Exhibit 10.3

 

LOGO [g663191.jpg]

 

AMERICAN FINANCIAL

REALTY TRUST

 

2005 BONUS PLAN

 

April 27, 2005

 

The 2005 Bonus Plan consists of cash and equity incentive awards based on the
achievement of individual and corporate performance goals. Individual
performance goals are tailored to each executive officer. The corporate
performance goals are based on AFFO targets, and, for our executive vice
presidents, AFFO targets and individualized corporate performance goals based on
quantitative metrics. Under the 2005 Bonus Plan the executive officers are
eligible for (i) a cash bonus in an amount equal to a percentage of the
participant’s base salary, which percentage is adjusted based on the achievement
of certain corporate and personal goals, and (ii) an award of restricted common
shares, one-half of which is guaranteed and the remainder of which is based on
the achievement of the same performance goals that apply to the award of cash
bonuses.

 

The AFFO corporate performance goals are based on the Company’s reported AFFO,
excluding gains (losses) resulting from, or impairments taken in anticipation
of, the disposition of properties or property portfolios (including joint
venture interests in such properties or property portfolios) that are expected
to produce positive “net operating income” for a significant period following
disposition. For Mr. Schorsch, the achievement of corporate and individual
performance targets comprise 85% and 15%, respectively, of the measurement of
his overall goal achievement. For our executive vice presidents, the achievement
of corporate and individual targets comprise 80% (50% based on AFFO, 30% based
on other quantitative performance measures) and 20%, respectively, of the
measurement of their overall goal achievement. For our senior vice presidents,
the achievement of corporate and individual targets comprise 65% and 35%,
respectively, of the measurement of their overall goal achievement.

 

For the cash portion of Mr. Schorsch’s bonus, the percentages of base salary for
the achievement of the threshold, target and maximum performance goals are 50%,
100% and 200%, respectively. For the cash portion of the other executives’
bonuses, the percentages of base salary are 50% for the achievement of the
threshold performance goal, a range of 85% to 100% for the achievement of the
target performance goal and a range of 115% to 150% for the achievement of the
maximum performance goal.

 

For the stock portion of Mr. Schorsch’s bonus, his target grant for 2005 is
128,734 restricted common shares, of which one-half (i.e., 64,367 restricted
common shares) is guaranteed and the balance of which will be subject to the
achievement of the same performance thresholds that apply to the award of cash
bonuses. For the stock portion of the other executives’ bonuses, the

--------------------------------------------------------------------------------

target grants for 2005 range from 16,092 restricted common shares to 64,367
restricted common shares, one-half of which are guaranteed and the balance of
which will be subject to the achievement of the same performance thresholds that
apply to the award of cash bonuses.

 

The Company’s Compensation and Human Resources Committee may, in its sole
discretion, determine to include (on a case-by-case basis) gains, losses or
impairments that would otherwise be excluded pursuant to the above parameters.
The Committee also has the right to alter the incentive bonus criteria and/or
make additional bonus awards to any executive officer, as it deems appropriate.

 

2