Exhibit 10.5
DEVELOPERS DIVERSIFIED REALTY CORPORATION
VALUE SHARING EQUITY PROGRAM
     This Developers Diversified Realty Corporation Value Sharing Equity Program
(as may be amended, modified or supplemented from time to time, the “Program”)
is established as of July 29, 2009, by Developers Diversified Realty
Corporation, an Ohio corporation (the “Company”).
     The Program is designed to allow the Company to reward its officers and
other key employees for successful efforts in helping the Company achieve
superior financial performance, as measured by increases in the Company’s
adjusted market capitalization over pre-established periods of time. Effective
as of the date first written above (the “Effective Date”), the Program is hereby
established on the following terms and subject to the following conditions:
     1. Operation Under the Equity Plan. The Program is adopted to operate
pursuant to the Equity Plan and is subject to the terms and conditions set forth
herein and in the Equity Plan. In the event of any inconsistency between the
Equity Plan and the Program, the terms and conditions set forth in the Equity
Plan shall control.
     2. Administration.
          (a) The Program will be administered by the Committee. The Committee
shall have full power to interpret and administer the Program.
          (b) The Committee shall have the authority to adopt, alter and repeal
such rules, guidelines and practices governing the Program as it shall, from
time to time, deem advisable; to interpret the terms and provisions of the
Program and any Award issued under the Program (and any agreements relating
thereto); to direct Eligible Employees or other advisors to prepare such
materials or perform such analyses as the Committee deems necessary or
appropriate; and otherwise to supervise the administration of the Program.
          (c) Any interpretation or administration of the Program by the
Committee, and all actions and determinations of the Committee, shall be final,
binding and conclusive on the Company, its shareholders, subsidiaries,
affiliates, all Participants and Eligible Employees, their respective legal
representatives, successors and assigns, and all persons claiming under or
through any of them. No member of the Board or of the Committee shall incur any
liability for any action taken or omitted, or any determination made, in good
faith in connection with the Program.
     3. Definitions. Capitalized terms used herein without definitions shall
have the meanings given to those terms in the 2008 Equity Plan. In addition, as
used herein:
     “2008 Equity Plan” means the Amended and Restated 2008 Developers
Diversified Realty Corporation Equity-Based Award Plan, as amended and restated
(as may be amended, modified or supplemented from time to time).

1

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

 

     “Additional Common Shares” means, for each applicable Measurement Period,
the aggregate number of Common Shares equal to the excess, if any, of (a) the
Ending Shares Outstanding minus (b) the Starting Shares Outstanding; provided,
that the number of Additional Common Shares will not be less than zero.
     “Award” means an Other Share-Based Award that entitles the Participant to
earn Award Shares as determined in accordance with the terms and provisions of
the Program.
     “Award Shares” means, for each applicable Measurement Period, the number of
Common Shares earned by a Participant for such Measurement Period pursuant to an
Other Share-Based Award, which Award Shares shall be subject to the additional
time-based vesting requirements provided in Section 8 hereof.
     “Cash Payments” has the meaning set forth in Section 8(a) hereof.
     “Cause” means, unless otherwise provided by the Committee (in order of
applicability) (a) “Cause” as defined in any Individual Agreement to which the
Participant is a party, or (b) if there is no such Individual Agreement or if it
does not define Cause: (i) conviction of the Participant for committing a felony
under federal law or in the law of the state in which such action occurred,
(ii) dishonesty in the course of fulfilling the Participant’s employment duties,
(iii) willful and deliberate failure on the part of the Participant to perform
the Participant’s employment duties in any material respect, or (iv) prior to a
Change in Control, such other events as shall be determined by the Committee.
The Committee shall, unless otherwise provided in an Individual Agreement with
the Participant, have the sole discretion to determine whether “Cause” exists,
and its determination shall be final.
     “Change in Control” means the occurrence of any of the following:
     (a) consummation of a consolidation or merger in which the Company is not
the surviving corporation, the sale of substantially all of the assets of the
Company, or the liquidation or dissolution of the Company;
     (b) any person or other entity (other than the Company or a subsidiary or
any Company employee benefit plan (including any trustee of any such plan acting
in its capacity as trustee)) purchases any Common Shares (or securities
convertible into Common Shares) pursuant to a tender or exchange offer without
the prior consent of the Board, or becomes the beneficial owner of securities of
the Company representing 30% or more of the voting power of the Company’s
outstanding securities without the prior consent of the Board; or
     (c) during any two-year period, individuals who at the beginning of such
period constitute the entire Board cease to constitute a majority of the Board;
provided, that any person becoming a director of the Company during such
two-year period whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least two-thirds of the directors who
at the beginning of such period constituted the entire Board (either by a
specific vote or by approval of the Company’s proxy statement in which such
person is named as a nominee of the Company for director), but excluding for
this purpose any person whose initial assumption of office as a director of

