Document:

Exhibit 10(bb)

 Exhibit 10.(bb) 
 WASHINGTON REAL ESTATE INVESTMENT TRUST 
  
 SHORT-TERM
INCENTIVE PLAN 
 (Effective January 1, 2006) 
  
 Description of Plan Operation 
  
 Background: The new STIP replaces the STIP in effect for calendar year 2005, which is described in the document titled “Washington Real Estate
Investment Trust Short-term and Long-term Incentive Compensation Plan.” The 2005 STIP paid annual cash bonuses to Officers, other than the Managing Director Leasing, and Management Level A and B employees, other than leasing employees, based on
WRIT’s actual financial performance, measured by two equally rated measures, FFO per share and EBITDA, adjusted by environmental factors (in the manner specified in the plan description), against pre-established target performance. 

 
 The STIP: The new STIP provisions are similar, but not identical, to
the provisions of the 2005 STIP. The key differences are (1) the discretion granted the Compensation Committee has to alter performance results based on market factors; (2) the discretion the Compensation Committee has to alter individual
STI awards; and (3) the opportunity for Officers to defer cash STI awards into restricted share units (RSUs) under a new Deferred Compensation Plan and receive a 25% match from WRIT, subject to the applicable rules of Section 409A of the
Internal Revenue Code. 
  
 1.    Eligibility:
Officers, other than the Managing Director Leasing, and Management Level A and B employees, other than leasing employees, who are employed at the commencement of the performance year (January 1), are eligible to participate in the STIP and receive a
short-term incentive award (STI award). 
  
 An employee hired after
January 1 will not participate, unless the employee’s offer letter specifies that the employee will be eligible for an STI award in his or her first year of employment. In this case, the STI award will be pro-rated based on months of
employment in the year, during which the participant is employed by WRIT for more than 50% of the days in the month (15 or more days in February and 16 or more days in all other months). 
  
 2.    Treatment of Employees who are Promoted during the Year: An employee who is promoted during the year will
receive a pro-rated STI award for each portion of the year during which he or she is employed in an eligible class, based on months of WRIT employment in that class relative to months in the year. For this purpose, a month will be treated as a month
of employment only if the employee is employed for more than 50% of the days in that month (15 or more days in February and 16 or more days in all other months). 
  
 3.    Performance Measures: Performance will be measured on 50% annual FFO per share and 50% EBIDTA, adjusted to
reflect market or economic factors that are outside of management’s control. 
  

	 	•	 	 In November of the year preceding the performance year (i.e., November 2006 for 2007 performance year), the CEO drafts and submits to the Compensation Committee a discussion
of the expected market conditions, key indicators and underlying budget assumptions for the coming year. The Board approves 2007 FFO and EBITDA measures for 2007 at the November meeting. 

  

	 	•	 	 In November of the performance year the CEO drafts and submits a discussion of actual market conditions relative to expected conditions. 

  

	 	•	 	 The Compensation Committee assesses the market changes and decides whether to adjust the performance outcome for incentive purposes. 

  

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	 	•	 	 Only dramatic improvements or declines in market conditions will result in an adjustment to the performance measures. Adjustments will range between 2%-5% and will be applied
at the discretion of the Compensation Committee. 

  
 4.    Determination of STI Awards: Target Awards, payable if WRIT achieves Target Performance and the participant satisfies the payment conditions, are established by the Compensation Committee in November
preceding the performance year, as a percentage of a participant’s base salary for the performance year, based on the participant’s position. If WRIT achieves 95% of Target Performance (Threshold Performance), an Officer will receive 50%
percent of his or her Target Award and a Management Level A or B employee will receive 60% of his or her Target Award. No payouts are made to Officers or Management Level B employees if WRIT fails to achieve Threshold Performance. Payouts may be
made at management’s discretion to Management Level A employees for below Threshold Performance. The maximum level of performance that will be recognized for Officers is 110% of Target Performance. The maximum level of performance that will be
recognized for Management Level A and B employees is 105% of Target Performance, The Maximum Award, payable for Maximum Performance or above, is 200% of the Target Award. Charts reflecting the STI payout, as a percentage of base salary, for each
level of achievement, are attached as Appendix A for Officers, Appendix B for Management Level A employees, and Appendix C for Management Level B employees. 
  

	 	•	 	 The Compensation Committee has discretion to adjust the payout upward or downward to recognize individual contributions. 

