UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
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 Each of the nominees has represented that they are willing to serve as a Trustee if elected. Mr. Ashner has been the Chief Executive Officer of the Trust since December 31, 2003 and Chairman since April 2004. Mr. Ashner also Mr. Mr. Embry has been the Chairman of Magten Asset Management Corp. Mr. Goldberg has been a private investor in both real estate and start-up companies and has provided consulting services to start-up companies since 1999. From 1994 through 1998, Mr. Goldberg served as President, CEO, and Board member of Player’s International, a publicly-traded company in the gaming business prior to its sale to relating to audit committee qualification, and the Board has determined that its Audit Committee possesses sufficient financial expertise to effectively discharge its obligations. The Compensation Committee acted through unanimous written consent twice during the 2008 fiscal year. Committee: 7 Bulfinch Place, Suite 500, Boston, Massachusetts 02114. accordance with Section 303A.02(a) and (b) of the listing standards of the New York Stock Exchange. In particular, the Committee reviewed with counsel responses given by the Trustees in their Trustee Questionnaires, asked counsel if it was aware of any relationships between the Trustees and All communications through the toll-free number or our website are forwarded solely to Mr. Heymann and will be handled in the same manner as written correspondence described above. Name Fees Earned or Stock Awards Option Awards Non-Equity Change in Pension All Other Total Bruce Berkowitz 53,500 — — — — — 53,500 Arthur Blasberg, Jr. 73,500 — — — — — 73,500 Talton Embry 40,000 — — — — — 40,000 Howard Goldberg 53,500 — — — — — 53,500 Steven Mandis 30,000 — — — — — 30,000 2008: www.winthropreit.com. services. 2008. 2006 Base Management Fee (1) $ 3,681,000 (3)(4) Loan Servicing Fee (1) — Property Management (2) 217,000 Reimbursement (1) — Incentive Fee — Name and Address Position with Amount and Nature of Percent FUR Investors, LLC — 11,000,000 16.8 % John Alba (2) Chief Investment Officer — (6) (6) Michael L. Ashner(2) Chairman and Chief Executive Officer 11,027,000 (3) 16.8 % Bruce R. Berkowitz (4) Trustee 4,293,070 (5) 6.3 %(5) Arthur Blasberg, Jr. (10) Trustee 120,091 * Peter Braverman(2) President and Trustee 13,164 (6) (6) Talton Embry (7) Trustee 1,209,288 (7) 1.8 % Howard Goldberg (10) Trustee 174,047 * Steven G. Mandis (8) Trustee 5,633,679 (9) 8.0 %(9) Thomas Staples(10) Chief Financial Officer — (6) (6) All Trustees and executive officers as a group 22,470,339 (11) 30.8 %(12) Vornado Investments L.L.C. (13) — 4,054,222 (13) 6.2 % HBK Investments, L.P.(14) — 5,296,621 (14) 7.5 %(14) King Street Capital, L.P.(15) — 5,244,444 (15) 7.4 %(15) King Street Advisors, L.L.C. King Street Capital Management, L.L.C. O. Francis Biondi, Jr. Brian J. Higgins www.winthropreit.com. reviewing the scope of their audit services; approving non-audit services; and confirming the independence of the independent registered public accounting firm. 2009. Type of Fee Fiscal 2006 Fiscal 2005 Audit Fee $ 700,000 $ 637,000 Audit Related Fees 273,000 130,000 Tax Fees 136,000 140,000 Total $ 1,109,000 $ 907,000 PwC for audit and audit related fees. 2006.
the SecuritiesFiled by the Registrant xFiled by a Party other than the Registrant oCheck the appropriate box:oPreliminary Proxy StatementoConfidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))xDefinitive Proxy StatementoDefinitive Additional MaterialsoSoliciting Material Pursuant to §240.14a-12Winthrop Realty 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):xNo fee required.oFee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.(1)Title of each class of securities to which transaction applies: N/A(2)Aggregate number of securities to which transaction applies: N/A(3)(set(Set forth the amount on which the filing fee is calculated and state how it was determined): N/A¨ (4)Proposed maximum aggregate value of transaction: N/A(5)Total fee paid: N/AoFee paid previously with preliminary materials.oFormform or Scheduleschedule and the date of its filing.(1)Amount Previously Paid:N/A(2)Form, Schedule or Registration Statement No.: N/A(3)Filing Party: N/A(4)Date Filed: N/A
WINTHROP REALTY TRUSTNOTICE OF ANNUAL MEETING OF SHAREHOLDERSTO BE HELD ON MAY 2, 2007NOTICE IS HEREBY GIVEN thatYou are cordially invited to attend the 2009 Annual Meeting of Shareholders (the “Meeting”) of Winthrop Realty Trust to be held Thursday, May 21, 2009, at 11:00 A.M., local time, at the 11th Floor Conference Center in the offices of Katten Muchin Rosenman, 575 Madison Avenue, New York, New York 10022, to consider and act upon the following:1. To elect eight Trustees to our Board of Trustees to serve for a term of one year and until their respective successors shall be elected and shall qualify; 2. To amend Section 1.3 of the Declaration of Trust to clarify the purpose of the Trust; 3. To amend Section 3.3 of the Declaration of Trust to modify the indemnification rights of Trustees, officers, employees and agents of the Trust; 4. To amend Section 4.1 of the Declaration of Trust to more clearly set forth the rights of the Trust to issue shares of beneficial interest; 5. To amend Section 7.1 of the Declaration of Trust to modify the timing of the Trust’s annual meeting and permit additional persons to call special meetings of holders of beneficial interests; 6. To amend Article VIII of the Declaration of Trust to modify, among other things, the voting requirement for election of Trustees; 7. To amend Section 10.1 of the Declaration of Trust to permit certain amendments to the Declaration of Trust to be made without the consent of holders of beneficial interests; 8. To amend Article XI of the Declaration of Trust to correct inconsistencies set forth therein and to clarify the rights of the Trust; 9. To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the 2009 fiscal year; 10. To consider and act upon such other matters as may properly come before the Annual Meeting or any adjournment thereof. (the “Trust”), an Ohio business trust, willGENERAL INFORMATION 1 Record Date and Voting Securities 1 Attending the Annual Meeting 2 Solicitation of Votes 2 Voting 2 Quorum; Method of Tabulation 2 Vote Required 3 Annual Report 3 PROPOSAL NO. 1 – ELECTION OF TRUSTEES 3 General 3 Information as to Trustees 4 Recommendation of the Board 6 EXECUTIVE OFFICERS 7 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 7 THE BOARD, ITS COMMITTEES AND OTHER CORPORATE GOVERNANCE INFORMATION 9 Board Meetings 9 Board Committees 9 Audit Committee 10 Compensation Committee 10 Nominating and Corporate Governance Committee 11 Conflicts Committee 12 Independence of Trustees 12 Meetings of Non-Management Trustees 12 Communication with Trustees 13 Compensation of Trustees 13 CODE OF ETHICS 14 COMPENSATION DISCUSSION AND ANALYSIS 14 General 14 Executive Compensation Principles 14 Share Options/Grants 14 COMPENSATION COMMITTEE REPORT 15 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION 15 AUDIT COMMITTEE REPORT 15 SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 16 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 17 AMENDMENTS TO THE DECLARATION OF TRUST………………………………… 19 PROPOSAL NO. 2 – AMENDMENT TO SECTION 1.3 OF THE DECLARATION OF TRUST 19 PROPOSAL NO. 3 – AMENDMENT TO SECTION 3.3 OF THE DECLARATION OF TRUST 20 PROPOSAL NO. 4 – AMENDMENT TO SECTION 4.1 OF THE DECLARATION OF TRUST 22 PROPOSAL NO. 5 – AMENDMENT TO SECTION 7.1 OF THE DECLARATION OF TRUST 23 PROPOSAL NO. 6 – AMENDMENTS TO ARTICLE VIII OF THE DECLARATION OF TRUST 23 PROPOSAL NO. 7 – AMENDMENT TO SECTION 10.1 OF THE DECLARATION OF TRUST 25 PROPOSAL NO. 9 – SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 27 Recommendation of the Board 28 28 SHAREHOLDER PROPOSALS 28 ANNUAL REPORT 28 MISCELLANEOUS 28 Wednesday,Thursday May 2, 200721, 2009 at 1:11:00 p.m, to consider and act upon the following:1. To elect six directors to serve for a term of one year and until their respective successors shall be elected and shall qualify;2. To ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Trust for the 2007 fiscal year;3. To adopt the Winthrop Realty Trust 2007 Long Term Stock Incentive Plan;4. To consider and act upon such other matters as may properly come before the Meeting or any adjournment thereof.Only holders of common shares of beneficial interests (“Shareholders”) of record at the close of business on March 16, 2007 shall be entitled to receive notice of, and to vote at, the Meeting, and at any adjournment or adjournments thereof.All Shareholders are cordially invited to attend the Meeting. Whether or not you plan to attend the Meeting, please complete, date and sign the enclosed proxy, which is solicited by the Board of Trustees of the Trust, and mail it promptly in the enclosed envelope to make sure that your shares in the Trust are represented at the Meeting. In the event you decide to attend the Meeting in person, you may, if you desire, revoke your proxy and vote your shares in person.By order of the Board of Trustees,/s/ MICHAEL L. ASHNERMichael L. AshnerChairman and Chief Executive OfficerBoston, MassachusettsMarch 30, 2007IMPORTANT: The prompt return of proxies will ensure that your shares will be voted. A self-addressed envelope is enclosed for your convenience. No postage is required if mailed within the United States.WINTHROP REALTY TRUSTPROXY STATEMENTANNUAL MEETING OF SHAREHOLDERSMAY 2, 2007TABLE OF CONTENTSWINTHROP REALTY TRUST7 Bulfinch PlaceSuite 500Boston, Massachusetts 02114PROXY STATEMENTANNUAL MEETING OF SHAREHOLDERSMAY 2, 2007This Proxy Statement and the enclosed Proxy Card are being furnished to all holders as of March 16, 2007 (the “Record Date”) of the common shares of beneficial interest, par value $1.00 per share (the “Common Shares”), of WINTHROP REALTY TRUST (the “Trust”), an Ohio business trust, in connection with the solicitation of proxies, in the form enclosed, by the Board of Trustees of the Trust (the “Board”) for use at the 2007 Annual Meeting of Shareholders to be held at the 11th Floor Conference Center in the offices of Katten Muchin Rosenman, 575 Madison Avenue, New York, New York 10022, on Wednesday May 2, 2007 at 1:00 p.m.A.M., and at any adjournment or adjournments thereof, (the “Meeting”)which we refer to as the “Annual Meeting”. The persons named as proxies on the Proxy Card were selected by the Board.The Trust anticipatesWe are first sendingmailing this Proxy Statement and the enclosed Proxy Cardaccompanying form of proxy to its shareholdersShareholders on or about March 31, 2007. The Trust’s Annual Report to Shareholders, which includes financial statements for the fiscal year ended December 31, 2006, is being mailed together withApril xx, 2009. In this Proxy Statement, all references to shareholdersthe “Trust,” “we,” “our” and “us” mean Winthrop Realty Trust, an Ohio business trust. All references to “Shareholder” and “you” refer to a holder of record of our beneficial interests designated as common shares, par value $1.00 per share, which we refer to as Common Shares.1. To elect eight Trustees to our Board of Trustees to serve for a term of one year and until their respective successors shall be elected and shall qualify; 2. To amend Section 1.3 of the Declaration of Trust to clarify the purpose of the Trust; 3. To amend Section 3.3 of the Declaration of Trust to modify the indemnification rights of Trustees, officers, employees and agents of the Trust; 4. To amend Section 4.1 of the Declaration of Trust to more clearly set forth the rights of the Trust to issue shares of beneficial interest; 5. To amend Section 7.1 of the Declaration of Trust to modify the timing of the Trust’s annual meeting and permit additional persons to call special meetings of holders of beneficial interests; 6. To amend Article VIII of the Declaration of Trust to modify, among other things, the voting requirement for election of Trustees; 7. To amend