AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 1, 1999
REGISTRATION NO. 33-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------
FIRST UNION REAL ESTATE
EQUITY AND MORTGAGE INVESTMENTS
(Exact name of registrant as specified in its charter)
OHIO 34-6513657
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
SUITE 1900, 55 PUBLIC SQUARE
CLEVELAND, OHIO 44113-1937
(Address of Principal Executive Offices) (Zip Code)
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
1999 AMENDED AND RESTATED LONG TERM INCENTIVE PERFORMANCE PLAN
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
1999 SHARE OPTION PLAN FOR TRUSTEES
(Full title of the plans)
DANIEL P. FRIEDMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
FIRST UNION REAL ESTATE
EQUITY AND MORTGAGE INVESTMENTS
SUITE 1900, 55 PUBLIC SQUARE
CLEVELAND, OHIO 44113-1937
(216) 781-4030
(Name, address, and telephone number of agent for service)
COPIES TO:
STEVEN G. SCHEINFELD F. RONALD O'KEEFE
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON HAHN LOESER & PARKS
ONE NEW YORK PLAZA 3300 BP TOWER
NEW YORK, NY 10004-1980 200 PUBLIC SQUARE
(212) 859-8000 CLEVELAND, OHIO 44114-2301
(216) 621-0150
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED (1) PER SHARE (2) OFFERING PRICE (2) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Beneficial Interest, par value 1,857,037 $4.78125 $8,878,958.10 $2,468.35
$1.00 per share (3) shares
- -------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Plus such additional number of shares as may be required in the event
of a stock dividend, stock split, recapitalization or other similar
event in accordance with Rule 416 of the Securities Act of 1933, as
amended.
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) of the Securities Act of 1933 based upon the
closing price of the Registrant's shares of beneficial interest on the
New York Stock Exchange on October 27, 1999.
(3) Includes associated rights (the "Rights") to purchase the Registrant's
shares of beneficial interest. Until the occurrence of certain
prescribed events, none of which has occurred, the Rights are not
exercisable, are evidenced by the certificates representing the
Registrant's shares of beneficial interest, and will be transferred
along with and only with the Registrant's shares of beneficial
interest.
</FN>
</TABLE>
<PAGE>
EXPLANATORY NOTE
This Form S-8 Registration Statement relates to
(a) 1,357,037 Shares of Beneficial Interest, par value $1.00 per
share, to be issued under the 1999 Amended and Restated Long
Term Incentive Performance Plan; and
(b) 500,000 Shares of Beneficial Interest, par value $1.00 per
share, to be issued under the 1999 Share Option Plan for
Trustees.
PART I
The documents containing information specified by Part I of this
Registration Statement will be sent or given to participants in the 1999
Amended and Restated Long Term Incentive Performance Plan, and 1999 Share
Option Plan for Trustees, as specified in Rule 428(b)(1) promulgated by the
Securities and Exchange Commission under the Securities Act of 1933, as
amended. Such document(s) are not required to be filed with the SEC but
constitute (along with the documents incorporated by reference into this
Registration Statement pursuant to Item 3 of Part II) a prospectus that
meets the requirements of Section 10(a) of the Securities Act.
You may receive, without charge, upon written or oral request, a copy
of the documents incorporated by reference in Item 3 of Part II of this
Registration Statement, which documents are incorporated by reference into
the Section 10(a) prospectus. You may also receive, without charge, a copy
of the plans by contacting a company representative at the following phone
number: (216) 781-4030, ext. 2702.
References to "the Trust" or "the Registrant" shall mean First Union
Real Estate Equity and Mortgage Investments, an Ohio business trust.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New York, NY and
Chicago, IL. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the
public from the SEC's web site at http://www.sec.gov. Reports, proxy and
information statements and other information concerning us can also be
inspected at the offices of the New York Stock Exchange.
