) also may order permanent injunctive relief, including, without limitation, specific performance, without the necessity of the prevailing party proving actual damages and without regard to the adequacy of any remedy at law.
(d) In the event that Employee is the prevailing party in such arbitration, then Employee shall be entitled to reimbursement by Employer for all reasonable legal and other professional fees and expenses incurred by Employee in such arbitration or in enforcing the award, including reasonable attorney's fees.
(e) The parties agree that the results of any such arbitration proceeding shall be conclusive and binding upon them.
(a) During the term of his or her employment by or with Employer, and for one (1) year from the date of the termination of Employee's employment with Employer (the "Post Termination Period"), Employee shall not, without the prior written consent of Employer, for himself or herself or on behalf of or in conjunction with any other person, persons, company, firm, partnership, corporation, business, group or other entity (each, a "Person"), work on or participate in the acquisition, leasing, financing, pre-development or development of any project or property which was considered and actively pursued by Employer or its affiliates for acquisition, leasing,
financing, pre-development or development within one year prior to the date of termination of Employee's employment.
(b) During the term of his or her employment by or with Employer, and thereafter during the Post Termination Period, Employee shall not, for any reason whatsoever, directly or indirectly, for himself or herself or on behalf of or in conjunction with any other Person:
(i) so that Employer may maintain an uninterrupted workforce, solicit and/or hire any Person who is at the time of termination of employment, or has been within six (6) months prior to the time of termination of Employee's employment, an employee of Employer or its affiliates, for the purpose or with the intent of enticing such employee away from or out of the employ of Employer or its affiliates, provided that Employee shall be permitted to call upon and hire any member of the Employee's immediate family;
(iii) solicit, induce or attempt to induce any Person who is or that is, at the time of termination of Employee's employment, or has been within six (6) months prior to the time of termination of Employee's employment, a tenant, supplier, licensee or consultant of, or provider of goods or services to Employer or its affiliates, for the purpose or with the intent of (A) inducing or attempting to induce such Person to cease
doing business with Employer or its affiliates or (B) in any way interfering with the relationship between such Person and Employer or its affiliates.
(c) The above notwithstanding, the restrictions contained in subsections (a) and (b) above shall not apply to Employee in the Post-Termination Period in the event that Employee has ceased to be employed by Employer under circumstances described in Section 8 of this Amended and Restated Severance Agreement.
(d) Because of the difficulty of measuring economic losses to Employer as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused to Employer for which it would have no other adequate remedy, Employee agrees that the foregoing covenants, in addition to and not in limitation of any other rights, remedies or damages available to Employer at law, in equity or under this Agreement, may be enforced by Employer in the event of the breach or threatened breach by Employee, by injunctions and/or restraining orders. If Employer is involved in court or other legal proceedings to enforce the covenants contained in this Section 16, then in the event Employer prevails in such proceedings, Employee shall be liable for the payment of reasonable attorneys' fees, costs and ancillary expenses incurred by Employer in enforcing its rights hereunder.
(e) It is agreed by the parties that the covenants contained in this
Section 16 impose a fair and reasonable restraint on Employee in
light of the activities and business of Employer on the date of
the execution of this Agreement and the current plans of
Employer; but it is also the intent of Employer and Employee that
such covenants be construed and enforced in accordance with the
changing activities, business and locations of Employer and its
affiliates throughout the term of these covenants.
(f) It is further agreed by the parties hereto that, in the event that Employee shall cease to be employed hereunder, and enters into a business or pursues other activities that, at such time, are not in competition with Employer or its affiliates or with any business or activity which Employer or its affiliates contemplated pursuing, as of the date of termination of Employee's employment, within twelve (12) months from such date of termination, or similar activities or business in locations the operation of which, under such circumstances, does not violate this Section 16 or any of Employee's
obligations under this Section 16, Employee shall not be chargeable with a violation of this Section 16 if Employer or its affiliates subsequently enter the same (or a similar) competitive business, course of activities or location, as applicable.
(g) The covenants in this Section 16 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth herein are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent that such court deems reasonable, and the Agreement shall thereby be reformed to reflect the same.
(h) All of the covenants in this Section 16 shall be construed as an
agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of Employee
against Employer whether predicated on this Agreement or
otherwise shall not constitute a defense to the enforcement by
Employer of such covenants. It is specifically agreed that the
Post Termination Period, during which the agreements and
covenants of Employee made in this Section 16 shall be effective,
shall be computed by excluding from such computation any time
during which Employee is in violation of any provision of this
Section 16.