Section 10.1 of the Declaration of Trust to permit certain amendments to the Declaration of Trust to be made without the consent of holders of beneficial interests; 8. To amend Article XI of the Declaration of Trust to correct inconsistencies set forth therein and to clarify the rights of the Trust; 9. To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the 2009 fiscal year; 10. To consider and act upon such other matters as may properly come before the Annual Meeting or any adjournment thereof. (eachas of the close of business on the Record Date. If you hold Common Shares in “street name” (i.e., through a “shareholder”bank, broker or other nominee) and collectively, “shareholders”)wish to vote at the Annual Meeting, you will need to contact your nominee and obtain a proxy from your nominee and bring it to the Annual Meeting.entitledsoliciting a proxy in the form accompanying this Proxy Statement for use at the Annual Meeting, and will not vote the proxy at any other meeting. Mr. Michael L. Ashner and Ms. Carolyn Tiffany, or each acting individually, are the persons named as proxies on the proxy card accompanying this Proxy Statement, who have been selected by the Board to oneserve in such capacity. Both Mr. Ashner and Ms. Tiffany are members of the Board and executive officers of the Trust.for each Common Share held by such holder. The presence,on the matters to be voted upon at the Annual Meeting either in person at the Annual Meeting or by proxy. If you choose to vote by proxy, you may do so in one of three ways, over the Internet, by telephone or by executing and returning the enclosed proxy card. Once you authorize a proxy, you may revoke that proxy by (1) executing and submitting a later dated proxy card, (2) subsequently authorizing a proxy through the Internet or by telephone, (3) sending a written revocation of proxy to our Secretary at our principal executive office, 7 Bulfinch Place, Suite 500, Boston, Massachusetts 02114, or (4) attending the Annual Meeting and voting in person. Attending the Annual Meeting without submitting a new proxy or voting in person will not automatically revoke your prior authorization of your proxy. Only the last vote of a Shareholder will be counted.is necessary to constitute a quorum at the Meeting. Votes cast by proxy or in person at the Meeting will be counted by the person appointed by the Trust to act as inspector of election for the Meeting. The six nominees for election as Trustees who receive the greatest number of votes properly cast for the election of Trustees shall be elected Trustees. The affirmative vote of a majority of the votes in attendance atclose of business on the Meeting (at which a quorum is present),Record Date, present in person or represented by proxy, that are properly cast is necessary to approvewill constitute a quorum for the actions described in Proposals No. 2 and 3 below.transaction of business at the Annual Meeting. Abstentions and broker “non-votes” are included in the determination of the number of shares present at the Annual Meeting for quorum purposes but broker “non-votes” are not counted in the tabulations of the votes cast on proposals presented to shareholders.Shareholders. A broker “non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner.If any other matters are properly presented at the Meeting for consideration, including, among other things, consideration of a motion to adjourn the Meeting to another time or place, the persons namedenclosed Proxy Cardaccompanying form, which is properly executed, duly returned to us and acting thereundernot revoked, will have discretion to vote on those mattersbe voted in accordance with their best judgmentthe instructions contained therein and, in the absence of specific instructions, will be voted (i) FOR the election, as Trustees, of the eight persons who have been nominated by the Board, (ii) FOR the amendments to the same extentTrust’s Declaration of Trust, which we refer to as the “Declaration of Trust”, set forth in Proposals 2 through 8, (iii) FOR the ratification of the selection of PricewaterhouseCoopers LLP, who we refer to as “PwC”, as the independent registered public accounting firm to audit and report upon the consolidated financial statements of the Trust for the 2009 fiscal year, and (iv) in accordance with the judgment of the person signingor persons voting the proxies on any other matter that may be properly brought before the Annual Meeting.Card would beStatement to Shareholders entitled to vote. The Trust does not currently anticipate that any other matters will be raisedvote at the Meeting or that the Meeting willAnnual Meeting. The Annual Report is not to be adjourned.regarded as proxy soliciting material.
— seveneight members, sixseven of which are elected by the holders of Common Shares and one of which is elected by the holders of the Series B-1 Shares. SixThe Board has determined, in accordance with our By-laws, to increase the number of members of the Board to nine persons. Accordingly, eight persons, which constitutes all of the members of the Board thatwho are elected by the holders of the Common Shares,Shareholders, will be elected at the Annual Meeting to serve for a term of one year and until their respective successors shall have been elected and shall qualify. The Board of Trustees has nominated Michael L. Ashner, Bruce R. Berkowitz, Arthur Blasberg, Jr., Peter Braverman, Talton Embry, and Howard Goldberg, Thomas McWilliams, Carolyn Tiffany and Steven Zalkind for re-election as Trustees.ShareholdersTrustees, and has nominated Lee Seidler for election to the Board to fill the vacancy created by the increase in the number of members of the TrustBoard.“FOR”"FOR" the election of the named nominees for Trustee unless authorization is withheld on the Proxy Card. Should any nominee be unable or unwilling to serve as a Trustee, which is not anticipated, it is intended that the named proxies will vote for the election of such other person or persons as they, in their discretion, may choose.THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF THE ELECTION OF MESSERS. ASHNER, BERKOWITZ, BLASBERG, BRAVERMAN, EMBRY AND GOLDBERG TO THE BOARD OF TRUSTEES. UNLESS OTHERWISE INDICATED, THE ACCOMPANYING FORM OF PROXY WILL BE VOTED FOR THE NOMINEES LISTED ABOVE.current Trustees all of whom, other than Mr. Steven Mandis, are nominees for re-election toelection as Trustees as well as Mr. Bradley Scher who is a Trustee elected by the Board.holders of the Series B-1 Shares. There are no family relationships among our Trustees and executive officers of the Trust.officers. and month and year firstbecame appointed of the TrustApril 54servesserved as the Executive Chairman and a trustee of Lexington Realty Trust (“Lexington”), a New York Stock Exchange listed real estate investment trust, positions he has held sincefrom December 31, 2006 when Newkirk Realty Trust, Inc. (“Newkirk”) was merged into Lexington.Lexington to March 20, 2008. Mr. Ashner previously served as a director and the Chairman and Chief Executive Officer of Newkirk until it was merged into Lexington. Mr. Ashner also currently serves as the Chief Executive Officer of Winthrop Realty Partners, L.P., a real estate investment and management company, positions he has held since 1996. Mr. Ashner previously served as a director and Chief Executive Officer of Shelbourne Properties I, Inc., Shelbourne Properties II, Inc. and Shelbourne Properties III, Inc. (collectively, the “Shelbourne Entities”), three real estate investment trusts, from August 2002 until their liquidation in April 2004. Mr. Ashner serves on the Board of Directors of NBTY, Inc., a manufacturer and distributor of nutritional supplements as well as Lexington.supplements. Bruce R. BerkowitzDecember 200048Mr. Berkowitz has been the Managing Member of Fairholme Capital Management, L.L.C., a registered investment advisor, since June 1997 and President and Director of Fairholme Funds, Inc., a registered investment company under the Investment Company Act of 1940, since December 1999. Mr. Berkowitz is a director of White Mountains Insurance Group, Ltd., a publicly held property and casualty insurer, and also serves as a director of TAL International Group, Inc., a publicly traded lessor of intermodel freight containers.December 79Blasberg’sBlasberg's activities for the past five years include serving as a receiver appointed by the Superior Court in Massachusetts and as a trustee of various businesses, including real estate investment firms and industrial companies. Mr. Blasberg was a director and chairman of the audit committee of each of the Shelbourne Entities from August 2002 to their liquidation in April 2004. Mr. Blasberg also has served as a director of several private companies. He is an attorney admitted to practice in the Supreme Court of the United States, various federal courts and state courts and served for five years in the general counsel’scounsel's office of the Securities and Exchange Commission.Peter BravermanApril 200455Mr. Braverman currently serves as the President and a trustee of the Trust. From January 8, 2004 to August 4, 2004, Mr. Braverman was the Executive Vice President of the Trust. Mr. Braverman also currently serves as the Executive Vice President of Winthrop Realty Partners, L.P., a real estate investment and management company, a position he has held since January 1996. Mr. Braverman served as a director and President of Newkirk until it was merged into Lexington and as a director and Executive Vice President of each Shelbourne Entity from August 2002 until their liquidation in April 2004.September 60(“Magten”("Magten"), a private investment management company, since 1978. Mr. Embry has been associated with Magten in various capacities since 1978. Mr. Embry is also a director of National Patent Development.December 61Harrah’sHarrah's Entertainment Inc. From 2003 through 2005, Mr. Goldberg served as a part-time consultant to Laser Lock Technologies, Inc., LLTI.OB, a publicly-traded development stage company, engaged in the development and marketing of technologies for the prevention of product and document counterfeiting and electronic article surveillance. From 1995 through 2000, Mr. Goldberg served on the board of directors and audit committee of Imall Inc., a publicly-traded company that provided on-line shopping prior to its sale to Excite-at-Home. Mr. Goldberg served as a member of the board of directors and the audit committees of the Shelbourne Entities from August 2002 until their liquidation in April 2004. Mr. Goldberg has a law degree from New York University and was previously the managing partner of a New Jersey law firm where he specialized in gaming regulatory law and real estate from 1970 through 1994.Steven G. MandisFebruary 20053666 Mr. MandisMcWilliams is currently a managing partner and member of the investment committee of Court Square Capital Partners, a private equity company that manages approximately $6 billion in capital, a position he has held since 2006 when Court Square Capital Partners was formed. From 1983 to 2006, Mr. McWilliams held a similar position with Citigroup Venture Capital, the private equity arm of Citigroup.48 Mr. Scher is currently the ViceManaging Member of Ocean Ridge Capital Advisors, LLC, a privately held consulting firm formed in 2002 to provide financial and operating consultative services to institutional investors, boards of directors of public and private companies and to managements of public and private companies. Prior to the formation of Ocean Ridge, Mr. Scher was a Managing Director for PPM America, Inc., managing in excess of $1 billion of investments for a special situations fund. Previously he was a Director with TIAA-CREF in the special loans unit of the investing arm of this insurance and pension company. Prior to TIAA-CREF, Mr. Scher was an Investment Manager in the Private Placements division of The Travelers and was a middle market lending officer with Chemical Bank, where he graduated from the bank’s highly acclaimed credit