2

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

 

the Company occurs as a result of either an actual or threatened election
contest with respect to the election or removal of directors of the Company or
other actual or threatened solicitation of proxies or consents by or on behalf
of an individual, the corporation, partnership, group, associate or other entity
or person other than the Board, shall be, for purposes of this definition,
considered as though such person was a member of the Board at the beginning of
such period.
     “Change in Control Measurement Date” means the date upon which a Change in
Control first occurs.
     “Common Share” means a common share, par value $0.10 per share, of the
Company.
     “Company” has the meaning set forth in the preamble hereof.
     “Disabled.” A Participant shall be considered Disabled if the Participant
has suffered a Disability.
     “Effective Date” has the meaning set forth in the preamble hereof.
     “Ending Share Price” means the average Share Price for a Common Share for
the five-trading-day period ending on the applicable Measurement Date.
     “Ending Shares Outstanding” means the aggregate number of Common Shares
issued and outstanding, plus the aggregate number of Common Shares for which the
OP Units are then exchangeable, as of the applicable Measurement Date.
     “Eligible Employees” means the employees of the Company.
     “Equity Plan” means, unless otherwise determined by the Committee from time
to time, the equity-based award plan most recently adopted by the Company among
the 2008 Equity Plan and the Other Equity-Based Award Plans under which the
Company may grant equity-based performance awards such as Other Share-Based
Awards to employees of the Company.
     “Equity Plan Limit” means the aggregate number of Common Shares available
from time to time for issuance under the Equity Plan.
     “Equity Raised” means an amount equal to the sum of the aggregate value
received by the Company during the period between the Effective Date through and
including the applicable Measurement Date pursuant to (a) the issuance of
Additional Common Shares, (b) the exercise of any warrants representing the
right to purchase Common Shares and (c) the conversion of any Company
convertible debt into Company equity (with such Company convertible debt
calculated for purposes of this definition at face value).
     “Equity Repurchased” means the aggregate amount paid by the Company during
the period between the Effective Date through and including the applicable
Measurement Date for the repurchase of Common Shares by the Company.
     “Fifth Measurement Date” means July 31, 2012.

3

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

 

     “Fifth Measurement Period” has the meaning set forth in the definition of
Measurement Period.
     “Final Measurement Date” means December 31, 2012.
     “Final Measurement Period” has the meaning set forth in the definition of
Measurement Period.
     “First Measurement Date” means July 31, 2010.
     “First Measurement Period” has the meaning set forth in the definition of
Measurement Period.
     “Fourth Measurement Date” means January 31, 2012.
     “Fourth Measurement Period” has the meaning set forth in the definition of
Measurement Period.
     “Gross Award Shares” means, for each applicable Measurement Period, a
number of Award Shares (rounded up to the nearest whole number of Award Shares)
equal to the quotient of (a) the Participant’s Share of Value Created divided by
(b) the Ending Share Price on the applicable Measurement Date for such
Measurement Period.
     “Individual Agreement” means an employment or similar agreement between a
Participant and the Company.
     “Initial Market Capitalization” means a value equal to the product of
(a) the Starting Shares Outstanding multiplied by (b) the Starting Share Price.
     “Market Capitalization” means, with respect to an applicable Measurement
Date, a value equal to the product of (a) the Ending Shares Outstanding
multiplied by (b) the Ending Share Price.
     “Measurement Date” means, for each applicable Measurement Period, the
earlier of the Change in Control Measurement Date or, as applicable, (a) the
First Measurement Date, (b) the Second Measurement Date, (c) the Third
Measurement Date, (d) the Fourth Measurement Date, (e) the Fifth Measurement
Date, or (f) the Final Measurement Date.
     “Measurement Period” means each of the following periods: (a) the period
commencing on the Effective Date and ending on the First Measurement Date (or
the Change in Control Measurement Date, if applicable) (the “First Measurement
Period”); (b) the period commencing on the first day immediately subsequent to
the First Measurement Date and ending on the Second Measurement Date (or the
Change in Control Measurement Date, if applicable) (the “Second Measurement
Period”); (c) the period commencing on the first day immediately subsequent to
the Second Measurement Date and ending on the Third Measurement Date (or the
Change in Control Measurement Date, if applicable) (the “Third Measurement
Period”); (d) the period commencing on the first day immediately subsequent to
the Third Measurement Date and ending on the Fourth Measurement Date (or the
Change in Control Measurement Date, if applicable)