(i) Notwithstanding any of the foregoing, if any applicable law,
judicial ruling or order shall reduce the time period during
which Employee shall be prohibited from engaging in any
competitive activity described in Section 16 hereof, the period
of time for which Employee shall be prohibited pursuant to
Section 16 hereof shall be the maximum time permitted by law.
other substantially similar transaction) to all or substantially all of the shareholders of the Employer (a "Spin-off") and, upon such assignment, the affiliate shall be deemed the Employer for all purposes of this Amended and Restated Severance Agreement. This Amended and Restated Severance Agreement shall not be terminated either by the voluntary or involuntary dissolution or the winding up of the affairs of Employer, or by any merger or consolidation wherein Employer is not the surviving entity, or by any transfer of all or substantially all of Employer's assets on a consolidated basis. In the event of any such merger, consolidation or transfer of assets, the provisions of this Amended and Restated Severance Agreement shall be binding upon and shall inure to the benefit of the surviving entity or to the entity to which such assets shall be transferred.
Employee), that will restore to Employee (to the extent legally permissible) substantially the same economic, substantive and income tax benefits Employee would have enjoyed had any such provision of this Amended and Restated Severance Agreement been upheld as legal, valid and enforceable. Failure to insist upon strict compliance with any provision of this Amended and Restated Severance Agreement shall not be deemed a waiver of such provision or of any other provision of this Amended and Restated Severance Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Amended and Restated Severance Agreement to be effective as of the day and year indicated above.
/s/ Nancy J. Herman ______________________________________________ Employee's Signature |
Employee's Permanent Address:
FEDERAL REALTY INVESTMENT TRUST
By: /s/ Walter F. Loeb
__________________________________________
Name: Walter F. Loeb
_________________________________
Title: Chair Compensation Committee
_________________________________
Address: 1626 East Jefferson Street
Rockville, Maryland 20852
|
Exhibit 10(x)(x)(v)(i)(i)(i)
FEDERAL REALTY INVESTMENT TRUST
RESTRICTED SHARE AWARD AGREEMENT
This Restricted Share Award Agreement (this "Agreement") is made as of February 9, 2000 between Federal Realty Investment Trust, a Maryland real estate investment trust (the "Trust"), and Donald C. Wood, 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 Restricted Share Award for a certain number of shares of beneficial interest 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:
1.1. The Trust hereby grants to the Key Employee, as of February 9, 2000 (the "Award Date"), thirty-seven thousand five hundred (37,500) Shares (the "Restricted 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 Restricted 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 Restricted Shares shall be held in custody by the Chief Financial Officer of the Trust until the Restriction Period
(as hereinafter defined in Paragraph 3) 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 Restricted 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 3, of all or any portion of the Restricted Shares, the certificate or certificates representing the forfeited Restricted Shares shall be canceled.
2.1. Beginning on the Award Date, the Key Employee shall have all rights and privileges of a stockholder with respect to the Restricted Shares, except that the following restrictions shall apply:
(a) none of the Restricted 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 4 hereof) or sold by the Key Employee during the Restriction Period (as hereinafter defined in Paragraph 3);
(b) all or a portion of the Restricted Shares may be forfeited in accordance with Paragraph 3; and
(c) any Shares distributed as a dividend or otherwise with respect to any Restricted Shares as to which the restrictions have not yet lapsed shall be subject to the same restrictions as such Restricted Shares and shall be represented by book entry and held in the same manner as the Restricted Shares with respect to which they were distributed.
2.2. Any attempt to dispose of Restricted Shares in a manner contrary to the restrictions set forth in this Agreement shall be null, void and ineffective. As the restrictions set forth in this Paragraph 2 hereof lapse in accordance with the terms of this Agreement as to all or a portion of the Restricted Shares, such shares shall no longer be considered Restricted Shares for purposes of this Agreement.
3.2. (a) The Restriction Period shall lapse as to all Restricted Shares if the Key Employee is terminated by the Trust (i) without Cause (as defined in Paragraph 3.2(b)) or (ii) due to Disability (as defined in Paragraph 3.2(b)), and if the Key Employee or his legal representative tenders (or the Trust otherwise withholds in accordance with Paragraph 3.6) (x) 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 Restricted Shares or (y) an executed promissory note evidencing the Key Employee's obligation to repay a Tax Loan (in accordance with 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.
