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                                                                  Exhibit 10(i)
                               SEVERANCE AGREEMENT

     THIS SEVERANCE AGREEMENT ("Severance Agreement"), made and entered into as
of this 1st day of March, 2002 by and between FEDERAL REALTY INVESTMENT TRUST, a
Maryland real estate investment trust ("Employer"), and LARRY E. FINGER
("Employee").

     WHEREAS, Employee has been hired to serve as Employer's Senior Vice
President - Chief Financial Officer, and Employer and Employee wish to set forth
the terms of a severance agreement for Employee;

     NOW THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained and of other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:

     1. Termination Without Cause. In the event that Employee's employment with
Employer is terminated under any of the circumstances in Sections 1(a) or 1(b),
Employee will be deemed to have been Terminated Without Cause and shall receive
payments and benefits as described in this Section 1; provided, however, in the
event Employee's employment with Employer is terminated under any of the
circumstances in Sections 1(a) or 1(b) under circumstances described in Section
6 below, Employee shall receive such payments and benefits as are set forth in
Section 6 in lieu of the payments and benefits under this Section 1; and
provided, further, that no payments or benefits shall be payable under this
Section 1 unless Employee shall have been employed by Employer for at least six
(6) months at the time of the triggering event (i.e., the termination by
Employer or the occurrence of any of the events described in 1(b)(i)-(iv)
below):

        (a) by Employer other than with Cause (as "Cause" is defined in Section
            3, hereof);

        (b) by Employee within six (6) months following the occurrence of one or
            more of the following events:

            (i) the nature of Employee's duties or the scope of Employee's
                responsibilities or authority as of the date first written above
                are materially modified by Employer without Employee's written
                consent where such material modification constitutes an actual
                or constructive demotion of Employee; provided, however, that a
                change in the position(s) to whom Employee

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                  reports shall not by itself constitute a material modification
                  of Employee's responsibilities;

            (ii)  Employer changes the location of its principal office to
                  outside a fifty (50) mile radius of Washington, D.C.;

            (iii) Employer's setting of Employee's base salary for any year at
                  an amount which is less than ninety percent (90%) of
                  Employee's highest base salary during Employee's employment
                  with Employer; and

            (iv)  this Severance Agreement is not expressly assumed by any
                  successor (directly or indirectly, whether by purchase,
                  merger, consolidation or otherwise) to all or substantially
                  all of the business and/or assets of Employer.

        (c) Decision by Employer to Terminate Without Cause. Employer's decision
            to terminate Employee's employment Without Cause shall be made by
            the Board of Trustees.

        (d) Severance Payment Upon Termination Without Cause. In the event of
            Termination Without Cause other than under circumstances described
            in Section 6 below, Employee will receive as severance pay an amount
            in cash equal to one (1) year's salary. For the purpose of
            calculating the amount payable pursuant to this Section 1(d),
            "salary" shall be an amount equal to Employee's annual base salary
            in the year of termination. Payment also will be made for vacation
            time that has accrued, but is unused as of the date of termination.

        (e) Benefits. In the event of Termination Without Cause other than under
            circumstances described in Section 6 below, Employee shall receive
            "Full Benefits" for nine (9) months. Employer shall have satisfied
            its obligation to provide Full Benefits to Employee if it (i) pays
            premiums due in connection with COBRA continuation coverage to
            continue Employee's medical and dental insurance coverage at not
            less than the levels of coverage immediately prior to termination of
            Employee's employment; (ii) maintains at not less than Employee's
            highest levels of coverage prior to Termination Without Cause
            individual life insurance policies and accidental death and
            dismemberment policies for the benefit of Employee and pays the
            annual premiums associated therewith; (iii) to the extent that
            Employer maintained a long-term disability policy that provided

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            coverage to Employee in excess of the coverage provided under
            Employer's group long-term disability policy, maintains at not less
            than Employee's highest levels of coverage prior to Termination
            Without Cause an individual long-term disability policy for the
            benefit of Employee and pays the annual premiums associated
            therewith, subject to the limitations of the policy; and (iv) pays
            the annual premiums associated with Employee's continued
            participation, at not less than Employee's highest levels of
            coverage prior to Termination Without Cause, under Employer's group
            long-term disability policy for a period of one (1) year following
            Termination Without Cause, subject to the limitations of the policy.
            Notwithstanding the foregoing, Employee shall be required to pay the
            premiums and any other costs of such Full Benefits in the same
            dollar amount that Employee was required to pay for such costs
            immediately prior to Termination Without Cause.

        (f) Stock Options. Notwithstanding any agreement to the contrary, in the
            event of any Termination Without Cause other than under
            circumstances described in Section 6 below, the vesting of options
            to purchase shares of Employer's common stock granted to Employee
            and outstanding as of the date of Employee's termination and
            scheduled to vest during the twelve (12) months thereafter shall be
            accelerated such that all such options will be vested as of the date
            of Employee's termination of employment with Employer. The terms of
            the stock option agreements shall determine the period during which
            any vested options may be exercisable.

        (g) Outplacement Services. In the event of Termination Without Cause
            other than under circumstances described in Section 6 below,
            Employer shall make available at Employer's expense to Employee at
            Employee's option the services of an employment search/outplacement
            agency selected by Employer for a period not to exceed six (6)
            months from the date of Employee's termination.

        (h) Provision of Telephone/Secretary. In the event of Termination
            Without Cause other than under circumstances described in Section 6
            below, Employer shall provide Employee for a period not to exceed
            six (6) months from Employee's date of termination with a telephone
            number assigned to Employee at Employer's offices, telephone mail
            and a secretary to answer the telephone. Such benefits shall not
            include an office or physical access to Employer's offices and will
            cease upon commencement by Employee of employment with another
            employer.

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            (i) Notice. If Employee terminates his or her employment pursuant to
                Section 1(b) hereof other than under circumstances described in
                Section 6 below and (i) Employee is not an executive officer of
                Employer, Employee shall give sixty (60) days' written notice to
                Employer of such termination, or (ii) if Employee is an
                executive officer of Employer, Employee shall give ninety (90)
                days' written notice to Employer of such termination.

         2. Voluntary Resignation. If Employee is not an executive officer of
Employer, Employee shall give sixty (60) days' written notice to Employer of
Employee's resignation from employment in all capacities with Employer other
than under circumstances described in Section 6 below; if Employee is an
executive officer of Employer, Employee shall give ninety (90) days' written
notice to Employer of Employee's resignation from employment in all capacities
with Employer other than under circumstances described in Section 6 below.

         3. Termination With Cause. Employee shall be deemed to have been
terminated with Cause in the event that the employment of Employee is terminated
for any of the following reasons other than under circumstances described in
Section 6 below:

            (a) failure (other than failure due to disability) to substantially
                perform his or her duties with Employer or an affiliate thereof;
                which failure remains uncured after written notice thereof and
                the expiration of a reasonable period of time thereafter in
                which Employee is diligently pursuing cure, as determined by the
                President of Employer in his absolute discretion ("Failure to
                Perform");

            (b) willful or intentional conduct which is demonstrably injurious
                to Employer or an affiliate thereof, monetarily or otherwise;

            (c) breach of fiduciary duty involving personal profit; or

            (d) willful violation in the course of performing his or her duties
                for Employer of any law, rule or regulation (other than traffic
                violations or misdemeanor offenses). No act or failure to act
                shall be considered willful unless done or omitted to be done in
                bad faith and without reasonable belief that the action or
                omission was in the best interest of Employer.

