Exhibit 10.7

DDR CORP.

PERFORMANCE SHARES AWARD MEMORANDUM

 

 

1.Holder:

[PARTICIPANT NAME] (the “Holder”)

2.Plan:

DDR Corp. 2012 Equity and Incentive Compensation Plan (the “Plan”)

3.Date of Grant:

March 2, 2017 (the “Date of Grant”)

4.Number of Performance Shares:

[# PERFORMANCE SHARES]

5.Purchase Price:

$0

6.Performance Period

March 1, 2017 through February 28, 2018 (the “Performance Period”)

 

Additional provisions regarding the earning and payment of the Performance
Shares subject hereto (the “Performance Shares”), and other terms and conditions
of the Performance Shares, are specified in the attached Performance Shares
Terms (the “Agreement”).  Capitalized terms not defined in this Performance
Shares Award Memorandum (the “Award Memorandum”) shall have the meaning as
defined in the Agreement, or if not defined therein, in the Plan.

 

 

ACCEPTANCE OF AWARD

 

I accept the Performance Shares granted to me on the Date of Grant as specified
in this Award Memorandum, and I agree to be bound by the terms and conditions of
the Award Memorandum, the Agreement and the Plan.

 

 

DDR CORP., an Ohio corporationHOLDER

 

 

By: ___________________________________________________

       Name:Name:  

       Title:

 

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PERFORMANCE SHARES TERMS

 

 

DDR Corp., an Ohio corporation (the “Company”), has granted to the Holder named
in the Award Memorandum the number of Performance Shares set forth in the Award
Memorandum effective as of Date of Grant specified in the Award
Memorandum.  Subject to the degree of attainment of the Management Objectives
described in Section 3 of these terms and conditions (the “Agreement”), as
approved by the Committee and distributed to the Holder (the “Statement of
Management Objectives”), the Holder may earn a percentage of the Performance
Shares as described in the Statement of Management Objectives.  Each Performance
Share shall then represent the right of the Holder to receive one Common Share
subject to and upon the terms and conditions of this Agreement.  The Performance
Shares have been granted pursuant to the Plan and are subject to all provisions
of the Plan and the Award Memorandum, which are hereby incorporated herein by
reference, and to the following provisions of this Agreement (capitalized terms
not defined in this Agreement shall have the meaning as defined in the Award
Memorandum, or if not defined therein, in the Plan):

 

 

1.

Payment of Performance Shares.  The Performance Shares will become payable in
accordance with the provisions of Section 6 of this Agreement if the Holder’s
right to receive payment for the Performance Shares becomes nonforfeitable
(“Vest,” “Vesting” or “Vested”) in accordance with Section 3 and Section 4 of
this Agreement.

 

2.

Performance Shares Not Transferrable.  Subject to Section 16 of the Plan,
neither the Performance Shares evidenced hereby nor any interest therein or in
the Common Shares underlying such Performance Shares shall be transferable prior
to payment to the Holder pursuant to Section 6 hereof other than by will or
pursuant to the laws of descent and distribution, or pursuant to a qualified
domestic relations order (as defined in the Code or the Employee Retirement
Income Security Act of 1974, as amended).

 

3.

Vesting of Performance Shares.

 

(a)

Subject to the terms and conditions of Section 4 and Section 5 of this
Agreement, the Performance Shares will Vest on the basis of the relative
achievement of the Management Objectives described in the Statement of
Management Objectives approved by the Committee for the Performance Shares for
the Performance Period specified in the Award Memorandum if the Holder is in the
continuous employ of the Company or a Subsidiary from the Date of Grant through
the last day of the Performance Period.  

 

(b)

For purposes of this Agreement, the continuous employment of the Holder with the
Company or a Subsidiary will not be deemed to have been interrupted, and the
Holder shall not be deemed to have ceased to be an employee of the Company or a
Subsidiary, by reason of the transfer of the Holder’s employment among the
Company and its Subsidiaries.

 

4.

Alternative Vesting of Performance Shares.  Notwithstanding the provisions of
Section 3 of this Agreement, and subject to the payment provisions of Section 6
hereof, the Holder shall Vest in some or all of the Performance Shares under the
following circumstances (to the extent the Performance Shares have not been
forfeited or previously Vested):

 

(a)

Certain Qualifying Terminations:  If the Holder’s employment with the Company or
any Subsidiary terminates due to death, termination by the Company or any

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Subsidiary due to Disability, termination by the Company or any Subsidiary
without Cause or termination by the Holder for Good Reason, then, on the date of
such termination of employment (notwithstanding anything in the Statement of
Management Objectives to the contrary):  (i) the Performance Shares will be
earned on the basis of the relative achievement of the applicable Management
Objectives determined in accordance with Section 3(a), except that the
Performance Period will be deemed to have ended on the date of such termination
of employment; and (ii) the Holder will Vest in the number of Performance Shares
earned in accordance with Section 4(a)(i).  Performance Shares that Vest in
accordance with this Section 4(a) will be paid as provided for in Section 6 of
this Agreement.