3.4. In the event of the death of the Key Employee, the Restriction
Period shall lapse as to three hundred ninety-one (391) Restricted Shares as
provided in Paragraph 3.1, as of the last day of the month in which the Key
Employee dies, if the Key Employee's legal representative tenders (or the Trust
otherwise withholds in accordance with Paragraph 3.6) (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 estate's
obligation to repay a Tax Loan (in accordance with Paragraph 4) in the amount of
any such tax obligation. After the Restriction Period with respect to such
Shares has lapsed, all rights of the Key Employee to any and all then-remaining
Restricted Shares shall terminate and be forfeited.
3.5. If during the Restriction Period (i) the Key Employee is terminated by the Trust for Cause or (ii) the Key Employee voluntarily terminates his employment in all capacities with the Trust (other than due to Disability, death or after a Change in Control), then all rights of the Key Employee to any and all then-remaining Restricted Shares shall terminate and be forfeited.
3.6. 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 3 or (ii) elects not to execute a promissory note evidencing his obligation to repay a Tax Loan (in accordance with Paragraph 4) in the amount of any required tax withholding amount, then the Trust shall retain a portion of the Restricted Shares sufficient to meet its tax withholding obligation.
(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 4(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.
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/ Walter F. Loeb
_____________________________
|
Name: Walter F. Loeb Title: Chair, Compensation Committee
Address:
1626 East Jefferson Street
Rockville, Maryland 20852
KEY EMPLOYEE:
/s/ Donald C. Wood ______________________________________ DONALD C. WOOD |
Address:
55 Warwick Stone Way
Great Falls, Virginia 22066
Exhibit 10(x)(x)(i)(x)
FEDERAL REALTY INVESTMENT TRUST
PERFORMANCE SHARE AWARD AGREEMENT
This Performance Share Award Agreement (this "Agreement") is made as of February 9, 2000 between Federal Realty Investment Trust, a Maryland real estate investment trust (the "Trust"), and Donald C. Wood, 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 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:
1.1. The Trust hereby grants to the Key Employee, as of February 9, 2000 (the "Award Date"), thirty-seven thousand five hundred (37,500) 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.
2.1. 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.
The Performance Period shall be the period beginning on January 1, 2000 and ending on December 31, 2007. 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.
4.1. 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.
(b) The Performance Target will have been met or exceeded based upon the application of an annual test, which shall meet the criteria set forth in Section 8.01(a) of the Amended Plan. The Committee shall establish both a threshold level, the attainment of which shall result in the Restriction Period lapsing as to 4,687.5 Performance Shares, and a maximum level, the attainment of which will result in the Restriction Period lapsing as to 7,500 Performance Shares. The Performance Target (both the threshold level and the maximum level) for the 2000 Award Period is attached to this Agreement, and the Performance Target for each subsequent Award Period shall be attached to this Agreement as it is established by the Committee. In the event that the Committee fails to establish a Performance Target for an Award Period during the first calendar quarter of such Award Period, the Performance Target for the prior Award Period shall be deemed to apply. 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.
4.5. (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.
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.
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.
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/ Walter F. Loeb
____________________________________
Name: Walter F. Loeb
Title: Chair, Compensation Committee
|
Address:
1626 East Jefferson Street
Rockville, Maryland 20852
KEY EMPLOYEE:
/s/ Donald C. Wood _______________________________________ DONALD C. WOOD |
Address:
55 Warwick Stone Way
Great Falls, Virginia 22066
ATTACHMENT TO WOOD PERFORMANCE SHARE AWARD AGREEMENT
Funds From Operations/Annual Number of Performance Shares as to which
Per Share Growth Rate/1/ Restriction Period Lapses
Less than 5% None
Threshold level: Equal to or greater than 5% but less 4,687.5 shares
than 7%
Maximum level: Equal to or greater than 7% 7,500 shares
|
/1/ As the same may be adjusted for specific items as agreed between the Committee and the Key Employee.
Exhibit 10(x)(x)(x)
AMENDMENT TO
PERFORMANCE SHARE AWARD AGREEMENT
This Amendment to Performance Share Award Agreement (this "Amendment") is made as of February 25, 2000, between Federal Realty Investment Trust, a Maryland real estate investment trust (the "Trust"), and Steven J. Guttman, an individual employee of the Trust (the "Key Employee").