training program74 42 Ms. Tiffany has been the Trust’s President since January 1, 2009 and served as the Trust’s Chief Operating Officer and Secretary from January 8, 2004 to January 31, 2007. From February 2007 through March 2008 Ms. Tiffany served as a principal and the Chief Operating Officer for High Street Equity Advisors, a private equity real estate firm. From April 2008 to December 31, 2008, Ms. Tiffany was a private investor. In addition, Ms. Tiffany served as the Chief Operating Officer and Secretary of Newkirk and its predecessor entities from 1996 to December 31, 2006 67 Mr. Zalkind has been a principal of Resource Investments Limited, LLC (“Resource”), a real estate investment firm, since 1975 acting as either an officer of the General Partner or Managing Member in the acquisition of over 26,000 multi-family apartment units and 2,000,000 square feet of commercial shopping centers and office buildings. Mr. Zalkind currently serves as the Chairman and Chief Executive Officer of Resource. Mr. Zalkind was a director of each of the Shelbourne Entities from August 2002 to their liquidation in April 2004 and a director of Newkirk from November 2005 until its merger with Lexington in December 2006. Name Age Current Position Michael L. Ashner 56 Chairman and Chief Executive Officer Carolyn Tiffany 42 President Peter Braverman 57 Executive Vice Chairman Thomas Staples 53 Chief Financial Officer John Alba 38 Chief Investment Officer and Secretary Halcyon StructuredBeneficial Owner-- 2,442,000 15.4% John Alba (1) -- (4) (4) Michael L. Ashner(1) 2,532,256 (2) 16.0% Trustee 28,000 * Executive Vice Chairman 6,166 (4) (4) Trustee 232,255 (5) 1.5% Trustee 48,619 * Thomas F. McWilliams(3) -- * Trustee -- * Lee Seidler 2,000 * Chief Financial Officer -- (4) (4) President and Trustee 9,410 * Trustee 10,613 * 2,870,319 18.1% -- 1,699,160 (6) 10.4%(6) -- 1,499,998 (7) 9.5% -- 947,114 (8) 6.0% -- 820,393 (9) 5.2% (1) The address for each of FUR Investors LLC, FUR Holdings LLC, WEM-FUR Investors LLC, Mr. Alba, Mr. Ashner and Mr. Braverman is Two Jericho Plaza, Wing A, Suite 111, Jericho, NY 11753 (2) Comprised of 2,442,000 shares owned by FUR Investors LLC, 60,256 shares held directly by Mr. Ashner and 30,000 shares held by The Ashner Family Evergreen Foundation, a New York not for profit corporation (the “Foundation”). Mr. Ashner is the managing member of WEM-FUR Investors LLC, the managing member of FUR Holdings, LLC, the sole member of FUR Investors LLC. As such, Mr. Ashner may be deemed to beneficially own all shares owned by Investors. Mr. Ashner is a director of the Foundation and, as such, may be deemed to beneficially own all shares owned by the Foundation. (3) The address for each of Messrs. Blasberg, Goldberg, McWilliams, Scher, Staples and Zalkind and Ms. Tiffany is c/o of Winthrop Realty Trust, 7 Bulfinch Place, Suite 500, Boston, MA 02114. (4) Messrs. Alba, Braverman, and Staples are members of WEM-FUR Investors LLC, the managing member of FUR Holdings, LLC, the sole member of FUR Investors LLC. Accordingly, Messrs. Alba, Braverman and Staples have an indirect pecuniary interest in approximately 25,396.8, 60,073.2 and 29,304, respectively, of the Common Shares owned by FUR Investors LLC. However, Messrs. Alba, Braverman and Staples do not exercise investment control over the shares held by FUR Investors LLC. Accordingly, Messrs. Alba, Braverman and Staples are not deemed to beneficially own any of such shares under Section 13 or Section 16 of the Securities Exchange Act of 1934, as amended. (5) L.P. (“Halcyon”)Corp., an investment management firm based in7 East 89th Street, New York, City.New York 10128. The number of shares reported consists of (i) 192,698 shares held in an IRA for the benefit of Mr. Mandis joined HalcyonEmbry, (ii) 20,687 shares held in 2004. Prior to joining Halcyon,an IRA for the benefit of Mr. MandisEmbry’s spouse, (iii) 11,880 shares held by Mr. Embry’s son who had workedshares a residence with Mr. Embry, and (iv) 7,960 shares held by Mr. Embry’s daughter who shares a residence with Mr. Embry. Amount excludes 31,652 shares owned in discretionary accounts in which Mr. Embry has no pecuniary interest.(6) The address for Fairholme Capital Management, LLC (“Fairholme”) and Mr. Berkowitz is c/o Fairholme Capital Management, LLC, 4400 Biscayne Boulevard, 9th Floor, Miami, FL 33137. Number of shares includes 444,444.48 Common Shares issuable upon the conversion of the 400,000 Series B-1 Shares held by Fairholme. Percentage based on outstanding Common Shares at Goldman Sachs since 1992, acted as a portfolio manager in its Special Situations InvestingMarch 16, 2009 plus 444,444 Common Shares issuable upon conversion of the 400,000 Series B-1 Shares held by Fairholme. Information is derived from the 13-G/A filing by Fairholme and Mr. Berkowitz with the SEC on February 13, 2009.(7) The address for Abrams Capital, LLC, Pamet Capital Management, LLC, Pamet Capital Management, L.P. and David Abrams (collectively, “Abrams”) is c/o Pamet Capital Management, L.P., 222 Berkeley Street, 22nd Floor, Boston, MA 02116. Information is derived from the 13-G/A filing by Abrams with the SEC on February 13, 2009. (8) The address for The Vanguard Group a multi-billion dollar proprietary investing area within Goldman Sachs’ Fixed Income Division. Before joiningInc. (“Vanguard”) is 100 Vanguard Avenue, Malvern, Pennsylvania 19355. Information is derived from the Fixed Income Division, Mr. Mandis worked in Goldman Sachs’ Principal Investment Area and Mergers & Acquisitions Department.13-G filing by Vanguard with the SEC on February 13, 2009.(9) The address for Barclays Global Investors, NA. (“Barclays”) is 400 Howard Street, San Francisco, California 94105. Information is derived from the 13-G filing by Vanguard with the SEC on February 2, 2009. 2006,2008, the Board met or acted through written consent 1424 times. Each of the Trustees attended either in person or telephonically 75% or more of the aggregate number of meetings of the Board and Board committees on which the Trustee served in 2006.2008. It is the policy of the Board to have all members of the Board in attendance at the Annual Meeting, or if unavailable to attend in person, to make arrangement, if possible, to participate by telephone or video conference. All members of the Board attended, either in person or by telephone conference call, the 20062008 Annual Meeting of Shareholders.Trust’sDeclaration of Trust and our By-laws give the Board the authority to delegate its powers to a committee appointed by the Board. All committees are required to conduct meetings and take action in accordance with the directions of the Board and the provisions of the Trust’sour By-laws. The Board has appointed four standing committees: an audit committee, a compensation committee, a nominating and corporate governance committee, and a conflicts committee. Certain of the committees’committees' principal functions are described below.· reviews annual and quarterly consolidated financial statements with the Trust’s management and independent registered public accountants;· recommends the appointment and reviews the performance, independence, and fees of the Trust’s independent registered public accountants and the professional services they provide;· oversees the Trust’s system of internal accounting controls and the internal audit function; and· discharges such other responsibilities specified in the listing standards of the New York Stock Exchange for audit committees.· reviews annual and quarterly consolidated financial statements with our management and independent registered public accounting firm; · recommends the appointment and reviews the performance, independence, and fees of our independent registered public accounting firm and the professional services they provide; · oversees our system of internal accounting controls and the internal audit function; and · discharges such other responsibilities specified in the listing standards of the New York Stock Exchange for audit committees. Trust’s Audit Committee, which is available at the Trust’sour website www.winthropreit.com, under the link “Corporate Governance”. A printed copy of the charter is also available to any shareholderShareholder who requests it in writing to the Trust’s PresidentSecretary at 7 Bulfinch Place, Suite 500, Boston, Massachusetts 02114. Trust’s headquarters.The Audit Committee consistsconsisted of Arthur Blasberg, Jr. (Chairman), Bruce Berkowitz and Howard Goldberg. Following Mr. Berkowitz’ resignation as a Trustee effective March 14, 2008, and Mr. Zalkind’s election as Trustee on March 17, 2008, Mr. Zalkind was appointed to the Audit Committee. The Audit Committee held sevenmeets periodically throughout the year both through formal meetings duringand written consents as well as through informal discussions as necessary. During the 20062008 fiscal year.year, the Audit Committee met or acted through unanimous written consent six times. All members of the Audit Committee and representatives of the Trust’s independent registered public accountants attended either in person or by telephone conference call all meetings of the Audit Committee other than one meeting which Mr. Berkowitz did not attend. Representatives of PwC, our independent registered public accounting firm for the year ended December 31, 2008, attended all meetings of the Audit Committee. On February 27, 2007, theThe Audit Committee met on February 24, February 26 and March 3, 2009 with the independent registered public accountantsrepresentatives of the TrustPwC to discuss the Trust’s 2006our 2008 consolidated financial statements.(“SEC”) definition of “audit"audit committee financial expert”expert". The Trust isWe are currently in compliance with the listing requirements of the New York Stock Exchange1315 of this Proxy Statement.· recommends to the Board the compensation policies and arrangements for the Trust’s officers, trustees, advisors and affiliates;· ensures appropriate oversight of the Trust’s executive compensation programs and human resources policies;· will, as appropriate, report to shareholders on the Trust’s executive compensation policies and programs;· discharges such other responsibilities specified in the listing standards of the New York Stock Exchange for compensation committees; and· reviews the “Compensation Discussion and Analysis” section of this Proxy Statement set forth on pages 8-9 of this Proxy Statement and issues its report which can be found on page 9 of this Proxy Statement.· recommends to the Board the compensation policies and arrangements for our officers, Trustees, advisors and affiliates; · discharges such other responsibilities specified in the listing standards of the New York Stock Exchange for compensation committees; and · reviews the “Compensation Discussion and Analysis” section of this Proxy Statement set forth on page 14 of this Proxy Statement and issues its report which can be found on page 15 of this Proxy Statement. Trust’s Compensation Committee, which is available at the Trust’sour website www.winthropreit.com, under the link “Corporate Governance”. A printed copy of the charter is also available to any shareholderShareholder who requests it in writing to the Trust’s PresidentSecretary at the Trust’s headquarters.During 2006,7 Bulfinch Place, Suite 500, Boston, Massachusetts 02114.TheFrom March 17, 2008 through November 11, 2008, the Compensation Committee held one meeting duringconsisted of Talton Embry (Chairman), Arthur Blasberg, Jr., Howard Goldberg, Steven Mandis and Steven Zalkind. Effective November 11, 2008, the 2006 fiscal year whichCompensation Committee was attended in person or by telephone conference call by allreconstituted and Messrs. Embry (Chairman), McWilliams and Zalkind were appointed as the only members of the Compensation Committee.