4

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

 

(the “Fourth Measurement Period”); (e) the period commencing on the first day
immediately subsequent to the Fourth Measurement Date and ending on the Fifth
Measurement Date (or the Change in Control Measurement Date, if applicable) (the
“Fifth Measurement Period”); and (f) the period commencing on the first day
immediately subsequent to the Fifth Measurement Date and ending on the Final
Measurement Date (or the Change in Control Measurement Date, if applicable) (the
“Final Measurement Period”).
     “Notice of Grant” means an agreement between the Company and a Participant
substantially in the form of Exhibit B attached hereto, with such other terms
and provisions as the Committee may determine from time to time.
     “OP Units” means the operating partnership minority interests in the
Company.
     “Other Equity-Based Award Plans” means any equity-based award plans (other
than the 2008 Equity Plan) maintained by the Company from time to time.
     “Participant” means an Eligible Employee determined by the Committee to
participate under the Program.
     “Participant’s Share of Value Created” means: (a) for the First Measurement
Period, a value equal to the product of (1) Value Created and (2) two-sevenths
of the Participant’s Value Sharing Opportunity; (b) for the Second Measurement
Period, a value equal to the product of (1) Value Created and (2) three-sevenths
of the Participant’s Value Sharing Opportunity; (c) for the Third Measurement
Period, a value equal to the product of (1) Value Created and (2) four-sevenths
of the Participant’s Value Sharing Opportunity; (d) for the Fourth Measurement
Period, a value equal to the product of (1) Value Created and (2) five-sevenths
of the Participant’s Value Sharing Opportunity; (e) for the Fifth Measurement
Period, a value equal to the product of (1) Value Created and (2) six-sevenths
of the Participant’s Value Sharing Opportunity; and (f) for the Final
Measurement Period, the Participant’s Value Sharing Opportunity.
     “Pro Rata Gross Award Shares” means, for each applicable Measurement
Period, a number of Award Shares equal to the product of (a)(i) the Gross Award
Shares minus (ii) the number of Award Shares, if any, previously earned by the
Participant under the Program, multiplied by (b) a fraction, the numerator of
which equals the number of days in the Measurement Period through and including
the date of the Participant’s death or Disability or the date on which the
Participant’s employment with the Company is terminated without Cause, as
applicable, and the denominator of which equals the total number of days in the
Measurement Period.
     “Program” has the meaning set forth in the preamble hereof.
     “Second Measurement Date” means January 31, 2011.
     “Second Measurement Period” has the meaning set forth in the definition of
Measurement Period.
     “Share Price” means, as of a given date (in order of applicability):
(a) the closing price of a Common Share on the principal exchange on which the
Common Shares are then trading, if

5

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

 

