Exhibit 10.27
CHANGE IN CONTROL
AGREEMENT
THIS CHANGE IN CONTROL
AGREEMENT (“Agreement”) is made and entered
into effective as of February 12, 2007 by and between
FEDERAL REALTY INVESTMENT TRUST , a Maryland real estate
investment trust (“Employer”), and ANDREW P.
BLOCHER (“Employee”).
WHEREAS , Employee serves as Employer’s Senior
Vice President – Capital Markets and Investor Relations, and
Employer and Employee wish to set forth the terms of a change in
control agreement for Employee.
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:
1. Benefits Upon Termination
Upon Change in Control .
(a) Change in Control
Defined . No benefits
shall be payable under this Agreement unless there shall have
occurred a “Change in Control” (hereinafter defined) of
Employer. For purposes of this Agreement, a “Change in
Control” of Employer shall mean any of the following
events:
(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
Agreement, are members of the Board of Trustees (the
“Incumbent Trustees”), cease for any reason to
constitute at least two-thirds (2/3) 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 (2/3) of the Incumbent Trustees,
such new member shall, for purposes of this 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 (2/3) of the
members of the board of directors of the Surviving Person;
and
(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.
A transaction described in clauses
(1) through (3) above is hereinafter 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
Agreement to the contrary, if Employee’s employment is
terminated while this 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 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.
(b) Termination of Employment
Following Change in Control . Employee shall be entitled to the benefits
provided in this Agreement if a Change in Control occurs and
Employee’s employment with Employer is terminated:
(i) under any of the following circumstances within
a period of eighteen (18) months after the occurrence of such
Change in Control:
(A) by Employer other than with Cause.
“Cause” shall mean: (1) Employee’s failure
(other than failure due to disability) to substantially perform his
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; (2) Employee’s willful conduct
which is demonstrably and materially injurious to Employer or an
affiliate thereof, monetarily or otherwise;
(3) Employee’s breach of fiduciary duty involving
personal profit; or (4) Employee’s willful violation in
the course of performing his 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.
(B) by Employee within six (6) months following
the occurrence of one or more of the following events:
(1) 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 8 ) of that affiliate, the nature of
Employee’s duties and the scope of responsibilities and
authority referred to above in this
Section 1(b)(i)(A)(1) 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;
(2) Employer changes the location of its principal
office to outside a fifty (50) mile radius of the office where
the Employee is headquartered;
(3) 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: (x) Employee’s
base salary for 2007; or (y) 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;
or
(4) this 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.
(ii) for any reason, either voluntarily or
involuntarily, during the 30-day period beginning on the first
anniversary of such Change of Control, unless such termination is
because of
Employee’s death, Disability or
Retirement. The term “Disability” shall have the same
meaning as set forth in Employer’s group long-term disability
policy. The term “Retirement” shall mean termination of
employment in accordance with: (A) a qualified employee
pension or profit-sharing plan maintained by Employer; or
(B) Employer’s retirement policy in effect immediately
prior to the Change in Control. For purposes of this Agreement,
Employee’s employment shall be terminated by written notice
delivered by either Employer or Employee to the other party. The
date of Employee’s termination of employment shall be the
earlier of the date of Employee’s or Employer’s written
notice terminating Employee’s employment with Employer,
unless such notice shall specify an effective date of termination
occurring later than the date of such notice, in which event such
specified effective date shall govern (“Termination
Date”).
(c) Payment of Benefits upon
Termination . If,
after a Change in Control has occurred, Employee’s employment
with Employer is terminated in accordance with
Section 1(b) above, then Employer shall pay to Employee
and provide Employee, his or her beneficiaries and estate, the
following payment and benefits:
(i) Employer shall pay to Employee a single, lump
sum cash payment equal to eighteen (18) months’ salary.
For the purpose of calculating amounts payable pursuant to this
Section 1(c) , “salary” shall be an amount
equal to: (A) the greater of (1) Employee’s highest
annual base salary paid during the previous three (3) years;
or (2) Employee’s annual base salary in the year of
termination, plus (B) the greatest annual aggregate
amount of any annual bonus paid to Employee in respect of any of
the three (3) fiscal years immediately preceding such
termination. For purposes of the preceding sentence: (w) the
term “salary” shall not include any cash or
equity-based incentive award intended to be a long-term incentive
award, including awards made pursuant to Employer’s 2003
Long-Term Incentive Award Program; (x) an annual bonus paid in
the form of stock will be considered to have been paid in respect
of a particular year if (1) in the case of a bonus paid under
Employer’s annual Incentive Bonus Plan in effect for the
applicable year (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 (2) in the case of any other stock bonus, the
shares vested in that year (other than as a result of the Change in
Control); (y) a stock bonus will be valued: (1) 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
(2) 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; and
(z) notwithstanding the valuation provisions in
clause (y) above, if Employee elected to receive all or any
portion of an annual bonus in the form of stock rather than cash,
the maximum amount to be included as bonus in the computation of
“salary” for that year shall be the amount of cash
bonus otherwise payable without taking into account any additional
stock granted in consideration for delayed vesting. Payment also
will be made for vacation time that has accrued, but is unused as
of the date of termination. 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.
Notwithstanding the above, if Employee’s termination of
employment occurs under the circumstances described in
Section 1(b)(ii) (i.e., for any reason, either
voluntarily or involuntarily, during the 30-day period beginning on
the first anniversary of such Change of Control, unless such
termination is because of Employee’s death, Disability or
Retirement), then if and to the extent required in order to comply
with Section 409A of the Code, as determined by the Employer,
the payment to Employee shall be delayed until six months and one
day after the Termination Date;
(ii) Employee shall receive “Full
Benefits” for eighteen (18) months following the
Termination Date. Employer shall have satisfied its obligation to
provide Full Benefits to Employee if it: (A) pays premiums due
in connection with COBRA continuation coverage to continue
Employee’s medical and dental insurance coverage at not less
than the levels of coverage immediately prior to termination of
Employee’s employment; (B) maintains at not less than
Employee’s highest levels of coverage prior to the
termination of Employee’s employment individual life
insuran