            (e) Decision by Employer to Terminate With Cause. The decision to
                terminate the employment of Employee with Cause shall be made by
                the Board of Trustees.

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               (f)    Payment Upon Termination with Cause. In the event that
                      Employee's employment is terminated with Cause, Employee
                      shall receive all base salary due and payable as of the
                      date of Employee's termination of employment. No payment
                      shall be made for bonus or other compensation. Payment
                      also will be made for accrued, but unused vacation time.
                      The terms of the stock option agreements between Employer
                      and Employee thereunder will determine the terms of the
                      vesting of options and the exercisability of vested
                      options.

         4.    Severance Benefits Upon Termination Upon Disability. Employer may
terminate Employee upon thirty (30) days' prior written notice if (i) Employee's
Disability has disabled Employee from rendering service to Employer for at least
a six (6) month consecutive period during the term of Employee's employment,
(ii) Employee's "Disability" is within the meaning of such defined term in
Employer's group long-term disability policy, and (iii) Employee is covered
under such policy. In the event of Employee's Termination Upon Disability,
Employee shall be entitled to receive as severance pay each month for the year
immediately following the date of termination an amount in cash equal to the
difference, if any, between (i) the sum of (y) the amount of payments Employee
receives or will receive during that month pursuant to the disability insurance
policies maintained by Employer for Employee's benefit and (z) the adjustment
described in the next sentence and (ii) Employee's base monthly salary on the
date of termination due to Disability. The adjustment referred to in clause (z)
of the preceding sentence is the amount by which any tax-exempt payments
referred to in clause (y) would need to be increased if such payments were
subject to tax in order to make the after-tax proceeds of such payments equal to
the actual amount of such tax-exempt payments.

               (a)    Benefits. Employee shall receive Full Benefits (as defined
                      above) for one (1) year following termination due to
                      Disability.

               (b)    Stock Options. In the event that Employee's  employment is
                      terminated due to Disability, the terms of the stock
                      option agreements between Employer and Employee shall
                      determine the vesting of any options held by Employee as
                      of the date of termination due to Disability and the
                      exercise period for any vested option.

         5.    Severance Benefits Upon Termination Upon Death. If Employee dies,
Employee's estate shall be entitled to receive an amount in cash equal to
Employee's then-current base salary through the last day of the month in which
Employee's death occurs plus any bonus previously awarded but unpaid and any
accrued vacation pay through the last day of the month in which Employee's death
occurs. The terms of the

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stock option agreements between Employer and Employee shall determine the
vesting of any options held by Employee as of the date of his or her death and
the exercise period for any vested option.

         6.    Severance Benefits Upon Termination Upon Change in Control.

               (a)    Change in Control Defined. No benefits shall be payable
under this Section 6 unless there shall have occurred a Change in Control of
Employer, as defined below. For purposes of this Section 6, a "Change in
Control" of Employer shall mean any of the following events:

                      (i)   An acquisition in one or more transactions (other
than directly from Employer or pursuant to options granted by Employer) of any
voting securities of Employer (the "Voting Securities") by any "Person" (as the
term is used for purposes of Section 13(d) or 14(d) of the Securities Act of
1934, as amended (the "Exchange Act")) immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the combined voting power of Employer's then
outstanding Voting Securities; provided, however, in determining whether a
Change in Control has occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A "Non-Control Acquisition"
shall mean an acquisition by (A) an employee benefit plan (or a trust forming a
part thereof) maintained by (1) Employer or (2) any corporation or other Person
of which a majority of its voting power or its equity securities or equity
interest is owned directly or indirectly by Employer (a "Subsidiary"), (B)
Employer or any Subsidiary, or (C) any Person in connection with a "Non-Control
Transaction" (as hereinafter defined);

                      (ii)  The individuals who, as of the date of this
Severance Agreement, are members of the Board of Trustees (the "Incumbent
Trustees"), cease for any reason to constitute at least two-thirds of the Board;
provided, however, that if the election, or nomination for election by
Employer's shareholders, of any new member was approved by a vote of at least
two-thirds of the Incumbent Trustees, such new member shall, for purposes of
this Severance Agreement, be considered as a member of the Incumbent Trustees;
provided, further, however, that no individual shall be considered a member of
the Incumbent Trustees if such individual initially assumed office as a result
of either an actual or threatened "Election Contest" (as described in Rule
14a-11 promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Trustees (a "Proxy Contest") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest; or

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               (iii)  Approval by shareholders of Employer of

                      (A)  A merger, consolidation or reorganization involving
Employer, unless:

                           (1)   the shareholders of Employer, immediately
before such merger, consolidation or reorganization, own, directly or indirectly
immediately following such merger, consolidation or reorganization, at least a
majority of the combined voting power of the outstanding voting securities of
the Person resulting from such merger or consolidation or reorganization (the
"Surviving Person") in substantially the same proportion as their ownership of
the Voting Securities immediately before such merger, consolidation or
reorganization,

                           (2)   the individuals who were members of the
Incumbent Trustees immediately prior to the execution of the agreement providing
for such merger, consolidation or reorganization constitute at least two-thirds
of the members of the board of directors of the Surviving Person,

                           (3)   no Person (other than Employer or any
Subsidiary, any employee benefit plan (or any trust forming a part thereof)
maintained by Employer, or any Subsidiary, or any Person which, immediately
prior to such merger, consolidation or reorganization had Beneficial Ownership
of 20% or more of the then outstanding Voting Securities) has Beneficial
Ownership of 20% or more of the combined voting power of the Surviving Person's
then outstanding voting securities, and

                           (4)   a transaction described in clauses (1) through
(3) shall herein be referred to as a "Non-Control Transaction;"

                      (B)  A complete liquidation or dissolution of Employer; or

                      (C)  An agreement for the sale or other disposition of all
or substantially all of the assets of Employer to any Person (other than a
transfer to a Subsidiary).

               (iv)   Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur (A) solely because any Person (the "Subject Person")
acquired Beneficial Ownership of more than the permitted amount of the
outstanding Voting Securities as a result of the acquisition of Voting
Securities by Employer which, by reducing the number of Voting Securities
outstanding, increases the proportional number of Voting Securities Beneficially
Owned by the Subject Person; provided, however, that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by Employer, and after such share acquisition
by Employer, the Subject Person becomes the Beneficial Owner of any additional
Voting

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Securities which increases the percentage of the then outstanding Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur; or (B) if Employer (1) establishes a wholly-owned subsidiary
("Holding Company"), (2) causes the Holding Company to establish a wholly-owned
subsidiary ("Merger Sub"), and (3) merges with Merger Sub, with Employer as the
surviving entity (such transactions collectively are referred as the
"Reorganization"). Immediately following the completion of the Reorganization,
all references to the Voting Securities shall be deemed to refer to the voting
securities of the Holding Company.

