Edgar Filing: FEDERAL REALTY INVESTMENT TRUST

Position

Donald C. Wood

President and Chief Executive Officer

James M. Taylor, Jr.

Executive Vice President—Chief Financial Officer and Treasurer

Dawn M. Becker

Executive Vice President—General Counsel and Secretary

Definitive Proxy Statement

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant x Filed by a Party other than the Registrant ¨

Check the appropriate box:


¨	Preliminary Proxy Statement

¨	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x	Definitive Proxy Statement

¨	Definitive Additional Materials

¨	Soliciting Material under Rule 14a-12

FEDERAL REALTY INVESTMENT TRUST
(Name of registrant as specified in its charter)


(Name of person(s) filing proxy statement, if other than the registrant)

Payment of Filing Fee (Check the appropriate box):

x	No fee required

¨	Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11

	(1)	Title of each class of securities to which transaction applies:

	(2)	Aggregate number of securities to which transaction applies:

	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

	(4)	Proposed maximum aggregate value of transaction:

	(5)	Total fee paid:




¨	Fee paid previously with preliminary materials.

¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)	Amount Previously Paid:

	(2)	Form, Schedule or Registration Statement No.:

	(3)	Filing Party:

	(4)	Date Filed:

LOGO

March 25, 2016

Dear Shareholder:

Please accept our invitation to attend our Annual Meeting of Shareholders on Wednesday, May 4, 2016 at 10:00 a.m. This year’s meeting will be held at AMP by Strathmore located at the Trust’s Pike & Rose property, 11810 Grand Park Avenue, North Bethesda, Maryland.

The business to be conducted at the meeting is described in the formal notice that follows. In addition, management will provide a review of 2015 operating results and discuss the outlook for the future. After the formal presentation, our Trustees and management will be available to answer any questions you may have.

Your vote is important to us. Please take this time to vote via the Internet (www.voteproxy.com) or by telephone (1-800-PROXIES or 1-800-776-9437).

We look forward to seeing you on May 4.

Sincerely,



Joseph S. Vassalluzzo		Donald C. Wood
Non-Executive Chairman of the Board		President and Chief Executive Officer

FEDERAL REALTY INVESTMENT TRUST

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 4, 2016

To Our Shareholders:

The 2016 Annual Meeting of Shareholders of Federal Realty Investment Trust will be held at AMP by Strathmore located at 11810 Grand Park Avenue, North Bethesda, Maryland, on Wednesday, May 4, 2016, at 10:00 a.m. for the purpose of considering and acting upon the following:

The election of seven Trustees to serve until our 2017 Annual Meeting of Shareholders.

The ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016.

An advisory vote approving the compensation of our named executive officers.

The transaction of such other business as may properly come before the Annual Meeting or any adjournment.

Shareholders of record at the close of business on March 18, 2016 are entitled to notice of and to vote at the Annual Meeting.

For the Trustees:

LOGO

Dawn M. Becker

Executive Vice President—General

Counsel and Secretary

Your vote is important. Even if you plan to attend the meeting, please vote via the Internet (www.voteproxy.com) or by telephone (1-800-PROXIES or 1-800-776-9437) by following the instructions on the Notice of Internet Availability or Proxy Materials or as instructed in the accompanying proxy. If you received or requested a copy of the proxy card by mail or by e-mail, you may submit your vote by mail; however, we encourage you to vote via the Internet or by telephone. These methods are convenient and save us significant postage and processing charges. If you attend the meeting, you may revoke your proxy and vote in person.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 4, 2016

The 2016 Proxy Statement and 2015 Annual Report to Shareholders, which includes our Annual Report on Form 10-K for the year ended December 31, 2015, are available at www.federalrealty.com.

TABLE OF CONTENTS


	Page
Notice of Electronic Availability of Proxy Materials		1
About the Annual Meeting		1
Who is soliciting my vote?		1
Who is paying for the solicitation of proxies?		1
When will the Annual Meeting take place?		1
What is the purpose of the Annual Meeting?		1
What are the Board’s recommendations?		2
Why am I receiving these proxy materials?		2
What is the difference between a “registered” shareholder and holding Shares in “street name?”		2
Who is entitled to vote at the Annual Meeting?		2
How many votes must be present to hold the Annual Meeting?		2
How many votes do I have?		2
What is a proxy?		2
How do I vote?		2
What if I don’t vote my Shares?		3
What if I return my proxy but abstain?		3
May I change my vote after I return my proxy?		3
Why did I receive more than one Notice, proxy card, voting instruction form and/or email?		3
Are there other matters to be acted upon at the Annual Meeting?		4
How may “registered” shareholders and shareholders holding Shares in “street name” elect to receive future shareholder materials by electronic mail (“email”)?		4
How can I obtain paper copies of future shareholder materials?		4
What if I have questions about the Notice, voting or email delivery?		4

Share Ownership		5
Who are the largest owners of Shares?		5
How many Shares do our Trustees and executive officers own?		6

Corporate Governance		7
Independence of Trustees		7
Board of Trustees and Board Committees		9
Board of Trustees		9
Board Committees		10
Identifying individuals to stand for election as Trustees		10
Risk Management Oversight		11
Trustee Compensation		12
Communications with the Board		13
Other Corporate Documents		13

Item 1—Election of Trustees		14

Report of the Audit Committee		16

Relationship with Independent Registered Public Accounting Firm		17

Item 2—Ratification of Independent Registered Public Accounting Firm		18

Executive Officers		19


	Page

Compensation Discussion and Analysis		19
Executive Summary		19
Compensation Philosophy and Objectives		22
Compensation Methodology		23
Elements of Total Compensation		23
Base Salaries		23
Annual Performance Bonus		24
Annual Performance Based Long-Term Equity Incentives		25
Chief Executive Officer Compensation		27
Timing of Equity Grants		27
Termination and Change-in-Control Arrangements		27
Deductibility of Executive Compensation in Excess of $1.0 Million		27

Compensation Committee Report		28

Summary Compensation Table		28

2015 Grants of Plan-Based Awards Table		30

2015 Outstanding Equity Awards at Fiscal Year-End Table		30

2015 Option Exercises and Stock Vested		31

2015 Non-Qualified Deferred Compensation		31

Potential Payments on Termination of Employment and Change-in-Control		32

Compensation Committee Interlocks and Insider Participation		34

Item 3—Advisory Vote on the Compensation of our Named Executive Officers		35

Equity Compensation Plan Information		36

Certain Relationships and Related Transactions		36
Related Party Policies		36
Related Party Transactions		36

Section 16(a) Beneficial Ownership Reporting Compliance		37

Solicitation of Proxies, Shareholder Proposals and Other Matters		37

FEDERAL REALTY INVESTMENT TRUST

1626 East Jefferson Street, Rockville, Maryland 20852

PROXY STATEMENT

We are providing these proxy materials in connection with the 2016 Annual Meeting of Shareholders (“Annual Meeting”) of Federal Realty Investment Trust (the “Trust”). These materials will assist you in voting your common shares of beneficial interest of the Trust (“Shares”) by providing information on matters that will be presented at the Annual Meeting.

NOTICE OF ELECTRONIC AVAILABILITY OF PROXY MATERIALS

We are furnishing proxy materials including this proxy statement and our 2015 Annual Report to Shareholders, which includes our Annual Report on Form 10-K for the year ended December 31, 2015 (“Annual Report”), to each shareholder by providing access to such documents on the Internet instead of mailing printed copies unless the shareholder has previously requested to receive these materials by mail or e-mail. On or about March 25, 2016, we mailed to our shareholders who have not previously requested to receive these materials by mail or e-mail a “Notice of Internet Availability of Proxy Materials” (“Notice”) containing instructions on how to access and review this proxy statement and our Annual Report and submit your vote on the Internet or by telephone. You cannot vote by marking the Notice and returning it. If you received the Notice by mail, you will not automatically receive a printed copy of our proxy materials or Annual Report unless you follow the instructions for requesting these materials included in the Notice.

ABOUT THE ANNUAL MEETING

Who is soliciting my vote?

The Board of Trustees (the “Board” or “Board of Trustees”) of the Trust is soliciting your proxy to vote on matters that will be presented at our Annual Meeting.

Who is paying for the solicitation of proxies?

The cost of this solicitation of proxies will be borne by us. We may solicit proxies through the mail, Internet, in person and by telephone or facsimile, and may request brokerage houses and other custodians, nominees and fiduciaries to forward soliciting materials to the beneficial owners of Shares and reimburse them for their reasonable expenses. We may also hire a proxy solicitation firm at a standard industry compensation rate.

When will the Annual Meeting take place?

The Annual Meeting will be held at 10:00 a.m. EDT, Wednesday, May 4, 2016, at AMP by Strathmore, 11810 Grand Park Avenue, North Bethesda, Maryland.

What is the purpose of the Annual Meeting?

To vote on the following matters:

•

The election of seven Trustees to serve until our 2017 Annual Meeting of Shareholders;

•

The ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016;

•

An advisory vote approving the compensation of our named executive officers; and

•

The transaction of such other business as may properly come before the Annual Meeting or any adjournment.

What are the Board’s recommendations?

The Board recommends a vote:

•

FOR the election of each of the seven Trustees to serve until our 2017 Annual Meeting;

•

FOR the ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016; and

•

FOR the approval of the compensation of our named executive officers.

Why am I receiving these proxy materials?

You are receiving these materials because you owned our Shares as a “registered” shareholder or you held Shares in “street name” at the close of business on the record date for the Annual Meeting and that entitles you to vote at our Annual Meeting.

What is the difference between a “registered” shareholder and holding Shares in “street name?”

If your Shares are registered directly in your name with American Stock Transfer and Trust Company, our transfer agent, you are a “registered” shareholder. If you own Shares through a broker, bank, trust or other nominee rather than in your own name, you are the beneficial owner of the Shares, but considered to be holding the Shares in “street name.”

Who is entitled to vote at the Annual Meeting?

The Board established March 18, 2016 as the record date for the Annual Meeting. Holders who owned our Shares at the close of business on that date are entitled to receive notice of and may attend and vote at the Annual Meeting or any postponements or adjournments of the meeting. We had 70,861,269 Shares outstanding on March 18, 2016.

How many votes must be present to hold the Annual Meeting?

A quorum is required for our shareholders to conduct business at the Annual Meeting. A quorum occurs when a majority of the Shares entitled to vote at the Annual Meeting are present in person or by proxy. Properly executed proxy cards marked “for,” “against”, “withhold” or “abstain” and broker “non-votes” will be counted as present at the Annual Meeting for purposes of determining a quorum.

How many votes do I have?

As to each item, you are entitled to cast one vote per Share; however, as to the election of Trustees, you are entitled to cast one vote per Share for each of the seven open trustee positions.

What is a proxy?

A proxy is your legal designation of another person (the “proxy”) to vote your Shares on your behalf. By completing your proxy through the Internet, by telephone or by returning a completed proxy card, you are giving Dawn M. Becker and James M. Taylor, Jr. the authority to vote your Shares in the manner you indicate on your proxy.

How do I vote?

If you are a “registered” shareholder, you can vote either in person at the Annual Meeting or by proxy without attending the Annual Meeting. We urge you to vote by proxy even if you plan to attend the Annual

Meeting so that we will know as soon as possible that enough votes will be present for us to hold the meeting. If you attend the Annual Meeting in person, you may vote at the meeting and your proxy will not be counted. You can vote by proxy by any of the following methods:

Voting by Telephone or Through the Internet. If you are a “registered” shareholder, you may vote by proxy by using either the telephone or Internet methods of voting. Proxies submitted by telephone or through the Internet must be received by 11:59 p.m., eastern daylight time, on May 3, 2016. Please see the Notice or proxy card for instructions on how to access the telephone and Internet voting systems.

Voting by Proxy Card. Each “registered” shareholder electing to receive shareholder materials by mail may vote by proxy by using the accompanying proxy card. If you return a proxy card that is properly signed and completed, the Shares represented by your proxy will be voted as you specify on the proxy card. If you sign and return a proxy card without indicating how you want your Shares to be voted, Dawn M. Becker and James M. Taylor, Jr. will vote your Shares in accordance with the recommendations of the Board.

For those of you holding your Shares in “street name,” we have supplied copies of our proxy materials for the Annual Meeting to the broker, bank, trust or other nominee holding your Shares of record and they have the responsibility to send these proxy materials to you. You must either direct the broker, bank, trust or nominee as to how to vote your Shares, or obtain a proxy from the broker, bank, trust or nominee to vote at the Annual Meeting. Please refer to the notice of internet availability of proxy materials or the voter instruction card used by your broker, bank, trust or nominee for specific instructions on methods of voting, including by telephone or using the Internet. If you fail to give your broker, bank, trust or nominee specific instructions on how to vote your Shares with respect to Items 1 and 3, your vote will NOT be counted for those matters. It is important for every shareholder’s vote to be counted on these matters so we encourage you to provide your broker, bank, trust or nominee with voting instructions. If you fail to give your broker, bank, trust or nominee specific instructions on how to vote your Shares on Item 2, such broker, bank, trust or nominee will generally be able to vote on Item 2 as he, she or it determines.

What if I don’t vote my Shares?

If you do not vote your Shares, your Shares will not be counted for purposes of determining a quorum or for determining whether the matters presented at the Annual Meeting are approved.

What if I return my proxy but abstain?

Abstentions are counted as present for determining a quorum; however, abstentions will have no effect on any of the items to be considered at the Annual Meeting.

May I change my vote after I return my proxy?

Yes. A proxy may be revoked by a “registered” shareholder at any time before it is exercised at the Annual Meeting by submitting a proxy bearing a later date or by voting in person at the Annual Meeting. If you hold your Shares in “street name,” you must contact your broker, bank, trust or other nominee to determine how to revoke your original proxy. In general, submitting a subsequent proxy executed by the party that executed the original proxy will revoke the earlier proxy.

Why did I receive more than one Notice, proxy card, voting instruction form and/or email?

You will receive more than one Notice, proxy card, voting instruction form or email, or any combination of these, if you hold your Shares in different ways (i.e., joint tenancy, trusts, custodial accounts) or in multiple accounts. You should provide voting instructions for all Notices, proxy cards, voting instruction forms and email links you receive.

Are there other matters to be acted upon at the Annual Meeting?

The Trust does not know of any matter to be presented at the Annual Meeting other than those described in the proxy statement. If, however, other matters are properly presented for action at the Annual Meeting, Dawn M. Becker and James M. Taylor, Jr. will have the discretion to vote on such matters in accordance with their best judgment.