any, on such date, or if Common Shares were not traded on such date, then on the
next preceding trading day during which a sale occurred; (b) if Common Shares
are not then traded on an exchange, the mean between the closing representative
bid and asked prices for Common Shares on such date as reported by a national
quotation system; (c) if Common Shares are not traded on an exchange and not
quoted on a national quotation system, the mean between the closing bid and
asked prices for Common Shares, on such date, as determined in good faith by the
Committee; or (d) if Common Shares are not publicly traded, the fair market
value established by the Committee acting in good faith and in accordance with
the applicable requirements of Code Section 409A and the regulations promulgated
thereunder.
     “Starting Shares Outstanding” means the aggregate number of Common Shares
issued and outstanding, plus the aggregate number of Common Shares for which the
OP Units are then exchangeable, as of the Effective Date.
     “Starting Share Price” means the greater of (a) the average closing price
of a Common Share as reported on the New York Stock Exchange over the 20 trading
days ending on the Effective Date and (b) the closing price of a Common Share as
reported on the New York Stock Exchange on the Effective Date.
     “Third Measurement Date” means July 31, 2011.
     “Third Measurement Period” has the meaning set forth in the definition of
Measurement Period.
     “Undelivered Award Shares” has the meaning set forth in Section 8(a)
hereof.
     “Value Created” means, for each applicable Measurement Period, an aggregate
amount equal to (a) the Market Capitalization minus (b) the Initial Market
Capitalization minus (c) the Equity Raised (if, during any Measurement Period,
the Company issues Additional Common Shares) plus (d) the Equity Repurchased
(if, during any Measurement Period, the Company repurchases Common Shares).
     “Value Sharing Opportunity” means a percentage established for each
Participant from time to time by the Committee under the Program. As of the
Effective Date, the aggregate amount of the Value Sharing Opportunities equals
2.8743%.
     “Vested Undelivered Award Shares” has the meaning set forth in Section 8(b)
hereof.
     “Vesting Schedule” has the meaning set forth in Section 8(b) hereof.
     4. Participants and Value Sharing Opportunities. The Committee has
determined that, as of the Effective Date, the Eligible Employees serving in the
positions listed on Exhibit A shall be Participants and that each Participant
shall be awarded the Value Sharing Opportunity designated on Exhibit A for such
Participant, respectively. Any allocation or reallocation of, and any adjustment
to, the Value Sharing Opportunities for the Participants shall be made at the
sole discretion of the Committee; provided, however, that in no event shall the
Committee reduce the Value Sharing Opportunity for any Participant.

6

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

 

     5. Awards; Notices of Grant. The Committee shall grant each Participant an
Award. In order to participate in the Program and receive an Award, each
Participant must execute and deliver to the Company a Notice of Grant, which
Notice of Grant shall constitute the agreement or other instrument evidencing
the Award as required under the Equity Plan. Each Notice of Grant and Award will
be subject to the terms of the Program and the Equity Plan. In no event will an
Award result in Participants being paid out Award Shares in excess of the annual
award limit set forth in the Equity Plan.
     6. Determining Award Shares. With respect to each applicable Measurement
Period, each Participant shall earn a number of Award Shares equal to the
excess, if any, of (a) the Gross Award Shares minus (b) the number of Award
Shares, if any, previously earned by the Participant under the Program;
provided, that the number of Award Shares in each case will not be less than
zero.
     7. Effect of Certain Events During a Measurement Period. For each
Measurement Period, if any of the following events occurs during the Measurement
Period, then, with respect to such Measurement Period, Participants shall not
earn Award Shares pursuant to Section 6 hereof, but shall instead earn a number
of Award Shares as determined pursuant to this Section 7 as follows:
          (a) If, during the Measurement Period, a Participant shall die or
become Disabled, or the Participant’s employment with the Company is terminated
by the Company without Cause, then (i) the Participant shall earn a number of
Award Shares equal to the Pro Rata Gross Award Shares; provided, that the number
of Pro Rata Gross Award Shares will not be less than zero, and (ii) the
Participant shall immediately, as of the date of such death, Disability or
termination of employment, forfeit any and all rights to receive Award Shares
with respect to any and all subsequent Measurement Periods under the Program.
          (b) If, during the Measurement Period, a Participant’s employment with
the Company is terminated for Cause or the Participant voluntarily terminates
his or her employment with the Company for any reason, then (i) the Participant
shall immediately, as of the date of such termination of employment, forfeit any
and all rights to earn Award Shares with respect to such Measurement Period and
any and all subsequent Measurement Periods under the Program, and (ii) any and
all rights the Participant had, or may have had, under the Program will
immediately, as of the date of such termination of employment, be forfeited
without further action.
          (c) If, during the Measurement Period, a Change in Control occurs,
then (i) the Participant shall earn a number of Award Shares equal to the
excess, if any, of (a) the Gross Award Shares minus (b) the number of Award
Shares, if any, previously earned by the Participant under the Program;
provided, that the number of Award Shares in each case will not be less than
zero, and (ii) all Participants shall immediately, as of the date of such Change
in Control, forfeit any and all rights to earn any Award Shares with respect to
any and all subsequent Measurement Periods under the Program.
     8. Payment; Additional Time-Based Vesting Requirements.