                      (v)  Notwithstanding anything contained in this Severance
Agreement to the contrary, if Employee's employment is terminated while this
Severance Agreement is in effect and Employee reasonably demonstrates that such
termination (A) was at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change in Control and
who effectuates a Change in Control (a "Third Party") or (B) otherwise occurred
in connection with, or in anticipation of, a Change in Control which actually
occurs, then for all purposes of this Severance Agreement, the date of a Change
in Control with respect to Employee shall mean the date immediately prior to the
date of such termination of Employee's employment.

               (b)    Termination of Employment Following Change in Control. If
a Change in Control of Employer occurs, Employee shall be entitled to the
benefits provided in this Section 6 upon the subsequent termination of
Employee's employment with Employer for any reason, either voluntarily or
involuntarily, within six (6) months of such Change of Control, unless such
termination is because of Employee's death, Disability or retirement. The term
"Retirement" shall mean termination of employment in accordance with (x) a
qualified employee pension or profit-sharing plan maintained by Employer, or (y)
Employer's retirement policy in effect immediately prior to the Change in
Control. For purposes of this Section 6, Employee's employment shall be
terminated by written notice delivered by either Employer or Employee to the
other party. The date of Employee's termination of employment shall be the
earlier of the date of Employee's or Employer's written notice terminating
Employee's employment with Employer, unless such notice shall specify an
effective date of termination occurring later than the date of such notice, in
which event such specified effective date shall govern ("Termination Date").

               (c)    Payment of Benefits upon Termination. If, after a Change
in Control has occurred, Employee's employment with Employer is terminated in
accordance with Section 6(b) above, then Employer shall pay to Employee and
provide Employee, his or her beneficiaries and estate, the following:

                      (i)  Employer shall pay to Employee a single cash payment
equal to the amount described in Section 1(d) above. If Employee's employment is
terminated by Employee by a written notice which specifies a Termination Date at
least five (5)

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business days later than the date of such notice, the payment shall be made on
the Termination Date. If Employee gives less than five (5) business days notice,
then such payment shall be made within five (5) business days of the date of
such notice;

                      (ii)   Employee shall receive Full Benefits for one (1)
year following the Termination Date;

                      (iii)  Employer, to the extent legally permissible, shall
continue to provide to Employee all other officer perquisites, allowances,
accommodations of employment, and benefits on the same terms and conditions as
such are from time to time made available generally to the other officers of
Employer but in no event less than the highest level of the perquisites,
allowances, accommodations of employment and benefits that were available to
Employee during the last twelve (12) months of Employee's employment prior to
the Change in Control for a period of one (1) year following the Termination
Date;

                      (iv)   For the purposes of this Section 6(c), Employee's
right to receive officer perquisites, allowances and accommodations of
employment is intended to include (A) Employee's right to have Employer provide
Employee for a period not to exceed six (6) months from Employee's Termination
Date with a telephone number assigned to Employee at Employer's offices,
telephone mail and a secretary to answer the telephone; provided, however, such
benefits described in this Section 6(c)(iv)(A) shall not include an office or
physical access to Employer's offices and will cease upon the commencement by
Employee of employment with another employer, and (B) Employee's right to have
Employer make available at Employer's expense to Employee at Employee's option
the services of an employment search/outplacement agency selected by Employee
for a period not to exceed six (6) months.

                      (v)    Upon the occurrence of a Change in Control, all
restrictions on the receipt of any option to acquire or grant of Voting
Securities to Employee shall lapse and such option shall become immediately and
fully exercisable. Notwithstanding any applicable restrictions or any agreement
to the contrary, Employee may exercise any options to acquire Voting Securities
as of the Change in Control by delivery to Employer of a written notice dated on
or prior to the expiration of the stated term of the option.

               (d)    Redemption.

                      (i)    Except as provided in subsection (ii) below,
Employer shall within five (5) business days of receipt of written notice from
Employee given at any time after the occurrence of a Change in Control but prior
to the latest stated expiration date of any option held by Employee on the date
of the Change in Control, redeem any Voting Securities held by Employee (whether
acquired by exercise of any such option or grant or otherwise), at a price equal
to the average closing price of Voting Securities as

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quoted on the New York Stock Exchange, or if such Voting Securities are not
listed thereon, then the average of the closing "bid" and "ask" prices per share
in the over-the-counter securities market for the fifteen (15) trading days
prior to the date of such notice;

               (ii)   If, during the fifteen (15) day trading period, Voting
Securities are not listed, quoted or reported on any publicly traded securities
market for at least two-thirds (2/3) of the days included in such period, then
the redemption price shall be determined as follows: (A) Employee shall
designate in a written notice to Employer an appraiser to appraise the value of
the Voting Securities to be redeemed; (B) within ten (10) business days of
receipt of such notice Employer shall designate an appraiser to appraise the
value of the Voting Securities to be redeemed, (C) such designated appraisers
shall together designate, within ten (10) business days of the date the
appraiser is designated by Employer, a third appraiser to appraise the value of
such Voting Securities, (D) each appraiser shall value such Voting Securities
within twenty (20) business days of the designation of the third appraiser using
generally accepted appraisal methods for valuing such securities based upon the
value of all of Employer's assets less all of its liabilities without giving
effect for any costs of liquidation or distress sale, if otherwise applicable,
and (E) the average of the three (3) values determined by the three (3)
appraisers shall constitute the price at which Employer must redeem the Voting
Securities covered by Employee's written notice within five (5) business days of
the completion of this appraisal process. All costs and expenses associated with
any appraisal prepared pursuant to this Section 6(d)(ii) shall be borne entirely
by Employer.

          (e)  Excise Tax Payments.

               (i)    In the event that any payment or benefit (within the
meaning of Section 280G(b)(2) of the Code) that is provided for hereunder (other
than the payment provided for in this Section 6(e)(i)) to be paid to or for the
benefit of Employee (including, without limitation, the payments or benefits
provided for under any provision of this Section 6) or payments or benefits
under any other plan, agreements or arrangement between Employee and Employer (a
"Payment" or "Payments"), be determined or alleged to be subject to an excise or
similar purpose tax pursuant to Section 4999 of the Code or any successor or
other comparable federal, state, or local tax laws or any interest or penalties
incurred by Employee with respect to such excise or similar purpose tax (such
excise tax, together with any such interest and penalties, hereinafter
collectively referred to as the "Excise Tax") Employer shall pay to Employee
such additional compensation as is necessary (after taking into account all
federal, state and local taxes (including any interest and penalties imposed
with respect to such taxes), including any income or Excise Tax, payable by
Employee as a result of the receipt of such additional compensation) (a
"Gross-Up Payment") to place Employee in the same after-tax position (including
federal, state and local taxes) Employee would have been in had no such Excise
Tax been paid or incurred.