WHEREAS, the Trust and the Key Employee entered into that certain Performance Share Award Agreement dated as of January 1, 1998 (the "Performance Share Agreement") setting forth the terms of 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 of 300,000 shares of beneficial interest of the Trust (the "Performance Shares"); and
WHEREAS, the Performance Share Agreement provided for the Performance Shares to vest according to the attainment of certain fixed performance target levels set forth therein (the "Performance Target"); and
WHEREAS, the Compensation Committee of the Board of Trustees of the Trust (the "Committee") has determined that the Performance Target, rather than remaining at a fixed level for the entire term of the Agreement, should be established annually by the Committee at the beginning of each year in order to better align the Key Employee's financial incentives under the Agreement with successful execution of the Trust's business plan for that year.
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. Paragraph 4.2(b) of the Performance Share Agreement is hereby amended to read in its entirety as follows:
"Beginning with the Award Period commencing on January 1, 2000, the Performance Target will have been met or exceeded based upon the application of an annual test, which shall meet the criteria set forth in Section 8.01(a) of the Amended Plan. The Committee shall establish both a threshold level, the attainment of which shall result in the Restriction Period lapsing as to 37,500 Performance Shares, and a maximum level, the attainment of which will result in the Restriction Period lapsing as to 60,000 Performance Shares. The Performance Target (both the threshold level and the maximum level) for the 2000 Award Period is attached to this
Agreement, and the Performance Target for each subsequent Award Period shall be attached to this Agreement as it is established by the Committee. In the event that the Committee fails to establish a Performance Target for an Award Period during the first calendar quarter of such Award Period, the Performance Target for the prior Award Period shall be deemed to apply. 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."
2. Appendix A to the Performance Share Agreement is hereby deleted in its entirety, as is the reference in Paragraph 4.2(a) to Appendix A.
3. Capitalized terms used in this Amendment, unless otherwise defined herein, have the respective meanings given to such terms in the Performance Share Agreement.
4. Except as specifically modified hereby, the Performance Share Agreement remains in full force and effect, and the Trust and the Key Employeee hereby ratify and reaffirm each and all of the terms and provisions of the Performance Share Agreement as modified hereby.
5. This Amendment 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.
IN WITNESS WHEREOF, the Trust has caused this Amendment 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/ Walter F. Loeb __________________________________ Name: Walter F. Loeb Title: Chair, Compensation Committee |
Address:
1626 East Jefferson Street
Rockville, Maryland 20852
STEVEN J. GUTTMAN
/s/ Steven J. Guttman _____________________________________ Address: 5126 Wissioming Road Bethesda, Maryland 20816 |
ATTACHMENT TO GUTTMAN PERFORMANCE SHARE AWARD AGREEMENT
Funds From Operations/Annual Number of Performance Shares as to which
Per Share Growth Rate/1/ Restriction Period Lapses
Less than 5% None
Threshold level: Equal to or greater than 5% but less 37,500 shares
than 7%
Maximum level: Equal to or greater than 7% 60,000 shares
|
/1/ As the same may be adjusted for specific items as agreed between the Committee and the Key Employee.
Exhibit 10(x)(x)(x)(i)
AMENDMENT TO
PERFORMANCE SHARE AWARD AGREEMENT
This Amendment to Performance Share Award Agreement (this "Amendment") is made as of February 25, 2000, between Federal Realty Investment Trust, a Maryland real estate investment trust (the "Trust"), and Ron D. Kaplan, an individual employee of the Trust (the "Key Employee").
WHEREAS, the Trust and the Key Employee entered into that certain Performance Share Award Agreement dated as of January 1, 1998 (the "Performance Share Agreement") setting forth the terms of the award by the Trust to the Key Employee of a Performance Share Award of 12,500 shares of beneficial interest of the Trust (the "Performance Shares"); and
WHEREAS, the Performance Share Agreement provided for the Performance Shares to vest according to the attainment of certain fixed performance target levels set forth therein (the "Performance Target"); and
WHEREAS, the Compensation Committee of the Board of Trustees of the Trust (the "Committee") has determined that the Performance Target, rather than remaining at a fixed level for the entire term of the Agreement, should be established annually by the Committee at the beginning of each year in order to better align the Key Employee's financial incentives under the Agreement with successful execution of the Trust's business plan for that year.