  

	 	•	 	 Notwithstanding the payout schedule, the FFO per share growth for the annual performance period must be at least zero or greater for any payout to be earned. If FFO per share
growth is less than zero for the performance period any payouts will be made at the discretion of the Board of Trustees. 

  
 5.    Payment Dates, Form of Payment: A Management Level A or B employee will receive 100% of his or her STI award entitlement in cash on or about
December 15 of the performance year, based on 11 months of actual results and budgeted results for December of the performance year. An Officer will receive 90% of his or her STI award in cash on or about December 15 of the performance
year, based on 11 months of actual results and budgeted results for December of the performance year, unless the Officer makes a deferral election. Officers receive the balance (based on the full 12 months of actual results) on or about
February 15 after the end of the performance year. 
  
 6.    Conditions for Payment. A participant must be employed on December 15 to receive the December 15 payment, and an Officer must be employed on December 31 to receive the February 15
payment, subject to certain exceptions for absences on authorized leave of one month or longer, and terminations on account of retirement, death, total and permanent disability, or layoff as a result of a reduction in force. In each of these cases
STI awards will be pro-rated based on months of employment in the year. For this purpose, a month will be treated as a month of employment only if the employee is employed for more than 50% of the days in that month (15 or more days in February and
16 or more days in all other months). 
  

	 	•	 	 Retirement means termination of employment on or after age 65, or on or after age 55 with 20 years of continuous service 

  

	 	•	 	 Total and permanent disability means a medical or physical impairment which can be expected to result in death or last for a continuous period of at least 12 months, as a
result of which the participant is receiving income replacement benefits for a period of at least three months from an accident or health plan covering WRIT employees. 

  
 7.    Change in Control. The performance period will end on the date of a Change in Control. Each participant who is
employed by WRIT on the date of the Change in Control will receive a pro rata STI 

  

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award based on months of employment through the end of the performance period. The amount of the STI award to be prorated will be based on prorated targets through the
end of the performance period. For this purpose, a month will be treated as a month of employment only if the employee is employed for more than 50% of the days in that month (15 or more days in February and 16 or more days in all other months). If
a participant has terminated employment before the Change in Control on account of death, total and permanent disability, retirement, or a layoff on account of a reduction in force, or on account of the Change in Control, his or her STI award will
be based on prorated targets through the end of the performance period and his or months of employment relative to the months of employment he or she would have had he or she been employed on the date of the Change in Control. 
  

	 	•	 	 A termination that occurs after a Change in Control and is involuntary or for good reason (i.e., because of a diminution of the participant’s duties, responsibilities,
or compensation) will be considered on account of a Change in Control. If a termination that is voluntary or for good reason occurs within 90 days before a Change of Control, it will be considered on account of a Change in Control, provided WRIT or
its successor cannot demonstrate through a preponderance of evidence that the termination was not on account of the Change in Control. 

  

	 	•	 	 The definition of Change in Control is the same as the definition used in the Share Grant Plan. 

  
 8.    Deferral Election: Participants who are Officers may elect to
defer up to 100% of the STI award amount payable on or about December 15 by making a deferral election under the new Deferred Compensation Plan. The first deferrals will be permitted for STI awards payable with respect to the 2007 plan year.
Elections must be made by December 15 of the year prior to the performance year. For elections made in 2006, with respect to the 2007 performance year, and in 2007, with respect to the 2008 performance year, the deferral may be for three or
more years. For elections made in 2008 and beyond, the deferral must be for at least five years unless the final 409A regulations clearly indicate that the deferral may be made for fewer than five additional years. If a participant makes a deferral
election his or her STI award is converted to RSUs and held under the Deferred Compensation Plan until the end of the deferral period. Deferred amounts are matched 25% in RSUs. (For details on the Deferred Compensation Plan, see separate summary
entitled “WRIT Deferred Compensation Plan Summary.”) 
  
 9.    STIP Administration and Interpretation. The STIP will be administered by the Compensation Committee of the Board of Trustees of WRIT, which has the discretion and authority to interpret the STIP. The
STIP will be interpreted in a manner consistent with ensuring that STI awards under the STIP are exempt from the application of Section 409A of the Internal Revenue Code as “short-term deferrals” within the meaning of the regulations
issued under Section 409A. 
  
 10.    Amendment and
Termination of the STIP. WRIT reserves the right to amend or terminate the STIP at any time, provided that no amendment will deprive a participant of any vested right under the STIP. 
  