The SEC allows us to "incorporate by reference" information into this
Registration Statement, which means that we can disclose important
information to you by referring you to another document filed separately
with the SEC. The information incorporated by reference is considered to be
part of this Registration Statement, and later information that we file
with the SEC will automatically update this Registration Statement. We
incorporate by reference the following documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended, prior to the
termination of the offering:
(a)The description of the Shares of Beneficial Interest contained in
the Registrant's Registration Statement on Form S-3, No. 3357756
filed with the SEC on February 2, 1993 and the description of the
Rights to purchase Shares of Beneficial Interest contained in the
Registrant's Registration Statement on Form 8-A, filed on April 2,
1990, as amended by Form 8-A/A filed on May 2, 1990;
(b)Our Annual Report on Form 10-K for the fiscal year ended December
31, 1998, filed with the SEC on March 29, 1999, as amended by Form
10-K/A, filed with the SEC on April 13, 1999;
(c)Our Quarterly Reports on Forms 10-Q for the quarter ended June 30,
1999, filed with the SEC on August 13, 1999, and for the quarter
ended March 31, 1999, filed with the SEC on May 14, 1999, and
(d)Our Current Reports on Forms 8-K filed with the SEC on February 3,
1999, March 29, 1999, April 15, 1999, April 29, 1999, as amended by
Form 8-K/A dated April 30, 1999, May 27, 1999, and August 16, 1999.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Trustees and Officers
Pursuant to Article III, Section 3.3 of the Declaration of Trust of
the Registrant, each trustee, officer, employee and agent of the
Registrant is entitled to indemnification for any loss, cost,
liability or obligation in connection with the Registrant's property
or the affairs of the Registrant, or which he may suffer because he is
or was or consented to become a trustee, officer, employee or agent of
the Trust, except for such of his own acts as constitute bad faith,
willful misfeasance, or willful disregard of his duties.
Article III, Section 3.3 of the Declaration of Trust of the Registrant
also authorizes the trustees to make advance payments in connection
with indemnification, provided that the indemnified trustee, officer,
employee or agent of the Trust gives a written undertaking to repay
such amount if it is ultimately determined that he is not entitled to
such indemnification.
Pursuant to Article III, Section 3.1 of the Declaration of Trust of
the Registrant, the trustees are obligated to maintain insurance
against possible liability on the part of the Trust, the beneficiaries
and any officers or trustees of the Trust in the course of Trust
business, as the trustees in their discretion deem appropriate to
protect the Trust property, the beneficiaries, officers or trustees of
the Trust.
The Registrant has acquired insurance indemnifying trustees and
officers in certain cases and with certain deductible limitations.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
(4)(a) Declaration of Trust dated August 1, 1961, as
amended through July 25, 1986, and By-Laws, as
amended (incorporated by reference to Registrant's
Annual Report on Form 10-K for the fiscal year
ended 1986).
(4)(b) Rights Agreement between Registrant and National
City Bank dated March 7, 1990 (incorporated by
reference to Form 8-A dated March 30, 1990 No.
0-18411).
(4)(c) First Union Real Estate Equity & Mortgage
Investments 1999 Amended and Restated Long Term
Incentive Performance Plan (incorporated by
reference to Exhibit A to the Trust's Definitive
Proxy Statement filed with the SEC on April 19,
1999).
(4)(d) First Union Real Estate Equity & Mortgage
Investments 1999 Share Option Plan for Trustees
(incorporated by reference to Exhibit B to the
Trust's Definitive Proxy Statement filed with the
SEC on April 19, 1999).
(4)(e)* Form of Stock Option Agreement for Daniel P.
Friedman, David Schonberger, Rosalie C. Souders,
and Anne N. Zahner dated as of May 18, 1999
implementing the initial grant of share options.
(4)(f)* Form of Stock Option Agreement for Daniel P.
Friedman, David Schonberger, and Anne N. Zahner
dated as of May 28, 1999 implementing the
additional stock option awards.
(5)(a)* Opinion of Hahn Loeser and Parks, LLP as to the
legality of securities being registered.
(23)(a)* Consent of Arthur Andersen, LLP, Independent
Public Accountants.
(23)(b) Consent of Hahn Loeser and Parks, LLP (included in
Opinion filed as Exhibit 5(a)).
- ----------------------
* filed herewith
<PAGE>
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement.
Provided, however, that the undertakings set forth in paragraphs
(i) and (ii) above do not apply if the information required to be
included in a post-effective amendment by those clauses is
contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for the purpose
of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to trustees, directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such trustee, director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cleveland, State of Ohio, on
October 29, 1999.
FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
/s/ William A. Ackman
----------------------------------
By: William A. Ackman, Chairman
of the Board of Trustees
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and trustees of First Union Real Estate
Equity and Mortgage Investments, an Ohio business trust, hereby constitute
and appoint William A. Ackman, Daniel P. Friedman and William A. Scully,
and each of them, as his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him or her in his
or her name, place and stead, in any and all capacities, to sign any and
all amendments to this Registration Statement and any additional
registration statements pursuant to Instruction E to Form S-8 and any and
all documents in connection therewith, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the SEC,
granting unto said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, and hereby ratifies, approves and
confirms all that his or her said attorney-in-fact and agent, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ William A. Ackman Chairman of the Board October 28, 1999
- ----------------------- of Trustees
William A. Ackman
/s/ Daniel P. Friedman
- ----------------------- President and Chief Executive October 28, 1999
Daniel P. Friedman Officer and Trustee
/s/ William A. Scully Vice Chairman of the Board of October 28, 1999
- ----------------------- Trustees
William A. Scully
/s/ Daniel J. Altobello
- ----------------------- Trustee October 28, 1999
Daniel J. Altobello
/s/ David P. Berkowitz
- ----------------------- Trustee October 28, 1999
David P. Berkowitz
/s/ David S. Klafter
- ----------------------- Trustee October 28, 1999
David S. Klafter
/s/ Stephen J. Garchik
- ----------------------- Trustee October 28, 1999
Stephen J. Garchik
/s/ Daniel Shuchman
- ----------------------- Trustee October 28, 1999
Daniel Shuchman
/s/ Steven S. Snider
- ----------------------- Trustee October 28, 1999
Steven S. Snider
/s/ Mary Ann Tighe Trustee October 28, 1999
- -----------------------
Mary Ann Tighe
/s/ James A. Williams Trustee October 28, 1999
- -----------------------
James A. Williams
<PAGE>
Index to Exhibits
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
(4)(a) Declaration of Trust dated August 1, 1961, as
amended through July 25, 1986, and By-Laws, as
amended (incorporated by reference to Registrant's
Annual Report on Form 10-K for the fiscal year
ended 1986).
(4)(b) Rights Agreement between Registrant and National
City Bank dated March 7, 1990 (incorporated by
reference to Form 8-A dated March 30, 1990 No.
0-18411).
(4)(c) First Union Real Estate Equity & Mortgage
Investments 1999 Amended and Restated Long Term
Incentive Performance Plan (incorporated by
reference to Exhibit A to the Trust's Definitive
Proxy Statement filed with the SEC on April 19,
1999).
(4)(d) First Union Real Estate Equity & Mortgage
Investments 1999 Share Option Plan for Trustees
(incorporated by reference to Exhibit B to the
Trust's Definitive Proxy Statement filed with the
SEC on April 19, 1999).
(4)(e)* Form of Stock Option Agreement for Daniel P.
Friedman, David Schonberger, Rosalie C. Souders,
and Anne N. Zahner dated as of May 18, 1999
implementing the initial grant of share options.
(4)(f)* Form of Stock Option Agreement for Daniel
P. Friedman, David Schonberger, and Anne N. Zahner
dated as of May 28, 1999 implementing the
additional stock option awards.
(5)(a)* Opinion of Hahn Loeser and Parks, LLP as to the
legality of securities being registered.
(23)(a)* Consent of Arthur Andersen, LLP, Independent Public
Accountants.
(23)(b) Consent of Hahn Loeser and Parks, LLP (included in
Opinion filed as Exhibit 5(a)).
- ----------------------
* filed herewith
EXHIBIT (4)(e)
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
1999 AMENDED AND RESTATED
LONG TERM INCENTIVE PERFORMANCE PLAN
STOCK OPTION AGREEMENT
This Agreement dated as of May 18, 1999 (the "Agreement") between
First Union Real Estate Equity and Mortgage Investments (the "Trust") and
[ ] ("Executive").
WHEREAS, under the terms of a certain Employment Agreement (the
"Employment Agreement") dated November 2, 1998 (the "Effective Date")
between the Trust and the Executive, the Board of Trustees and shareholders
have authorized the granting to Executive of options to purchase shares of
beneficial interest, $1.00 par value per share, of the Trust (the "Shares")
pursuant to the Trust's 1999 Amended and Restated Long Term Incentive
Performance Plan (the "Plan") and upon the terms and conditions hereinafter
stated.
NOW, THEREFORE, in consideration of the covenants set forth herein and
in the Employment Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows:
1. Shares and Price. The Trust grants to Executive the right to
purchase, upon and subject to the terms and conditions herein
stated and the terms and conditions of the Plan, (i) [ ],
at the purchase price of $6.50 per share (the "$6.50 Options")
and (ii) [ ], at the purchase price of $8.50 per share
(the "$8.50 Options") (collectively, the "Share Options"). The
purchase price for the exercise of a Share Option is subject to
adjustment in accordance with the provisions of Section 4(c)(v)
of the Employment Agreement. The purchase price for the exercise
of a Share Option is payable in accordance with Paragraph 5
hereof.
2. Term of Share Options. The Share Options shall expire ten (10)
years from the Effective Date, subject to the provisions of
Section 4(c)(v) of the Employment Agreement.
3. Exercisability. The Share Options shall be exercisable in
accordance with the provisions of Section 4(c)(v) of the
Employment Agreement.
4. Partial Exercise. Subject to the provisions hereof, the Share
Options may be exercised in whole or in part in accordance with
Paragraph 5 hereof at any time after becoming exercisable, but
not later than the date the Share Options expire.
5. Exercise and Payment of Exercise Price. The Share Options may be
exercised by delivery to the Trust of a written notice of
exercise, in form acceptable to the Trust, stating the number of
Shares then being purchased hereunder and the delivery of payment
of the exercise price in accordance with Section 7 of the Plan.
6. Trust Call Option. With respect to certain of the Share Options,
the Trust shall have the right to require the Executive to
transfer such options to the Trust in the events and to the
extent provided in Section 4(c)(v) of the Employment Agreement.
7. ISO's. Any Share Options granted hereunder shall be "incentive
stock options" under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), to the maximum extent possible
under the Code, subject to Executive satisfying the applicable
employment and holding period requirements under the Code.
8. Transferability. The Share Options shall be subject to the
restrictions on transfer set forth in Section 4(c)(v) of the
Employment Agreement.
9. No Rights as Stockholders. Executive shall have no rights as a
stockholder with respect to the Shares covered by the Share
Options until the date of the issuance of stock certificates
representing the Shares acquired pursuant to the exercise of the
Options. No adjustment will be made for dividends or other rights
for which the record date is prior to the date such stock
certificates are issued pursuant to the exercise of the Options.
10. Modification and Termination. The rights of Executive with
respect to the Share Options are subject to modification and
termination in certain events as provided in the Employment
Agreement and in the Plan.
11. Shares Purchased for Investment. Executive represents and agrees
that if Executive exercises the Share Options in whole or in
part, Executive shall acquire the Shares upon such exercise for
the purpose of investment and not with a view to their resale or
distribution. The Trust reserves the right to include a legend on
each certificate representing shares subject to the Share Options
stating in effect that such Shares have not been registered under
the Securities Act of 1933 (the "Act"), as amended, and may not
be transferred without registration under the Act or an exemption
therefrom.
12. This Agreement Subject to Employment Agreement and Plan.
Executive acknowledges that Executive has read and understands
the Employment Agreement and the Plan. This Agreement is made
subject to the provisions of the Employment Agreement and the
Plan and is intended, and shall be interpreted in a manner, to
comply therewith. Any provision hereof inconsistent with the
Employment Agreement or the Plan shall be superseded and governed
by the Employment Agreement or the Plan, respectively. In the
event of a conflict between the provisions of the Employment
Agreement and the Plan, the provisions of the Employment
Agreement shall govern. The provisions of the Employment
Agreement and Plan are incorporated herein by this reference.
13. Governing Law. To the extent not preempted by Federal law, this
Agreement shall be construed in accordance with and shall be
governed by the laws of the State of Ohio.
14. Notices. Any notices or other communication required or permitted
hereunder shall be sufficiently given if delivered personally or
sent by registered or certified mail, postage prepaid, to the
Trust at its corporate headquarters, and to the Executive at the
last address maintained for such person in the records of the
Trust, or to such other address as shall be furnished in writing
by either party to the other party, and shall be deemed to have
been given as of the date so delivered or deposited in the United
States mail, as the case may be.