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. Paragraph 4.2(b) of the Performance Share Agreement is hereby amended to read in its entirety as follows:
"Beginning with the Award Period commencing on January 1, 2000, the Performance Target will have been met or exceeded based upon the application of an annual test, which shall meet the criteria set forth in Section 8.01(a) of the Amended Plan. The Committee shall establish both a threshold level, the attainment of which shall result in the Restriction Period lapsing as to 1,563 Performance Shares, and a maximum level, the attainment of which will result in the Restriction Period lapsing as to 2,500 Performance Shares. The Performance Target (both the threshold level and the maximum level) for the 2000 Award Period is attached to this Agreement, and the Performance Target for each subsequent Award Period
shall be attached to this Agreement as it is established by the Committee. In the event that the Committee fails to establish a Performance Target for an Award Period during the first calendar quarter of such Award Period, the Performance Target for the prior Award Period shall be deemed to apply. 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."
2. Appendix A to the Performance Share Agreement is hereby deleted in its entirety, as is the reference in Paragraph 4.2(a) to Appendix A.
3. Capitalized terms used in this Amendment, unless otherwise defined herein, have the respective meanings given to such terms in the Performance Share Agreement.
4. Except as specifically modified hereby, the Performance Share Agreement remains in full force and effect, and the Trust and the Key Employeee hereby ratify and reaffirm each and all of the terms and provisions of the Performance Share Agreement as modified hereby.
5. This Amendment 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.
IN WITNESS WHEREOF, the Trust has caused this Amendment 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/ Walter F. Loeb
__________________________________
Name: Walter F. Loeb
Title: Chair, Compensation Committee
|
Address:
1626 East Jefferson Street
Rockville, Maryland 20852
RON D. KAPLAN
/s/ Ron D. Kaplan _____________________________________ Address: 7909 Greentree Road Bethesda, Maryland 20817 |
ATTACHMENT TO KAPLAN PERFORMANCE SHARE AWARD AGREEMENT
Funds From Operations/Annual Number of Performance Shares as to which
Per Share Growth Rate/1/ Restriction Period Lapses
Less than 5% None
Threshold level: Equal to or greater than 5% but less 1,563 shares
than 7%
Maximum level: Equal to or greater than 7% 2,500 shares
|
AMENDMENT TO
PERFORMANCE SHARE AWARD AGREEMENT
This Amendment to Performance Share Award Agreement (this "Amendment") is made as of February 25, 2000, between Federal Realty Investment Trust, a Maryland real estate investment trust (the "Trust"), and Ron D. Kaplan, an individual employee of the Trust (the "Key Employee").
WHEREAS, the Trust and the Key Employee entered into that certain Performance Share Award Agreement dated as of January 1, 1998 (the "Performance Share Agreement") setting forth the terms of 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 of 50,000 shares of beneficial interest of the Trust (the "Performance Shares"); and
WHEREAS, the Performance Share Agreement provided for the Performance Shares to vest according to the attainment of certain fixed performance target levels set forth therein (the "Performance Target"); and
WHEREAS, the Compensation Committee of the Board of Trustees of the Trust (the "Committee") has determined that the Performance Target, rather than remaining at a fixed level for the entire term of the Agreement, should be established annually by the Committee at the beginning of each year in order to better align the Key Employee's financial incentives under the Agreement with successful execution of the Trust's business plan for that year.
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. Paragraph 4.2(b) of the Performance Share Agreement is hereby amended to read in its entirety as follows:
"Beginning with the Award Period commencing on January 1, 2000, the Performance Target will have been met or exceeded based upon the application of an annual test, which shall meet the criteria set forth in Section 8.01(a) of the Amended Plan. The Committee shall establish both a threshold level, the attainment of which shall result in the Restriction Period lapsing as to 6,250 Performance Shares, and a maximum level, the attainment of which will result in the Restriction Period lapsing as to 10,000 Performance Shares. The Performance Target (both the threshold level and the maximum level) for the 2000 Award Period is attached to this Agreement, and the Performance Target for each subsequent Award Period shall be attached to this
Agreement as it is established by the Committee. In the event that the Committee fails to establish a Performance Target for an Award Period during the first calendar quarter of such Award Period, the Performance Target for the prior Award Period shall be deemed to apply. 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."
2. Appendix A to the Performance Share Agreement is hereby deleted in its entirety, as is the reference in Paragraph 4.2(a) to Appendix A.