How may “registered” shareholders and shareholders holding Shares in “street name” elect to receive future shareholder materials by electronic mail (“email”) delivery?

Opting to receive all future proxy materials via email delivery is another method of saving us the cost of producing and mailing documents to your home or business and helps us to conserve natural resources. “Registered” shareholders who wish to receive their proxy materials in this manner may register to do so on American Stock Transfer & Trust Company’s website at www.amstock.com in which case you will receive an email containing links to our proxy materials. If you own Shares in “street name” and wish to receive proxy materials via an email containing links, you must contact your broker, bank, trust or nominee for instructions on how to receive future proxy materials in this manner. Shareholders who hold Shares in different ways (i.e., joint tenancy, trusts, custodial accounts) or in multiple accounts will need to complete the applicable process for each account. Your election to receive your proxy materials by email delivery will remain in effect for all future annual meetings until you revoke it.

How can I obtain paper copies of future shareholder materials?

Shareholders can access this Proxy Statement, our Annual Report and our other filings with the Securities and Exchange Commission (“SEC”) on the Investors page of our website at www.federalrealty.com. A copy of our Annual Report, including the financial statements and financial statement schedules (“Form 10-K”) is being provided to shareholders along with this Proxy Statement. The Form 10-K includes certain exhibits, which we will provide to you only upon request, addressed to Investor Relations at 1626 East Jefferson Street, Rockville, Maryland 20852. The request must be accompanied by payment of a fee to cover our reasonable expenses for copying and mailing the Form 10-K.

The SEC’s rules permit us to deliver a single Notice or single set of Annual Meeting materials to one address shared by two or more of our shareholders unless we have received contrary instructions from shareholders. This procedure, referred to as “householding”, reduces the volume of duplicate information shareholders receive and can result in significant savings on mailing and printing costs. To take advantage of this opportunity, only one Notice, Proxy Statement and the Annual Report is being delivered to multiple shareholders who share a single address, unless any shareholder residing at that address gave contrary instructions. If any shareholder sharing an address with another shareholder desires at this time to receive a separate copy of this Proxy Statement and the Annual Report or wishes to receive a separate proxy statement and annual report in the future, or receives multiple copies of the proxy statement and Annual Report and wishes to receive a single copy, the shareholder should provide such instructions by calling our Investor Relations Department at (800) 937-5449, by writing to Investor Relations at 1626 East Jefferson Street, Rockville, Maryland 20852, or by sending an e-mail to Investor Relations at IR@federalrealty.com.

If you elected to receive our shareholder materials via the Internet or via email delivery, you may request paper copies, without charge, by written request addressed to the address set forth above.

What if I have questions about the Notice, voting or email delivery?

Questions regarding the Notice, voting or email delivery should be directed to our Investor Relations Department at (800) 937-5449 or by email at IR@federalrealty.com.

SHARE OWNERSHIP

Who are the largest owners of Shares?

Based upon our records and the information reported in filings with the SEC, the following were beneficial owners of more than 5% of our Shares as of March 18, 2016:


Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership		Percentage of Our Outstanding Shares (1)
The Vanguard Group, Inc.(2) 100 Vanguard Blvd. Malvern, PA 19355		10,102,534		14.3	%

BlackRock, Inc.(3) 55 East 52^nd Street New York, NY 10055		8,338,015		11.8	%

Vanguard Specialized Funds—Vanguard REIT Index Fund(4) 100 Vanguard Blvd. Malvern, PA 19355		4,978,229		7.0	%

State Street Corporation(5) State Street Financial Center One Lincoln Street Boston, MA 02111		4,778,001		6.7	%

(1)	The percentage of outstanding Shares is calculated by taking the number of Shares stated in the Schedule 13G or 13G/A, as applicable, filed with the SEC divided by 70,861,269, the total number of Shares outstanding on March 18, 2016.

(2)

Information based on a Schedule 13G/A filed with the SEC on February 10, 2016 by The Vanguard Group. The Schedule 13G/A states that The Vanguard Group, an investment advisor, has sole voting power over 169,618 Shares, shared voting power over 59,500 Shares, sole dispositive power over 9,969,728 Shares and shared dispositive power over 132,806 Shares; that Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, is the beneficial owner of 46,716 Shares as a result of serving as investment manager of collective trust accounts, the voting of which it directs; and that Vanguard Investments Australia, Ltd., a wholly owned subsidiary of The Vanguard Group, is the beneficial owner of 208,992 Shares as a result of serving as investment manager of Australian investment offerings, the voting of which it directs.

(3)

Information based on a Schedule 13G/A filed with the SEC on January 8, 2016 by BlackRock, Inc., which states BlackRock, Inc., a parent holding company, has sole voting power over 7,832,627 Shares, sole dispositive power over 8,338,015 Shares and that none of its subsidiaries owns 5% or more of Shares other than BlackRock Fund Advisors. The Schedule 13G/A states that BlackRock, Inc.’s subsidiaries are BlackRock (Luxembourg) S.A., BlackRock (Netherlands) B.V., BlackRock Advisors (UK) Limited, BlackRock Advisors, LLC, BlackRock Asset Management Canada Limited, BlackRock Asset Management Ireland Limited, BlackRock Asset Management North Asia Limited, BlackRock Asset Management Schweiz AG, BlackRock Capital Management, BlackRock Financial Management, Inc., BlackRock Fund Advisors, BlackRock Fund Managers Ltd., BlackRock Institutional Trust Company, N.A., BlackRock International Limited, BlackRock Investment Management (Australia) Limited, BlackRock Investment Management (UK) Ltd., BlackRock Investment Management, LLC, BlackRock Japan Co. Ltd. and BlackRock Life Limited.

(4)

Information based on a Schedule 13G/A filed with the SEC on February 9, 2016 by Vanguard Specialized Funds—Vanguard REIT Index Fund. The Schedule 13G/A states that Vanguard Specialized Funds—Vanguard REIT Index Fund, an investment company registered under Section 8 of the Investment Company Act of 1940, has sole voting power over 4,978,229 Shares.

(5)

Information based on a Schedule 13G filed with the SEC on February 12, 2016 by State Street Corporation, which states State Street Corporation, a parent holding company, has shared voting and dispositive power over 4,778,001 Shares. The Schedule 13G also states that State Street Corporation’s subsidiaries are SSGA Funds Management, Inc., State Street Global Advisors Limited, State Street Global Advisors, Ltd., State Street Global Advisors, Australia, Limited, State Street Global Advisors (Asia) Limited, State Street Global Advisors France, S.A., State Street Global Advisors (Japan) Co., Ltd. and State Street Global Advisors Ireland Limited, each an investment advisor, and State Street Bank and Trust Company, a bank.

How many Shares do our Trustees and executive officers own?

As of March 18, 2016, our Trustees and executive officers, both individually and collectively, beneficially owned the Shares reflected in the table below. The number of Shares shown in this table reflects beneficial ownership determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and, therefore, includes unvested Shares and Shares that have not been issued but as to which options are outstanding and may be exercised within 60 days of the date of this proxy statement. Except as noted in the footnotes that follow the table, each Trustee and executive officer has sole voting and investment power as to all Shares listed. Fractional Shares have been rounded to the nearest full Share.


Name and Address of Beneficial Owner (1)	Common		Unvested Restricted Shares		Options Currently Exercisable or Exercisable Within 60 Days		Total Shares Beneficially Owned		Percentage of Outstanding Shares Owned (2)
Dawn M. Becker		102,311		12,143		39,941		154,395		*
Jon E. Bortz(3)		8,062		0		0		8,062		*
David W. Faeder		7,719		0		0		7,719		*
Kristin Gamble(4)		29,347		0		0		29,347		*
Gail P. Steinel		7,515		0		0		7,515		*
James M. Taylor, Jr.		14,708		17,151		0		31,859		*
Warren M. Thompson		7,594		0		0		7,594		*
Joseph S. Vassalluzzo		18,945		0		0		18,945		*
Donald C. Wood(5)		234,189		84,212		247,996		566,397		*
Trustees, trustee nominees and executive officers as a group (9 individuals)		430,390		113,506		287,937		831,833		1.2	%

*	Less than 1%

(1)	Unless otherwise indicated, the address of each beneficial owner is 1626 East Jefferson Street, Rockville, MD 20852.

(2)

The percentage of outstanding Shares owned is calculated by taking the number of Shares reflected in the column titled “Total Shares Beneficially Owned” divided by 70,861,269, the total number of Shares outstanding on March 18, 2016, plus the number of options for such person or group reflected in the column titled “Options Currently Exercisable or Exercisable Within 60 Days.”

(3)	As to these Shares, voting and investment power is shared with Mr. Bortz’ wife.

(4)	Includes 19,035 Shares as to which Ms. Gamble shares investment power for clients. Includes 1,400 Shares as to which Ms. Gamble is a trustee of a profit sharing plan, of which Ms. Gamble has a direct interest in 581 Shares and of which 581 Shares are owned by Ms. Gamble’s husband’s estate.

(5)	Includes 53,879 Shares owned by Mr. Wood’s wife.

CORPORATE GOVERNANCE

Independence of Trustees

Article III, Section 1 of our Bylaws provides that no more than one of our Trustees can fail to qualify as independent under the requirements of the New York Stock Exchange (“NYSE”), the SEC, our Corporate Governance Guidelines and other applicable rules and regulations. At its first quarterly meeting each calendar year, the Board reviews all relationships between us and each Trustee to determine whether each Trustee is independent under all applicable requirements. That review includes a determination of whether there are any material relationships between us and the Trustee which, in the opinion of the Board, adversely affect the Trustee’s ability to exercise independent judgment as a trustee. The Board also considers independence on an ongoing basis throughout the year if there are any changes in circumstances that could impact a Trustee’s independence.

The Board, on recommendation of the Nominating and Corporate Governance Committee, and after considering all relevant facts and circumstances, determined in each of February 2015 and February 2016 that, except for Mr. Wood, the Trust’s Chief Executive Officer, each Trustee then serving on the Board satisfied all applicable requirements to be considered independent. In making that determination, the Board concluded that a Trustee’s position as a director of a company with which we do business does not constitute a material relationship so long as payments made by that company do not account for more than five percent (5%) of our gross revenues or more than ten percent (10%) of the gross revenues of that company. This standard is set forth in our Corporate Governance Guidelines. Further, the Board has concluded that except for Mr. Wood, who is an employee of the Trust, there are no relationships, material or otherwise, between us and any of the Trustees except as described below. All of these relationships were considered by the Board in making its determination that all Trustees other than Mr. Wood are independent. The specific relationships considered by the Board in

making its independence determinations were the following, which includes all of those relationships described in the “Certain Relationships and Related Transactions” section below:


Name	Affiliated Company/Position	Relationship¹
Jon E. Bortz	Chief Executive Officer and Chairman of the Board of Trustees of Pebblebrook Hotel Trust	• Pebblebrook Hotel Trust owns hotels we used for one quarterly board meeting and accommodations for conferences and business trips for various employees in each of 2013, 2014 and 2015

David W. Faeder	Managing Member of The Kensington of Falls Church, LLC	• The Kensington of Falls Church, LLC, leases on a temporary basis 1 location from us totaling 3,003 square feet

Kristin Gamble	None	• None

Gail P. Steinel	None	• None

Warren M. Thompson	President and Chairman of the Board of Directors of Thompson Hospitality Corporation	• Wholly owned subsidiaries of Thompson Hospitality Corporation (collectively “THC”) lease 4 locations from us totaling 23,855 square feet • In 2012 we entered into a partnership with THC to operate the restaurant at one of these locations

Joseph S. Vassalluzzo	Director of Office Depot	• Office Depot and its subsidiary, Office Max, collectively lease 5 locations totaling 104,594 square feet

In no instance did the payments made by us or to us by any tenant with which our Trustees are affiliated, or the payments made by us to Pebblebrook Hotel Trust, account for more than five percent (5%) of our gross revenues or more than ten percent (10%) of the gross revenues of any tenant or Pebblebrook Hotel Trust. Further, (a) the payments made by us to Pebblebrook Hotel Trust in each of the last three fiscal years accounted for significantly less than the greater of $1 million or 2% of both our and Pebblebrook Hotel Trust’s consolidated gross revenues for each of the last three fiscal years, (b) the payments from The Kensington of Falls Church, LLC in 2016 are anticipated to be significantly less than $1 million, and (c) the payments made by us and to us by two of Thompson Hospitality Corporation’s wholly-owned subsidiaries collectively accounted for less than 2% of both our and Thompson Hospitality Corporation’s consolidated gross revenues for each of the last three fiscal years.

Board of Trustees and Board Committees

Board of Trustees:

The Board of Trustees discharges its responsibilities through regularly scheduled meetings as well as through telephonic meetings, action by written consent and other communications with management as appropriate. During 2015, the Board of Trustees held five meetings. The non-management Trustees (all of whom are independent) held four executive sessions at the meetings that were attended by all non-management Trustees. Mr. Vassalluzzo, the Non-Executive Chairman of the Board, presided over all Board meetings as well as all executive sessions of the non-management Trustees during 2015. The Non-Executive Chairman of the Board is expected to preside over all future Board meetings and executive sessions of non-management Trustees.

Since 2003, we have operated under a governance structure where the Chairman of the Board and Chief Executive Officer are separate positions held by different individuals. The Board continues to believe that this structure is the best structure for us. Having the Board operate under the leadership and direction of someone independent from management provides the Board with the most appropriate mechanism to fulfill its oversight responsibilities and hold management accountable for the performance of the Trust. It also allows our Chief Executive Officer to focus his time on running our day-to-day business. The Board believes that one of the most important attributes for the Board is independence from management and that belief has been reflected in the separation of the chairman and CEO roles as well as in our Corporate Governance Guidelines which permit no more than one member of the Board to be a non-independent trustee.

Each of the Trustees attended 100% of all meetings of the Board and the Board committees on which each Trustee served during 2015. Our Corporate Governance Guidelines provide that all Trustees are expected to attend all meetings of the Board and the Board committees on which he or she serves as well as the Annual Meeting of Shareholders. All Trustees attended our 2015 Annual Meeting of Shareholders.