7

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

 

          (a) The Company will grant to each Participant (or to the estate,
guardian or beneficiary of the Participant, as the case may be) any Award Shares
earned by the Participant pursuant to an Award as soon as reasonably practicable
following the applicable Measurement Date, but in no event later than 30 days
after the applicable Measurement Date; provided, however, that, as determined by
the Committee, to the extent any Participant is prohibited under the Equity Plan
(other than because the grant of such Award Shares would cause the aggregate
number of Common Shares issued by the Company under the Equity Plan to exceed
the Equity Plan Limit) or otherwise from being granted or actually receiving in
any particular calendar year any Award Shares previously earned by the
Participant pursuant to an Award (the “Undelivered Award Shares”), such
Undelivered Award Shares will be granted to the Participant (or to the estate,
guardian or beneficiary of the Participant, as the case may be) in the
immediately succeeding calendar year not later than January 15th of such
immediately succeeding calendar year; provided further, that if any grant of
Award Shares earned under the Program would cause the aggregate number of Common
Shares issued by the Company under the Equity Plan to exceed the Equity Plan
Limit, then each Participant (or the estate, guardian or beneficiary of the
Participant, as the case may be), as applicable, shall be entitled to cash
payments (“Cash Payments”) from the Company in an aggregate amount equal to the
product of (i) the Share Price on the applicable Measurement Date multiplied by
(ii) the number of Award Shares earned by the Participant the granting of which
would cause the aggregate number of Common Shares issued by the Company under
the Equity Plan to exceed the Equity Plan Limit, which Cash Payments will be
paid by the Company according to the applicable Vesting Schedule and other
vesting provisions provided in this Section 8 as if such Cash Payments were
Award Shares being granted pursuant to this Section 8, but in all cases subject
to the Committee’s ability to again pay Participants in Award Shares instead of
Cash Payments if and when, as determined by the Committee, grants of Award
Shares earned under the Program would no longer cause the aggregate number of
Common Shares issued by the Company under the Equity Plan to exceed the Equity
Plan Limit.
          (b) Unless otherwise determined by the Committee at the time an Award
is granted, any Award Shares earned by a Participant under the Program and
granted pursuant to Section 8(a) hereof, and any Undelivered Award Shares to be
granted pursuant to Section 8(a) hereof, will be subject to the following
additional time-based vesting requirements: (i) such Award Shares will vest in
20% annual increments beginning on the date of grant of the Award Shares and on
each of the first four anniversaries of the date of grant of the Award Shares
(the “Vesting Schedule”); and (ii) such Undelivered Award Shares will vest
according to the same Vesting Schedule that would have been applicable had such
Undelivered Award Shares been awarded as Award Shares pursuant to Section 8(a)
hereof; provided, that to the extent that any portion of the Undelivered Award
Shares would have vested according to the applicable Vesting Schedule prior to
or as of the date on which such Undelivered Award Shares are actually granted
pursuant to Section 8(a) hereof (the “Vested Undelivered Award Shares”), such
Vested Undelivered Award Shares will be immediately vested when the Vested
Undelivered Award Shares are actually granted pursuant to Section 8(a) hereof;
provided further, that to the extent that any Award Shares or Undelivered Award
Shares have been earned as a result of the Participant’s death or Disability
pursuant to Section 7(a) hereof, such Award Shares or Undelivered Award Shares
shall not be subject to the additional time-based vesting requirements described
in this Section 8(b).