15. Notwithstanding anything contained in this Stock Option Agreement
or the Plan to the contrary, this Agreement is made and executed
by the Trust, a business trust organized under the laws of the
State of Ohio, by its officer on behalf of the Trustees thereof,
and none of the Trustees or any additional or successor Trustee
hereafter appointed, or any beneficiary, officer, employee or
agent of the Trust shall have any liability in his personal or
individual capacity, but instead, all parties shall look solely
to the property and assets of the Trust for satisfaction of
claims of any nature arising under or in connection with this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed the Agreement
effective as of the date first written above.
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
(the "Trust")
By:
------------------------------
William A. Ackman, Chairman
("Executive")
------------------------------
Executive Name
EXHIBIT (4)(f)
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
1999 AMENDED AND RESTATED
LONG TERM INCENTIVE PERFORMANCE PLAN
STOCK OPTION AGREEMENT
This Agreement dated as of May 28, 1999 (the "Agreement") between
First Union Real Estate Equity and Mortgage Investments (the "Trust") and
[ ] ("Executive").
WHEREAS, under the terms of a certain Employment Agreement (the
"Employment Agreement") dated November 2, 1998 (the "Effective Date")
between the Trust and the Executive, the Board of Trustees and shareholders
have authorized the granting to Executive of options to purchase shares of
beneficial interest, $1.00 par value per share, of the Trust (the "Shares")
pursuant to the Trust's 1999 Amended and Restated Long Term Incentive
Performance Plan (the "Plan") and upon the terms and conditions hereinafter
stated.
WHEREAS, pursuant to the terms of the Employment Agreement, Executive
is entitled to receive options to purchase in the aggregate [ ]
Shares, at a purchase price of $4.00 per share, in connection with the
completion by the Trust of its Rights Offering, which has been completed as
of the date hereof.
NOW, THEREFORE, in consideration of the covenants set forth herein and
in the Employment Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows:
1. Shares and Price. The Trust grants to Executive, in accordance
with the provisions of Section 4(c)(vi) of the Employment
Agreement, the right to purchase, upon and subject to the terms
and conditions herein stated and the terms and conditions of the
Plan, [ ] Shares, at the purchase price of $4.00 per
share (the "Share Option"). The purchase price for the exercise
of the Share Option is subject to adjustment in accordance with
the provisions of Section 4(c)(v) and 4(c)(vi) of the Employment
Agreement. The purchase price for the exercise of the Share
Option is payable in accordance with Paragraph 5 hereof.
2. Term of the Share Option. The Share Option shall expire ten (10)
years from the Effective Date, subject to the provisions of
Section 4(c)(v) of the Employment Agreement.
3. Exercisability. The Share Option shall be exercisable in
accordance with the provisions of Section 4(c)(v) of the
Employment Agreement.
4. Partial Exercise. Subject to the provisions hereof, the Share
Option may be exercised in whole or in part in accordance with
Paragraph 5 hereof at any time after becoming exercisable, but
not later than the date the Share Option expires.
5. Exercise and Payment of Exercise Price. The Share Option may be
exercised by delivery to the Trust of a written notice of
exercise, in form acceptable to the Trust, stating the number of
Shares then being purchased hereunder and the delivery of payment
of the exercise price in accordance with Section 7 of the Plan.
6. Trust Call Option. With respect to certain of the Share Option,
the Trust shall have the right to require the Executive to
transfer such options to the Trust in the events and to the
extent provided in Section 4(c)(v) of the Employment Agreement.
7. ISO's. Any Share Options granted hereunder shall be "incentive
stock options" under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), to the maximum extent possible
under the Code, subject to Executive satisfying the applicable
employment and holding period requirements under the Code.
8. Transferability. The Share Option shall be subject to the
restrictions on transfer set forth in Section 4(c)(v) of the
Employment Agreement.
9. No Rights as Stockholders. Executive shall have no rights as a
stockholder with respect to the Shares covered by the Share
Option until the date of the issuance of stock certificates
representing the Shares acquired pursuant to the exercise of the
Option. No adjustment will be made for dividends or other rights
for which the record date is prior to the date such stock
certificates are issued pursuant to the exercise of the Option.
10. Modification and Termination. The rights of Executive with
respect to the Share Option are subject to modification and
termination in certain events as provided in the Employment
Agreement and in the Plan.
11. Shares Purchased for Investment. Executive represents and agrees
that if Executive exercises the Share Option in whole or in part,
Executive shall acquire the Shares upon such exercise for the
purpose of investment and not with a view to their resale or
distribution. The Trust reserves the right to include a legend on
each certificate representing shares subject to the Share Option
stating in effect that such Shares have not been registered under
the Securities Act of 1933 (the "Act"), as amended, and may not
be transferred without registration under the Act or an exemption
therefrom.
12. This Agreement Subject to Employment Agreement and Plan.
Executive acknowledges that Executive has read and understands
the Employment Agreement and the Plan. This Agreement is made
subject to the provisions of the Employment Agreement and the
Plan and is intended, and shall be interpreted in a manner, to
comply therewith. Any provision hereof inconsistent with the
Employment Agreement or the Plan shall be superseded and governed
by the Employment Agreement or the Plan, respectively. In the
event of a conflict between the provisions of the Employment
Agreement and the Plan, the provisions of the Employment
Agreement shall govern. The provisions of the Employment
Agreement and Plan are incorporated herein by this reference.
13. Governing Law. To the extent not preempted by Federal law, this
Agreement shall be construed in accordance with and shall be
governed by the laws of the State of Ohio.
14. Notices. Any notices or other communication required or permitted
hereunder shall be sufficiently given if delivered personally or
sent by registered or certified mail, postage prepaid, to the
Trust at its corporate headquarters, and to the Executive at the
last address maintained for such person in the records of the
Trust, or to such other address as shall be furnished in writing
by either party to the other party, and shall be deemed to have
been given as of the date so delivered or deposited in the United
States mail, as the case may be.
15. Notwithstanding anything contained in this Stock Option Agreement
or the Plan to the contrary, this Agreement is made and executed
by the Trust, a business trust organized under the laws of the
State of Ohio, by its officer on behalf of the Trustees thereof,
and none of the Trustees or any additional or successor Trustee
hereafter appointed, or any beneficiary, officer, employee or
agent of the Trust shall have any liability in his personal or
individual capacity, but instead, all parties shall look solely
to the property and assets of the Trust for satisfaction of
claims of any nature arising under or in connection with this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed the Agreement
effective as of the date first written above.
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
(the "Trust")
By:
-----------------------------
William A. Ackman, Chairman
("Executive")
-----------------------------
Executive Name
Exhibit 5(a)
OCTOBER 28, 1999
First Union Real Estate Equity and Mortgage Investments
Suite 1900, 55 Public Square
Cleveland, Ohio 44113-1937
Gentlemen:
You have requested our opinion with respect to 1,857,037 shares of
beneficial interest, $1.00 par value per share (the "Shares"), of First
Union Real Estate Equity and Mortgage Investments, an Ohio business trust
(the "Trust"), which Shares are to be issued (i) to certain executive
employees pursuant to the terms of the Trust's 1999 Amended and Restated
Long Term Incentive Performance Plan and (ii) to the Trust's non-employee
trustees pursuant to the terms of the Trust's 1999 Share Option Plan for
Trustees (collectively, the "Plans"). The Shares are the subject of a
Registration Statement on Form S-8 (the "Registration Statement"), to which
this opinion is attached as an exhibit, to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended.
In connection with the foregoing, we have examined (a) the Amended and
Restated Declaration of Trust and the Amended Bylaws of the Trust, (b) the
Plans, filed as Exhibits 4(c) and 4(d), respectively, to the Registration
Statement, (c) the forms of Stock Option Agreements for use under the 1999
Amended and Restated Long Term Incentive Performance Plan, filed as
Exhibits 4(e) and 4(f) to the Registration Statement, and (d) such records
of the proceedings of the Trust and such other documents as we deemed
necessary to render this opinion.
Based upon such examination, we are of the opinion that:
1. The Trust is a validly existing real estate investment trust
organized under the laws of the State of Ohio.
2. The Shares to be sold by the Trust have been duly authorized
and, when issued and sold pursuant to the Plan, and in the manner
contemplated by the Registration Statement, will be validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5(a) to the
Registration Statement.
Very truly yours,
HAHN LOESER & PARKS LLP
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-8 of our report dated
March 29, 1999 included in the Company's Form 10-K and Form 10-K/A for the
year ended December 31, 1998 and to all references to our Firm included in
this registration statement.
ARTHUR ANDERSEN, LLP
Cleveland, Ohio
October 29, 1999.