· reviews the qualifications of current and potential Trustees including determining whether they are “independent” under the listing standards of the New York Stock Exchange;· reviews each Trustee’s continued service on the Board;· reviews outside activities of Board members and resolves any issue of possible conflict of interest;· considers nominees for trustees of the Trust submitted in writing to the Chairman of the Nominating Committee (along with other information submitted in accordance with the Trust’s By-laws and Declaration of Trust), which are submitted by executive officers of the Trust, current Trustees, search firms engaged by the Nominating Committee, if any, by others in its discretion and, nominees for trustee proposed by a shareholder in accordance with the terms of the Trust’s By-laws and Declaration of Trust;· considers proposals submitted by shareholders for inclusion in the proxy statement for the Trust’s Annual Meeting of Shareholders if they are submitted in writing to the Chairman of the Nominating Committee at the principal address of the Trust in accordance with the provisions of the Trust’s By-laws and Declaration of Trust and so long as the submitting shareholder meets the qualifications and complies with the procedures provided in the proxy rules of the SEC. All such proposals shall be accompanied by information with respect to the submitting shareholder sufficient for the committee to determine whether such qualifications are met;· reviews any other shareholder communications intended for management of the Trust or the Board of Trustees or an individual Trustee and the Nominating Committee shall determine, in its discretion, considering the identity of the submitting shareholder and the materiality and appropriateness of the communication, whether, and to whom within the Trust, to forward the communication;· recommends nominations for members of the Board;· reviews and assesses the adequacy of the Audit Committee’s, Compensation Committee’s and Conflicts Committee’s charters; and· discharges such other responsibilities specified in the listing standards of the New York Stock Exchange for nominating and corporate governance committees.· reviews the qualifications of current and potential Trustees including determining whether they are “independent” under the listing standards of the New York Stock Exchange; · reviews each Trustee's continued service on the Board; · reviews outside activities of Board members and resolves, to the extent not referred to the Conflicts Committee, any issue of possible conflict of interest related thereto; · considers nominees for Trustees submitted in writing to the Chairman of the Nominating Committee (along with other information submitted in accordance with our By-laws and the Declaration of Trust), which are submitted by our executive officers, current Trustees, search firms engaged by the Nominating Committee, if any, by others in its discretion and, nominees for Trustee proposed by a Shareholder in accordance with the terms of our By-laws and the Declaration of Trust; · considers proposals submitted by Shareholders for inclusion in the proxy statement for our Annual Meeting of Shareholders if they are submitted in writing to the Chairman of the Nominating Committee at our principal address in accordance with the provisions of our By-laws and the Declaration of Trust and so long as the submitting Shareholder meets the qualifications and complies with the procedures provided in the proxy rules of the Securities and Exchange Commission. All such proposals shall be accompanied by information with respect to the submitting Shareholder sufficient for the committee to determine whether such qualifications are met; · reviews any other Shareholder communications intended for our management unless such communication is directed to a specific Trustee or Trustees; · recommends nominations for members of the Board; · reviews and assesses the adequacy of the charters of the Audit Committee, Compensation Committee and Conflicts Committee; and · discharges such other responsibilities specified in the listing standards of the New York Stock Exchange for nominating and corporate governance committees. Trust’s Corporate Governance and Nominating Committee, which is available at the Trust’sour website www.winthropreit.com, under the link “Corporate Governance”. The Board has also adopted Corporate Governance Guidelines which is also available at the Trust’sour website www.winthropreit.com, under the link “Corporate Governance.” A printed copy of the charter and the guidelines are also available to any shareholderShareholder who requests it in writing to the Trust’s PresidentSecretary at 7 Bulfinch Place, Suite 500, Boston, Massachusetts 02114. Trust’s headquarters.The Nominating and Corporate Governance Committee consistsconsisted of Bruce Berkowitz (Chairman), Arthur Blasberg, Jr., Talton Embry and Howard Goldberg. Following Mr. Berkowitz’ resignation as a Trustee effective March 14, 2008, Mr. Goldberg was appointed the Chairman of the Nominating and Corporate Governance Committee. Effective November 11, 2008, the Nominating and Corporate Governance Committee was reconstituted and Messrs. Goldberg (Chairman), Blasberg, Embry and McWilliams were appointed as the only members of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee held one meetingmet or acted through unanimous written consent two times during the 20062008 fiscal year which wasyear. All members of the Nominating and Corporate Governance Committee attended either in person or by telephone conference call by all membersmeetings of the Nominating and Corporate Governance Committee.Committee :· considers and approves, on behalf of the Trust, all material transactions that relate to conflicts of interests between the Trust and its affiliates, on the one hand, and (i) FUR Advisors LLC (“FUR Advisors”), the Trust’s external advisor (and any successor advisor), Michael Ashner, and any of their affiliates, (ii) Lexington, The Lexington Master Limited Partnership, or Apollo Real Estate Investment Fund III, L.P. or any of their respective affiliates, (iii) a beneficial owner of more than 4.9% of the issued and outstanding Common Shares, either directly or upon the conversion of any preferred shares of beneficial interest in the Trust, or (iv) a beneficial owner of more than 4.9% of any other entity in which the Trust holds a 10% or greater interest;· advises the Board on actions to be taken by the Trust or matters related to the Trust upon request of the Board or the Nominating or Corporate Governance Committee, which may include conflicts of interest.· considers and approves, on behalf of the Trust, all material transactions that relate to conflicts of interests between us and our affiliates, on the one hand, and (i) FUR Advisors LLC, which we refer to as “FUR Advisors”, our external advisor (and any successor advisor), Michael Ashner, and any of their affiliates, (ii) Lexington Realty Trust, The Lexington Master Limited Partnership, or Apollo Real Estate Investment Fund III, L.P. or any of their respective affiliates, (iii) a beneficial owner of more than 4.9% of the issued and outstanding Common Shares, either directly or upon the conversion of any of our preferred shares of beneficial interest, or (iv) a beneficial owner of more than 4.9% of any other entity in which we hold a 10% or greater interest; and · advises the Board on actions to be taken by us or matters related to us upon request of the Board or the Nominating or Corporate Governance Committee, which may include conflicts of interest. Trust’s Conflicts Committee, which is available at the Trust’sour website www.winthropreit.com, under the link “Corporate Governance”. A printed copy of the charter is also available to any shareholderShareholder who requests it in writing to the Trust’s PresidentSecretary at the Trust’s headquarters.Bruce Berkowitz, Arthur Blasberg, Jr. (Chairman), Talton Embry and Howard Goldberg.all non-management Trustees of the Board. At each meeting, the members of the Conflicts Committee choose a presiding member for such meeting, based upon the topics to be discussed. The Conflicts Committee held fivethree meetings during the 20062008 fiscal year which was attended either in person or by telephone conference call by all members of the Conflicts Committee.directorTrustee independence in February 2007.March 2009. During this review, the Committee considered transactions and relationships between each Trustee or any member of his or her immediate family and the Trust and its subsidiaries and affiliates, including those reported under “Certain Relationships and Related Transactions” below. The Committee also examined transactions and relationships between Trustees or their affiliates and members of the Trust’sour senior management or their affiliates. The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the Trustee is independent in6the Trustus or itsour affiliates and reviewed the bright-line independence tests set forth in Section 303A.02(b).of Trustees of the Trust affirmatively determined that each of Messrs. Berkowitz, Blasberg, Embry, Goldberg, McWilliams, Scher, Seidler and MandisZalkind are independent of the Trust and its management in accordance with Section 303A.02(a) and (b) of the listing standards of the New York Stock Exchange. Mr. Ashner and Mr. BravermanMs. Tiffany are not considered independent because of their acting as our executive officers of the Trust as well as their ownership interest in FUR Advisors. See “Certain Relationships and Related Transactions” below.Prior to or following every regularly scheduled quarterly meeting of the Board, the Trust’spresent.present from time and time as they deem appropriate including, without limitation, prior to or following every regular quarterly meeting of the Board. There is not a predetermined non-management Trustee who presides over all such meetings. At each meeting, the non-management Trustees choose a presiding member for such meeting, based upon the topics to be discussed. “Non-management”"Non-management" Trustees are all those Trustees who are not executive officers, and may include Trustees who are not considered to be independent under regulations issued by the SEC or the New York Stock Exchange. The Trust’sOur current non-management Trustees are: Bruce Berkowitz, Arthur Blasberg, Jr., Talton Embry, Howard Goldberg, Thomas McWilliams, Bradley Scher and Steven Mandis.CompensationZalkind.2006:
(a)
Paid in Cash
($)
(b)
($)
(c)
($)
(d)
Incentive
Compensation
($)
(e)
Value and
Nonqualified
Deferred
Compensation
Earnings ($)
(f)
Compensation
($)
(g)
($)