Board Committees:

The Board has three standing committees which are the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Each committee operates under a written charter which is available in the Investors section of our website at www.federalrealty.com. Each member of these committees meets, and throughout 2015 met, the independence, experience and, with respect to the Audit Committee, the financial literacy requirements, of the NYSE, the SEC and our Corporate Governance Guidelines. The membership, primary functions and number of meetings during 2015 for each of these standing committees are described below:


Committee Members	Primary Responsibilities	Number of Meetings During 2015

Audit Committee:

Gail P. Steinel* Jon E. Bortz David W. Faeder** Warren M. Thompson	• selecting the independent registered public accounting firm and approving and overseeing its work; • overseeing our financial reporting, including reviewing results with management and the independent registered public accounting firm; and • overseeing our internal systems of accounting and controls	4

Compensation Committee:

David W. Faeder* Kristin Gamble Gail P. Steinel Joseph Vassalluzzo	• reviewing and recommending compensation for our officers; • administering our Amended and Restated 2001 Long-Term Incentive Plan (“2001 Plan”) and our 2010 Performance Incentive Plan (“2010 Plan”), including making awards under the 2010 Plan; and • administering other benefit programs of the Trust	3

Nominating and Corporate Governance Committee:

Warren M. Thompson* Jon E. Bortz Kristin Gamble Joseph S. Vassalluzzo	• recommending individuals to stand for election to the Board; • making recommendations regarding committee memberships; and • overseeing our corporate governance policies and procedures, including Board and Trustee evaluations	2

*	Denotes current chairperson of the committee

**	Denotes our audit committee financial expert.

Identifying individuals to stand for election as Trustees

The Nominating and Corporate Governance Committee is responsible for identifying individuals to stand for election as Trustees. It begins the process by determining whether there are any changes that should be made to the Board in terms of size or skill sets in order for the Board to appropriately perform its responsibilities. If the Committee concludes that no changes are needed, it first reviews each of the incumbent Trustees whose terms are expiring to determine whether those individuals should be nominated for reelection to the Board. If the Committee determines that the Board should be expanded or that the incumbent Trustees whose terms are expiring should not be nominated for reelection and those positions need to be filled, the Committee will seek recommendations from other Board members for possible candidates. If no appropriate candidates are identified,

the Committee will consider retaining a search firm. Recommendations provided by shareholders will also be considered and will be evaluated on the same basis as all other Board candidates.

The primary factors included in the Committee’s determination are whether the individual possesses skills which are desirable for the effective oversight of the Trust’s operation and complementary to the skills of the other Trustees. If the individual is an incumbent Trustee, the Committee also considers whether he or she is performing his or her responsibilities as a Trustee well and adding value to the Board and its operations as reflected on the most recent individual Trustee evaluations. All candidates for election to the Board should, at a minimum, possess public company, real estate, retail and/or other financial experience and have a history of honesty, integrity and fair dealing with third parties. The Board has no specific policy on diversity but believes that Board membership should reflect diversity in a broad sense, including, among other things, geography, gender and ethnicity. In addition, the Board specifically reviews and considers the backgrounds, experience and competencies of each Trustee nominee and Trustee to ensure that the Board reflects as a whole an appropriate diversity of knowledge, experience, skill and expertise required to enable the Board to perform its responsibilities in managing and directing our business efficiently and effectively.

Once a candidate is identified who has not previously served on the Board, the Committee arranges meetings between the candidate and Board members as well as our senior management. The Committee also undertakes whatever investigative and due diligence activities it deems necessary to verify the candidate’s credentials and determine whether the candidate would be a positive contributor to the operations of the Board and a good representative of our shareholders. Critical to this whole process is the Committee’s determination that any candidate presented to the shareholders for election to the Board satisfies all of the independence requirements imposed by the NYSE, the SEC, our Corporate Governance Guidelines and other applicable rules and regulations.

Any shareholder may propose a candidate to be nominated for election to the Board by following the procedures outlined in Article II, Section 13 of our Bylaws. Any shareholder wishing to present a candidate for consideration as a Trustee for election at the Trust’s 2017 Annual Meeting of Shareholders must provide the Committee with the name of the shareholder proposing the candidate as well as contact information for that shareholder, the name of the individual proposed for election, a resume or similar summary that includes the individual’s qualifications and such other factual information that would be necessary or helpful for the Committee to evaluate the individual. The information should be sent to the Committee, in care of the Trust’s Secretary, by no later than November 25, 2016 so that the Secretary can forward it to the Committee chair for consideration. The Committee will not have sufficient time to evaluate any candidate submitted after that date. A copy of our Bylaws may be obtained by sending a written request to Investor Relations at 1626 East Jefferson Street, Rockville, MD 20852.

Risk Management Oversight

Although the Board has delegated to the Audit Committee responsibility for overseeing our risks and exposures on an ongoing basis, the entire Board regularly receives updates from management on the continued viability of our business plan, market conditions, capital position, and our business results and specifically reviews potential risks from time to time. The Board reviews that information together with our quarterly and annual financial statements and operating results and short and long-term business prospects to assess the risks that we may encounter and to establish appropriate direction to avoid or minimize the potential impact of the identified risks. Some of the details that are discussed as part of the Board’s review of potential risks facing us include, without limitation: (a) the impact of market conditions on our business; (b) operational risks such as the ability of our tenants to be successful and the ability to grow the company through increasing rents and redeveloping our properties; (c) liquidity and credit risks, including our ability to access capital to run and grow our business and our overall cost of capital and the impact on our profitability; (d) investment risks from acquisitions and our development and redevelopment projects; (e) regulatory risks that may impact our profitability such as environmental laws and regulations, the Americans with Disabilities Act of 1990 and various

other federal, state and local laws; (f) REIT risks such as our failure to qualify as a REIT for federal income tax purposes; (g) cybersecurity risks; and (h) general risks inherent in the real estate industry.

As part of the Board’s risk oversight function, our Compensation Committee reviewed in February 2016 our compensation policies and practices for all of our employees to determine whether any of such policies or programs created any risk that could have a material adverse impact on us. Approximately 97% of our employees participate in compensation programs tied to either corporate performance or regional performance necessary to achieve corporate objectives and the Committee believes that those programs do not encourage excessive and unnecessary risk taking. The Committee focused its review on the approximately 3% of our employees (8 individuals) who are compensated on a full or partial commission/bonus basis where significant portions of their annual compensation is driven by completing leasing transactions or closing acquisitions. As part of that review, the Committee reviewed the internal approval processes of the Trust and determined that none of the individuals who are compensated on a transactional commission/bonus basis can complete any leasing or acquisition transaction without getting approval from the Board and/or one or more members of senior management whose compensation is tied to achieving corporate objectives.

Trustee Compensation

The Trustees received the following fees for their service on the Board in 2015:


Annual Retainer for Non-Employee Trustees	$	175,000
Annual Retainer for Non-Executive Chairman	$	250,000
Annual Fee for Audit Committee Chairman	$	20,000
Annual Fee for Compensation Committee Chairman	$	10,000
Annual Fee for Nominating Committee Chairman	$	10,000

Each non-employee Trustee and the Non-Executive Chairman of the Board are paid sixty percent (60%) of his/her annual retainer in the form of Shares. All Shares paid as part of the annual retainer vested immediately upon issuance. The equity portion of the annual retainer for 2015 was paid in Shares on January 4, 2016. The number of Shares actually received by each Trustee on January 4, 2016 was determined by dividing the amount of the annual retainer to be paid in Shares by $146.10, the closing price of our stock on the NYSE on December 31, 2015, the last business day prior to the date the Shares were issued. The remainder of the annual retainer as well as the annual fees paid to the Chairs of the Audit, Compensation and Nominating and Corporate Governance Committees were paid in cash. Each Trustee is required to hold at all times an amount of Shares valued at least at five times the amount of the cash portion of the annual retainer. As of December 31, 2015, all Trustees complied with the required level of stock ownership.

In addition to the annual retainer described above, Mr. Vassalluzzo receives administrative support for both Trust business and personal use from our regional office in Wynnewood, Pennsylvania. Except for the annual fee for serving as a Trustee, the annual fee for serving as the chair of a committee and the use of administrative support made available to Mr. Vassalluzzo, all as described above, there were no additional fees paid to any Trustee, including the Non-Executive Chairman, for service on any of the Board committees or for attendance at any Board or committee meetings.

Total compensation awarded to Trustees for service in 2015 was as follows:


2015 TRUSTEE COMPENSATION TABLE
Name	Fees Earned or Paid in Cash		Stock Awards		All Other Compensation		Total
	($)		($) (1)(2)		($)		($)
Jon E. Bortz	$	70,000	$	105,000	$	—	$	175,000
David W. Faeder	$	80,000	$	105,000	$	—	$	185,000
Kristin Gamble	$	70,000	$	105,000	$	—	$	175,000
Gail P. Steinel	$	90,000	$	105,000	$	—	$	195,000
Warren M. Thompson	$	80,000	$	105,000	$	—	$	185,000
Joseph S. Vassalluzzo	$	100,000	$	150,000	$	6,975	$	256,975

Total	$	490,000	$	675,000	$	6,975	$	1,171,975

(1)

Amounts in this column reflect the aggregate grant date fair value of the stock awards calculated in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“FASB ASC Topic 718”) for the fiscal year ended December 31, 2015. Dividends are paid on all Shares awarded at the same rate as paid to all other holders of our Shares as declared by our Board from time to time.

(2)	As of December 31, 2015, Mr. Bortz owned 7,343 Shares; Mr. Faeder owned 7,000 Shares; Ms. Gamble owned 8,774 Shares; Ms. Steinel owned 6,796 Shares; Mr. Thompson owned 6,875 Shares and Mr. Vassalluzzo owned 17,918 Shares.

(3)

The amount in the “All Other Compensation” column represents our estimated value of the administrative services we made available to Mr. Vassalluzzo for both Trust business and personal use in our regional office in Wynnewood, Pennsylvania. We believe there is no incremental cost to us of providing this administrative support.

Communications with the Board

Any shareholder of the Trust or any other interested party may communicate with the Board as a whole, the non-management Trustees of the Board as a group, the Non-Executive Chairman of the Board, and/or any individual Trustee by sending the communication to the Trust’s corporate offices at 1626 East Jefferson Street, Rockville, MD 20852 in care of the Trust’s Secretary. All such communication should identify the party to whom it is being sent, and any communication which indicates it is for the Board of Trustees or fails to identify a particular Trustee will be deemed to be a communication intended for the Trust’s Non-Executive Chairman of the Board. The Trust’s Secretary will promptly forward to the appropriate Trustee all communications she receives for the Board or any individual Trustee which relate to the Trust’s business, operations, financial condition, management, employees or similar matters. The Trust’s Secretary will not forward to any Trustee any advertising, solicitation or similar materials.

Other Corporate Documents

The Board of Trustees has adopted a Code of Ethics for senior financial officers as well as a Code of Business Conduct that applies to all of our Trustees and employees. In addition, the Board operates under Corporate Governance Guidelines. The Code of Ethics for our senior financial officers, our Code of Business Conduct and our Corporate Governance Guidelines are available in the Investors section of our website at www.federalrealty.com.

ITEM 1

ELECTION OF TRUSTEES

Our Board of Trustees has seven Trustees. The Board, on recommendation of the Nominating Committee, approved the nomination of the following individuals, all of whom are currently serving on the Board, for election as trustees to hold office until the 2017 Annual Meeting of Shareholders and until their successors have been duly elected and qualified:


Name	Age		Position	Trustee Since
Jon E. Bortz		59	Independent Trustee		2005
David W. Faeder		59	Independent Trustee		2003
Kristin Gamble		70	Independent Trustee		1995
Gail P. Steinel		59	Independent Trustee		2006
Warren M. Thompson		56	Independent Trustee		2007
Joseph S. Vassalluzzo		68	Independent Trustee Non-Executive Chairman of the Board		2002
Donald C. Wood		55	Non-Independent Trustee President and Chief Executive Officer of the Trust		2003

In connection with reviewing nominees to stand for election at the 2016 Annual Meeting of Shareholders, the Nominating Committee considered the following qualifications for each nominee:

Jon E. Bortz, President, Chief Executive Officer and Chairman of the Board of Pebblebrook Hotel Trust, a REIT that acquires and invests in upper upscale hotels in large US cities (from 2009 to the present); Chief Executive Officer and a Trustee (from 1998 to 2009), President (from 1998 to 2008) and Chairman of the Board (from 2001 to 2009) of LaSalle Hotel Properties, a multi-tenant, multi-operator hotel REIT; and various real estate related positions with Jones Lang LaSalle (from 1981 to 1998). Mr. Bortz brings to the Board public company, REIT and real estate experience. His experience as chief executive officer of LaSalle Hotel Properties and Pebblebrook Hotel Trust provide a valuable perspective for running a public real estate company while his real estate experience at Jones Lang LaSalle provides fundamental real estate experience critical to our core business.

David W. Faeder, Managing Partner of Fountain Square Properties, a diversified real estate company, since 2003; Vice Chairman (from 2000 to 2003), President (from 1997 to 2000) and Executive Vice President and Chief Financial Officer (from 1993 to 1997) of Sunrise Senior Living, Inc., a provider of senior living services in the United States, United Kingdom and Canada; and prior to that time, Vice President of Credit Suisse First Boston (formerly First Boston Corporation) and Morgan Stanley and Company, Inc. specializing in real estate transactions. Director of Arlington Asset Investment Corp., a company that acquires and holds mortgage-related and other assets, including residential mortgage-backed securities issued by U.S. government agencies or guaranteed as to principal and U.S. government agencies or U.S. government-sponsored entities and mortgage-backed securities issued by private organizations. Mr. Faeder is a valuable member of the Board because of his public company and accounting experience, having previously served as the chief financial officer of Sunrise Senior Living, and his real estate investment experience from his time as a private real estate investor.

Kristin Gamble, Sr. Managing Director of American Capital Management, Inc., an investment management organization since January 2016. President of Flood, Gamble Associates, Inc. (from 1984 to 2015), an investment counseling firm, and prior to that time, various management positions with responsibility for investments and investment research with brokerage firms and other financial services companies. Director of Ethan Allen Interiors Inc., a furniture manufacturer and retailer (from 1992 to 2015). Ms. Gamble benefits the Board through her broad financial related experience from an investor perspective, including as President of her own investment counseling company for over 30 years, and before that, as an executive with responsibility for investments and investment research with various brokerage firms and other financial services companies.

Gail P. Steinel, Owner of Executive Advisors (from 2007 to present), which provides consulting services and leadership seminars to companies. Executive Vice President with BearingPoint, Inc. (from 2002 to 2007), a management and technology consulting firm that provides application services, technology solutions and managed services to companies and government organizations with responsibility for overseeing the global commercial services business unit; global managing partner and a founding member of Arthur Andersen’s business consulting practice (from 1984 to 2002). Director of MTS Systems Corporation, a provider of mechanical test systems, material testing, fatigue testing and tensile testing equipment as well as motion simulation systems and calibration services. Ms. Steinel has over 25 years of auditing and consulting experience that provides the Board with a helpful perspective on managing risk and systems operations.

Warren M. Thompson, President and Chairman of Thompson Hospitality Corporation, a food service company that owns and operates restaurants and contract food services, since founding the company in October 1992. Mr. Thompson is the president, chairman and founder of his own private food service company, Thompson Hospitality Corporation since 1992. Mr. Thompson’s experience running restaurants owned by Thompson Hospitality provides the Board and management with a unique perspective that is shared by a large percentage of the Trust’s retail tenants.

Joseph S. Vassalluzzo, Non-Executive Chairman of the Board of Trustees since February 2006; Vice Chairman of Staples, Inc. (from 2000 to 2005), a retailer specializing in home, office, and computer products, with responsibility for overseeing domestic and international growth in its retail and commercial operations; various other officer positions with Staples’ and Staples Realty & Development, a subsidiary of Staples, Inc. (from 1997 to 2000); Director of Office Depot, Inc., a global supplier of office products and services; Director of Life Time Fitness, Inc., an operator of distinctive and large sports, athletic, fitness and family recreation centers (from 2006 to 2015); Director of iParty Corp., a premier multi-channel party supply and party planning company (from 2004 to 2013). Mr. Vassalluzzo’s extensive background in retail and real estate as a result of having served as an executive with Staples, expanding the real estate owned by Staples Realty & Development, a subsidiary of Staples, Inc. for over 10 years and serving on the boards of a number of retailers provides the board and management with retail and retail real estate expertise that is essential to our core business.

Donald C. Wood, President and Chief Executive Officer of the Trust since January 2003; prior to that time, various officer positions with the Trust, including President and Chief Operating Officer (from 2001 to 2003), Senior Vice President and Chief Operating Officer (from 2000 to 2001), Senior Vice President-Chief Operating Officer and Chief Financial Officer (from 1999 to 2000) and Senior Vice President-Treasurer and Chief Financial Officer (from 1998 to 1999); Chairman of the Board of the National Association of Real Estate Investment Trusts (from November 2011 to November 2012); member of the Board of Governors (since 2010) and the Executive Committee (from February 2014 to May 2015) of the International Council of Shopping Centers; Director of Post Properties, Inc., a developer and operator of upscale multifamily communities in the United States. Mr. Wood has been employed by the Trust for over seventeen years and serves on the Board as the sole non-independent Trustee. His tenure with the Trust and his responsibilities as chief executive officer provides the Board with familiarity and details on all aspects of the operations of the Trust.

Vote Required

The affirmative vote of a plurality of votes cast at the Annual Meeting, in person or by proxy, is required for the election of Trustees. If any Trustee does not receive at least 50% of the votes cast at the Annual Meeting, he or she must tender his or her resignation to the Chairman of the Nominating Committee within five (5) business days after certification of the vote. The Nominating Committee will promptly consider the resignation and make a recommendation to the Board of Trustees. In deciding whether to accept or reject a resignation that has been tendered, the Nominating Committee and the Board will consider such factors as they deem appropriate and relevant which may include, among others: (a) the stated reasons why votes were withheld from the Trustee and whether those reasons can be cured; (b) the Trustee’s length of service, qualifications and contributions as a Trustee; (c) listing requirements of the NYSE, rules and regulations of the SEC and other applicable rules and regulations; (d) our Corporate Governance Guidelines; and (e) such other factors as the Nominating Committee

or the Board deems appropriate. Any rejection of a resignation may (but does not have to) be conditioned on curing the underlying reason for the withheld votes. The Board will take action on any resignation no later than sixty (60) days after the certification of the vote, and will disclose the action taken with a full explanation of the process used by the Board and the reason for its decision in a Form 8-K filed with the SEC within four (4) business days after the Board’s decision. If a Trustee’s resignation is accepted by the Board of Trustees, then the Board of Trustees may fill the resulting vacancy pursuant to our Bylaws. The Trustee who tenders his or her resignation will not participate in the recommendation of the Nominating Committee or the decision of the Board.

If you are a “registered” shareholder who elects to receive materials by mail and you sign and return but fail to give any voting instructions on your proxy card on this matter, the proxies identified on the proxy card will vote FOR the election of the named individuals. An abstention or broker non-vote will have no effect on the outcome of the vote on this proposal. You are entitled to cast one vote per Share for each of the seven named individuals. Proxies may not be voted for more than seven individuals.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE SEVEN NOMINEES FOR TRUSTEE.

REPORT OF THE AUDIT COMMITTEE

The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Trust filing under the Securities Act of 1933 or the Exchange Act, except to the extent the Trust specifically incorporates this Report by reference therein.

Management is responsible for the financial reporting process, including the system of internal controls, for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) and for management’s report on internal control over financial reporting. The Trust’s independent registered public accounting firm, Grant Thornton LLP (“GT”), is responsible for auditing the consolidated financial statements and expressing an opinion on the financial statements and the effectiveness of internal control over financial reporting. The Audit Committee oversees the financial reporting process on behalf of the Board. In addition, the Audit Committee oversees the work of our internal audit function, which is performed by PricewaterhouseCoopers LLP (“PwC”).

The Audit Committee meets at least quarterly and at such other times as it deems necessary or appropriate to carry out its responsibilities. The Audit Committee met four times during 2015 and three of these quarterly meetings included executive sessions with GT without management being present. In the course of fulfilling its oversight responsibilities, the Audit Committee met with both management and GT to review and discuss all annual and quarterly financial statements and quarterly operating results prior to their issuance. Management advised the Audit Committee that all financial statements were prepared in accordance with GAAP. The Audit Committee also discussed with GT matters required to be discussed pursuant to applicable Public Company Accounting Oversight Board audit standards, including the reasonableness of judgments and the clarity and completeness of financial disclosures.

In addition, the Audit Committee discussed with GT matters relating to its independence and has received from GT the written disclosures and letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with GT its independence.

The Audit Committee continually monitors the non-audit services provided by GT. During 2015, the Audit Committee limited non-audit services primarily to income tax return preparation for us and our subsidiaries and the

provision of advice on the tax impacts and structuring of acquisition and other property related transactions. GT also performed the 2015 audit of the financial statements of two of our joint ventures. The Audit Committee approved GT’s performing these audits only after determining that it would not adversely impact GT’s independence.

The Audit Committee engaged PwC to provide our internal audit function in 2012 and continued to oversee PwC’s ongoing testing of the effectiveness of our internal controls during 2015. The findings of PwC were reported to the Audit Committee three times during 2015, and the Audit Committee met in executive session with PwC without management being present once during 2015. GT, as part of its 2015 audit of our financial statements, independently reviewed our internal controls and concluded that there were no material weaknesses.

On the basis of the reviews and discussions the Audit Committee has had with GT, PwC and management, the Audit Committee recommended to the Board of Trustees that the Board approve the inclusion of our audited financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 for filing with the SEC.

Submitted by:

Gail P. Steinel, Chairperson

Jon E. Bortz

David W. Faeder

Warren M. Thompson

RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

GT has served as our independent registered public accounting firm for the year 2015. The Audit Committee approves in advance all fees paid to and services provided by GT. In addition, the Audit Committee has considered those services provided by GT and has determined that such services are compatible with maintaining the independence of GT. During 2015 and 2014, we retained GT to provide services in the following categories and amounts:


	2015		2014
Audit Fees(1)	$	654,051	$	591,951
Audit-Related Fees(2)		59,063		26,763
Tax Fees(3)		287,854		238,205
Other		0		0

Total	$	1,000,968	$	856,919

(1)

Audit fees include all fees and expenses for services in connection with: (a) the audit of our financial statements included in our annual reports on Form 10-K; (b) Sarbanes-Oxley Section 404 relating to our annual audit; (c) the review of the financial statements included in our quarterly reports on Form 10-Q; and (d) consents and comfort letters issued in connection with debt offerings and common stock offerings. These figures do not include $15,750 in 2015 and $17,325 in 2014 we paid to GT as our 30% share of the cost of the 2015 and 2014 financial statement audits of our joint venture with affiliates of a discretionary fund created and advised by Clarion Partners.

(2)	Audit-related fees primarily include the audit of our employee benefit plan and the audit of one of our properties.

(3)

$234,224 and $204,308 of the amounts shown for 2015 and 2014, respectively, relate solely to tax compliance and preparation, including the preparation of original and amended tax returns and refund claims and tax payment planning. These figures do not include $3,210 in 2015 and $3,120 in 2014 we paid to GT as our 30% share of the cost of tax return preparation for our joint venture with affiliates of a discretionary fund created and advised by Clarion Partners. The remaining amounts relate to requested tax research, none of which research related to tax shelters.

ITEM 2

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Trustees has retained GT as our independent registered public accounting firm for the year ending December 31, 2016 and is asking the shareholders to ratify that selection. Our organizational documents do not require ratification of the selection of our independent registered public accounting firm; however, we are seeking ratification because we believe that it is a matter of good corporate practice to do so. If the selection of GT is not ratified, the Audit Committee may reconsider whether to retain GT. Even if the selection of GT is ratified, the Audit Committee may change the appointment of GT at any time if it determines such a change would be in the best interests of the Trust and our shareholders.

A representative of GT will be present at the Annual Meeting and will have the opportunity to make a statement and answer appropriate questions from shareholders.

The Audit Committee believes that GT is qualified to serve as our independent registered public accounting firm. GT is familiar with our affairs and financial procedures, having served as our independent accountant since June 2002. GT is registered with the Public Company Accounting Oversight Board. Pursuant to its charter, the Audit Committee must pre-approve all audit and non-audit services provided by GT. For 2016, the Audit Committee to date has approved GT providing the following non-audit services: (a) tax planning and other consultation for purposes of structuring acquisitions, dispositions, joint ventures and other investment or financing opportunities as well as consultation associated with financial reporting matters provided that the aggregate amount paid to Grant Thornton for such services does not exceed $100,000; (b) issuance of comfort letters and consents in connection with capital markets transactions approved in accordance with the Trust’s policies and procedures provided that the aggregate amount paid to Grant Thornton for such services does not exceed $125,000; (c) issuance of audit opinions related to acquisition audits required under Rule 3-14 of Regulation S-X provided that the aggregate amount paid to Grant Thornton for such services does not exceed $75,000; and (d) a limited review of the Trust’s letter to the State of California EPA provided that the aggregate amount paid to Grant Thornton for such services does not exceed $3,400. The scope and amount of non-audit services that GT can perform in 2016 has remained relatively unchanged the last few years.

Once the pre-approved dollar limit for the applicable non-audit service has been reached, no additional services of that type can be provided by GT without further approval by the Audit Committee. The Audit Committee has concluded that GT’s providing these permissible non-audit services up to the aggregate pre-approved amounts would not compromise GT’s independence. The Audit Committee may approve GT providing additional non-audit services or services in excess of the amounts specified above if it determines that it is in our best interest and that GT’s independence would not be compromised. All audit and non-audit services provided to the Trust by GT for the 2015 fiscal year are described in the “Relationship With Independent Registered Public Accounting Firm” section above.

In addition to the foregoing non-audit services, the Audit Committee also approved GT performing audits of the financial statements for properties owned in two of our joint ventures for the fiscal year ending December 31, 2016. The Audit Committee approved GT performing these audits using the same criteria it uses for approving non-audit services.

Vote Required

The affirmative vote of a majority of votes cast at the Annual Meeting, in person or by proxy, is required to approve the proposal to ratify the Audit Committee’s selection of GT as our independent registered public accounting firm for 2016. If you are a “registered” shareholder who elects to receive materials by mail and you sign and return but fail to give any voting instructions on your proxy card on this matter, the proxies identified on the proxy card will vote FOR this proposal. An “abstention” or broker “non-vote” will have no effect on the outcome of the vote on this proposal, however, if you fail to give instructions to your broker, your broker may have authority to vote the shares for this proposal.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL TO RATIFY THE AUDIT COMMITTEE’S SELECTION OF GT AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016.

EXECUTIVE OFFICERS

Our current “named executive officers” are:

Donald C. Wood, Information for Mr. Wood is provided above in “Item 1—Election of Trustees.”

James M. Taylor, Jr., Executive Vice President-Chief Financial Officer and Treasurer of the Trust (since August 2012) with responsibility for overseeing the Trust’s capital markets, financial reporting, investor relations, corporate communications, information technology and East Coast acquisitions; Executive Vice President-Managing Director Southeast Core Operations of the Trust (since June 2015) with responsibility for overseeing the southeast core shopping center operations and asset management functions; Executive Vice President of the Trust from July 30, 2012 until August 14, 2012; and a senior managing director in the real estate investment banking division of Eastdil Secured and predecessors Wachovia Securities and First Union Securities (1998 to 2012). Prior to his career in investment banking, Mr. Taylor practiced corporate and securities law at Hunton & Williams (1994 to 1998) and worked as a senior accountant for Price Waterhouse (1988 to 1991).

Dawn M. Becker, Executive Vice President-General Counsel and Secretary of the Trust (since April 2002) with responsibility for overseeing the Trust’s Legal Department; Executive Vice President-Managing Director Mixed Use Operations of the Trust (since June 2015) with responsibility for overseeing the Trust’s mixed use operations and asset management functions and prior to that time, various officer positions with the Trust, including Executive Vice President – Chief Operating Officer (2010 to 2015) and Vice President—Real Estate and Finance Counsel (2000 to 2002).

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation, Discussion and Analysis (“CD&A”) describes the material components of, and the material factors and considerations behind, the compensation and benefits paid to our named executive officers.

You will be asked in Item 3 of this proxy statement to provide a non-binding, advisory vote on the compensation of our named executive officers as described in the following sections of this proxy statement. Please keep that in mind as you review the CD&A, summary compensation table, the supplemental tables and narrative disclosures that follow.

Executive Summary:

At our 2015 annual shareholder meeting, more than 98% of the Shares voted at the meeting supported our advisory vote on compensation for our named executive officers. We believe this high level of support reflected a high degree of shareholder confidence in our executive compensation programs and as a result, no changes were made to the compensation programs for our named executive officers in 2015.

Financially, 2015 was another record year of performance that kept us on track with our long-term business plan objectives. Some of the 2015 highlights included:

Revenues:

•

Record level of gross revenues

•

8.4% greater than 2014

Funds from Operations Available for Common Shareholders (“FFO”). FFO is a metric commonly used by REITs to measure performance:

•

Record level of FFO per share of $5.32 (excluding the impact of a debt prepayment charge)

•

7.7% greater than 2014 (both years adjusted to exclude the impact of debt prepayment charges)

•

4^th consecutive year of FFO per share growth of 7% or greater (excluding the impact of debt prepayment charges)

Leasing:

•

Signed 316 new and renewal leases (1.4 million square feet) for space in which there was a prior tenant

•

Cash basis rents 17% higher than the prior rent (an additional $6.4 million of rent per year)

Balance Sheet:

•

Raised $564.7 million of debt and equity capital

•

Lowered weighted average interest rate on debt to 4.1% and increased weighted average term to 10 years

Acquisitions/Developments:

•

Acquired $272.7 of new properties which provide immediate cash flow benefit as well as longer-term redevelopment opportunities

•

Opened The Point, El Segundo, CA, a 115,000 square foot retail and office project adjacent to our Plaza El Segundo property

•

Broke ground on the next phases of development at Assembly Row, Somerville, MA and Pike & Rose, North Bethesda, MD

•

Signed a lease for the entirety of our 234,500 square foot office building under construction at Santana Row, San Jose, CA

Dividends:

•

Increased our cash dividend to shareholders for the 48^th consecutive year

Shareholder Returns:

•

Delivered total returns to our shareholders (including reinvestment of dividends) of 116.0% over the past 5 years, 52.5% over the past 3 years and 12.3% over the past 1 year.

With respect to compensation of our named executive officers, the Compensation Committee took the following actions:

•

Chief Executive Officer—increased Mr. Wood’s target award level under our performance based, long-term equity program to $5 million and based on 2015 performance, exercised discretion permitted under that program to increase his award by approximately 5%. This was the first change of any kind to Mr. Wood’s target compensation since 2010 and the first time in more than 5 years the Committee exercised discretion to increase Mr. Wood’s award under our equity program.

•

Chief Financial Officer—increased annual base pay for Mr. Taylor to $450,000, the first such increase to his base pay since he joined the Trust in 2012, and based on 2015 performance, exercised discretion permitted under our long-term equity program to increase Mr. Taylor’s award by approximately 4%. This was the first time since Mr. Taylor joined the Trust that the Committee exercised discretion to increase his award under our equity program.

•

General Counsel—increased annual base pay for Ms. Becker to $450,000, the first such increase to her base pay since 2011.

No other changes were made for 2015 to the compensation of our named executive officers.

The following chart sets forth the target compensation for each of our named executive officers for 2013, 2014 and 2015 and the actual compensation earned by each such officer for those years based on company performance as measured against our performance hurdles for our annual performance bonus plan and our long-term, performance based equity plan.


		2013				2014				2015
NEO	Compensation Component	Target		Actual		Target		Actual		Target		Actual
Wood	Base	$	850,000	$	850,000	$	850,000	$	850,000	$	850,000	$	850,000
	Annual Performance Bonus(a)	$	1,275,000	$	1,540,583	$	1,275,000	$	1,540,583	$	1,275,000	$	1,540,583
	Long-Term Performance Based Equity(b)	$	4,000,000	$	6,000,000	$	4,000,000	$	3,000,000	$	5,000,000	$	7,000,000

	Total	$	6,125,000	$	8,390,583	$	6,125,000	$	5,390,583	$	7,125,000	$	9,390,583


Becker	Base	$	425,000	$	425,000	$	425,000	$	425,000	$	450,000	$	450,000
	Annual Performance Bonus(a)	$	318,750	$	385,146	$	318,750	$	385,146	$	337,500	$	407,801
	Long-Term Performance Based Equity(b)	$	600,000	$	900,000	$	600,000	$	450,000	$	600,000	$	798,750

	Total	$	1,343,750	$	1,710,146	$	1,343,750	$	1,260,146	$	1,387,500	$	1,656,551


Taylor	Base	$	400,000	$	425,000	$	400,000	$	425,000	$	450,000	$	450,000
	Annual Performance Bonus(a)	$	300,000	$	362,490	$	300,000	$	362,490	$	337,500	$	407,801
	Long-Term Performance Based Equity(b)	$	750,000	$	900,000	$	750,000	$	450,000	$	750,000	$	798,750

	Total	$	1,450,000	$	1,687,490	$	1,450,000	$	1,237,490	$	1,537,500	$	1,656,551

(a)

Does not include additional amounts paid in consideration of any portion of the annual performance bonus the named executive officer elects to have paid in stock that vests over a 3 year period.

(b)

Awards are earned based on performance for the three-year period ending on December 31 of the year indicated and then vest equally over the next three years. For example, the awards reflected for 2015 were earned based on performance from January 1, 2013 through December 31, 2015 and will vest equally in each of 2017, 2018 and 2019.

The actual compensation earned by our named executive officers for the annual performance bonus and performance based, long-term equity program as reflected in the chart above differs from the amounts shown in the Summary Compensation Table for the years shown primarily because the chart above reflects those amounts in the performance year in which they were earned and the Summary Compensation Table reflects these amounts in the year in which they were paid. We believe the chart above is helpful because it allows the actual compensation earned in any given year to be understood in the context of the Trust’s financial and other performance for that year.

Compensation Philosophy and Objectives:

Our compensation programs are designed to create a compensation package for each named executive officer that is sufficiently competitive to attract and retain top-level real estate professionals and to motivate those individuals to achieve superior results for us and our shareholders. As part of this compensation philosophy, we try to provide a strong link between an executive’s total earnings opportunity and both our short-term and long-term performance based on the achievement of pre-determined financial targets and operating goals and to encourage our executives to enhance shareholder value by acting and thinking like shareholders. The key principles guiding our compensation decisions are:

1. Total compensation opportunities must be competitive with the marketplace so that we can attract, retain and motivate talented executives who are necessary for achieving superior results for the Trust; however, the aggregate compensation levels must be reasonable in the context of our overall cost structure and must support our business strategy.

2. The compensation of our named executive officers should include a significant portion that is “at risk” and variable depending on both our short-term financial performance and long-term creation of shareholder value with the largest portion of that “at risk” compensation designed to incentivize the creation of sustainable, long-term shareholder value. The “at risk” portion of 2015 compensation for our named executive officers is comprised of annual performance bonuses under our Annual Bonus Plan and performance based, long-term equity awards under our LTIAP, both of which are earned only if the Trust meets pre-established performance hurdles. As you can see from the chart below, these “at risk” portions of compensation represent a significant percentage of the total compensation for each of our named executive officers—91% for Mr. Wood, 73% for Ms. Becker and 75% for Mr. Taylor.

LOGO

3. We want our executives to act in the best interest of our shareholders and incentivize that behavior by having a significant portion of their compensation paid in the form of equity and by requiring that they maintain a meaningful ownership position. We require Mr. Wood, as our CEO, to have an equity ownership in the Trust of at least three times his base salary and annual performance bonus and that Ms. Becker and Mr. Taylor each have an equity ownership in the Trust of at least two and one-half times their respective base salary and annual performance bonus. Each of Mr. Wood, Ms. Becker and Mr. Taylor were in compliance with this requirement as of December 31, 2015. We also prohibit all of our officers and Trustees from engaging in any hedging or pledging activities with respect to the Trust’s stock.

4. The amount each executive actually earns out of his or her total compensation opportunity should vary based on the individual’s performance, contribution and overall value to the business. The proportion of an individual’s total compensation that varies with individual and company performance objectives should increase as the individual’s business responsibilities increase.

In crafting our compensation policies and programs, we also consider whether they will encourage excessive or unnecessary risk taking and as described in the “Risk Management Oversight” section, we have concluded that our compensation programs do not do so. We do not currently have any clawback or other compensation recovery policy with respect to compensation that may have been paid on the basis of incorrect financial results. Given the SEC’s pending clawback rule and the expectation that the final rule will be adopted in 2016, the Board elected to wait until the final rulemaking was in place before adopting a clawback policy so that our policy would be in full compliance with SEC requirements.

Compensation Methodology

The Compensation Committee of the Board is responsible for approving all compensation for our named executive officers and periodically reviews all elements of compensation to ensure that we remain competitive in the market and that overall compensation, including the means by which payment is made, is aligned with our business objectives, our performance and the interests of our shareholders. The Compensation Committee conducts an annual review of our CEO’s performance and takes those results into consideration when setting his compensation. Our CEO makes recommendation for the compensation for our other named executive officers based on his evaluation of their performance and the Compensation Committee has the discretion to accept, reject or modify the CEO’s recommendations.

The total potential compensation for our named executive officers is established based on the scope of their individual responsibilities and contributions to our performance taking into account competitive market compensation paid for similar positions. Competitive market compensation for our named executive officers is generally determined by the Compensation Committee members applying their individual understanding, experiences and judgments in the national marketplace of senior level real estate positions and related industry pay in both public and private concerns that may compete for our executives, considering the relative importance of various positions at the Trust given our business plan and organization compared with the business plans of our major competitors. The Compensation Committee consulted the National Association of Real Estate Investment Trust’s 2014 and 2015 Compensation Surveys (“NAREIT Surveys”) to confirm its assessment of appropriate market compensation for our named executive officers, both the information reported for each position by the 121 real estate investment trusts (“REITs”) that participated in the survey as well as by the approximately 28 retail focused REITs that participated in the survey. Not all REITs that participated in the survey provided information for each of the named executive officer positions and it is not possible to determine from the NAREIT Survey which of the participating REITs provided information for which executive officer position. Once the Compensation Committee determines an appropriate level of aggregate compensation for our named executive officers, an individual compensation package is created using a combination of base salary, annual bonus and long-term equity incentives, all in accordance with the compensation philosophy and objectives described earlier.

Elements of Total Compensation

Base Salaries

Base salaries are used to compensate the executive for services rendered during the year. Base salaries are set at the beginning of each year and are intended to be competitive with the market and commensurate with the executive’s level of responsibility, experience and sustained individual performance. Base salaries provide retention value and also align the executive with shareholder interests. Generally, we believe that executive base salaries should account for a relatively modest portion of each individual’s total compensation package. Because we start our process with determining an appropriate level of total compensation, we do not target base salaries to any specific level. We did, however, use information in the NAREIT Survey as a guide to confirm that the base salaries for our named executive officers are within market parameters.

Annual Performance Bonus:

Annual performance bonuses for each of our named executive officers are determined each year in accordance with our Annual Bonus Plan that covers approximately 97% of our employees. The Annual Bonus Plan is intended to compensate individuals for performance during a calendar year. Payment under the Annual Bonus Plan is dependent on: (a) the Trust’s achieving an annual level of FFO per share that is consistent with our business objectives for that year; and (b) the individual’s achieving his/her annual performance objectives as subjectively evaluated by the Board with respect to our CEO and by our CEO with respect to each of our other named executive officers. Under our Annual Bonus Plan, the Compensation Committee sets annually a potential bonus payout for each of our named executive officers for achieving various levels of FFO per share for that calendar year. The Compensation Committee also has the ability to decrease the final annual bonus payout to any of these individuals based on their performance for the year. Each of our named executive officers (as well as approximately 85 other employees) has the option to receive up to 25% of the annual bonus in the form of Shares that vest equally over three years. The amount an individual elects to receive in Shares is paid out at 120% of that amount in consideration of the extended vesting.

The level of FFO per share at which payouts are established is set at the beginning of each year by the Compensation Committee after a thorough review and discussion of our budget and investor expectations for that year and considering recommendations of our CEO. The FFO per share levels established by the Compensation Committee are intended to reflect acceptable to exceptional performance in light of our business objectives. FFO is widely accepted in the REIT industry as an appropriate measurement of operating performance on an annual basis and as a result, we believe FFO per share is an appropriate metric to use for determining short-term financial success which is being rewarded in annual performance bonuses. The following chart shows the potential 2015 annual bonus payouts established by the Compensation Committee for each of our named executive officers at various levels of FFO per share and the final potential annual bonus payout based on our 2015 results:


NEO	Potential Bonus Payout
NEO	FFO Below $4.94 per share		FFO at $4.94 per share		FFO at $5.00 per share		FFO at $5.06 per share		Final Payout Based on Results
Donald Wood	$	0	$	956,250	$	1,275,000	$	1,593,750	$	1,540,583
Dawn Becker	$	0	$	253,125	$	337,500	$	421,875	$	407,801
James Taylor	$	0	$	253,125	$	337,500	$	421,875	$	407,801

In 2015, we achieved FFO of $5.05 per share which resulted in an annual bonus payout of 96.7% of the maximum potential payout. FFO levels for Annual Bonus purposes include the impact of an approximately $0.27 per Share debt prepayment charge. A reconciliation of net income to FFO available for common shareholders can be found on page 49, in Item 7, of our Form 10-K for calendar year 2015 filed with the SEC on February 9, 2016.

The Compensation Committee determined, after reviewing individual performance, that each of our named executive officers should be paid the full amount of the annual bonus to which he or she is entitled based on the Trust’s 2015 results. The Compensation Committee’s determination with respect to Mr. Wood took into consideration our financial results for the year, progress made with our acquisitions and development projects to set the Trust up for future long-term growth, Mr. Wood’s effectiveness in leading the company, long-term strategic planning, succession planning, relationship with the Board, and relationship with shareholders and other stakeholders, among other factors. With respect to each of Ms. Becker and Mr. Taylor, the Compensation Committee accepted Mr. Wood’s recommendations as to the amount of their annual bonus payouts. Mr. Wood’s recommendations as to the bonus payouts for each of Ms. Becker and Mr. Taylor were based on his subjective assessment of each individual’s contributions to the Trust’s performance in 2015 in their respective job functions. Those contributions included, without limitation, the following: (a) Ms. Becker’s oversight of the Trust’s East Coast restructuring in 2015; and (b) Mr. Taylor’s work in financing our development pipeline and growing our portfolio through acquisitions.

For 2015, Mr. Wood elected to receive 25% of his annual bonus in Shares and Mr. Taylor elected to receive 20% of his annual bonus in Shares. The cash portion of the annual bonuses is reflected in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table in this proxy statement. The stock portion of these annual bonuses will be included in the “Stock Awards” column in the Summary Compensation Table and the Grants of Plan-Based Awards Table in next year’s proxy statement.

Annual Performance Based Long-Term Equity Incentives:

We believe that outstanding long-term performance is achieved through an ownership culture that encourages a focus on long-term performance by our executive officers through the use of equity-based awards. Long-term incentive awards are made annually to all officers under our LTIAP. This program was structured to align the most significant portion of compensation for our senior management team with the creation of long-term shareholder value. Recipients of awards under this program realize value over a minimum 6-year time horizon comprised of a 3-year performance period followed by a minimum of a 3-year time based vesting period. We believe that the combination of this extended period with the requirements described above for our named executive officers to continually hold a meaningful equity position in the company creates a strong long-term alignment of interests between those individuals and our shareholders.

The performance metrics used under the LTIAP, the levels of performance required to be achieved for our named executive officers to earn an LTIAP award and the performance actually achieved for the three year period from January 1, 2013 through December 31, 2015 are set forth below:


Relative Total Shareholder Return (a) (b) Weight 50%			Absolute Total Shareholder Return (a) Weight 25%				Return on Invested Capital Weight 25%
Performance	Payout % Target		Performance		Payout % Target		Performance		Payout % Target
< 40th percentile		0%		< 8%		0%		< 8.00%		0%
40th percentile		50%		8%		50%		8.00%		50%
60th percentile		100%		10%		100%		8.25%		100%
³ 80th percentile		150%		³ 12%		150%		³ 8.50%		150%

Actual Achieved		Actual Payout		Actual Achieved		Actual Payout		Actual Achieved		Actual Payout
66.58 percentile		133.13%		15.09%		150%		8.59%		150%

(a)

Total shareholder return takes into account both stock price appreciation and dividends assuming all dividends are reinvested.

(b)

Measured against the Bloomberg REIT Shopping Center Index (“BBRESHOP”).

The Compensation Committee believes that relative total shareholder return, absolute total shareholder return and return on invested capital are appropriate metrics to use for rewarding long-term performance. The relative shareholder return metric reflects how well we have performed for our shareholders as compared to other companies facing the same general market dynamics. The Compensation Committee determined that the BBRESHOP was the best index to use because the BBRESHOP is an industry index made up of primarily companies that own and operate strip shopping centers whose businesses are most closely aligned with ours. Absolute shareholder return measures whether we have actually created any value for our shareholders during this time while return on invested capital determines how effectively we have invested our shareholders’ capital. These performance metrics support the objectives of the company and the LTIAP and remain unchanged from prior years.

The potential LTIAP payments for each of our named executive officers at the various levels of performance for each of the performance metrics under the LTIAP and the amounts actually earned by each individual for the prior 3-year period are set forth in the following table:


	Threshold		Target		Stretch		Actual Award
Donald Wood
Relative Total Return	$	1,250,000	$	2,500,000	$	3,750,000	$	2,906,250
Absolute Total Return	$	625,000	$	1,250,000	$	1,875,000	$	1,875,000
Return on Invested Capital	$	625,000	$	1,250,000	$	1,875,000	$	1,875,000

Total Potential Award	$	2,500,000	$	5,000,000	$	7,500,000	$	6,656,250
Exercise of permitted discretion							$	343,750

Total							$	7,000,000

Dawn Becker
Relative Total Return	$	150,000	$	300,000	$	450,000	$	348,750
Absolute Total Return	$	75,000	$	150,000	$	225,000	$	225,000
Return on Invested Capital	$	75,000	$	150,000	$	225,000	$	225,000

Total Potential Award	$	300,000	$	600,000	$	900,000	$	798,750

James Taylor
Relative Total Return	$	300,000	$	375,000	$	450,000	$	435,938
Absolute Total Return	$	150,000	$	187,500	$	225,000	$	225,000
Return on Invested Capital	$	150,000	$	187,500	$	225,000	$	225,000

Total Potential Award	$	600,000	$	750,000	$	900,000	$	885,938
Exercise of permitted discretion							$	39,062

Total							$	925,000

The Compensation Committee approved paying each of our named executive officers the full amount of the LTIAP award to which they were entitled. In addition, under our LTIAP, the Compensation Committee has the discretion to increase or decrease any award by up to 20% to reflect individual performance and chose to exercise that discretion to increase Mr. Wood’s award by 5.2% and Mr. Taylor’s award by 4.4%. The Compensation Committee determined that such modest increases were appropriate to recognize the significant contributions made by Mr. Wood and Mr. Taylor in 2015.

The LTIAP awards are made in the form of restricted Shares that vest in equal installments over a three-year period; however, each individual can elect to take up to 50% of his or her award in the form of options which vest equally over five years. Although the Compensation Committee believes that paying these awards in restricted Shares provides the most retention value for employees, it has agreed to permit individuals to elect to take up to 50% of the award in options in order to give the individual employee some ability to structure his or her own equity compensation in a way that best matches the individual’s needs and provides the most value to that individual. The Compensation Committee has concluded that individual employees place value in having the ability to match the form of their equity compensation to their individual financial objectives and that this value to employees outweighs any diminution in the retention value of LTIAP awards by permitting up to 50% to be paid in options. Dividends are paid on all Shares issued under the LTIAP.

Each of our named executive officers elected to take the entirety of this or her 2015 LTIAP award in Shares. The number of Shares actually awarded to each individual was determined by dividing the amount of the award by $152.34, the closing price of our stock on the NYSE on the date the awards were made. There is no amount included for 2015 in the Summary Compensation Table or Grants of Plan-Based Awards Table in this proxy statement for these awards. The LTIAP awards reflected for 2015 in the Summary Compensation Table and the Grants of Plan-Based Awards Table for our named executive officers in this proxy statement relate to performance for the 3-year period ending December 31, 2014 which were awarded in February 2015.

Chief Executive Officer Compensation

More than 90% of Mr. Wood’s compensation is performance driven. Approximately 16% is earned through our Annual Bonus Plan on the basis of 1-year FFO goals reflecting our business objectives for that year and approximately 75% is earned through our LTIAP on the basis of total shareholder return (on both an absolute and relative basis) and return on invested capital over the longer-term 3-year performance period. The Compensation Committee believes that this mix of compensation creates an appropriate alignment between Mr. Wood’s compensation and company performance.

In addition to the base salary, annual bonus and LTIAP award described above, we have an agreement in place with Mr. Wood (“Health Coverage Continuation Agreement”) pursuant to which we have agreed to provide to Mr. Wood, his spouse and his dependents continuation of health coverage after Mr. Wood’s termination upon death, disability, retirement, change in control or otherwise (other than a termination with cause or resignation). The coverage will continue as to Mr. Wood and his spouse until their death, or with respect to his spouse until divorce, if earlier. As to Mr. Wood’s children, coverage will continue as to three of the children until each reaches age twenty-five and as to one of the children, until her death. The continued medical coverage is required to be at least the same level as provided to Mr. Wood and his family at the time of his termination and such coverage will be secondary to certain other coverages that may be available to Mr. Wood and his family. The Compensation Committee has determined that these perquisites and other personal benefits are a relatively small portion of Mr. Wood’s overall compensation, are reasonable in light of the total compensation package for Mr. Wood and are consistent with our compensation objectives of creating programs that will allow us to retain talented executives.

Timing of Equity Grants:

Equity awards to our employees under our Annual Bonus Plan and LTIAP described above are made at the Compensation Committee’s meeting that occurs in February of each calendar year. Whether these awards are made before or after we release financial results for the prior fiscal year depends solely on when the Compensation Committee meets in relation to the meetings of the Board and the Audit Committee, the dates for all of which are set during the preceding year. We have no policy that times the granting of equity awards relative to the release of material non-public information. Equity awards to new hires are generally made on the first day on which the employee starts work and equity awards to employees who are promoted generally are made on the day on which the promotion has been fully approved. All of our options are awarded at the closing price of our Shares on the NYSE on the date the award is made. The Compensation Committee has never re-priced options, granted options with an exercise price that is less than the closing price on the NYSE on the date of the grant or granted options which are priced on a date other than the grant date. Equity awards for Vice Presidents and above for the 3-year performance period ending on December 31, 2015 were made at the Compensation Committee’s meeting on February 3, 2016 based on the closing price of our Shares on the NYSE on that date.

Termination and Change-in-Control Arrangements:

We have agreements in place with each of our named executive officers providing for various payments and benefits to be made to them if there is a change in control or their employment with us is terminated for certain reasons. The circumstances in which payments may be made and the potential amounts of those payments are described in more detail in the “Potential Payments on Termination of Employment and Change-in-Control” section below. We believe that the payments provided for in these agreements are reasonable and appropriate as part of the total compensation packages available for our named executive officers.

Deductibility of Executive Compensation in Excess of $1.0 Million:

Section 162(m) of the Internal Revenue Code generally prohibits any publicly held corporation from taking a federal income tax deduction for compensation in excess of $1 million in any taxable year to an executive

officer who is named in the Summary Compensation Table. Exceptions are made for qualified performance-based compensation, among other things. In structuring our compensation programs, the Compensation Committee considers this Section 162(m) exception; however, the Compensation Committee does not believe that it is necessarily in our best interests and the best interests of our shareholders for all compensation to meet the requirements of Section 162(m) for deductibility. As a result, the Compensation Committee has determined that it is appropriate at times to make compensation awards that are non-deductible under Section 162(m). Further, because of ambiguities and uncertainties under Section 162(m), we cannot give any assurance that compensation that we intend to satisfy the requirements for deductibility under Section 162(m) will in fact be deductible.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Submitted by:

David W. Faeder, Chairman

Kristin Gamble

Gail P. Steinel

Joseph S. Vassalluzzo

SUMMARY COMPENSATION TABLE

The following table summarizes the total compensation earned by each of the named executive officers for the fiscal years ended December 31, 2015, 2014 and 2013, in accordance with current SEC rules. The Summary Compensation Table below does not include the value of the Shares issued to our named executive officers on February 3, 2016 for the performance period ending December 31, 2015. Those awards will appear in next year’s proxy statement in the Grants of Plan-Based Awards Table as well as the “Stock Awards” column of the Summary Compensation Table. The cash portion of the annual bonuses awarded pursuant to the Annual Bonus Plan in February 2016 based on 2015 performance is included below in the “Non-Equity Incentive Plan Compensation” column.


Name and Principal Position	Year		Salary		Stock Awards		Non-Equity Incentive Plan Compensation		All Other Compensation		Total
			($) (1)		($) (2)		($) (3)		($) (4)		($)
Donald C. Wood, President and Chief Executive Officer (PEO)		2015	$	850,000	$	3,462,159	$	1,155,437	$	15,435	$	5,483,031
		2014	$	850,000	$	6,369,693	$	1,155,437	$	13,140	$	8,388,270
		2013	$	850,000	$	6,351,889	$	1,232,466	$	16,716	$	8,451,071

James M. Taylor, Jr., Executive Vice President- Chief Financial Officer and Treasurer (PFO)		2015 2014 2013	$ $ $	450,000 400,000 400,000	$ $ $	108,717 1,886,948 982,810	$ $ $	326,241 271,868 289,992	$ $ $	1,977 1,977 1,392	$ $ $	886,935 2,560,793 1,674,194

Dawn M. Becker, Executive Vice President-General Counsel and Secretary		2015	$	450,000	$	565,500	$	407,801	$	10,384	$	1,433,685
		2014	$	425,000	$	1,015,465	$	288,859	$	10,159	$	1,739,483
		2013	$	425,000	$	1,009,986	$	288,859	$	9,652	$	1,733,497

(1)	Amounts shown in the Salary column include all amounts deferred at the election of the named executive officers into our non-qualified deferred compensation plan.

(2)

Amounts shown in the Stock Awards column reflects the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718 for the fiscal years ended December 31, 2015, 2014 and 2013. For a discussion of the valuation of these awards, please refer to Note 15 in the notes to our consolidated financial statements in our Annual Report on Form 10-K filed on February 9, 2016.

(3)

Amounts shown in this column represent only the cash portion paid under our Annual Bonus Plan and include amounts deferred by our named executive officers into our non-qualified deferred compensation plan. For 2015, Mr. Wood received 75% of his Annual Bonus in cash, Mr. Taylor received 80% of his Annual Bonus in cash and Ms. Becker received 100% of her bonus in cash. For 2014, all of the named executive officers received 75% of their Annual Bonus in cash and for 2013 Messrs. Wood and Taylor received 80% of their Annual Bonus in cash and Ms. Becker received 75% of her Annual Bonus in cash. The remaining amounts earned under the Annual Bonus Plan in 2015, 2014 and 2013 were paid in Shares in an amount equal to 120% of the cash value in consideration of a 3-year vesting schedule. The aggregate Annual Bonus paid to Ms. Becker and Messrs. Wood and Taylor for 2015 including both cash and Shares is as follows:


2015 Annual Incentive Bonus Information
Name	Annual Incentive Bonus Awarded		Amount Paid in Cash		Amount Paid in Shares		20% Premium Paid in Shares		Total Annual Incentive Bonus Paid		Number of Shares Issued
	($)		($)		($) (a)		($) (a)		($)		(#) (b)
Donald C. Wood	$	1,540,583	$	1,155,437	$	385,146	$	77,029	$	1,617,612		3,034
James M. Taylor, Jr.	$	407,801	$	326,241	$	81,560	$	16,312	$	424,113		642
Dawn M. Becker	$	407,801	$	407,801	$	—	$	—	$	407,801		0

(a)

The value of the Shares awarded in 2016 as part of the Annual Bonus for 2015, will be reflected in the Summary Compensation Table and the Grant of Plan-Based Awards Table in next year’s proxy statement.

(b)

The number of Shares actually awarded to Mr. Wood and Mr. Taylor was determined by dividing the amount of the award by $152.34, the closing price of our stock on the NYSE on February 3, 2016, the date the award was made.

(4)

The amounts shown in this column for the last fiscal year include the amounts below. The group-term life insurance, long-term disability insurance and contributions to the 401K plan are provided to the named executive officers on the same terms, condition and scope as are available to all of our full-time employees.


All Other Compensation Table
Name	Group Term Life Insurance		Long-Term Disability Insurance Premium		Supplemental Life Insurance		Trust Contribution to Section 401(k) Plan		Total
	($)		($)		($)		($)		($)
Donald C. Wood	$	4,128	$	1,291	$	3,390	$	6,625	$	15,434
James M. Taylor, Jr.	$	630	$	1,347	$	—	$	—	$	1,977
Dawn M. Becker	$	1,035	$	1,291	$	1,432	$	6,625	$	10,383

2015 GRANTS OF PLAN-BASED AWARDS TABLE

The following Share awards were made in 2015 for either a one or three-year performance period ending December 31, 2014. Awards made in 2016 to the named executive officers under the Annual Bonus Plan and LTIAP for either a one or three-year performance period ending December 31, 2015 will be reported in the Grants of Plan-Based Awards Table in next year’s proxy statement.