8

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

 

          (c) During the Vesting Schedule, the Participant shall not be
permitted to sell, transfer, pledge, assign or otherwise encumber any Award
Shares, Cash Payments or Undelivered Award Shares that remain unvested, and the
Award Shares, Cash Payments and Undelivered Award Shares that remain unvested
will also remain subject to forfeiture. Unless otherwise determined by the
Committee, if a Participant’s employment with the Company terminates by reason
of death or due to the Participant becoming Disabled during the Vesting
Schedule, (i) any unvested Award Shares held by the Participant (or unvested
Cash Payments) will be immediately vested (and any applicable restrictions will
lapse), and (ii) all Undelivered Award Shares will be immediately vested (and
any applicable restrictions will lapse) when such Undelivered Award Shares are
actually granted pursuant to Section 8(a) hereof. Further, unless otherwise
determined by the Committee or as provided for in an Individual Agreement, if a
Participant’s employment with the Company is terminated without Cause during the
Vesting Schedule, any unvested Award Shares held by the Participant (or unvested
Cash Payments) and any Undelivered Award Shares shall not be forfeited by the
Participant, but instead such unvested Award Shares (or unvested Cash Payments)
and Undelivered Award Shares shall remain outstanding and shall continue to vest
according to the Vesting Schedule described in Section 8(b) hereof. Unless
otherwise determined by the Committee or as provided for in an Individual
Agreement, if a Participant’s employment with the Company terminates during the
Vesting Schedule for any reason other than due to death, due to the Participant
becoming Disabled or due to the Participant’s employment with the Company being
terminated without Cause during the Vesting Schedule, (A) any unvested Award
Shares held by the Participant (or unvested Cash Payments) at the time of such
termination will thereupon be forfeited, and (B) any Undelivered Award Shares
other than Vested Undelivered Award Shares will thereupon be forfeited.
          (d) Except to the extent provided by Section 409A of the Code and as
permitted by the Company, no Common Shares may be issued to the Participant and
no cash payment may be made to the Participant at a time earlier than otherwise
expressly provided in the Program.
          (e) The Company’s obligations to any Participant with respect to his
or her Award will be satisfied in full upon the grant of any earned Award Shares
(or Undelivered Award Shares, if applicable) corresponding to the Award or upon
the payment of cash to the Participant pursuant to Section 8(a) hereof.
     9. Shareholder Rights and Restrictions.
          (a) No Participant shall have any rights as a shareholder of the
Company (including, without limitation, the right to receive dividends or voting
rights) with respect to an Award or any Award Shares until any earned Award
Shares (or Undelivered Award Shares, if applicable) are issued.
          (b) Award Shares and Undelivered Award Shares shall be subject to the
terms and conditions set forth in the Notice of Grant relating to such Award
Shares and Undelivered Award Shares.

9

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

 

          (c) The obligations of the Company under this Program will be merely
that of an unfunded and unsecured promise of the Company to deliver Award Shares
in the future, and the rights of a Participant will be no greater than that of
an unsecured general creditor. No assets of the Company will be held or set
aside as security for the obligations of the Company under this Program.
     10. Transferability. Awards and unvested Award Shares will not be
assignable or transferable by any Participant; provided, however, that no
provision in the Program will prevent the transfer of an Award or any unvested
Award Shares by will or the laws of descent and distribution in the event of the
death of the Participant.
     11. Section 409A of the Code. It is intended that the Program comply with
the provisions of Section 409A of the Code. The Program will be administered in
a manner that is intended to comply with Section 409A of the Code.
     12. Interpretation. Any reference in the Program to Section 409A of the
Code will also include any proposed, temporary or final regulations, or any
other guidance, promulgated with respect to such Section by the U.S. Department
of Treasury or the Internal Revenue Service.
     13. No Employment Rights. None of participation in the Program, the grant
of any Award and the delivery of any Award Shares will confer upon any
Participant any right with respect to continuance of employment by the Company.
     14. Severability. In the event that one or more of the provisions of the
Program shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.
     15. Adjustments, Etc. In the event of any (a) any stock dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of the Company, (b) any merger, consolidation, spin-off, split- off,
spin-out, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of rights or warrants to purchase securities,
or (c) any other corporate transaction or event having an effect similar to any
of the foregoing, the Committee shall make such substitutions or adjustments, if
any, as are deemed necessary or equitable in its sole discretion to preserve the
intent of this Program and to avoid any unintended windfalls or hardships with
respect to the number or valuation of Awards or Award Shares.
     16. Taxes. To the extent that the Company is required to withhold federal,
state, local or foreign taxes in connection with any payment made or benefit
realized by a Participant or other person under the Program, and the amounts
available to the Company for such withholding are insufficient, it will be a
condition to the receipt of such payment or the realization of such benefit that
the Participant or such other person make arrangements satisfactory to the
Company for payment of the balance of such taxes required to be withheld, which
arrangements (in the discretion of the Committee) may include relinquishment of
a portion of such benefit. Notwithstanding the foregoing, when a Participant is
required to pay the Company an amount required to be withheld under applicable
income and employment tax laws, the Participant may