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               (ii)   All mathematical determinations, and all determinations
as to whether any of the Total Payments are "parachute payments" (within the
meaning of Section 280G of the Code), that are required to be made under this
Section 6(e), including determinations as to whether a Gross-Up Payment is
required, and the amount of such Gross-Up Payment, shall be made by an
independent accounting firm selected by the Employee from among the six (6)
largest accounting firms in the United States (the "Accounting Firm"), which
shall provide its determination (the "Determination"), together with detailed
supporting calculations regarding the amount of any Gross-Up Payment and any
other relevant matter, both to Employer and the Employee by no later than ten
(10) days following the Termination Date, if applicable, or such earlier time as
is requested by Employer or the Employee (if the Employee reasonably believes
that any of the Payments may be subject to the Excise Tax). If the Accounting
Firm determines that no Excise Tax is payable by the Employee, it shall furnish
the Employee and Employer with a written statement that such Accounting Firm has
concluded that no Excise Tax is payable (including the reasons therefor) and
that the Employee has substantial authority not to report any Excise Tax on her
federal income tax return. If a Gross-Up Payment is determined to be payable, it
shall be paid to the Employee within twenty (20) days after the Determination
(and all accompanying calculations and other material supporting the
Determination) is delivered to Employer by the Accounting Firm. The cost of
obtaining the Determination shall be borne by Employer, any determination by the
Accounting Firm shall be binding upon Employer and the Employee, absent manifest
error. Without limiting the obligation of Employer hereunder, Employee agrees,
in the event that Employer makes a Gross-Up Payment to cover any Excise Tax, to
negotiate with Employer in good faith with respect to procedures reasonably
requested by Employer which would afford Employer the ability to contest the
imposition of such Excise Tax; provided, however, that Employee will not be
required to afford Employer any right to contest the applicability of any such
Excise Tax to the extent that Employee reasonably determines (based upon the
opinion of the Accounting Firm) that such contest is inconsistent with the
overall tax interest of Employee.

               (iii)  As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up Payment (or a
portion thereof) will be paid which should not have been paid (an "Excess
Payment") or a Gross-Up Payment (or a portion thereof) which should have been
paid will not have been paid (an "Underpayment"). An Underpayment shall be
deemed to have occurred (A) upon notice (formal or informal) to Employee from
any governmental taxing authority that Employee's tax liability (whether in
respect of Employee's current taxable year or in respect of any prior taxable
year) may be increased by reason of the imposition of the Excise Tax on a
Payment or Payments with respect to which Employer has failed to make a
sufficient Gross-Up Payment, (B) upon determination by a court, (C) by reason of
determination by Employer (which shall include the position taken by Employer,
together with its consolidated group, on its federal income tax return) or (D)
upon the resolution of the Dispute to Employee's satisfaction. If an
Underpayment occurs, Employee shall

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promptly notify Employer and Employer shall promptly, but in any event, at least
five (5) days prior to the date on which the applicable governmental taxing
authority has requested payment, pay to Employee an additional Gross-Up Payment
equal to the amount of the Underpayment plus any interest and penalties (other
than interest and penalties imposed by reason of Employee's failure to file a
timely tax return or pay taxes shown due on Employee's return where such failure
is not due to Employer's actions or omissions) imposed on the Underpayment. An
Excess Payment shall be deemed to have occurred upon a "Final Determination" (as
hereinafter defined) that the Excise Tax shall not be imposed upon a Payment or
Payments (or a portion thereof) with respect to which Employee had previously
received a Gross-Up Payment. A "Final Determination" shall be deemed to have
occurred when Employee has received from the applicable governmental taxing
authority a refund of taxes or other reduction in Employee's tax liability by
reason of the Excess Payment and upon either (x) the date a determination is
made by, or an agreement is entered into with, the applicable governmental
taxing authority which finally and conclusively binds Employee and such taxing
authority, or in the event that a claim is brought before a court of competent
jurisdiction, the date upon which a final determination has been made by such
court and either all appeals have been taken and finally resolved or the time
for all appeals has expired or (y) the statute of limitations with respect to
Employee's applicable tax return has expired. If an Excess Payment is determined
to have been made, the amount of the Excess Payment shall be treated as a loan
by Employer to Employee and Employee shall pay to Employer on demand (but not
less than ten (10) days after the determination of such Excess Payment and
written notice has been delivered to Employee) the amount of the Excess Payment
plus interest at an annual rate equal to the Applicable Federal Rate provided
for in Section 1274(d) of the Code from the date the Gross-Up Payment (to which
the Excess Payment relates) was paid to Employee until date of repayment of the
Excess Payment to Employer.

               (iv)   Notwithstanding anything contained in this Section 6 to
the contrary, in the event that, according to the Final Determination, an Excise
Tax will be imposed on any Payment or Payments, Employer shall pay to the
applicable governmental taxing authorities as Excise Tax withholding, the amount
of the Excise Tax that Employer has actually withheld from the Payment or
Payments.

          (f)  No Set-Off. After a Change in Control, Employer shall have no
right of set-off, reduction or counterclaim in respect of any debt or other
obligation of Employee to Employer against any payment, benefit or other
Employer obligation to Employee provided for in this Section 6 or pursuant to
any other plan, agreement or policy.

          (g)  Interest on Amounts Payable. After a Change of Control, if any
amounts which are required or determined to be paid or payable or reimbursed or
reimbursable to Employee under this Section 6 (or under any other plan,
agreement,

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policy or arrangement with Employer) are not so paid promptly at the times
provided herein or therein, such amounts shall accrue interest, compounded daily
at the annual percentage rate which is three percentage points (3%) above the
interest rate which is announced by The Riggs National Bank (Washington, D.C.)
from time to time as its prime lending rate, from the date such amounts were
required or determined to have been paid or payable or reimbursed or
reimbursable to Employee until such amounts and any interest accrued thereon are
finally and fully paid; provided, however, that in no event shall the amount of
interest contracted for, charged or received hereunder exceed the maximum
non-usurious amount of interest allowed by applicable law.

          (h)  Disputes; Payment of Expenses. At any time after a Change of
Control, all costs and expenses (including legal, accounting and other advisory
fees and expenses of investigation) incurred by Employee in connection with (i)
any dispute as to the validity, interpretation or application of any term or
condition of this Section 6, (ii) the determination in any tax year of the tax
consequences to Employee of any amounts payable (or reimbursable) under this
Section 6, or (iii) the preparation of responses to an Internal Revenue Service
audit of, and other defense of, Employee's personal income tax return for any
year which is the subject of any such audit or an adverse determination,
administrative proceeding or civil litigation arising therefrom that is
occasioned by or related to an audit of the Internal Revenue Service of
Employer's income tax returns are, upon written demand by Employee, to be paid
by Employer (and Employee shall be entitled, upon application to any court of
competent jurisdiction, to the entry of a mandatory injunction, without the
necessity of posting any bond with respect thereto, compelling Employer)
promptly on a current basis (either directly or by reimbursing Employee). Under
no circumstances shall Employee be obligated to pay or reimburse Employer for
any attorneys' fees, costs or expenses incurred by Employer.