 

(b)

Change in Control.  

 

(i)

If at any time before the Performance Shares have Vested or been forfeited, and
while the Holder is continuously employed by the Company or a Subsidiary, a
Change in Control occurs, then, except to the extent that a Replacement Award is
provided to the Holder in accordance with Section 4(b)(ii) to continue, replace
or assume the Performance Shares covered by this Agreement (the “Replaced
Award”), on the date of such Change in Control (notwithstanding anything in the
Statement of Management Objectives to the contrary):  (A) the Performance Shares
will be earned on the basis of the relative achievement of the applicable
Management Objectives determined in accordance with Section 3(a), except that
the Performance Period will be deemed to have ended on the date of such Change
in Control; and (B) the Holder will Vest in the number of Performance Shares
earned in accordance with Section 4(b)(i)(A).  Performance Shares that Vest in
accordance with this Section 4(b)(i) will be paid as provided for in Section 6
of this Agreement.  

 

(ii)

For purposes of this Agreement, a “Replacement Award” means an award (A) of the
same type (e.g., performance shares), (B) that has a value at least equal to the
value of the Replaced Award, (C) that relates to publicly traded equity
securities of the Company or its successor in the Change in Control or another
entity that is affiliated with the Company or its successor following the Change
in Control, (D) if the Holder holding the Replaced Award is subject to U.S.
federal income tax under the Code, the tax consequences of which to such Holder
under the Code are not less favorable to such Holder than the tax consequences
of the Replaced Award, and (E) the other terms and conditions of which are not
less favorable to the Holder holding the Replaced Award than the terms and
conditions of the Replaced Award (including the provisions that would apply for
certain qualifying terminations as set forth in Section 4(a) or in the event of
a subsequent Change in Control).  A Replacement Award may be granted only to the
extent it does not result in the Replaced Award or Replacement Award failing to
comply with or be exempt from Section 409A of the Code.  The determination of
whether the conditions of this Section 4(b)(ii) are satisfied will be made by
the Committee, as constituted immediately before the Change in Control, in its
reasonable sole discretion.

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(iii)

If a Replacement Award is provided, notwithstanding anything in this Agreement
to the contrary, any outstanding Performance Shares that at the time of the
Change in Control are not subject to a “substantial risk of forfeiture” (within
the meaning of Section 409A of the Code) will be deemed to be Vested at the time
of such Change in Control.

 

5.

Forfeiture of Performance Shares.  Any Performance Shares that have not Vested
pursuant to Section 3 or Section 4 at the end of the Performance Period will be
forfeited automatically and without further notice after the end of the
Performance Period (or earlier if, and on such date that, the Holder ceases to
be an employee of the Company or a Subsidiary prior to the end of the
Performance Period for any reason other than as described in Section 4).

 

6.

Form and Time of Payment of Performance Shares.  Subject to Section 5, payment
for the Performance Shares (to the extent Vested) will be made in Common Shares
no later than May 15, 2018.

 

7.

Certain Defined Terms.  For purposes of this Agreement, notwithstanding anything
to the contrary in the Plan, the following terms have the following definitions:

 

(a)

“Cause” shall have the meaning ascribed to such term in the Employment
Agreement.

 

(b)

“Disability” shall have the meaning ascribed to the term “Total Disability” in
the Employment Agreement.

 

(c)

“Employment Agreement” means the Employment Agreement, dated as of March 2,
2017, by and between the Holder and the Company (including any successor
agreement).

 

(d)

“Good Reason” shall have the meaning ascribed to such term in the Employment
Agreement.

 

8.

Payment of Dividend Equivalents.  With respect to each of the Performance Shares
covered by this Agreement, the Holder shall be credited on the records of the
Company with dividend equivalents in an amount equal to the amount per Common
Share of any cash dividends declared by the Board on the outstanding Common
Shares during the period beginning on the Date of Grant and ending either on the
date on which the Holder receives payment for the Performance Shares pursuant to
Section 6 hereof or at the time when the Performance Shares are forfeited in
accordance with Section 5 of this Agreement.  These dividend equivalents will
accumulate without interest and, subject to the terms and conditions of this
Agreement, will be paid in the form of Common Shares at the same time, to the
same extent and in the same manner as the Performance Shares for which the
dividend equivalents were credited, based on the Market Value per Share on the
trading day immediately preceding the date of payment.