10

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

 

elect to satisfy the obligation, in whole or in part, by electing to have
withheld, from the Award Shares required to be delivered to the Participant,
Award Shares having a value equal to the amount required to be withheld, or by
delivering to the Company Common Shares held by such Participant. The Award
Shares or Common Shares used for tax withholding will be valued at an amount
equal to the market value per share of such Award Shares or Common Shares on the
date the applicable amount is to be included in the Participant’s income. In no
event will the market value per share of the Award Shares to be withheld
pursuant to this Section 16 to satisfy applicable withholding taxes exceed the
minimum amount of taxes required to be withheld.
     17. Governing Law. The laws of the State of Ohio will govern this Program
and all matters related hereto. If any Participant or the Company institutes a
suit or other legal proceedings, whether in law or equity with respect to this
Program, the Company and such Participant irrevocably consents to the
jurisdiction of the Common Pleas Court of the State of Ohio (Cuyahoga County) or
the United States District Court for the Northern District of Ohio.
     18. Amendments, Etc. The Committee may amend the terms of any Award under
the Program prospectively or retroactively, but subject to Section 15 hereof, no
such amendment shall impair the rights of any Participant without his or her
consent. The Program, the Equity Plan and the Notices of Grant contain the
entire agreement between the Company and the Participants relating to the
Program.
[signature on following page]

11

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

 

            DEVELOPERS DIVERSIFIED REALTY
CORPORATION
      By:   /s/ Robert H. Gidel         Robert H. Gidel        Chairman of the
Executive Compensation Committee   

12

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

 

EXHIBIT A

      Participants   Value Sharing Opportunities
 
   
Chairman & Chief Executive Officer (1 total)
  0.7250% (72.50 basis points)
President & Chief Operating Officer (1 total)
  0.5800% (58.00 basis points)
Senior Executive Vice Presidents (2 total)
  0.1300% (13.00 basis points)
Executive Vice Presidents (5 total)
  0.0725% (7.25 basis points)
Senior Vice Presidents (17 total)
  0.0400% (4.00 basis points)
Vice Presidents (23 total)
  0.0116% (1.16 basis points)

 

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

 

EXHIBIT B
DEVELOPERS DIVERSIFIED REALTY CORPORATION
NOTICE OF GRANT UNDER THE VALUE SHARING EQUITY PROGRAM
     The undersigned individual (the “Participant”) has been granted the
following Award under the Developers Diversified Realty Corporation Value
Sharing Equity Program (the “Program”):

     
Name of Participant:
  __________________________________________
 
   
Award Grant Date:
  __________________________________________
 
   
Measurement Periods in which
Participant will participate:
  __________________________________________
 
  __________________________________________
 
   
Value Sharing Opportunity:
  __________________________________________
 
   
Vesting Schedule:
  __________________________________________
 
  __________________________________________
 
  __________________________________________

     By the Participant’s signature and the signature of the Company
representative below, the Participant and the Company agree that this Award is
granted under and governed by the terms and conditions of the Program (the
provisions of which are incorporated herein by reference) and the Equity Plan,
copies of both of which are attached to and made a part of this document, which
document shall constitute the agreement or other instrument evidencing the Award
as required under the Equity Plan. The Participant shall have such rights
regarding his or her election to settle any tax withholding obligations with
Award Shares or Common Shares as are described in Section 16 of the Program.
Capitalized terms used in this document without definitions shall have the
meanings given to those terms in the Program.

     
PARTICIPANT
  DEVELOPERS DIVERSIFIED
REALTY CORPORATION
 
   
 
   
 
Participant’s Signature
 
 
 
  By:
 
 
   
 
Participant’s Printed Name
  Its: