EXHIBIT 10.4
FORM RESTRICTED SHARES AGREEMENT
     Developers Diversified Realty Corporation, an Ohio corporation (the
“Company”), has granted to                      (the “Holder”),
                     (                    ) of the Company’s Common Shares,
$0.10 par value per share (the “Restricted Shares”). The Restricted Shares have
been granted pursuant to the                      (the “Plan”) and are subject
to all provisions of the Plan, which are hereby incorporated herein by
reference, and to the following provisions of this Restricted Shares Agreement
(the “Agreement”) (capitalized terms not defined herein are used as defined in
the Plan):
     §1. Vesting. The Restricted Shares will vest in annual 20% increments with
the first                      Restricted Shares vesting on                     
(each such date a “Vesting Date”).
     §2. Purchase Price. The purchase price of the Restricted Shares is
$                    .
     §3. Transferability. The Holder may transfer Restricted Shares prior to
vesting, during his or her lifetime (a) to one or more members of such Holder’s
family, (b) to one or more trusts for the benefit of one or more of such
Holder’s family, or (c) to a partnership or partnerships of members of such
Holder’s family, provided that no consideration is paid for the transfer and
that the transfer would not result in the loss of any exemption under Rule 16b-3
of the Securities Exchange Act of 1934, as amended, with respect to the
Restricted Shares. The Restricted Shares are also transferable by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order (as defined in the Internal Revenue Code or the Employee Retirement Income
Security Act of 1974, as amended). The transferee of any Restricted Shares will
be subject to all restrictions, terms, and conditions applicable to the
Restricted Shares.
     §4. Termination of Employment. Subject to the terms of a Holder’s
Individual Agreement, if any, if the Holder’s employment by the Company or any
Subsidiary or Affiliate terminates prior to all of the Restricted Shares
vesting, the Restricted Shares will vest or be forfeited as follows:
     (a) Termination by Death. If the Holder’s employment with the Company or
any Subsidiary or Affiliate terminates by reason of death, all Restricted Shares
shall vest and any restriction shall lapse.
     (b) Termination by Reason of Disability. If the Holder’s employment with
the Company or any Subsidiary or Affiliate terminates by reason of Disability,
all Restricted Shares shall vest and any restriction shall lapse.
     (c) Termination Without Cause After a Change in Control or 409A Change in
Control. The provisions of Section 12(a) of the Plan shall be applicable
regarding the Restricted Shares only if, within                      years
following a Change in Control or 409A Change in Control, the Holder’s employment
with the Company or any Subsidiary or Affiliate is terminated without Cause.

 

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     (d) Other Termination. Unless otherwise determined by the Committee, if the
Holder’s employment with the Company or any Subsidiary or Affiliate terminates
other than in the circumstances described in paragraphs (a), (b) or (c) of this
Section 4, any Restricted Shares which are unvested or subject to restrictions
at the time of termination will be forfeited upon termination.
     (e) Leave of Absence. If the Holder is granted a leave of absence by the
Company or any Subsidiary or Affiliate, his or her employment will not be
considered terminated, and he or she will continue to be deemed an employee of
the Company or Subsidiary or Affiliate during such leave of absence or any
extension thereof granted by the Company, Subsidiary or Affiliate for purposes
of the Plan.
     §5. Dividends. All dividends payable on the Restricted Shares (whether or
not vested) will be payable in the same manner as paid to other shareholders.
All cash dividends payable on unvested Restricted Shares shall be paid in
unrestricted cash. In the case of dividends payable on unvested Restricted
Shares in shares or other property, the shares or other property so payable
shall be subject to the same restrictions and other terms and conditions that
apply to the Restricted Shares unless otherwise determined by the Committee or
the Board at the time the dividend is authorized.
     §6. Taxes. The Holder hereby agrees to pay to the Company, in accordance
with the terms of the Plan, any federal, state or local taxes of any kind
required by law to be withheld and remitted by the Company with respect to the
Restricted Shares. The Holder may satisfy such tax obligation, in whole or in
part, by (a) electing to have the Company withhold a portion of the Shares
otherwise to be delivered upon vesting of the Restricted Shares with a Fair
Market Value equal to the amount of such taxes, or (b) delivering to the Company
other Shares with a Fair Market Value equal to the amount of such taxes. The
election, if any, must be made on or before the date that the amount of tax to
be withheld is determined. If the Holder does not make such payment to the
Company, the Company shall have the right to withhold from any payment of any
kind otherwise due to the Holder from the Company, any federal, state or local
taxes of any kind required by law to be withheld with respect to the award or
vesting of the Restricted Shares.
     §7. Deferral. The Holder may, in his or her sole discretion, with respect
to this award of Restricted Shares, elect to participate in any equity deferred
compensation plan established by the Company, in which case such plan shall
govern amounts deferred.
     §8. Subject to the Plan. This Agreement is made and the Restricted Shares
evidenced hereby are granted under and pursuant to, and they are expressly made
subject to all of the terms and conditions of, the Plan, notwithstanding
anything herein to the contrary. The Holder hereby acknowledges receipt of a
copy of the Plan and that the Holder has read and understands the terms and
conditions of the Plan.
     §9. Securities Law Compliance.
     (a) The Holder agrees that the Company may impose such restrictions on the
Shares as are deemed advisable by the Company, including, without limitation,
restrictions relating to

 

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listing or trading requirements. The Holder further agrees that certificates
representing the Shares may bear such legends and statements as the Company
shall deem appropriate or advisable to assure, among other things, compliance
with applicable securities laws, rules and regulations.
     (b) The Holder agrees that any Shares which the Holder may acquire by
virtue of this Agreement may not be transferred, sold, assigned, pledged,
hypothecated or otherwise disposed of by the Holder unless (i) a registration
statement or post-effective amendment to a registration statement under the
Securities Act of 1933, as amended, with respect to such Shares has become
effective so as to permit the sale or other disposition of such Shares by the
Holder, or (ii) there is presented to the Company an opinion of counsel
satisfactory to the Company to the effect that the sale or other proposed
disposition of such Shares by the Holder may lawfully be made otherwise than
pursuant to an effective registration statement or post-effective amendment to a
registration statement relating to such Shares under the Securities Act of 1933,
as amended.
     §10. Rights of the Holder. The granting of the Restricted Shares shall in
and of itself not confer any right of the Holder to continue in the employ of
the Company and shall not interfere in any way with the right of the Company to
terminate the Holder’s employment at any time, subject to the terms of any
employment agreement between the Company and the Holder.
     §11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, except to the extent otherwise
governed by Federal law.
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     IN WITNESS WHEREOF, the parties have subscribed their names hereto.

            DEVELOPERS DIVERSIFIED REALTY
CORPORATION, an Ohio corporation
      By:           Name:           Title:        

DATE OF GRANT:
                                    
ACCEPTANCE OF AGREEMENT
      The Holder hereby:
     (a) Acknowledges that he/she has received a copy of the Plan and a copy of
the Company’s most recent Annual Report and other communications routinely
distributed to the Company’s shareholders;
     (b) Accepts this Agreement and the Restricted Shares granted to him/her
under this Agreement subject to all provisions of the Plan and this Agreement;
     (c) Represents and warrants to the Company that he/she is acquiring the
Restricted Shares for his/her own account, for investment, and not with a view
to or any present intention of selling or distributing the Restricted Shares
either now or at any specific or determinable future time or period or upon the
occurrence or nonoccurrence of any predetermined or reasonably foreseeable
event; and
     (d) Agrees that no transfer of the Restricted Shares will be made unless
the Restricted Shares have been duly registered under all applicable Federal and
state securities laws pursuant to a then-effective registration which
contemplates the proposed transfer or unless the Company has received the
written opinion of, or satisfactory to, its legal counsel that the proposed
transfer is exempt from such registration.

                       Holder’s Signature:                                      
                 Holder’s Social Security Number