Name	Grant Date			All Other Stock Awards: Number of Shares of Stock or Units (3)		Grant Date Fair Value
				(#)		($)
Donald C. Wood		2/6/2015	(1)		3,248	$	462,190
		2/6/2015	(2)		21,082	$	2,999,969
James M. Taylor		2/6/2015	(1)		764	$	108,717
Dawn M. Becker		2/6/2015	(1)		812	$	115,548
		2/6/2015	(2)		3,162	$	449,953

(1)	Issued under our Annual Bonus Plan. These Shares vest equally over 3 years.

(2)	Issued under our LTIAP. These Shares vest equally over 3 years.

(3)	Dividends are paid on all Shares issued at the same rate and time as paid to all other holders of our Shares as declared by our Board from time to time.

2015 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

The following table sets forth information about outstanding equity awards held on December 31, 2015 by our named executive officers.


	Option Awards								Stock Awards
	Number of Securities Underlying Unexercised Options		Number of Securities Underlying Unexercised Options		Option Exercise Price		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested			Market Value of Shares or Units of Stock That Have Not Vested
Name	Exercisable		Unexercisable		Option Exercise Price		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested
	(#)		(#)		($)				(#)			($)
Donald C. Wood		144,788		0	$	43.48		2/17/2019		3,248	(1)	$	474,533
		84,507		0	$	73.03		2/10/2018		21,082	(1)	$	3,080,080
		18,701		0	$	92.30		2/12/2017		2,207	(2)	$	322,443
										35,810	(2)	$	5,231,841
										1,096	(3)	$	160,126
										18,693	(3)	$	2,731,047
James M. Taylor, Jr.		0		0						764	(1)	$	111,620
										519	(2)	$	75,826
										6,446	(4)	$	941,761
										6,446	(4)	$	941,761
										258	(3)	$	37,694
										2,804	(3)	$	409,664
Dawn M. Becker		39,941		0	$	73.03		2/10/2018		812	(1)	$	118,633
										3,162	(1)	$	461,968
										689	(2)	$	100,663
										5,371	(2)	$	784,703
										343	(3)	$	50,112
										2,804	(3)	$	409,664
										1,220	(5)	$	178,242

(1)	One-third of these Shares vested on February 12, 2016 and the remaining Shares vest on February 12, 2017 and 2018.

(2)	One-half of these Shares vested on February 12, 2016 and the remaining Shares vest on February 12, 2017.

(3)	These shares vested on February 12, 2016.

(4)	One-fourth of these Shares vested on February 12, 2016 and the remaining Shares vest on February 12, 2017, 2018 and 2019.

(5)	The remaining Shares vest on February 10, 2017.

2015 OPTION EXERCISES AND STOCK VESTED

The following table includes certain information with respect to options exercised in 2015 by each named executive officer and Shares that vested during 2015.


	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise		Value Realized on Exercise		Number of Shares Acquired on Vesting		Value Realized on Vesting
	(#)		($)		(#)		($)
Donald C. Wood		0	$	—		121,656	$	17,432,440
James M. Taylor		0	$	—		6,544	$	945,870
Dawn M. Becker		8,203	$	602,693		10,382	$	1,497,967

2015 NON-QUALIFIED DEFERRED COMPENSATION

We maintain a non-qualified deferred compensation plan that is open to participation by 34 members of our management team, including our named executive officers. Each participant can elect to defer up to 100% of his or her base salary and cash payment under our Annual Bonus Plan with deferral elections made in December of each year for amounts to be earned in the following year. A number of widely available investment options are made available to each plan participant who then decides how to allocate amounts deferred among those investment options. The amount earned by plan participants on their deferrals is calculated by our third party plan administrator as if the amounts deferred had actually been invested in the investment options selected by each participant. We do not make any contributions to the deferred compensation plan for any individual nor do we guaranty any rate of return on amounts deferred. Amounts deferred into the plan, including amounts earned on the deferrals, are generally payable to the participant shortly after he or she retires or is otherwise no longer employed by us; however, there are a few other alternatives where amounts may be paid to a participant sooner. We have an unsecured contractual obligation to each participant in the plan to pay him or her the actual amount he or she deferred into the plan together with a return calculated as if the deferred amounts had been invested in the investment options selected by the participant. We try to invest amounts deferred by participants into the same investment options in the same proportions as selected by the participant so that sufficient amounts will be available to pay each participant when required. The amounts deferred by Ms. Becker and Mr. Wood into the plan in 2015, the earnings on plan investments in 2015 and aggregate withdrawals and distributions made in 2015 are described below. Mr. Taylor does not participate in our deferred compensation plan.


Name	Executive Contributions in Last Fiscal Year		Registrant Contributions in Last Fiscal Year		Aggregate Earnings in Last Fiscal Year			Aggregate Withdrawals / Distributions		Aggregate Balance at Last Fiscal Year-End
	($) (a)		($)		($)			($)		($)
Donald C. Wood	$	250,000	$	—	$	(4,689	)	$	—	$	4,154,235
Dawn M. Becker	$	44,971	$	—	$	15,457		$	—	$	1,130,477

(a)	All amounts in this column are included in either the “Salary” or “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.

POTENTIAL PAYMENTS ON TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL

We have entered into agreements with each of our named executive officers that require us to make certain payments and provide certain benefits to them in the event of a termination of employment or change in control of the Trust. Regardless of the reason for a named executive officer’s termination of employment, he or she will be entitled to receive upon termination all accrued but unused vacation pay and a distribution of any amounts in our non-qualified deferred compensation plan. No named executive officer is entitled to receive an award under the Annual Bonus Plan or the LTIAP for the year in which the termination occurs. Further, no named executive officer is entitled to receive an award under the Annual Bonus Plan or LTIAP for the year prior to the year of termination unless he or she is still employed when those awards are made in February of the following year. The agreements with each of our named executive officers contain provisions restricting the executive from engaging in competing behavior and soliciting and/or hiring our employees for a period of time after termination. The payments that will be made to a named executive officer vary depending on the reason for termination and are summarized below.

1. Payments on Voluntary Termination: On any voluntary termination of employment, the named executive officers receive no additional compensation and all unvested options and Shares are forfeited. Each named executive officer has one year after terminating employment to exercise all vested options (subject to the 10-year term of those options). With respect to Mr. Wood, all rights to receive extended health insurance coverage under the Health Coverage Continuation Agreement are terminated.

2. Payments on Death and Disability: Upon death, the estates of our named executive officers receive the amount of his or her then current salary through the month in which death occurs. In the event of disability, our named executive officers are entitled to receive payments for one year equal to the difference between his or her then current salary and the amount of any payments received under any disability policy we maintained for his or her benefit and to receive health benefits for one year. Those payments are subject to gross-up for taxes on any non-tax exempt payments. On death or disability, there is accelerated vesting of all Shares issued under the Annual Bonus Plan and all Shares and options issued under the LTIAP. This accelerated vesting is the same for all employees on a non-discriminatory basis who hold any Shares or options issued under the Annual Bonus Plan or the LTIAP. The Retention/Non-Solicitation Award to Ms. Becker in February 2011 does not provide for accelerated vesting in the event of death or disability. Each named executive officer or his or her beneficiary has two years after the executive’s death or disability to exercise all vested options (subject to the 10-year term of those options), including options that vested as a result of the death or disability. In addition, Mr. Wood will receive the benefits described in his Health Coverage Continuation Agreement.

3. Payment on Termination for Cause: Upon termination for cause resulting from a failure to substantially perform his or her job responsibilities, each of our named executive officers is entitled to receive one month of base salary for every year he or she has been employed by us over 5 years up to a maximum of 6 months of base salary and to receive health benefits for that same time period. Our named executive officers are not entitled to receive any compensation on a termination with cause for any reason other than failure to perform. On a termination for cause, all unvested options and Shares are forfeited. In addition, the right to exercise any previously vested options issued under the LTIAP immediately terminates. With respect to Mr. Wood, all rights to receive extended health insurance coverage under the Health Coverage Continuation Agreement are terminated.

4. Termination without Cause: Upon a termination without cause, each of our named executive officers is entitled to receive the following:

•

A lump sum cash payment equal to a multiple of the highest base salary and the highest annual bonus earned by the named executive officer in the prior three year period. For Ms. Becker and Mr. Taylor, the multiple is 1 time and for Mr. Wood, the multiple is 1.5 times.

•

Continuation of health and welfare benefits for a period of 9 months

•

Outplacement and administrative assistance for a period of 6 months

In addition, the vesting of all unvested Shares issued under the Annual Bonus Plan and all unvested Shares and options issued under the LTIAP is accelerated for each of our named executive officers. This accelerated vesting is the same for all employees on a non-discriminatory basis who hold any Shares or options issued under the Annual Bonus Plan or the LTIAP. The Retention/Non-Solicitation Award to Ms. Becker in February 2011 does not provide for accelerated vesting in the event of a termination without cause. Each named executive officer has one year after the executive’s termination to exercise all vested options (subject to the 10-year term of those options), including options that vested as a result of the termination. In addition, Mr. Wood will receive the benefits described in his Health Coverage Continuation Agreement.

5. Change of Control: Upon a change of control, each named executive officer is entitled to receive the following payments so long as he or she is terminated from employment or leaves for good reason within two (2) years after the change of control or voluntarily leaves employment within the thirty day window following the 1-year anniversary of the change of control:

•

A lump sum cash payment equal to a multiple of the highest base salary and highest annual bonus earned by the named executive officer in the prior three year period. For Ms. Becker and Mr. Taylor the multiple is 2 times and for Mr. Wood, the multiple is 3 times

•

Continuation of health, welfare and other benefits such as administrative assistance for a period of 2 years for Ms. Becker and Mr. Taylor and 3 years for Mr. Wood

•

Continued use of any company owned automobile for 3 years for Mr. Wood

•

An amount equal to the excise tax charged to the named executive officer as a result of receiving any change of control payments plus an additional “gross-up” amount sufficient to pay the taxes to be paid by the named executive officer on the excise tax payment received

In addition, if the named executive officer is terminated within one year after the change of control, the vesting of all unvested Shares issued under the Annual Bonus Plan and all unvested Shares and options issued under the LTIAP is accelerated. This accelerated vesting is the same for all employees on a non-discriminatory basis who hold any Shares or options issued under the Annual Bonus Plan or the LTIAP. Each named executive officer has one year after the executive’s termination to exercise all vested options (subject to the 10-year term of those options), including options that vested as a result of the termination. In addition, in the event of a change of control, the unvested Shares issued under the Retention/Non-Solicitation Award to Ms. Becker in February 2011 will vest. Mr. Wood will also receive the benefits described in his Health Coverage Continuation Agreement.

Under our 2001 and 2010 Plans, a change of control is deemed to have occurred when a person acquires a 20% interest in us, or our current Trustees, or those subsequently approved by our current Trustees, constitute less than two-thirds of our Board.

The amount of compensation payable to each of the named executive officers under various termination scenarios is reflected below. The following table does not include amounts for accrued but unused vacation pay or the distribution of any amounts in our non-qualified deferred compensation plan because all employees or participants in the applicable plan are entitled to the same benefit on a non-discriminatory basis. Our corporate policy permits employees, including our named executive officers, to accrue up to eight weeks of unused vacation time. The amounts

shown below assume that the termination was effective on December 31, 2015 and therefore, includes all amounts earned to that date as well as an estimate of amounts that would be payable upon the termination.


	Cash Payment		Medical Benefits (1)		Accelerated Equity (2)		Other Benefits (3)		Excise Tax Gross-Up		Total
Donald C. Wood
Death	$	—	$	894,000	$	9,825,883	$	—	$	—	$	10,719,883
Disability(4)	$	923,919	$	1,221,033	$	9,825,883	$	—	$	—	$	11,970,835
TWOC	$	3,585,874	$	1,242,275	$	9,825,883	$	62,028	$	—	$	14,716,060
Termination for Cause	$	425,000	$	15,517	$	—	$	—	$	—	$	440,517
CIC	$	7,171,748	$	1,312,100	$	9,825,883	$	124,055	$	—	$	18,433,786

James M. Taylor, Jr.
Death	$	—	$	—	$	1,934,329	$	—	$	—	$	1,934,329
Disability(4)	$	342,559	$	23,965	$	1,934,329	$	—	$	—	$	2,300,853
TWOC	$	857,801	$	17,974	$	1,934,329	$	54,250	$	—	$	2,864,354
Termination for Cause	$	—	$	—	$	—	$	—	$	—	$	—
CIC	$	1,715,602	$	47,930	$	1,934,329	$	81,375	$	—	$	3,779,236

Dawn M. Becker
Death	$	—	$	—	$	1,579,100	$	—	$	—	$	1,579,100
Disability(4)	$	328,591	$	11,097	$	1,579,100	$	—	$	—	$	1,918,788
TWOC	$	857,801	$	8,323	$	1,579,100	$	54,250	$	—	$	2,499,474
Termination for Cause	$	225,000	$	5,549	$	—	$	—	$	—	$	230,549
CIC	$	1,715,602	$	22,195	$	1,679,115	$	81,375	$	—	$	3,498,287

(1)

Amounts in this column represent our estimate of the COBRA equivalent to provide the same benefits as being provided to each named executive officer at December 31, 2015 for the required time period. This estimate was determined by us with input from our health insurance broker and health coverage insurer to confirm that our estimate was consistent with the market cost of providing a stand-alone health insurance program with similar coverage. Because our health insurance program includes a self-insured retention, it is impossible to determine the exact cost to us of the continued health insurance. We believe the COBRA equivalent is the best possible measure of potential costs for these benefits. For Mr. Wood, this column also includes the following estimated costs (calculated in accordance with GAAP) pursuant to the Health Continuation Coverage Agreement with Mr. Wood: $894,000 in the event of death; $1,190,000 in the event of disability; and $1,219,000 in the event of termination without cause and change in control.

(2)	Amounts in this column were calculated by multiplying the number of unvested Shares and options that vest on the occurrence of the specified event as of December 31, 2015 by the value for each Share and option determined in accordance with the FASB ASC Topic 718.

(3)

Amounts in this column include the following: (a) the annual cost of administrative assistance in the amount of $93,500 for each of our named executive officers. This amount is based on estimated personnel costs for executive administrative assistants and assumes that each named executive officer has full time use of an assistant; (b) annual outplacement costs of $15,000 based on a current estimate of these costs; and (c) the estimated annual cost of $15,555 for Mr. Wood’s use of a company vehicle in the event of a change in control should he choose to use that benefit. There are no additional incremental costs to us for continuing to provide these individuals with office space, e-mail capability or a telephone.