     7.   Confidentiality - Employer's Obligations. Unless Employee and
Employer mutually agree on appropriate language for such purposes, in the event
that Employee's employment is Terminated Without Cause pursuant to Section 1
above, With Cause pursuant to Section 3(a) above, or under circumstances
described in Section 6, or Employee voluntarily resigns, Employer, except to the
extent required by law, will not make or publish, without the express prior
written consent of Employee, any written or oral statement concerning Employee's
work related performance or the reasons or basis for the severing of Employee's
employment relationship with Employer; provided, however, that the foregoing
restriction is not applicable to information which was or became generally
available to the public other than as a result of a disclosure by Employer.

     8.   Confidentiality - Employee's Obligations. Employee acknowledges and
reaffirms that Employee will comply with the terms of the confidentiality letter
executed by Employee upon commencement of Employee's employment with Employer.

                                       13

<PAGE>

     9.   Payments. In the event of the termination of Employee's employment
under circumstances described in Section 6, the severance payment made pursuant
to that section shall be made as a lump sum payment. In the event of Employee's
voluntary resignation other than under circumstances described in Section 6,
severance payments made pursuant to this Severance Agreement shall be made pro
rata on a monthly basis. All other severance payments payable to Employee
pursuant to the terms of this Severance Agreement may be made either as a lump
sum payment or pro rata on a monthly basis, at Employee's option.

     10.  Tax Withholding. Employer may withhold from any benefits payable under
this Severance Agreement, and pay over to the appropriate authority, all
federal, state, county, city or other taxes (other than any excise tax imposed
under Section 4999 of the Code or any similar tax to which the indemnity
provisions of Section 6(e) of this Severance Agreement shall apply) as shall be
required pursuant to any law or governmental regulation or ruling.

     11.  Arbitration.

          (a)  Any controversy, claim or dispute arising out of or relating to
               this Severance Agreement or the breach thereof shall be settled
               by arbitration in accordance with the then existing Commercial
               Arbitration Rules of the American Arbitration Association, and
               judgment upon the award rendered by the arbitrator(s) may be
               entered in any court having jurisdiction thereof. The parties
               irrevocably consent to the jurisdiction of the federal and state
               courts located in Maryland for this purpose. Each such
               arbitration proceeding shall be located in Maryland.

          (b)  The arbitrator(s) may, in the course of the proceedings, order
               any provisional remedy or conservatory measure (including,
               without limitation, attachment, preliminary injunction or the
               deposit of specified security) that the arbitrator(s) consider to
               be necessary, just and equitable. The failure of a party to
               comply with such an interim order may, after due notice and
               opportunity to cure with such noncompliance, be treated by the
               arbitrator(s) as a default, and some or all of the claims or
               defenses of the defaulting party may be stricken and partial or
               final award entered against such party, or the arbitrator(s) may
               impose such lesser sanctions as the arbitrator(s) may deem
               appropriate. A request for interim or provisional relief by a
               party to a court shall not be deemed incompatible with the
               agreement to arbitrate or a waiver of that agreement.

                                       14

<PAGE>

            (c) The parties acknowledge that any remedy at law for breach of
                this Severance Agreement may be inadequate, and that, in the
                event of a breach by Employee of Sections 8 or 14, any remedy at
                law would be inadequate in that such breach would cause
                irreparable competitive harm to Employer. Consequently, in
                addition to any other relief that may be available, the
                arbitrator(s) also may order permanent injunctive relief,
                including, without limitation, specific performance, without the
                necessity of the prevailing party proving actual damages and
                without regard to the adequacy of any remedy at law.

            (d) In the event that Employee is the prevailing party in such
                arbitration, then Employee shall be entitled to reimbursement by
                Employer for all reasonable legal and other professional fees
                and expenses incurred by Employee in such arbitration or in
                enforcing the award, including reasonable attorney's fees.

            (e) The parties agree that the results of any such arbitration
                proceeding shall be conclusive and binding upon them.

       12.  Continued Employment. This Severance Agreement shall not confer upon
the Employee any right with respect to continuance of employment by Employer.

       13.  Mitigation. Employee shall not be required to mitigate the amount of
any payment, benefit or other Employer obligation provided for in this Severance
Agreement by seeking other employment or otherwise and no such payment shall be
offset or reduced by the amount of any compensation or benefits provided to
Employee in any subsequent employment.

       14.  Restrictions on Competition; Solicitation; Hiring.

            (a) During the term of his or her employment by or with Employer,
                and for one (1) year from the date of the termination of
                Employee's employment with Employer (the "Post Termination
                Period"), Employee shall not, without the prior written consent
                of Employer, for himself or herself or on behalf of or in
                conjunction with any other person, persons, company, firm,
                partnership, corporation, business, group or other entity (each,
                a "Person"), work on or participate in the acquisition, leasing,
                financing, pre-development or development of any project or
                property which was considered and actively pursued by Employer
                or its affiliates for acquisition, leasing, financing,
                pre-development or development within one year prior to the date
                of termination of Employee's employment.

                                       15

<PAGE>

                  (b)      During the term of his or her employment by or with
                           Employer, and thereafter during the Post Termination
                           Period, Employee shall not, for any reason
                           whatsoever, directly or indirectly, for himself or
                           herself or on behalf of or in conjunction with any
                           other Person:

                           (i)    so that Employer may maintain an
                                  uninterrupted workforce, solicit and/or hire
                                  any Person who is at the time of termination
                                  of employment, or has been within six (6)
                                  months prior to the time of termination of
                                  Employee's employment, an employee of
                                  Employer or its affiliates, for the purpose
                                  or with the intent of enticing such employee
                                  away from or out of the employ of Employer
                                  or its affiliates, provided that Employee
                                  shall be permitted to call upon and hire any
                                  member of the Employee's immediate family;

                           (ii)   in order to protect the confidential
                                  information and proprietary rights of
                                  Employer, solicit, induce or attempt to
                                  induce any Person who or that is, at the
                                  time of termination of Employee's
                                  employment, or has been within six (6)
                                  months prior to the time of termination of
                                  Employee's employment, an actual customer,
                                  client, business partner, property owner,
                                  developer or tenant or a prospective
                                  customer, client, business partner, property
                                  owner, developer or tenant (i.e., a customer,
                                  client, business partner, property owner,
                                  developer or tenant who is party to a written
                                  proposal or letter of intent with Employer, in
                                  each case written less than six (6) months
                                  prior to termination of Employee's employment)
                                  of Employer, for the purpose or with the
                                  intent of (A) inducing or attempting to induce
                                  such Person to cease doing business with
                                  Employer or its affiliates, or (B) in any way
                                  interfering with the relationship between such
                                  Person and Employer or its affiliates; or

                           (iii)  solicit, induce or attempt to induce any
                                  Person who is or that is, at the time of
                                  termination of Employee's employment, or has
                                  been within six (6) months prior to the time
                                  of termination of Employee's employment, a
                                  tenant, supplier, licensee or consultant of,
                                  or provider of goods or services to Employer
                                  or its affiliates, for the purpose or with
                                  the intent of (A) inducing or attempting to
                                  induce such Person to cease doing business
                                  with Employer or its affiliates or (B) in
                                  any way interfering with the relationship
                                  between such Person and Employer or its
                                  affiliates.