3. Capitalized terms used in this Amendment, unless otherwise defined herein, have the respective meanings given to such terms in the Performance Share Agreement.
4. Except as specifically modified hereby, the Performance Share Agreement remains in full force and effect, and the Trust and the Key Employee hereby ratify and reaffirm each and all of the terms and provisions of the Performance Share Agreement as modified hereby.
5. This Amendment 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.
IN WITNESS WHEREOF, the Trust has caused this Amendment 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/ Walter F. Loeb
__________________________________
Name: Walter F. Loeb
Title: Chair, Compensation Committee
|
Address:
1626 East Jefferson Street
Rockville, Maryland 20852
RON D. KAPLAN
/s/ Ron D. Kaplan _____________________________________ Address: 7909 Greentree Road Bethesda, Maryland 20817 |
ATTACHMENT TO KAPLAN PERFORMANCE SHARE AWARD AGREEMENT
Funds From Operations/Annual Number of Performance Shares as to which
Per Share Growth Rate/1/ Restriction Period Lapses
Less than 5% None
Threshold level: Equal to or greater than 5% but less 6,250 shares
than 7%
Maximum level: Equal to or greater than 7% 10,000 shares
|
/1/ As the same may be adjusted for specific items as agreed between the Committee and the Key Employee.
Exhibit 12
FEDERAL REALTY INVESTMENT TRUST
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS
Year ended December 31,
1999 1998 1997
Net earnings before loss (gain) on sale of real estate $55,493 $44,960 $40,129
Add back:
Fixed charges 69,978 61,189 51,885
Deduct:
Capitalized interest (6,867) (5,078) (3,649)
------- ------- -------
Earnings available for fixed charges and preferred
dividends $118,604 $101,071 $88,365
======== ======== =======
Fixed Charges
Interest expense $61,492 $55,125 $47,288
Capitalized interest 6,867 5,078 3,649
Interest portion of rent expense 1,619 986 948
------- ------- -------
Total fixed charges 69,978 61,189 51,885
Preferred dividends 7,950 7,950 1,877
------- ------- -------
Total fixed charges and preferred dividends $77,928 $69,139 $53,762
======= ======= =======
Ratio of Earnings to Fixed Charges and
Preferred Dividends 1.52 1.46 1.64
|
Exhibit 23
We have issued our reports dated February 8, 1999 accompanying the consolidated financial statements and schedules included in the Annual Report of Federal Realty Investment Trust on Form 10K for the year ended December 31, 1998. We hereby consent to the incorporation by reference of said reports in the Registration Statements of Federal Realty Investment Trust on Form S-3 (File No. 333-63619, effective September 30, 1998, which pursuant to Rule 429 of the Securities and Exchange Act of 1934 constitutes a post-effective amendment to File No. 33-63687, effective December 4, 1995; File No. 33-63955, effective November 3, 1995; and File No. 33-15264, effective August 4, 1987).
Grant Thornton LLP
Washington, D.C.
March 15, 2000
| ARTICLE 5 |
| This schedule contains summary financial information extracted from the Consolidated Balance Sheet of Federal Realty Investment Trust as of December 31, 1999 and the related consolidated statement of operations for the twelve months ended December 31, 1999 and is qualified in its entirety by reference to such financial statements. |
| PERIOD TYPE | YEAR |
| FISCAL YEAR END | DEC 31 1999 |
| PERIOD END | DEC 31 1999 |
| CASH | $11,738 |
| SECURITIES | 0 |
| RECEIVABLES | 23,130 |
| ALLOWANCES | 0 |
| INVENTORY | 0 |
| CURRENT ASSETS | 0 1 |
| PP&E | 1,721,459 |
| DEPRECIATION | (317,921) |
| TOTAL ASSETS | 1,534,048 |
| CURRENT LIABILITIES | 0 1 |
| BONDS | 920,630 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 100,000 |
| COMMON | 713,758 |
| OTHER SE | (311,931) |
| TOTAL LIABILITY AND EQUITY | 1,534,048 |
| SALES | 0 |
| TOTAL REVENUES | 257,064 |
| CGS | 0 |
| TOTAL COSTS | 78,698 |
| OTHER EXPENSES | 0 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 61,492 |
| INCOME PRETAX | 40,493 |
| INCOME TAX | 0 |
| INCOME CONTINUING | 0 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 40,493 |
| EPS BASIC | 1.02 |
| EPS DILUTED | 1.02 |