(h) Fees Earned or Paid in Cash Stock Awards Option Awards All Other Compensation Bruce Berkowitz(1) $11,750 - - - $11,750 Arthur Blasberg, Jr. $79,000 - - - $79,000 Talton Embry $30,000 - - - $30,000 Howard Goldberg $49,000 - - - $49,000 Steven Mandis(2) $30,000 - - - $30,000 Thomas McWilliams(3) $22,500 $22,500 Bradley Scher(4) - - - - - Steven Zalkind(5) $35,750 - - - $35,750 Trust’s current non-officer Trustees, Messrs. Berkowitz, Blasberg, Embry, Goldberg, McWilliams,, Scher and Mandis,Zalkind, each receive $30,000 annually for their services as Trustees. In addition, each member of the audit committee receives $10,000 annuallyreceived $15,000 for serving on the Audit Committee in 2008, $500 for each committee meeting they attend and the chairman of the Audit Committee receives an additional $15,000$30,000 annually. During 2006, each of Messrs. Berkowitz, Embry and Goldberg received a fee for $10,000 for serving on the Conflicts Committee and Mr. Blasberg received a fee of $15,000 for serving as the chairman of the Conflicts Committee, in each case in connection with their additional time requirements necessitated by the transactions with Newkirk and Lexington in connection with the merger of Newkirk into Lexington in December 2006. Trustees of the Trust who are also our officers of the Trust receive no compensation for serving on the Board. However, all Trustees are reimbursed for travel expenses and other out-of-pocket expenses incurred in connection with their service on the Board.Shareholders or other interested parties wishing to communicate with the Board or an individual Trustee or group of Trustees may do so either in person at the Meeting or by mail. Mail addressed to the Trustees can be sent to: Winthrop Realty Trust, 7 Bulfinch Place, Suite 500, P.O. Box 9507, Boston, Massachusetts 02114, Attn: President, indicating it to be a correspondence to a particular member(s) of the Board or the Board in its entirety. All mail received will be opened and screened for security purposes. The mail will then be logged in, and all mail other than mail determined by the Trust’s primary outside corporate counsel to be trivial or obscene will beforwarded to the particular Trustee in question or to the Board in its entirety, as requested in the shareholder’s correspondence in question. Trivial items will be delivered to the Trustees at the next scheduled Board meeting. Obscene items will not be forwarded.Compensation Committee Interlocks and Insider ParticipationThere were no relationships among members of the Compensation Committee, members of the Board or the Trust’s executive officers who served during our 2006 fiscal year that require disclosure under Item 407(e)(4) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended. All current members of the Compensation Committee are considered independent under our Corporate Governance Guidelines.areis applicable to all Trustees and our executive officers, of the Trust, including the principal executive officer, the principal financial officer and the principal accounting officer, as well as FUR Advisors the Trust’s outside advisor and its employees. The Code of Ethics can be obtained upon request from the Trust’s Presidentour Secretary and at the Trust’sour website www.winthropreit.com under the link “Corporate Governance”.page 5pages 10-11 of this Proxy Statement, the Compensation Committee is responsible for recommending to the Board the compensation policies and arrangements for the Trust’sTrust's officers, trustees,Trustees, advisors and affiliates. The Compensation Committee acts pursuant to the Compensation Committee Charter and is comprised of fivethree members who were independent within the meaning of Section 303A.02 of the listing standards of the New York Stock Exchange. A copy of the Compensation Committee Charter is available upon request from the Trust’s PresidentSecretary at 7 Bulfinch Place, Suite 500, Boston, Massachusetts 02114 and at the Trust’sour website (www.winthropreit.com).itsour executive officers and doesdo not have any direct employees. The Trust has retainedWe retain FUR Advisors to provide substantially all of our asset management, accounting and investor services for the Trust.Advisory Agreementadvisory agreement with FUR Advisors to determine their consistency with market terms and whether the retention of an outside advisor is more favorable to the Trustus than retaining direct employees of the Trust.employees. The Compensation Committee reviews the fees payable to FUR Advisors in comparison to the general and administration costs of other public real estate investment trusts. Based on its review, the Compensation Committee recommended to the Board that the Advisory Agreementadvisory agreement with FUR Advisors be renewed.the Trustwe were to retain itsour executive officers directly, the Compensation Committee would, in making its compensation recommendations to the Board likely consider (1) the potential holding periods of the Trust’sour assets, (2) the number of individual investments held by the Trust,us, (3) the business plan with respect to such assets and the amount of asset management required with respect to theour assets, (4) theour overall investment prospects of the Trust and our short and long-term business plan, of the Trust, and (5) with respect to a specific executive officer, such officer’sofficer's responsibilities, experience and overall performance. The Compensation Committee would further seek to attract and retain highly qualified executives and to motivate them to work together as a team to maximize the Trust’sour financial performance on an annual and long-term basis thereby resulting in increased shareholder value.the Trust hasto May 2007, we did not hadmaintain any share option or share grant plans in effect pursuant to which it canwe could issue options. Accordingly, noIn May 2007, our Shareholders approved the Winthrop Realty Trust 2007 Long Term Incentive Plan pursuant to which share options or share grants can be granted. No such share options or share grants were granted during the year ended December 31, 2006. The Compensation Committee has recommended to the Board and the Board has approved, subject to shareholder approval, a long term incentive compensation plan. See “Proposal 3. 2007 Long Term Incentive Plan” below. If approved by the shareholders, the Trust will be permitted to issue share grants and/or options to trustees, directors and consultants of the Trust and its subsidiaries. At present the Compensation Committee has not yet determined the procedures or requirements for issuance of options or grants under this plan.Members of the Compensation CommitteeTalton Embry—ChairmanBruce BerkowitzArthur Blasberg, Jr.Howard GoldbergSteven MandisSEC,Securities and Exchange Commission, nor shall any information in this report be incorporated by reference into any past or future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Trustwe specifically incorporatesincorporate it by reference into such filing.CERTAIN RELATIONSHIPSTrust and its subsidiaries are administered by FUR Advisors pursuant to the termsCompensation Committee, members of the Advisory Agreement between the Trust and FUR Advisors. FUR Advisors is controlled by and partially owned by theBoard or our executive officers who served during our 2008 fiscal year that require disclosure under Item 407(e)(4) of the Trust. Pursuant to the terms of the Advisory Agreement, FUR Advisors is responsible for providing asset management services to the Trust and coordinating with the Trust’s shareholder transfer agent and property managers. For providing these services, FUR Advisors is entitled to a quarterly base management fee equal the lesser of (i) an asset based fee or (ii) a fee based on outstanding equity, which are calculated as follows:·Asset based fee equals 1% of the gross asset value of the Trust up to $100,000,000, 0.75% of the gross asset value of the Trust between $100,000,000 and $250,000,000, 0.625% of the gross asset value of the Trust between $250,000,000 and $500,000,000 and 0.50% of the gross asset value of the Trust in excess of $500,000,000 (in light of the net lease nature of the 16 net lease properties, FUR Advisors agreed to reduce its fee for these properties to 0.25% of the gross asset value for the portion of that portfolio that is subject to leverage).·Equity based fee equals (i) 1.5% of the issued and outstanding equity securities of the Trust plus (ii) .25% of any equity contribution by a third party to a joint venture managed by the Trust. For purposes of the equity based calculation, the 31,058,913 Common Shares outstanding at January 1, 2005 are to be valued as follows: $2.30 (FUR Investors LLC’s tender offer price in its December 2003 tender offer) with respect to 26,058,913 Common Shares and $2.60 (the purchase price paid by FUR Investors LLC) with respect to the 5,000,000 Common Shares acquired on December 31, 2003. The Trust’s Series A preferred shares were valued at their liquidation preference amount of $25 per share until their conversion into Common Shares on February 7, 2006, at which time the Common Shares issued in connection therewith are valued at $5.0825 per Common Share. All preferred and Common Shares issued subsequent to January 1, 2005 areto be valued at the net issuance price including any Common Shares issued in connection with the conversion of the preferred shares.Under the Advisory Agreement, the Trust receives a credit against the quarterly base management fee payable to FUR Advisors equal to 80% of the incentive management fee, if any, payable by Newkirk to NKT AdvisorsRegulation S-K promulgated under the advisory agreement between Newkirk and NKT Advisors. In connection with the merger of Newkirk into Lexington in December 2006, the advisory agreement between Newkirk and NKT Advisors was terminated, and NKT Advisors received a payment of $5,500,000 attributable to its incentive fee. As a result, the Trust received a $4,400,000 credit (80% of total fee paid) to be utilized on a go forward basis in offsetting the quarterly base management fees payable under the Advisory Agreement. The Trust utilized $1,159,000 of this amount to offset the base management fee payable for the quarter ended December 31, 2006. The unutilized portion bears interest at a rate of 6.8%.Winthrop Management L.P. (formerly known as Kestrel Management L.P.), an affiliate of FUR Advisors and the Trust’s executive officers, provides property management responsibilities for the Trust’s Indianapolis, Indiana property (Circle Tower). Pursuant to the terms of the property management agreement, Winthrop Management L.P. receives a fee equal to 3% of the monthly revenues of Circle Tower, which fee has been approved by the independent Trustees, and is less than the amount paid to the prior property management company.The following table sets forth the fees and reimbursements paid by the Trust for the year ended December 31, 2006 to FUR Advisors and Winthrop Management L.P.:(1) Payable to FUR Advisors(2) Payable to Winthrop Management L.P.(3) Determined using the equity based method(4) Before credit of $4,400,000 in fourth quarter 2006During the year ended December 31, 2006, the Trust and The Newkirk Master Limited Partnership, the operating partnership of Newkirk formed Concord Debt Holdings, LLC (“Concord”). Pursuant to the Concord joint venture agreement, Concord was permitted to pay to such person, including a member of Concord or its affiliate, a fee in the amount not to exceed 50 basis points of the face value of any loan acquired. In lieu of paying the full 50 basis point fee, Concord paid to an affiliate of FUR Advisors, a total fee of approximately $1,066,000 which represented the costs of the employees dedicated to Concord’s business and equaled approximately 21 basis points of the face value of the loans acquired.All officers serve at the discretion of the Board. Set forth below is certain information regarding the executive officers and certain other officers of the Trust at March 1, 2007 (biographical information with respect to Messrs. Ashner and Braverman is set forth above on pages 2 and 3): NameAgeCurrent PositionMichael L. Ashner54Chairman and Chief Executive OfficerPeter Braverman55PresidentThomas Staples51Chief Financial OfficerJohn Alba36Chief Investment OfficerMr. Staples has been our Chief Financial Officer since January 8, 2004. Mr. Staples, has been with Winthrop Realty Partners, L.P. since 1994 and has served as its Chief Financial Officer since January 1999. Mr. Staples also served as the Chief Financial Officer of Newkirk until December 31, 2006 when it was merged into Lexington. Mr. Staples also served as Assistant Treasurer of the Shelbourne Entities from August 2002 until their liquidation in April 2004. Mr. Staples is a certified public accountant.Mr. Alba was appointed our Chief Investment Officer in October 2005. Mr. Alba has served as a Vice President of Winthrop Realty Partners, L.P. since January 1998.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTThe following table sets forth certain information as of March 1, 2007 (except as otherwise indicated) regarding the ownership of Common Shares by (i) each person who is known to the Trust to be the beneficial owner of more than 5% of the outstanding shares of Common Shares, (ii) each Trustee and nominee for Trustee, (iii) each executive officer named herein, and (iv) all current executive officers and Trustees of the Trust as a group. Except as otherwise indicated, each such shareholder has sole voting and investment power with respect to the shares beneficially owned by such shareholder.
of Beneficial Owner
the Trust
Beneficial Ownership(1)
of Class
FUR Holdings LLC
WEM-FUR Investors LLC (2)11*Less than 1%(1) Unless otherwise indicated, shares are beneficially owned by indicated holder.(2) The address for each of FUR Investors, FUR Holdings, WEM-FUR Investors LLC, Mr. Alba, Mr. Ashner and Mr. Braverman is Two Jericho Plaza, Wing A, Suite 111, Jericho, NY 11753(3) Comprised of 11,000,000 shares owned by FUR Investors and 27,000 shares held directly by Mr. Ashner. Mr. Ashner is the managing member of WEM-FUR Investors LLC, the managing member of FUR Holdings, LLC, the sole member of FUR Investors. As such, Mr. Ashner may be deemed to beneficially own all shares owned by Investors.(4) The address for Mr. Berkowitz is c/o Fairholme Capital Management, LLC, 1001 Brickell Bay Drive, Suite 3112, Miami, Florida 33131.(5) Number of shares consists of (i) 42,122 common shares owned directly by Mr. Berkowitz, (ii) 1,081,875.6 common shares owned by Fairholme Ventures II, LLC, an entity in which Fairholme Capital Management is the managing member, (iii) 16,476.15 common shares owned by Fairholme Holdings Ltd., an entity in which Fairholme Capital Management is the investment manager, (iv) 930,373.7 owned by Fairholme Associates, L.P., an entity in which Fairholme Capital Management is the general partner, and (v) 2,222,222 common shares issuable upon the conversion of the 400,000 Series B-1 Shares held by Fairholme Ventures II, LLC. Mr. Berkowitz is the managing member of Fairholme Capital Management. Furthermore, Mr. Berkowitz and Fairholme Capital Management have disavowed management and supervision with respect to 573,521 shares of common stock held in the separate accounts of advisory clients, and, accordingly, Mr. Berkowitz and Fairholme Capital Management do not attribute such shares. Percentage assumes conversion of only 400,000 Series B-1 Shares held by Fairholme Ventures II, LLC.(6) Messrs. Alba, Braverman, and Staples are members of WEM-FUR Investors LLC, the managing member of FUR Holdings, LLC, the sole member of FUR Investors. Accordingly, Messrs. Alba, Braverman and Staples have an indirect pecuniary interest in approximately 114,400, 270,600 and 132,000 of the shares of Common Shares owned by FUR Investors. However, Messrs. Alba, Braverman and Staples do not exercise investment control over the shares held by FUR Investors. Accordingly, Messrs. Alba, Braverman and Staples are not deemed to beneficially own any of such shares under Section 13 or Section 16 of the Securities Exchange Act of 1934, as amended.(7) The address for Mr. Embry is c/o Magten Asset Management Corp., 410 Park Avenue, 15th Floor, New York, New York 10022. The number of shares reported consists of (i) 947,640 shares held in an IRA for the benefit of Mr. Embry, (ii) 83,708 shares held in an IRA for the benefit of Mr. Embry’s spouse, (iii) 49,994 shares held in a trust account in which Mr. Embry is the trustee and which is for the benefit of Mr. Embry’s minor son, (iv) 33,500 shares held in a trust account in which Mr. Embry is the trustee and which is for the benefit of Mr. Embry’s minor daughter and (v) 94,446 shares are owned beneficially by discretionary accounts managed by Mr. Embry. Of the 94,446 shares owned in discretionary accounts, Mr. Embry has no pecuniary interest in any of such shares.(8) The address for Mr. Mandis is c/o Halcyon Management Company, 477 Madison Avenue, 8th Floor, New York, New York 10022.(9) Number of shares represents 433,679 common shares and 5,200,000 common shares issuable upon conversion of 936,000 Series B-1 Shares held by investment funds for which Halcyon Structured, LP is directly or indirectly the investment manager. Mr. Mandis is the Chief Investment Officer of Halcyon Structured LP, indirectly the investment manager All current members of the Halcyon Structured Opportunities Fund, L.P. and Halcyon Fund, L.P. Mr. Mandis disclaims beneficial ownership of all such securities except to the extent of his pecuniary interest therein. Percentage assumes conversion of only all Series B-1 Shares held by investment funds for which Halcyon Structured LP serves as investment manager and 289,333 Series B-1 Shares held by Halcyon Fund, L.P only.(10) The address for each of Messrs. Blasberg, Goldberg and Staples is c/o of Winthrop Realty Trust, 7 Bulfinch Place, Suite 500, Boston, MA 02114.(11) The total number of shares held by directors and executive officers, excluding shares issuable upon conversion of Series B-1 Shares held by directors, is 15,048,117.(12) Percentage represents the total number of shares held by directors and executive officers including shares issuable upon conversion of the Series B-1 Shares held by directors over total number of shares outstanding on March 1, 2007 plus shares issuable upon conversion of the Series B-1 Shares held by directors. Excluding shares issuable upon conversion of the Series B-1 Shares held by directors, the percentage ownership of shares held by directors and executive officers is 23%.(13) The address for Vornado Realty Trust is 888 Seventh Ave. New York, New York 10019. Information is derived from the 13-G filing by Vornado Realty Trust with the SEC on May 24, 2006.(14) The address for HBK Investments, L.P. is 300 Crescent Court, Suite 700, Dallas, Texas 75201. Information is derived from the 13-G/A filing by HBK Investments, L.P. with the SEC on February 9, 2007. Shares include 4,888,888 common shares issuable upon conversion of 880,000 Series B-1 Shares held by HBK Investments, L.P. and percentage assumes conversion of all Series B-1 Shares held by HBK Investments, L.P. only.(15) The address for each of these shareholders is 65 East 55th Street, 30th Floor, New York, New York 10022. Information is derived from the 13-G/A filing by King Street Capital, L.P., King Street Advisors, L.L.C., King Street Capital Management, L.L.C., O. Francis Biondi, Jr. and Brian J. Higgins with the SEC on March 2, 2006. Shares represents common shares issuable upon conversion of 944,000 Series B-1 Shares held by King Street Capital, L.P. and percentage assumes conversion of all Series B-1 Shares held by King Street Capital, L.P. only.SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCESection 16(a) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) requires the Trust’s executive officers, Trustees and persons who beneficially own greater than 10% of a registered class of the Trust’s equity securities to file certain reports (“Section 16 Reports”) with the SEC with respect to ownership and changes in ownership of the Common Shares and other equity securities of the Trust. Based solely on the Trust’s review of the Section 16 Reports furnished to the Trust and written representations from certain reporting persons, the Trusts officers, Trustees and greater than 10% beneficial owners have been complied with all Section 16(a) requirements applicable to them.the Trust’s Presidentour Secretary at 7 Bulfinch Place, Suite 500, Boston, Massachusetts 02114 and at the Trust’s website (www.winthropreit.com).Trust’sTrust's independent registered public accountants.accounting firm. Management is responsible for the Trust’sTrust's internal controls and financial reporting process. The independent registered public accountants areaccounting firm is responsible for performing an independent audit of the Trust’sTrust's consolidated financial statements in accordance with generally accepted auditing standards and for issuing a report thereon and expressing opinionsan opinion on the effectiveness of the Trust’s internal control over financial reporting and on management’s assessment of the effectiveness of the Trust’s internal control over financial reporting. The Audit Committee’sCommittee's responsibility is to oversee these processes.· monitors· supervisessupervise the relationship between the Trust and its independent registered public accountants,accounting firm, including having directresponsibility for their appointment, compensation and retention;accountants;accounting firm;· oversees discuss the Trust’s policies with respect to risk assessment and risk management; andinterestsinterest and review of the Trust’s internal auditing program.Deloitte & TouchePricewaterhouseCoopers LLP, the Trust’s independent registered public accountantsaccounting firm for 2006,2008, regarding the fair and complete presentation of the Trust’s financial results and the assessment of the Trust’s internal control over financial reporting. The Audit Committee has discussed significant accounting policies applied by the Trust in its consolidated financial statements, as well as alternative treatments. Management represented to the Audit Committee that the Trust’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accountants.Deloitte & TouchePricewaterhouseCoopers LLP all matters required to be discussed by Statement on Auditing Standards No. 61, as amended (Communication with Audit Committees), including the quality of the Trust’s accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements.. The Audit Committee also discussed with Deloitte & TouchePricewaterhouseCoopers LLP matters relating to its independence, including a review of audit and non-audit fees and the written disclosures and letter from Deloitte & TouchePricewaterhouse Coopers LLP to the Audit Committee pursuant to Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), “Communication"Communication with Audit Committees”Committees". The Audit Committee also has considered whether Deloitte & TouchePricewaterhouseCoopers LLP’s provision of non-audit services to the Trust is compatible with the auditor’sits independence. The Audit Committee has concluded that Deloitte & TouchePricewaterhouseCoopers LLP is independent from the Trust and its management. With and without management present, the Audit Committee discussed and reviewed the results of Deloitte & Touche LLP’s examination of the Trust’s financial statements for the year ended December 31, 2006.The Audit Committee reviewed and discussed Trust policies with respect to risk assessment and risk management.accountantsaccounting firm the overall scope and plans for their respective audits. The Audit Committee met with the internal auditor and the independent registered public accountants,accounting firm, with and without management present, to discuss the results of their examinations of the Trust’s consolidated financial statements for the year ended December 31, 2008, the evaluations of the Trust’s internal controls, and the overall quality of the Trust’s financial reporting.Committee’sCommittee's reviews and discussions referred to above and the Audit Committee’sCommittee's review of the representations of management, and the report of the independent registered public accountants to the Audit Committee,accounting firm, the Audit Committee recommended that the Board of Trustees include the audited consolidated financial statements in the Trust’sTrust's Annual Report on Form 10-K for the year ended December 31, 2006,2008, as filed with the Securities and Exchange Commission. The Audit Committee believes that it has satisfied its responsibilities under its charter.As discussed in Proposal No. 2, has selected, PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2007.Members of the Audit CommitteeArthur Blasberg, Jr. — ChairmanBruce BerkowitzHoward GoldbergSEC,Securities and Exchange Commission, nor shall any information in this report be incorporated by reference into any past or future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Trust specifically incorporates it by reference into such filing.· Asset based fee equals 1% of our gross asset value up to $100,000,000, 0.75% of our gross asset value between $100,000,000 and $250,000,000, 0.625% of our gross asset value between $250,000,000 and $500,000,000 and 0.50% of our gross asset value in excess of $500,000,000 (in light of the net lease nature of our 16 net lease properties, FUR Advisors agreed to reduce its fee for these properties to 0.25% of the gross asset value for the portion of that portfolio that is subject to leverage). · 2008 2007 2006 Asset Management (1) $5,616,000 (3) $5,263,000 (4) $3,681,000 (5) Property Management (2) 264,000 269,000 217,000 Construction Management (2) 23,000 9,000 - — Section 3.3. Trustee’s Liability to Trust and Beneficiaries - Indemnification and Expense - Bond and Security. Declaration of Trust Section Proposed Declaration of Trust Changes 8.1. Number of Trustees Eliminate provision permitting an entity to serve as a Trustee. 8.2 Election of Trustees; Term of Office Section 8.3 Resignation and Removal No changes Section 8.4 Filling Vacancies Eliminates the provision that an appointment or election of a Trustee does not become effective until such person signs the Declaration of Trust. Section 8.5 Trust Continues No changes Section 8.6 Trustees’ Meetings and Actions Fixes an inconsistency in the provision by adding the phrase “except as otherwise provided in this Declaration of Trust or the By-laws of the Trust” before the statement that the vote or written action by a majority of the Trustees is sufficient to constitute an action of the Board. Certain actions by the Board require more than a majority vote. Section 8.7 Trustees’ Compensation No changes Section 8.8 By-Laws of the Trust Eliminates the requirement that the By-laws be attached to the Declaration of Trust. Section 8.9 Committees Provides that a majority of the Trustees can establish committees of the Trustees. Provision currently requires unanimity. It further makes clear that a Trustee may serve on more than one committee of the Board and lists the current committees of the Board Section 8.10 Trustee’s Other Business Activities This provision has been eliminated as the Trust’s Conflicts Committee charter is currently more restrictive than this provision Declaration of Trust Section Proposed Declaration of Trust Changes 11.10. Contingent Powers of Beneficiaries Deleted in its entirety. 11.11. Investment Policy Provides that the assets acquired by the Trust will be consistent with the Trust’s purpose. 11.12. Notices on Distributions Deleted in its entirety. 11.13. Transactions with Interested Parties Deletes the requirement that all commissions and remuneration received by the Trust’s advisor, if any, in connection with a transaction entered into by the Trust is to be deducted from the advisory fee. 11.14. Advisors No changes. 11.15. Limitations on Expenses Deleted in its entirety. 11.16. Appraisals Previously deleted by vote of Shareholders. 11.17. Prohibited Investments Deleted in its entirety. 11.18. Prohibited Activities Deleted in its entirety. 11.19. Qualification as a Real Estate Investment Trust No changes. 11.20. Purposes of Article and Section Heading No changes. 11.21. Controlling Effect of Article XI No changes. Eliminates certain debt restrictions on the Trust. Deleted in its entirety. Declaration of Trust Section Proposed Declaration of Trust Changes Deleted in its entirety. 11.25. Options Respecting Trust’s Securities No changes. Deleted in its entirety. Deleted in its entirety. determinedselected PwC to changeserve as the Trust’s independent registered public accounting firm. As a result, the Audit Committee replaced Deloitte & Touche LLP (“Deloitte”) as the Trust’s independent auditors effective March 19, 2007. The Audit Committee has selected PricewaterhouseCoopers LLP (“PwC”) to audit the consolidated financial statementsfirm of the Trust andfor its subsidiaries for the fiscal year ending December 31, 2007.the Trust’sour past two fiscal years, there were: (i) no disagreements with DeloittePwC our independent registered public accounting firm for the years ended December 31, 2008 and 2007, on any matter of accounting principle or practice, financial statement disclosure, or auditing scope or procedure which disagreements, if not resolved to Deloitte’sPwC’s satisfaction, would have caused them to make reference to the subject matter in connection with theirits report on the Trust’s financial statements for such year; and (ii) no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended. Further, Deloitte’sPwC’s report on the Trust’sour consolidated financial statements as of and for the years ended December 31, 20062008 and 20052007 did not contain any adverse opinion or a disclaimer of opinion nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.shareholderShareholder ratification of the Board’s action in this respect is not required, the Board considers it desirable for shareholdersShareholders to pass upon the selection of the independent registered public accounting firm and, if the shareholdersShareholders disapprove of the selection, intends tothe Board would consider other firms for selection as the independent registered public accounting firm for the current fiscal year. It is not expected that representatives of Deloitte will be present either in person or by telephone conference at the Meeting.the Trustus for the year ended December 31, 20062008 and 20052007 represents fees billed by Deloitte, the Company’s registered public accounting firm, during those years.Type of Fee Fiscal 2008 Fiscal 2007 Annual Audit and Quarterly Review Fee $ 1,035,000 $ 775,000 Audit Related Fees 83,000 200,000 Tax Fees 93,000 133,000 Total $ 1,192,000 $ 1,108,000 20062008 and 20052007 were for professional services rendered in connection with the integrated audit of the Trust’sour consolidated financial statements and internal control over financial reporting.20062008 were for services related to (i)review of our Registration Statements on Form S-3 during 2008 and assisting in the Trust’s sale of Common Shares in 2006 ($170,000), (ii)response to the restatement ofSEC’s comment letter relating to our 2007 financial statements. Trust’s financial statements for year ended December 31, 20052007 were for services related to responding to an SEC comment letter and the quarterly periodrestatement of our financial statements for the year ended MarchDecember 31, 2006 ($75,000) and (ii) the Trust’s registration statement on Form S-3 relating to the Dividend Reinvestment Plan ($28,000).20062008 and 20052007 were for services related to tax compliance, tax planning and strategies, and state and local tax advice.The Trust hasthe Trustus by the independent registered public accountant of its financial statements.accounting firm. During 2006,2008, the Audit Committee approved all of the fees paid by us to Deloitte by the Trust.PwC.PROPOSAL NO. 3 — 2007 LONG TERM INCENTIVE PLANIn March 2007, the Trust’s Compensation Committee recommended to the Board the adoption of the Winthrop Realty Trust 2007 Long Term Incentive Plan (the “Plan”), subject to approval by the shareholders. The Board subsequently ratified the Compensation Committee’s recommendation and determined to submit the Plan to the shareholders. The shareholders are now requested to approve the adoption of the Plan.To become effective, the Plan must be approved by the affirmative vote of a majority of the votes cast at the Meeting on this proposal by the holders of the Common Shares entitled to vote there. The Board recommends that the shareholders vote FOR adoption of the Winthrop Realty Trust 2007 Long Term Incentive Plan.A general description of the basic features of the Plan is set forth below. Such description is qualified in its entirety by reference to the full text of the Plan, which is set forth as Appendix A to this Proxy Statement.PurposeThe purpose of the Plan is to further and promote the interests of the Trust, its subsidiaries and its shareholders by enabling the Trust and its subsidiaries to attract, retain and motivate trustees, directors and consultants, or those who will become trustees, directors or consultants, and to align the interests of those individuals and the shareholders. To do this, the Plan offers stock options and restricted share awards providing trustees, directors and consultants or those who may become trustees, directors or consultants with an interest in maximizing the growth, profitability and overall success of the Trust and/or its subsidiaries.Number of SharesThe maximum number of Common Shares as to which awards may be granted under the Plan may not exceed 500,000 Common Shares. The limits on the number of shares described in this paragraph are subject to proportional adjustment as determined by the Compensation Committee to reflect certain share changes, such as share dividends and share splits (see “Changes in Capital Structure” below).If any awards under the Plan expire, are forfeited, terminated, canceled, surrendered, settled in cash or otherwise terminate unexercised, the Common Shares allocable to the unexercised or expired, forfeited, terminated, canceled, surrendered or settled in cash portion of such award shall again be available for award under the Plan.AdministrationThe administration, interpretation and operation of the Plan will be vested in the Compensation Committee. The Compensation Committee may designate persons other than members of the Compensation Committee to carry out the day-to-day administration of the Plan.EligibilityTrustees, directors, consultants or those who may become trustees, directors or consultants with the Trust and/or its subsidiaries are eligible to receive awards under the Plan. Awards under the Plan will be made by the Compensation Committee. No determination has been made as to future awards which may be granted under the Plan, although it is anticipated that recipients of awards will include the current trustees (including members of the Compensation Committee).Awards under the PlanIntroduction. Awards under the Plan may consist of stock options and restricted shares, as described below. All awards will be evidenced by an award agreement between the Trust and the individual participant and approved by the Compensation Committee. In the discretion of the Compensation Committee, more than one award may be granted to an eligible participant.Stock Options. A stock option is an award that entitles a participant to purchase Common Shares at a price fixed at the time the option is granted. Stock options granted under the Plan will be “non-qualified stock options” and the plan does not permit the grant of “incentive stock options.”The exercise price and other terms and conditions of stock options will be determined by the Compensation Committee at the time of grant, but shall not be less than fair market value. An option grant under the Plan does not provide an optionee any rights as a shareholder, and such rights will accrue only as to shares actually purchased through the exercise of an option.Stock options granted under the Plan shall become exercisable at such time as designated by the Compensation Committee at the time of grant.Payment for shares issuable pursuant to the exercise of a stock option may be made either in cash, by certified check, bank draft, or money order, or, if permitted by the Compensation Committee and applicable law, by delivery of Common Shares satisfying such requirements as the Compensation Committee may establish or such other form of payment as is permitted by the Compensation Committee, in its sole discretion.Restricted Share Awards. Restricted share awards are grants of Common Shares made to a participant subject to conditions established by the Compensation Committee in the relevant award agreement on the date of grant.Restricted shares will vest in accordance with the conditions and vesting schedule, if any, provided in the relevant award agreement. A participant may not sell or otherwise dispose of restricted shares until the conditions imposed by the Compensation Committee with respect to such shares have been satisfied. Restricted share awards under the Plan may be granted alone or in addition to any other awards under the Plan.Restricted shares which vest will be reissued as unrestricted Common Shares.Each participant who receives a grant of restricted shares will have the right to receive all dividends and vote or execute proxies