 11.    Effective Date. The STIP is effective January 1, 2006.
The provisions of the STIP, as described above, apply to STI awards made for performance years beginning January 1, 2006 and each anniversary thereof. 
  

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 Appendix A 
  
 WASHINGTON REAL ESTATE INVESTMENT TRUST 
  
 SHORT-TERM INCENTIVE PLAN 
 (Effective January 1,
2006) 
  
 Description of Plan Operation 
  
 Eligible Officers: STIP Payout for as a Percentage of Salary 

 
 Payouts starts at 95% performance and ends at 110% performance. Payouts for every 1%
increase in performance are illustrated below. However, for performance that falls between whole percentage points, payouts will be interpolated. 
  

									
	 Performance vs.
Target

	 	 Payout as a % of Salary

	 	 CEO

	 	 EVP

	 	 SVPs

	 	 Managing
Directors

	<95%	 	0%	 	0%	 	0%	 	0%
	95%	 	50%	 	37.5%	 	32.5%	 	25%
	96%	 	60%	 	45%	 	39%	 	30%
	97%	 	70%	 	52.5%	 	45.5%	 	35%
	98%	 	80%	 	60%	 	52%	 	40%
	99%	 	90%	 	67.5%	 	58.5%	 	45%
	100%	 	100%	 	75%	 	65%	 	50%
	101%	 	110%	 	82.5%	 	71.5%	 	55%
	102%	 	120%	 	90%	 	78%	 	60%
	103%	 	130%	 	97.5%	 	84.5%	 	65%
	104%	 	140%	 	105%	 	91%	 	70%
	105%	 	150%	 	112.5%	 	97.5%	 	75%
	106%	 	160%	 	120%	 	104%	 	80%
	107%	 	170%	 	127.5%	 	110.5%	 	85%
	108%	 	180%	 	135%	 	117%	 	90%
	109%	 	190%	 	142.5%	 	123.5%	 	95%
	>=110%	 	200%	 	150%	 	130%	 	100%

  

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 Appendix B 
  
 WASHINGTON REAL ESTATE INVESTMENT TRUST 
  
 SHORT-TERM INCENTIVE PLAN 
 (Effective January 1,
2006) 
  
 Description of Plan Operation 
  
 Eligible Management Level A Employees: STI Payout as a Percentage of Salary

  
 Payouts start at 95% performance (subject to management discretion
for performance below 95% of target) and end at 105% performance. Payouts for every 1% increase in performance are illustrated below. 
  

			
	 Performance vs. Target

	  	Payout as a % of Salary

	<95%	  	Management Discretion
	95%	  	6%
	96%	  	7%
	97%	  	7%
	98%	  	8%
	99%	  	9%
	100%	  	10%
	101%	  	12%
	102%	  	14%
	103%	  	16%
	104%	  	18%
	>=105%	  	20%

  

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 Appendix C 
  
 WASHINGTON REAL ESTATE INVESTMENT TRUST 
  
 SHORT-TERM INCENTIVE PLAN 
 (Effective January 1,
2006) 
  
 Description of Plan Operation 
  
 Eligible Management Level B Employees: STI Payout as a Percentage of Salary

  
 Payouts start at 95% performance (subject to management discretion
for performance below 95% of target) and end at 105% performance. Payouts for every 1% increase in performance are illustrated below. 
  

			
	 Performance vs. Target

	 	 Payout as a % of Salary

	<95%	 	0%
	95%	 	3%
	96%	 	3%
	97%	 	4%
	98%	 	4%
	99%	 	4%
	100%	 	5%
	101%	 	6%
	102%	 	7%
	103%	 	8%
	104%	 	9%
	>=105%	 	10%

  

 Page 6 of 6EXHIBIT 10(z)

 Exhibit 10.(z) 
  
 AMENDMENT NO. 2 TO 
 WASHINGTON REAL ESTATE INVESTMENT
TRUST 
 SHARE GRANT PLAN 
  
 This Amendment No. 2 hereby amends the Washington Real Estate Investment Trust Share Grant Plan (the “Plan”) effective as of December 13, 2006.
This Amendment No. 2 supersedes Amendment No. 1 to the Plan in its entirety. 
  
 1.    The definition of “Change in Control” set forth in Section Two of the Plan is hereby amended and restated to read as follows: 
  
 “Change in Control”—an occasion upon which (i) any “person” (as such term is used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Trust or a corporation controlled by the Trust, is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Trust representing 40% or more of the combined voting power or combined total fair market value of the
Trust’s then outstanding securities; or (ii) during any period of twelve (12) consecutive months (not including any period prior to the adoption of this Plan), individuals who at the beginning of such period constitute the Board and
any new trustee (other than a trustee designated by a person who has entered into an agreement with the Trust to effect a transaction described in clauses (i) or (iii) of this Paragraph) whose election by the Board or nomination for
election by the Trust’s shareholders was approved by a vote of at least a majority of the trustees then still in office who either were trustees at the beginning of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof; or (iii) any of (a) the Trust consummates a merger, consolidation, reorganization, recapitalization or statutory share exchange (a “Business Combination”), other
than a Business Combination which would result in the voting securities of the Trust outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity)
at least 50% of the combined voting power and at least 50% of the combined total fair market value of the securities of the Trust or such surviving entity outstanding immediately after such Business Combination, (b) the Trust’s
shareholders approve a plan of complete liquidation of the Trust, or (c) the Trust completes the sale or other disposition of all or substantially all of its assets in one or a series of transactions. 
  
 2.    The definition of “Restricted Shares” set forth in Section
Two of the Plan as amended by Amendment No. 1 is hereby amended and restated to read as follows: 
  
 “Restricted Shares”—an Award (as defined below) of Shares that has been granted to an employee or trustee, which is subject to forfeiture under
certain conditions, or of Restricted Share Units that has been granted to an employee or trustee, which results in an issuance of Shares upon the satisfaction of certain vesting criteria. 
  
 3.    The definition of “Award” set forth in Section Two of the Plan is hereby amended and restated to read as
follows: 
  
 “Award”—Restricted Shares granted hereunder.

  

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 4.    Section Five of the Plan is hereby amended and restated to read as follows: 
  
 GRANT OF AWARDS AND 
 LIMITATION OF NUMBER OF SHARES SUBJECT TO AWARD 
  
 The Committee shall, in accordance with its discretion, make Awards to each Eligible Individual in accordance with this Plan. In administering each Award, the
Committee shall be bound by the following: 
  
 A.    Awards to Eligible Individuals Who are Employees of the Trust. Awards of Restricted Shares shall be made in the month of December of each calendar year to Eligible Individuals who are employees of the
Trust. The Committee also shall have the authority to make Awards of Restricted Shares to such Eligible Individuals on such other date or dates that it deems appropriate. The total number of Restricted Shares which may be granted to any single
Covered Employee under this Plan during any calendar year shall be limited to 100,000. 
  
 B.    Awards to Eligible Individuals Who are Trustees. Awards of Restricted Shares shall be made on or about December 16 of each calendar year to each Eligible Individual who is a trustee.
The Committee also shall have the authority to make Awards of Restricted Shares to such Eligible Individuals on such other dates or dates that it deems appropriate. 
  
 C.    Aggregate Limitation. The aggregate number of Shares which can be made the subject of Awards
under this Plan, together with the aggregate number of Shares issued either directly or in connection with the exercise of a stock option under any other plan maintained by the Trust, may not exceed three percent (3%) of the number of
then-outstanding Shares in any one calendar year and may not exceed, in the aggregate, during any five (5) year period, ten percent (10%) of the number of then-outstanding Shares 
  
 D.    To the extent that an Award lapses or the rights of
the Participant to whom it was granted terminate, expire or are cancelled for any other reason, in whole or in part, Restricted Shares (or remaining Restricted Shares) subject to such Award shall again be available for the grant of an Award under
the Plan; and Restricted Shares delivered by the Trust under the Plan may be authorized and unissued Shares, Shares held in the treasury of the Trust or Shares purchased on the open market (including private purchases) in accordance with applicable
securities laws. 
  
 5.    Section Seven of the Plan is hereby
amended and restated to read as follows: 
  
 RESTRICTED SHARE AWARDS

  
 A.    Form of Awards. An Award
made pursuant to this Plan may be granted in the form of Shares or of Restricted Share Units, and each Award shall specify whether it is for Shares or Restricted Share Units. Shares shall be restricted and held by the Trust in a Custodial Account in
the name of the Participant until the expiration of the applicable restrictions. Except as otherwise specified with respect to a particular Award or series of Awards of Shares, within thirty (30) days of the expiration of the restrictions, a
certificate or certificates representing all Shares relating to an Award which have not been previously forfeited shall be transferred from such Custodial Account to the Participant without the payment of consideration by such Participant. Except as
otherwise specified with respect to a particular Award or series of Awards of Restricted Share Units, within thirty (30) days of the satisfaction of the vesting criterion applicable to a particular Award of Restricted Share Units, a certificate
or certificates representing all Shares relating to such Award shall be issued or transferred to the Participant without the payment of consideration by such Participant. 
  