 

9.

Compensation Recovery.  Notwithstanding anything in this Agreement to the
contrary, the Holder acknowledges and agrees that this Agreement and the award
described herein (and any settlement thereof) are subject to the terms and
conditions of the Company’s clawback policy (if any) as may be in effect from
time to time specifically to implement

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Section 10D of the Exchange Act and any applicable rules or regulations
promulgated thereunder (including applicable rules and regulations of any
national securities exchange on which the Common Shares may be traded) (the
“Compensation Recovery Policy”), and that applicable provisions of this
Agreement shall be deemed superseded by and subject to the terms and conditions
of the Compensation Recovery Policy from and after the effective date thereof.

 

10.

Restrictive Covenants.  In the event the Holder breaches any of the restrictive
covenants set forth in the Employment Agreement while such restrictive covenants
are in effect, the Holder will forfeit any right to the Performance Shares, to
the extent the Performance Shares have not been paid pursuant to Section 6, as
of the date of such breach.

 

11.

Compliance with Law.  The Company shall make reasonable efforts to comply with
all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Company shall not be
obligated to issue any of the Common Shares covered by this Agreement if the
issuance thereof would result in violation of any such law.

 

12.

Adjustments.  Subject to Section 12 of the Plan, the Committee shall make any
adjustments in the number of Performance Shares or kind of shares of stock or
other securities underlying the Performance Shares covered by this Agreement, or
in the other terms and conditions of the Performance Shares, that the Committee
determines to be equitably required to prevent any dilution or expansion of the
Holder’s rights under this Agreement that otherwise would result from any event
listed in Section 12 of the Plan.

 

13.

Withholding 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 Performance Shares.  The Holder and the Committee hereby agree that such tax
obligation, in whole, will be satisfied by the Company withholding a portion of
the Common Shares otherwise to be delivered with a fair market value equal to
the amount of such taxes.  Additionally, 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 Performance Shares so long
as such withholding does not result in any adverse tax consequences under
Section 409A of the Code.

 

14.

No Right to Future Awards or Continued Employment.  The grant of the Performance
Shares under this Agreement to the Holder is a voluntary, discretionary award
being made on a one-time basis and it does not constitute a commitment to make
any future awards.  The grant of the Performance Shares and any payments made
hereunder will not be considered salary or other compensation for purposes of
any severance pay or similar allowance, except as otherwise required by law.  No
provision of this Agreement will limit in any way whatsoever any right that the
Company or a Subsidiary may otherwise have to terminate the employment of the
Holder at any time, subject to the terms of the Employment Agreement.

 

15.

Relation to Other Benefits.  Any economic or other benefit to the Holder under
this Agreement or the Plan will not be taken into account in determining any
benefits to which the Holder may be entitled under any profit‑sharing,
retirement or other benefit or compensation plan maintained by the Company or a
Subsidiary and will not affect the

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amount of any life insurance coverage available to any beneficiary under any
life insurance plan covering employees of the Company or a Subsidiary.

 

16.

Amendments.  Any amendment to the Plan will be deemed to be an amendment to this
Agreement to the extent that the amendment is applicable to this Agreement;
provided, however, that no amendment will adversely affect the rights of the
Holder with respect to the Common Shares or other securities covered by this
Agreement without the Holder’s consent.  Notwithstanding the foregoing, the
limitation requiring the consent of the Holder to certain amendments will not
apply to any amendment that is deemed necessary by the Company to ensure
compliance with Section 409A of the Code or Section 10D of the Exchange Act.

 

17.

Subject to Plan.  This Agreement is made and the Performance 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.  In the event of a conflict between the terms of this Agreement, the Award
Memorandum and the Plan, the terms of the Plan shall govern.  In the event of a
conflict between the terms of this Agreement and the Award Memorandum, the terms
of this Agreement shall govern.

 

18.

Severability.  In the event that one or more of the provisions of this Agreement
or the Award Memorandum is invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated will be deemed to be separable from
the other provisions of this Agreement or the Award Memorandum, as applicable,
and the remaining provisions of this Agreement and the Award Memorandum will
continue to be valid and fully enforceable.

 

19.

Governing Law.  This Agreement is made under, and shall be construed in
accordance with, the internal substantive laws of the State of Ohio.

 

20.

Section 409A of the Code.  To the extent applicable, it is intended that this
Agreement, the Award Memorandum and the Plan comply with or be exempt from the
provisions of Section 409A of the Code, so that the income inclusion provisions
of Section 409A(a)(1) of the Code do not apply to the Holder.  This Agreement,
the Award Memorandum and the Plan shall be administered in a manner consistent
with this intent.  Reference to Section 409A of the Code is to Section 409A of
the Internal Revenue Code of 1986, as amended, and will also include any
regulations or any other formal guidance promulgated with respect to such
Section by the U.S. Department of the Treasury or the Internal Revenue Service.