(4)	The cash severance payment includes a payment of $622,000 plus $301,919 as a tax gross-up for Mr. Wood, a payment of $222,000 plus $120,559 as a tax gross-up for Mr. Taylor and a payment of $222,000 plus $106,591 as a tax gross-up for Ms. Becker.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee consists of Mr. Faeder, Ms. Gamble, Ms. Steinel and Mr. Vassalluzzo. There are no Compensation Committee interlocks and no member of the Compensation Committee serves, or has in the past served, as an employee or officer of the Trust.

ITEM 3

ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

You are being asked to approve on an advisory basis the compensation of our named executive officers as described in the Compensation Discussion and Analysis (“CD&A”), the Summary Compensation Table, the supplemental tables and the disclosure narratives accompanying these sections of this proxy statement.

Our compensation philosophy is designed to attract and retain top level real estate professionals and to motivate those professionals to achieve superior results for us and our shareholders. Our compensation packages include base salaries, annual incentive compensation, long-term incentives and various other benefits and perquisites. We believe our compensation programs and policies are appropriate and effective in implementing our compensation philosophy and in achieving our goals and that they are aligned with the interests of our shareholders. In considering whether to approve this proposal, we believe our shareholders should consider the following:

1. A significant portion of our named executive officers’ compensation is directly linked to our performance and the creation of long-term shareholder value through long-term incentive awards. The value of these awards is only recognized over a 6-year period that consists of a 3-year performance period plus a 3-year vesting period.

2. The compensation of our named executive officers is strongly tied to our performance and to the performance of the individual. The annual incentive compensation is only paid if we achieve our annual FFO objective and long-term incentives are earned on the basis of our absolute and relative shareholder returns as well as our return on invested capital.

3. We have an appropriate balance of pay between short-term and long-term objectives.

4. Our Chief Executive Officer, Chief Financial Officer and General Counsel are incentivized to act in the best long-term interests of the Trust through stock ownership guidelines.

5. We have no perquisites for our named executive officers that are not widely available to other employees other than as described in the CD&A and the “Potential Payments on Termination of Employment and Change-in Control” section above.

We are requesting your advisory and non-binding approval of the compensation of our named executive officers for 2015 as disclosed in the CD&A, the Summary Compensation Table, the supplemental tables and the disclosure narratives accompanying these sections of this proxy statement. This proposal allows our shareholders to express their opinions regarding the decisions made by the Compensation Committee on the annual compensation to the named executive officers for 2015; however, because the vote on this proposal is advisory in nature, it will not affect any compensation already paid or awarded to any named executive officer for 2015 and will not be binding on the Compensation Committee, the Board or the Trust. The Board and our Compensation Committee value the opinions of our shareholders and will review the results of this vote and take them into consideration in addressing future compensation policies and decisions.

Our shareholders have the opportunity at our Annual Meeting to vote, in person or by proxy, on the following:

RESOLVED, that the shareholders of the Trust hereby approve, on an advisory basis, the compensation of our named executive officers as described in the Compensation Discussion and Analysis, the Summary Compensation Table, the supplemental tables and the narrative disclosures accompanying these materials as required by Item 402 of Regulation S-K.

The affirmative vote of a majority of votes cast at the Annual Meeting, in person or by proxy, is required to approve, on an advisory basis, this proposal. If you are a “registered” shareholder who elects to receive materials by mail and you sign and return but fail to give any voting instructions on your proxy card on this matter, the

proxies identified on the proxy card will vote FOR this proposal. An “abstention” or broker “non-vote” will have no effect on the outcome of the vote on this proposal.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THE COMPENSATION DISCUSSION AND ANALYSIS, THE SUMMARY COMPENSATION TABLE, THE SUPPLEMENTAL TABLES AND NARRATIVE DISCLOSURES ACCOMPANYING THESE SECTIONS.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information as of December 31, 2015 regarding our equity compensation plans, all of which were approved by our shareholders.


Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) (a)		Weighted average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance (excluding securities reflected in column (a)(2)) (c)
Equity compensation plans approved by security holders		313,802	$	60.93		1,865,984
Equity compensation plans not approved by security holders		—		—		—

Total		313,802	$	60.93		1,865,984

(1)	Consists entirely of Shares authorized for issuance under our 2001 Plan.

(2)	Consists entirely of Shares authorized for issuance under our 2010 Plan.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Related Party Policies:

Our Code of Business Conduct requires that our Trustees and all of our employees deal with the Trust on an arms-length basis in any related party transaction. All transactions between us and any of our Trustees, named executive officers or other vice presidents, or between us and any entity in which any of our Trustees, named executive officers or other vice presidents is an officer or director or has an ownership interest, must be approved in advance by the Audit Committee. Audit Committee approval is not required for us to enter into a lease with an entity in which any of our Trustees is a director, employee or owner of a company so long as the lease is entered into in the ordinary course of ours and the tenant’s businesses and is negotiated at arms-length and on market terms.

Related Party Transactions:

None of our named executive officers had any indebtedness to the Trust as of March 18, 2016 or at any time during 2015.

Mr. Thompson serves as the President and Chairman of the Board of Directors of Thompson Hospitality Corporation. Thompson Hospitality Corporation and its wholly owned subsidiaries (collectively, “THC”) lease from us approximately 17,400 square feet in three of the Trust’s properties under leases that were negotiated prior to Mr. Thompson’s joining the Board in July 2007. These leases were negotiated at arms-length and reflected market conditions at the time each lease was signed. In June 2012 we entered into a fourth lease with

THC for 6,500 square feet of space (“New Location”) because we believed that THC’s American Tap Room restaurant concept would be a successful fit for the market. The terms of the lease were negotiated at arms-length and reflected market conditions consistent with leases for similar uses at that time. The four leases expire on August 31, 2017, June 30, 2020, December 31, 2021 and September 30, 2023. We anticipate receiving approximately $1.3 million in rent and other related charges in 2016 from the four leased locations. In addition to the leases, one of our wholly owned subsidiaries entered into a partnership with THC to operate the restaurant at the New Location. We own 80% of the partnership and THC owns the remaining 20% of the partnership and acts as the manager of the restaurant. The terms and structure of the partnership with THC were negotiated at arms-length and reflect terms, structures and conditions consistent with other restaurant investments we have made and include market management and license fees payable to THC. The Board determined that Mr. Thompson met all independence requirements established by the NYSE, the SEC, the Trust’s Corporate Governance Guidelines and other applicable rules and regulations during his service as a Trustee during 2015 as described in the “Independence of Trustees” section above.

Mr. Faeder serves as the managing member of The Kensington of Falls Church, LLC which entered into a one-year lease with us in January 2016 for approximately 3,003 square feet in one of our properties. The lease was negotiated at arms-length and reflects market conditions. We anticipate receiving approximately $150,000 in rent and other related charges in 2016 from this lease.

Employment and change-in-control arrangements between the Trust and the named executive officers are described in the “Potential Payments on Termination of Employment and Change-in-Control” section above.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Our Trustees, executive officers and any persons who beneficially own more than 10% of our Shares are required by Section 16(a) of the Exchange Act to file reports of initial ownership and changes of ownership of our Shares with the SEC and with the NYSE. To our best knowledge, based solely on review of copies of such reports furnished to us and written representations that no other reports were required, the required filings of all such Trustees and executive officers were filed timely during 2015.

SOLICITATION OF PROXIES, SHAREHOLDER PROPOSALS AND OTHER MATTERS

Proposals of shareholders intended to be presented at the 2017 Annual Meeting of Shareholders, including nominations for persons for election to the Board of Trustees, must be received by us no later than November 25, 2016 to be considered for inclusion in our proxy statement and form of proxy relating to such meeting.

The Trustees know of no other business to be presented at the Annual Meeting. If other matters properly come before the meeting, the persons named as proxies will vote on them in their discretion.

You are urged to vote either by telephone (1-800-PROXIES or 1-800-776-9437) or on the Internet (www.voteproxy.com) by following the instructions on your Notice. For those of you who have elected email delivery, please follow the instructions for voting provided in the email. If you elect to receive your proxy materials by mail, please make sure to complete, sign, date and return your proxy card promptly to make certain your Shares will be voted at the Annual Meeting.

For the Trustees,

LOGO

Dawn M. Becker

Executive Vice President—General

Counsel and Secretary

YOUR PROXY IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.

PLEASE SUBMIT IT TODAY.

LOGO

0 FEDERAL REALTY INVESTMENT TRUST THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES The undersigned, a shareholder of Federal Realty Investment Trust (the “Trust”), hereby constitutes and appoints DAWN M. BECKER and JAMES M. TAYLOR, JR., or either of them, as the true and lawful attorneys and proxies of the undersigned, with full power of substitution in each of them, for and in the name of the undersigned, to vote and otherwise act at the Annual Meeting of Shareholders of the Trust to be held at AMP by Strathmore, 11810 Grand Park Avenue, North Bethesda, Maryland on Wednesday, May 4, 2016 at 10:00 a.m., or at any postponement or adjournment thereof, with respect to all of the Common Shares of Beneficial Interest of the Trust which the undersigned would be entitled to vote, with all the powers the undersigned would possess if personally present, on the following matters. The undersigned hereby ratifies and confirms all that the aforesaid attorneys and proxies may do hereunder. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and of the accompanying Proxy Statement and revokes any proxy previously given with respect to the Annual Meeting. (Continued and to be signed on the reverse side) 1.1 14475

LOGO

ANNUAL MEETING OF SHAREHOLDERS OF FEDERAL REALTY INVESTMENT TRUST May 4, 2016 GO GREEN e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access. NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Annual Meeting of Shareholders, Proxy Statement, Form of Proxy Card and Annual Report/Form 10-K Wrap are available at: http://ir.federalrealty.com/phoenix.zhtml?c=84166&p=proxy Please sign, date and mail your proxy card in the envelope provided as soon as possible. Please detach along perforated line and mail in the envelope provided. 20730300000000000000 9 050416 THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED “FOR” ALL NOMINEES IN PROPOSAL 1 AND “FOR” PLEASE PROPOSALS SIGN, 2 AND DATE 3, AND AND THE RETURN PROXIES WILL PROMPTLY VOTE IN THEIR IN SOLE THE JUDGMENT ENCLOSED UPON ANY ENVELOPE. OTHER MATTERS PLEASE PROPERLY MARK COMING YOUR BEFORE VOTE THE MEETING IN BLUE OR ANY OR POSTPONEMENT BLACK INK OR AS ADJOURNMENT SHOWN HERE THEREOF. x 1. To elect the following Trustees as set forth in the accompanying Proxy Statement:t. NOMINEES: FOR ALL NOMINEES O O Jon David E. W. Bortz Faeder WITHHOLD AUTHORITY O Kristin Gamble FOR ALL NOMINEES O Gail P. Steinel O Warren M. Thompson FOR (See ALL instructions EXCEPT below) O Joseph S. Vassalluzzo O Donald C. Wood INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: To indicate changes change your to the the new address registered address on name(s) your in the account, address on the please account space check above. may not the Please be box submitted at note right and that via this method. Signature of Shareholder Date: Signature of Shareholder Date: Note: Please full title sign as such. exactly If the as signer your name is a corporation, or names appear please on sign this full Proxy. corporate When name shares by duly are authorized held jointly, officer, each holder giving should full title sign. as such. When If signer signing is a as partnership, executor, administrator, please sign in attorney, partnership trustee name or by guardian, authorized please person. give 2. To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016. 3. To hold an advisory vote approving the compensation of our named executive officers. 4. To consider and act upon any other matters properly coming before the meeting or any postponement or adjournment thereof. ELECTRONIC ACCESS TO FUTURE DOCUMENTS If you would like to receive future shareholder communications over the Internet exclusively, and no longer receive any material by mail please visit http://www.amstock.com. Click on Shareholder Account Access to enroll. Please enter your account number and tax identification number to log in, then select Receive Company Mailings via E-Mail and provide your e-mail address.

LOGO

FEDERAL ANNUAL REALTY MEETING OF INVESTMENT SHAREHOLDERS OF TRUST May 4, 2016 PROXY VOTING INSTRUCTIONS INTERNET—Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page. TELEPHONE—Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call. Vote online/phone until 11:59 PM?EDT?the day before the meeting. COMPANY NUMBER MAIL—Sign, date and mail your proxy card in the envelope provided as soon as possible. IN?PERSON—You may vote your shares in person by attending ACCOUNT NUMBER the Annual Meeting. GO GREEN—e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access. NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Annual Meeting of Shareholders, Proxy Statement, Form of Proxy Card and Annual Report/Form 10-K Wrap are available at: http://ir.federalrealty.com/phoenix.zhtml?c=84166&p=proxy Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. 20730300000000000000 9 050416 THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED “FOR” ALL NOMINEES IN PROPOSAL 1 AND “FOR” PLEASE PROPOSALS SIGN, 2 AND DATE 3, AND AND THE RETURN PROXIES WILL PROMPTLY VOTE IN THEIR IN SOLE THE JUDGMENT ENCLOSED UPON ANY ENVELOPE. OTHER MATTERS PLEASE PROPERLY MARK COMING YOUR BEFORE VOTE THE MEETING IN BLUE OR ANY OR POSTPONEMENT BLACK INK OR AS ADJOURNMENT SHOWN HERE THEREOF. x Statement:t. NOMINEES: FOR ALL NOMINEES O O David Jon E. W. Bortz Faeder WITHHOLD AUTHORITY O Kristin Gamble FOR ALL NOMINEES O Gail P. Steinel O Warren M. Thompson FOR (See ALL instructions EXCEPT below) O Joseph S. Vassalluzzo O Donald C. Wood INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: JOHN SMITH 1234 MAIN STREET APT. 203 NEW YORK, NY 10038 To indicate changes change your to the the new address registered address on name(s) your in the account, address on the please account space check above. may not the Please be box submitted at note right and that via this method. 2. To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016. 3. To hold an advisory vote approving the compensation of our named executive officers. 4. To consider and act upon any other matters properly coming before the meeting or any postponement or adjournment thereof. ELECTRONIC ACCESS TO FUTURE DOCUMENTS If you would like to receive future shareholder communications over the Internet exclusively, and no longer receive any material by mail please visit http://www.amstock.com. Click on Shareholder Account Access to enroll. Please enter your account number and tax identification number to log in, then select Receive Company Mailings via E-Mail and provide your e-mail address. Signature of Shareholder Date: Signature of Shareholder Date: Note: Please full title sign as such. exactly If the as signer your name is a corporation, or names appear please on sign this full Proxy. corporate When name shares by duly are authorized held jointly, officer, each holder giving should full title sign. as such. When If signer signing is a as partnership, executor, administrator, please sign in attorney, partnership trustee name or by guardian, authorized please person. give