for such shares. Any share dividends granted with respect to such restricted shares will be treated as additional restricted shares.Changes in Capital Structure. Stock options granted under the Plan and any agreements evidencing such stock options and the maximum number of Common Shares subject to all stock options shall be subject to adjustment or substitution, as determined by the Compensation Committee in its sole discretion, as to the number, price or kind of a share or other consideration subject to such stock options or as otherwise determined by the Compensation Committee to be equitable (i) in the event of changes in the outstanding shares or in the capital structure of the Trust by reason of share or extraordinary cash dividends, stock splits, reverse stock splits, recapitalization, reorganizations, mergers, consolidations, combinations, exchanges, or other relevant changes in capitalization occurring after the date of grant of any such stock option or (ii) in the event of any change in applicable laws or any change in circumstances which results in or would result in any substantial dilution or enlargement of the rights granted to, or available for, participants, or which otherwise warrants equitable adjustment because it interferes with the intended operation of the Plan. The Trust shall give each participant notice of such adjustment and, upon notice, such adjustment shall be conclusive and binding for all purposes.Notwithstanding the above, in the event that the Trust is merged or consolidated with another entity, all or substantially all of the assets of the Trust are acquired by another person, or the Trust reorganizes or liquidates, then the Compensation Committee may, in its discretion, cancel any outstanding awards and cause the holders thereof to be paid, in cash or stock (including any stock of a successor or acquirer), or any combination thereof, the value of such awards, as determined by the Compensation Committee; in the case of stock options, that value shall be based upon the excess of the value of a Common Share over the exercise price per share.Amendment, Suspension or Termination of The PlanUnless earlier terminated by the Board, the Plan shall terminate on December 31, 2016. The Board may amend, suspend or terminate the Plan (or any portion thereof) at any time and from time to time in such respects asthe Board may deem advisable or in the best interests of the Trust or any subsidiary; provided, however, that no such amendment may increase the number of Common Shares available for awards under Section 4.2 of the Plan. In addition, no such amendment, suspension or termination shall materially and adversely affect the rights of any participant under any outstanding stock options, without the consent of such participant. The Compensation Committee may, in its sole discretion, amend or modify at any time and from time to time the restrictions, terms and conditions of any outstanding stock option in any manner to the extent that the Compensation Committee under the Plan or any award agreement could have initially established the restrictions, terms and conditions of such stock option. No such amendment or modification shall, however, materially and adversely affect the rights of any participant under any such stock option without the consent of such participant.Section 409A of the Code provides substantial penalties to persons deferring taxable income, unless the requirements of Section 409A have been satisfied. Some awards provided under the Plan could be viewed as deferring income for participants and may, therefore, be subject to Section 409A. As of the date this Proxy Statement, the Internal Revenue Service has not yet issued final regulations interpreting Section 409A, but they are expected to be issued in the near future. These final regulations, when issued, may require amendments to be made to the Plan. Consequently, the Plan explicitly provides that the Board may amend the Plan, without participant consent, in any way it deems appropriate, even if such amendment would materially and adversely affect the rights of participants to satisfy Section 409A and the regulations that will be issued thereunder.Certain Federal Income Tax Consequences of the PlanThe following is a brief and general summary of some United States federal income tax consequences applicable to the Plan. The summary does not reflect any provisions of the income tax laws of any state, local or foreign taxing jurisdiction. Because the tax consequences of events and transactions under the Plan depend upon various factors, including an individual’s own tax status, each participant who receives an award under the Plan should consult a tax advisor.Stock Options. All stock options granted under the plan shall be “non-qualified stock options” and shall not be “incentive stock options.” In general, upon the grant of a non-qualified stock option, an optionee will not recognize any income. At the time a nonqualified option is exercised, the optionee will recognize compensation taxable as ordinary income, and the Trust generally will be entitled to a deduction (see “Limits on Deductions” below), in an amount equal to the excess of the fair market value on the exercise date of the shares acquired pursuant to such exercise over the exercise price for those shares. Upon a subsequent disposition of the shares, the optionee will recognize long- or short-term capital gain or loss, depending upon the holding period of the shares. For purposes of determining the amount of such gain or loss, the optionee’s tax basis in the shares will be the fair market value of such shares on the exercise date.Effect of Share-for-Share Exercise. If the Compensation Committee permits and an optionee elects to tender Common Shares in partial or full payment of the option price for shares to be acquired through the exercise of an option, generally the optionee will not recognize any gain or loss on such tendered shares. However, the optionee will recognize compensation taxable as ordinary income and the Trust generally will be entitled to a deduction (see “Limits on Deductions” below) in an amount equal only to the fair market value of the number of shares received by the optionee upon exercise which is in excess of the number of tendered shares, less any cash paid by the optionee.Restricted Shares. A participant will not recognize any income upon the award of restricted shares unless the participant makes an election under Section 83(b) of the Code in respect of such grant, as described below. Unless a participant has made an election under Section 83(b) of the Code in respect of any restricted shares, any dividends received by the participant with respect to restricted shares prior to the date the participant recognizes income with respect to such award (as described below) must be treated by the participant as compensation taxable as ordinary income, and the Trust will be entitled to a deduction, in an amount equal to the amount of ordinary income recognized by the participant. After the terms and conditions applicable to the restricted shares are satisfied, or if the participant has made an election under Section 83(b) of the Code in respect of the restricted shares, any dividends received by the participant in respect of such award will be treated as a taxable dividend, and the Trust will not be entitled to a deduction in respect of any such dividend payment.Unless the participant has made an election under Section 83(b) of the Code, at the time the terms and conditions applicable to the restricted shares are satisfied, a participant will recognize compensation taxable as ordinary income, and the Trust generally will be entitled to a deduction, in an amount equal to the then fair market value of the Common Shares or which the terms and conditions applicable to the restricted share award have been satisfied. The participant’s tax basis for any Common Shares would be the fair market value on the date such terms and conditions are satisfied.A participant may irrevocably elect under Section 83(b) of the Code to recognize compensation taxable as ordinary income, and the Trust will be entitled to a corresponding deduction, in an amount equal to the fair market value of such restricted shares (determined without regard to any restrictions thereon) on the date of grant. Such an election must be made by the participant not later than 30 days after the date of grant. If such an election is made, no income would be recognized by the participant (and the Trust will not be entitled to a corresponding deduction) at the time the applicable terms and conditions are satisfied. The participant’s tax basis for the restricted shares received and for any Common Shares subsequently held in respect thereof would be the fair market value of the restricted shares (determined without regard to any restrictions thereon) on the date of grant. If a participant makes such an election and subsequently all or part of the award is forfeited, the participant will not be entitled to a deduction as a result of such forfeiture.The holding period for capital gain or loss purposes in respect of the Common Shares underlying an award of restricted shares shall commence when the terms and conditions applicable to the restricted shares are satisfied, unless the participant makes a timely election under Section 83(b) of the Code. In such case, the holding period will commence immediately after the grant of such restricted shares.Limits on Deductions. Under Section 162(m) of the Code, the amount of compensation paid to the chief executive officer and the four other most highly paid executive officers of the Trust in the year for which a deduction is claimed by the Trust (including its subsidiaries) is limited to $1,000,000 per person in any year, except that qualified performance-based compensation will be excluded for purposes of calculating the amount of compensation subject to this $1,000,000 limitation. As the Plan does not permit grants of awards to any executive officers, Section 162(m) of the Code should not impact the Plan.Section 409A. Section 409A of the Code provides substantial penalties (described below) to persons deferring taxable income, unless the requirements of Section 409A have been satisfied. Some awards provided under the Plan could be viewed as deferring income for participants and may, therefore, be subject to Section 409A. As of the date this proxy is being prepared, the Internal Revenue Service has not yet issued final regulations interpreting Section 409A, but they are expected to be issued in the near future. While it is the intention of the Board to prevent awards made under the Plan from being subject to Section 409A and failing to satisfy the requirements of Section 409A, there can be no assurance that awards made under the Plan which are subject to Section 409A will satisfy the requirements of Section 409A.In the event that an award made under the Plan is subject to Section 409A, but does not satisfy the requirements of that Section, then the affected participant will incur an additional 20% penalty of the amount found to be improperly deferred, as well as full taxation of that amount and interest on that amount from the date when that amount became vested. In addition, other deferrals by that participant found to be part of the same “plan”, even if the deferrals themselves satisfied Section 409A, would also be treated as failing to satisfy Section 409A and, with respect to those deferrals, the participant would also incur an additional 20% penalty of the amount deferred, as well as full taxation of that amount and interest on that amount from the date it became vested.Effective DateThe Plan is effective on March 19, 2007, the date of its approval by the Board subject to shareholder approval. The Plan will terminate on December 31, 2016, except with respect to awards then outstanding. After such date no further awards will be granted under the Plan unless the Plan is extended by the Board.