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 B.    Performance Measures—Employees. At the time an Award is made, the
amount of such Award of Restricted Shares may be specified by the Committee based upon such Performance Measures as the Committee may approve. For these purposes, “Performance Measures” may mean (1) total shareholder return (share
price appreciation plus dividends), (2) net income, (3) earnings per share, (4) funds from operations, (5) funds from operation per share, (6) return on equity, (7) return on assets, (8) return on invested capital,
(9) increase in the market price of Shares or other securities, (10) revenues, (11) operating income, (12) operating margin (operating income divided by revenues), (13) earnings before interest, taxes, depreciation and
amortization (EBITDA), (14) the performance of the Trust in any one or more of the items mentioned in clauses (1) through (13) in comparison to the average performance of the companies used in a self-constructed peer group for
measuring performance under an Award, (15) the performance of the Trust in any one or more of the items mentioned in clauses (1) through (13) in comparison to a budget or target for measuring performance under an Award or
(16) any other performance objective approved by the Committee. 
  
 C.    Vesting Period and Transfer Restriction—Employees. At the time a Award is made, the Committee may specify a vesting period applicable to such Award, which may be five (5) years, during which
twenty percent (20%) of the Shares related to such Award shall become nonforfeitable on each anniversary of the date of such grant, or such other vesting periods as the Committee deems appropriate. In addition, Shares may be restricted from
transfer (a “transfer restriction”) for such period or periods as shall be specified by the Committee. 
  
 D.    The Committee may also impose such other restrictions and conditions on the Award of Restricted Shares as it deems appropriate.

  
 E.    Awards to Trustees. An Award of
Restricted Shares with a value of $30,000 shall be made to each Eligible Individual who is a trustee each calendar year. 
  
 F.    Vesting Period and Transfer Restriction—Trustees. At the time an Award is made, the Committee shall establish a vesting
period applicable to such Award, which shall be the period for which such trustee continues to serve as a trustee of the Trust or such other period as the Committee deems appropriate. In addition, Shares may be subject to a transfer restriction for
such period or periods as shall be specified by the Committee. 
  
 G.    Forfeiture of Award. In the event that a Participant that is an employee ceases employment during a vesting period, Restricted Shares which had not previously vested under the terms of the Award as of
the date of termination of employment shall be forfeited, except to the extent set forth below in Section Ten regarding death, disability, and retirement, lay-off and Change in Control of the Trust or as otherwise specified in an Award or series of
Awards. Further, the Award or Series of Awards may specify that the vested portion of the Award shall continue to be subject to the terms of any applicable transfer or other restriction. 
  
 6.    Section Ten of the Plan is hereby amended and restated to read as follows: 
  
 RETIREMENT, DISABILITY, DEATH, LAY-OFF AND CHANGE IN CONTROL 
  
 A.    Retirement, Disability and Death. Upon
retirement on or after attaining age 65, or on or after age 55 with 20 years of continuous service, disability, or death of a Participant who is an employee, all unvested Restricted Shares subject to Awards to such Participant shall immediately
vest, except as otherwise specified in such Award or series of Awards. Each Participant who is an employee may designate a beneficiary for the Shares awarded to him/her under this Plan. If the Participant fails to designate a beneficiary, the
Participant shall be deemed to have designated his/her estate as his/her beneficiary. 
  

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 B.    Lay-Off. In the event the employment of a Participant who is an employee is
terminated due to a lay-off in connection with a reduction in force, all unvested Restricted Shares subject to Awards to such Participant shall continue to vest in accordance with the schedule set forth in such Awards notwithstanding the termination
of employment, except as otherwise specified in such Award or series of Awards. 
  
 C.    Change in Control. In the event of a Change in Control, all unvested Restricted Shares subject to Awards shall immediately vest, except as otherwise specified in such Awards or series of Awards.

  
 D.    The Committee shall have the authority
to define the terms Retirement, Disability, Lay-Off, and Change in Control, with respect to specific Awards or with respect to specific series of Awards. 
  

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