                                       16

<PAGE>

                   (c)   The above notwithstanding, the restrictions contained
                         in subsections (a) and (b) above shall not apply to
                         Employee in the Post-Termination Period in the event
                         that Employee has ceased to be employed by Employer
                         under circumstances described in Section 6 of this
                         Severance Agreement.

                   (d)   Because of the difficulty of measuring economic losses
                         to Employer as a result of a breach of the foregoing
                         covenants, and because of the immediate and irreparable
                         damage that could be caused to Employer for which it
                         would have no other adequate remedy, Employee agrees
                         that the foregoing covenants, in addition to and not in
                         limitation of any other rights, remedies or damages
                         available to Employer at law, in equity or under this
                         Agreement, may be enforced by Employer in the event of
                         the breach or threatened breach by Employee, by
                         injunctions and/or restraining orders. If Employer is
                         involved in court or other legal proceedings to enforce
                         the covenants contained in this Section 14, then in the
                         event Employer prevails in such proceedings, Employee
                         shall be liable for the payment of reasonable
                         attorneys' fees, costs and ancillary expenses incurred
                         by Employer in enforcing its rights hereunder.

                   (e)   It is agreed by the parties that the covenants
                         contained in this Section 14 impose a fair and
                         reasonable restraint on Employee in light of the
                         activities and business of Employer on the date of the
                         execution of this Agreement and the current plans of
                         Employer; but it is also the intent of Employer and
                         Employee that such covenants be construed and enforced
                         in accordance with the changing activities, business
                         and locations of Employer and its affiliates throughout
                         the term of these covenants.

                   (f)   It is further agreed by the parties hereto that, in
                         the event that Employee shall cease to be employed
                         hereunder, and enters into a business or pursues other
                         activities that, at such time, are not in competition
                         with Employer or its affiliates or with any business or
                         activity which Employer or its affiliates contemplated
                         pursuing, as of the date of termination of Employee's
                         employment, within twelve (12) months from such date of
                         termination, or similar activities or business in
                         locations the operation of which, under such
                         circumstances, does not violate this Section 14 or any
                         of Employee's obligations under this Section 14,
                         Employee shall not be chargeable with a violation of
                         this Section 14 if Employer or its affiliates
                         subsequently enter the same (or a similar) competitive
                         business, course of activities or location, as
                         applicable.

                                       17

<PAGE>

             (g)  The covenants in this Section 14 are severable and separate,
                  and the unenforceability of any specific covenant shall not
                  affect the provisions of any other covenant. Moreover, in the
                  event any court of competent jurisdiction shall determine that
                  the scope, time or territorial restrictions set forth herein
                  are unreasonable, then it is the intention of the parties that
                  such restrictions be enforced to the fullest extent that such
                  court deems reasonable, and the Agreement shall thereby be
                  reformed to reflect the same.

             (h)  All of the covenants in this Section 14 shall be construed as
                  an agreement independent of any other provision in this
                  Agreement, and the existence of any claim or cause of action
                  of Employee against Employer whether predicated on this
                  Agreement or otherwise shall not constitute a defense to the
                  enforcement by Employer of such covenants. It is specifically
                  agreed that the Post Termination Period, during which the
                  agreements and covenants of Employee made in this Section 14
                  shall be effective, shall be computed by excluding from such
                  computation any time during which Employee is in violation of
                  any provision of this Section 14.

             (i)  Notwithstanding any of the foregoing, if any applicable law,
                  judicial ruling or order shall reduce the time period during
                  which Employee shall be prohibited from engaging in any
                  competitive activity described in Section 14 hereof, the
                  period of time for which Employee shall be prohibited pursuant
                  to Section 14 hereof shall be the maximum time permitted by
                  law.

       15.   No Assignment. Neither this Severance Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by either Employer or Employee without the prior written consent of
the other party; provided, however, that this provision shall not preclude
Employee from designating one or more beneficiaries to receive any amount that
may be payable after Employee's death and shall not preclude Employee's executor
or administrator from assigning any right hereunder to the person or persons
entitled thereto. This Severance Agreement shall not be terminated either by the
voluntary or involuntary dissolution or the winding up of the affairs of
Employer, or by any merger or consolidation wherein Employer is not the
surviving entity, or by any transfer of all or substantially all of Employer's
assets on a consolidated basis. In the event of any such merger, consolidation
or transfer of assets, the provisions of this Severance Agreement shall be
binding upon and shall inure to the benefit of the surviving entity or to the
entity to which such assets shall be transferred.

                                       18

<PAGE>

         16. Amendment. This Severance Agreement may be terminated, amended,
modified or supplemented only by a written instrument executed by Employee and
Employer.

         17. Waiver. Either party hereto may by written notice to the other: (i)
extend the time for performance of any of the obligations or other actions of
the other party under this Severance Agreement; (ii) waive compliance with any
of the conditions or covenants of the other party contained in this Severance
Agreement; (iii) waive or modify performance of any of the obligations of the
other party under this Severance Agreement. Except as provided in the preceding
sentence, no action taken pursuant to this Severance Agreement shall be deemed
to constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained herein. The
waiver by any party hereto of a breach of any provision of this Severance
Agreement shall not operate or be construed as a waiver of any preceding or
succeeding breach. No failure by either party to exercise any right or privilege
hereunder shall be deemed a waiver of such party's rights to exercise the same
any subsequent time or times hereunder.

         18. Severability. In case any one or more of the provisions of this
Severance Agreement shall, for any reason, be held or found by determination of
the arbitrator(s) pursuant to an arbitration held in accordance with Section 11
above to be invalid, illegal or unenforceable in any respect (i) such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Severance Agreement, (ii) this Severance Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein, and (iii) if the effect of a holding or finding that any such provision
is either invalid, illegal or unenforceable is to modify to Employee's
detriment, reduce or eliminate any compensation, reimbursement, payment,
allowance or other benefit to Employee intended by Employer and Employee in
entering into this Severance Agreement, Employer shall promptly negotiate and
enter into an agreement with Employee containing alternative provisions
(reasonably acceptable to Employee), that will restore to Employee (to the
extent legally permissible) substantially the same economic, substantive and
income tax benefits Employee would have enjoyed had any such provision of this
Severance Agreement been upheld as legal, valid and enforceable. Failure to
insist upon strict compliance with any provision of this Severance Agreement
shall not be deemed a waiver of such provision or of any other provision of this
Severance Agreement.

         19. Governing Law. This Severance Agreement has been executed and
delivered in the State of Maryland and its validity, interpretation, performance
and enforcement shall be governed by the laws of said State; provided, however,
that any arbitration under Section 11 hereof shall be conducted in accordance
with the Federal Arbitration Act as then in force.

                                       19

<PAGE>

         20. No Attachment. Except as required by law, no right to receive
payments under this Severance Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or the execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.

         21. Source of Payments. All payments provided under this Severance
Agreement shall be paid in cash from the general funds of Employer, and no
special or separate fund shall be established and no other segregation of assets
shall be made to assure payment.

         22. Headings. The section and other headings contained in this
Severance Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Severance Agreement.

         23. Notices. Any notice required or permitted to be given under this
Severance Agreement shall be in writing and shall be deemed to have been given
when delivered in person or when deposited in the U.S. mail, registered or
certified, postage prepaid, and mailed to Employee's addresses set forth herein
and the business address of Employer, unless a party changes its address for
receiving notices by giving notice in accordance with this Section, in which
case, to the address specified in such notice.

         24. Counterparts. This Severance Agreement may be executed in multiple
counterparts with the same effect as if each of the signing parties had signed
the same document. All counterparts shall be construed together and constitute
the same instrument.

         25. Entire Agreement. Except as may otherwise be provided herein, this
Severance Agreement supersedes any and all prior written agreements existing
between Employer and Employee with regard to the subject matter hereof.

                            [signatures on next page]

                                       20

<PAGE>

         IN WITNESS WHEREOF, the parties have executed and delivered this
Severance Agreement to be effective as of the day and year indicated above.

                                          ______________________________________
                                          Employee's Signature

                                          Employee's Permanent Address:

                                          FEDERAL REALTY INVESTMENT TRUST

                                          By:___________________________________
                                             Name:
                                             Title:   Chairman, Compensation
                                                      Committee
                                             Address: 1626 East Jefferson Street
                                                      Rockville, Maryland  20852

                                       21<PAGE>

                                                                  Exhibit 10(ii)

                         FEDERAL REALTY INVESTMENT TRUST
                COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION
                            AGREEMENT FOR EMPLOYEES

         AGREEMENT ("Agreement") dated this 28th day of February, 2002, by and
between FEDERAL REALTY INVESTMENT TRUST, a Maryland real estate investment trust
("Trust"), and LARRY E. FINGER, an employee of the Trust ("Optionee").

         WHEREAS, the Trust desires to have Optionee continue in its employ and
to provide Optionee with an incentive by sharing in the success of the Trust;

         WHEREAS, in order to provide such an incentive to its key employees,
the Trust has adopted the Amended and Restated Federal Realty Investment Trust
1993 Long-Term Incentive Plan ("Amended Plan");

         WHEREAS, the Trust desires to grant, as set forth herein, to Optionee
under the Amended Plan (1) options that qualify as "Incentive Stock Options"
within the meaning of Section 422 or any successor provision of the Internal
Revenue Code of 1986, as amended ("Code"), and/or (2) options not intended to
qualify as Incentive Stock Options ("Non-Qualified Stock Options"); and

         WHEREAS, unless otherwise provided herein, capitalized terms used in
this Agreement shall have the meaning given them in the Amended Plan;

         NOW, THEREFORE, in consideration of the mutual covenants and
representations herein contained and intending to be legally bound, the parties
hereto agree as follows:

         1. Number of Shares and Price. The Trust hereby grants to the Optionee
an option ("Option") to purchase the number of Shares set forth on the last page
of this Agreement. The exercise price per Share of the Option shall be as is set
forth on the last page of this Agreement, such price being the Fair Market Value
per Share on the Date of Grant of the Option. The portion of the Option
indicated on the last page of this Agreement as an Incentive Stock Option is
intended to be an Incentive Stock Option; provided, however, that to the extent,
but only to the extent, that the provisions of this Agreement or the nature of
any actions taken by the Optionee are inconsistent with the treatment of such
portion of the Option as an Incentive Stock Option, such portion of the Option
shall be deemed a Non-Qualified Stock Option. The other portion of the Option
indicated on the last page of this Agreement is a Non-Qualified Stock Option.

1

<PAGE>

         2. Term and Exercise. The Option shall expire ten (10) years from the
date hereof, subject to earlier termination as set forth in Section 4. Subject
to the provisions of Sections 3 and 4, the Option shall become exercisable in
installments as set forth on the last page of this Agreement. Notwithstanding
the foregoing, the Option shall not be exercisable in whole, or in part, prior
to six months from the Date of Grant, except as provided in Section 3.

         3. Change in Control. In the event of a Change in Control, the Option,
to the extent it is outstanding and unexercised on the date of such Change in
Control, shall become immediately and fully exercisable. The provisions of this
Section 3 shall not be applicable to the Option if such Change in Control
results from the Optionee's beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act) of Shares or Trust Voting Securities.

         4. Exercise of Option Upon Termination of Employment.

            (a)  Exercise of Vested Option Upon Termination of Employment.

                 (i)   Termination of Employment. Upon the Optionee's
Termination of Employment other than by reason of death, Disability, retirement
on or after the Optionee's Normal Retirement Date or following a Change in
Control, the Optionee may, within one year from the date of such Termination of
Employment, exercise all or any part of the Option to the extent it was
exercisable at the date of Termination of Employment; provided, however, if such
Termination of Employment is for Cause, the right of the Optionee to exercise
the Option shall terminate at the date of Termination of Employment. In no event
may the Option be exercised later than the expiration date described in Section
2.

                 (ii)  Disability or Retirement. Upon the Optionee's Disability
Date or Termination of Employment by reason of retirement on or after the
Optionee's Normal Retirement Date, the Optionee may, within two years after such
Disability Date or Termination of Employment, as the case may be, exercise all
or a part of the Option to the extent that it was exercisable upon such
Disability Date or Termination of Employment. In no event, however, may the
Option be exercised later than the expiration date described in Section 2.

                 (iii) Death. In the event of the death of the Optionee while
employed by the Trust or within the additional period of time from the date of
the Optionee's Disability Date or Termination of Employment by reason of
retirement and prior to the expiration of the Option as provided in Section
4(a)(ii), to the extent all or any part of the Option was exercisable as of (a)
the date of death while employed by the

                                       2

<PAGE>

Trust or (b) the Disability Date or the date of Termination of Employment by
reason of retirement and did not expire during the applicable additional period
provided in Section 4(a)(ii) and prior to the Optionee's death, the right of the
Optionee's Beneficiary to exercise the Option shall expire upon the expiration
of two years from the date of the Optionee's death (but in no event more than
two years from the Optionee's Disability Date or the date of the Optionee's
Termination of Employment by reason of retirement, as the case may be) or, if
earlier, on the date of expiration of the Option determined pursuant to Section
2. In all other cases of death following the Optionee's Termination of
Employment, the Optionee's Beneficiary may exercise the Option within the
remaining time, if any, provided in Section 4(a)(i).

                 (iv) Change in Control. Upon the Optionee's Termination of
Employment following a Change in Control, each Option shall remain exercisable
for a period ending on the date which is the earlier of (A) the first
anniversary of the termination of the Optionee's employment or (B) the
expiration date described in Section 2.

            (b)  Exercise of Unvested Option Upon Termination of Employment.
Subject to Section 3, to the extent all or any part of the Option was not
exercisable as of the date of Termination of Employment, the unexercisable
portion of the Option shall expire at the date of such Termination of
Employment.

         5. Exercise Procedures.

            (a)  Method of Exercise. The Option shall be exercisable by written
notice to the Trust, which must be received by the Secretary of the Trust not
later than 5:00 P.M. local time at the principal executive office of the Trust
on the expiration date of the Option. Such written notice shall set forth (a)
the number of Shares being purchased and whether those Shares are issuable as a
result of the exercise of the Incentive Stock Option portion of the Option or
the Non-Qualified Stock Option portion of the Option, (b) the total exercise
price for the Shares being purchased, (c) the exact name as it should appear on
the stock certificate(s) to be issued for the Shares being purchased, and (d)
the address to which the stock certificate(s) should be sent.

            (b)  Payment of Exercise Price. The exercise price of Shares
purchased upon exercise of the Option shall be paid in full (a) in cash, (b) by
delivery to the Trust of Shares (which may include Shares issued in connection
with the exercise of the Option or, with respect to the exercise of the portion
of the Option that is a Non-Qualified Stock Option, Restricted Shares, in each
case subject to such rules as the Committee deems

3

<PAGE>

appropriate), (c) in any combination of cash and Shares, or (d) by delivery of
such other consideration as the Committee deems appropriate and in compliance
with applicable law (including payment in accordance with a cashless exercise
program under which, if so instructed by the Optionee, Shares may be issued
directly to the Optionee's broker or dealer against receipt of the exercise
price in cash from the broker or dealer).

            In the event that any Shares shall be transferred to the Trust to
satisfy all or any part of the exercise price, the part of the exercise price
deemed to have been satisfied by such transfer of Shares shall be equal to the
product derived by multiplying the Fair Market Value as of the date of exercise
times the number of Shares transferred to the Trust. The Optionee may not
transfer to the Trust in satisfaction of the exercise price any fraction of a
Share, and any portion of the exercise price that would represent less than a
full Share must be paid in cash by the Optionee. If payment in full or part is
to be made in the form of Restricted Shares, an equivalent number of Shares
issued on exercise of the Option shall be subject to the same restrictions and
conditions for the remainder of the Award Period applicable to the Restricted
Shares surrendered therefor.

            (c) Delivery of Certificate. Subject to Section 9 hereof,
certificates for the purchased Shares will be issued and delivered to the
Optionee as soon as practicable after the receipt of payment of the exercise
price in accordance with Section 5(b) above; provided, however, that delivery of
any such Shares shall be deemed effected for all purposes when a stock transfer
agent of the Trust shall have deposited such certificates in the United States
mail, addressed to Optionee, at the address set forth on the last page of this
Agreement or to such other address as Optionee may from time to time designate
in a written notice to the Trust. The Optionee shall not be deemed for any
purpose to be a shareholder of the Trust in respect of any Shares as to which
the Option shall not have been exercised, as herein provided, until such Shares
have been issued to Optionee by the Trust hereunder.

            (d) Alternative Method of Exercise. If the Fair Market Value of the
Shares with respect to which the Option is being exercised exceeds the exercise
price of such Option, the Optionee may, instead of exercising an Option as
provided in Sections 5(a) and 5(b) above, make a request to the Secretary of the
Trust at least ninety (90) days in advance of the expiration of such Option
that, at the Committee's next regularly scheduled meeting, or in the event that
such Options would expire before such meeting, at a special meeting of the
Committee, the Committee authorize payment to the Optionee of the difference
between the Fair Market Value of part or all of the Shares which are the subject
of the Option and the exercise price of the Option, such difference to be

                                       4

<PAGE>

determined as of the date prior to the date the Trust receives the request from
the Optionee. To the extent the Committee in its sole discretion grants such a
request from the Optionee with respect to part or all of the Shares as to which
the Option is then exercisable, the Committee shall direct the Trust to make
payment to the Optionee either in cash or in Shares or in any combination
thereof; provided, however, that payment in Shares shall be made based upon the
Fair Market Value of Shares as of the date the Trust received the request from
the Optionee. An Option shall be deemed to have been exercised and shall be
canceled to the extent that the Committee grants such a request.

         6. Plan Provisions Control Option Terms; Modifications. The Option is
granted pursuant and subject to the terms and conditions of the Amended Plan,
the provisions of which are incorporated herein by reference. In the event any
provision of this Agreement shall conflict with any of the terms in the Amended
Plan as constituted on the Date of Grant, the terms of the Amended Plan as
constituted on the Date of Grant shall control. The Option shall not be modified
after the Date of Grant except by express written agreement between the Trust
and the Optionee; provided, however, that any such modification (a) shall not be
inconsistent with the terms of the Amended Plan, and (b) shall be approved by
the Committee. No modifications may be made to the Option while the Optionee is
subject to Section 16(b) of the Exchange Act except in compliance with Exchange
Act Rule 16b-3.

         7. Limitations on Transfer. The Option may not be assigned or
transferred other than by will or the laws of descent and distribution or, if
the Committee determines in its sole discretion, pursuant to a domestic
relations order (within the meaning of Exchange Act Rule 16a-12). During the
lifetime of the Optionee, except as the preceding sentence provides, only the
Optionee personally may exercise rights under this Agreement. The Optionee's
Beneficiary may exercise the Optionee's rights hereunder only to the extent they
were exercisable under this Agreement at the date of the death of the Optionee
and are otherwise currently exercisable.

         8. Taxes. The Trust shall be entitled to withhold (or secure payment
from the Optionee in lieu of withholding) the amount of any withholding or other
tax required by law to be withheld or paid by the Trust with respect to any
Shares issuable under this Agreement, or upon a disqualifying disposition of
Shares received pursuant to the exercise of the portion of the Option that is an
Incentive Stock Option, and the Trust may defer issuance of Shares upon the
exercise of the Option unless the Trust is indemnified to its satisfaction
against any liability for any such tax. The amount of such withholding

5

<PAGE>

or tax payment shall be determined by the Committee or its delegate and shall be
payable by the Optionee at such time as the Committee determines. The Optionee
may satisfy his or her tax withholding obligation by the payment of cash to the
Trust and/or by the withholding from the Option, at the appropriate time, of a
number of Shares sufficient, based upon the Fair Market Value of such Shares, to
satisfy such tax withholding requirements. The Committee shall be authorized, in
its sole discretion, to establish such rules and procedures relating to any such
withholding methods as it deems necessary or appropriate, including, without
limitation, rules and procedures relating to elections to have Shares withheld
upon exercise of the Option to meet such withholding obligations.

         9. No Exercise in Violation of Law. Notwithstanding any of the
provisions of this Agreement, the Optionee hereby agrees that he or she will not
exercise the Option granted hereby, and that the Trust will not be obligated to
issue any Shares to the Optionee hereunder, if the exercise thereof or the
issuance of such Shares shall constitute a violation by the Optionee or the
Trust of any provision of any law or regulation of any governmental authority.
Any determination in this connection by the Committee shall be final, binding
and conclusive.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                       FEDERAL REALTY INVESTMENT TRUST

                                       By: _____________________________________
                                       Name:
                                       Title: Chairman, Compensation Committee

WITNESS:                               OPTIONEE

________________________________       _________________________________________
                                       Larry E. Finger

                                       6

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