 

21.

Electronic Delivery.  The Company may, in its sole discretion, deliver any
documents related to the Performance Shares and the Holder’s participation in
the Plan, or future awards that may be granted under the Plan, by electronic
means or request the Holder’s consent to participate in the Plan by electronic
means.  The Holder hereby consents to receive such documents by electronic
delivery and, if requested, agrees to participate in the Plan through an on-line
or electronic system established and maintained by the Company or another third
party designated by the Company.

 

22.

Successors and Assigns.  Without limiting Section 2 hereof, the provisions of
this Agreement shall inure to the benefit of, and be binding upon, the
successors,

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administrators, heirs, legal representatives and assigns of the Holder, and the
successors and assigns of the Company.

 

23.

Acknowledgements.  By accepting the Performance Shares, 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 Performance 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 Performance
Shares for his/her own account, for investment, and not with a view to or any
present intention of selling or distributing the Performance 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 Performance Shares will be made unless the
Performance 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.

 

 

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Statement of Management Objectives

This Statement of Management Objectives applies to the Performance Shares
granted to the Holder on the Date of Grant and applies with respect to the
Performance Shares Terms (the “Agreement”) and the Performance Shares Award
Memorandum between the Company and the Holder (the “Award
Memorandum”).  Capitalized terms used in this Statement of Management Objectives
that are not specifically defined in this Statement of Management Objectives
have the meanings assigned to them in the Agreement, the Award Memorandum or in
the Plan, as applicable.  

1.

Definitions.  For purposes hereof:

 

(a)

“Peer Group” means the following entities:  Acadia Realty Trust, Brixmor
Property Group Inc., Federal Realty Investment Trust, Kimco Realty Corporation,
Kite Realty Group Trust, Ramco-Gershenson Properties Trust, Regency Centers
Corporation, Retail Opportunity Investments Corp., Retail Properties of America,
Inc., Urban Edge Properties, and Weingarten Realty Investors.  In terms of
mandatory adjustments to the Peer Group during the Performance Period: (i) if
any member of the Peer Group files for bankruptcy and/or liquidation, is
operating under bankruptcy protection, or is delisted from its primary stock
exchange because it fails to meet the exchange listing requirement, then such
entity will remain in the Peer Group, but RTSR for the Performance Period will
be calculated as if such entity achieved Total Shareholder Return placing it at
the bottom (chronologically, if more than one such entity) of the Peer Group;
(ii) if, by the last day of the Performance Period, any member of the Peer Group
has been acquired and/or is no longer existing as a public company that is
traded on its primary stock exchange (other than for the reasons as described in
subsection (i) above), then such entity will not remain in the Peer Group and
RTSR for the Performance Period will be calculated as if such entity had never
been a member of the Peer Group; and (iii) except as otherwise described in
subsection (i) and (ii) above, for purposes of this Statement of Management
Objectives, for each of the members of the Peer Group, such entity shall be
deemed to include any successor to all or substantially all of the primary
business of such entity at end of the Performance Period.

 

(b)

“Relative Total Shareholder Return” or “RTSR” means the percentile rank of the
Company’s Total Shareholder Return as compared to (but not included in) the
Total Shareholder Returns of all members of the Peer Group, ranked in descending
order, at the end of the Performance Period.

 

(c)

“Total Shareholder Return” means, with respect to each of the Common Shares and
the common stock of each of the members of the Peer Group, a rate of return
reflecting stock price appreciation, plus the reinvestment of dividends in
additional shares of stock, from the beginning of the Performance Period through
the end of the Performance Period.  For purposes of calculating Total
Shareholder Return for each of the Company and the members of the Peer Group,
the beginning stock price will be based on the closing price on the trading day
immediately prior to the first day of the Performance Period on the principal
stock exchange on which the stock then traded and the ending stock price will be
based on the closing price on the last day of the Performance Period on the
principal stock exchange on which the stock then trades.

 

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2.

RTSR Performance Matrix.

From 0% to 200% of the Performance Shares will be earned based on achievement of
RTSR during the Performance Period as follows:

 

Performance Level

RTSR

Performance Shares Earned

Below Threshold

Below 33rd percentile

0%

Threshold

33rd percentile

50%

Target

55th percentile

100%

Maximum

70th percentile or above

200%

 

3.

Number of Performance Shares Earned.  Following the Performance Period, the
Committee shall determine whether and to what extent RTSR goals have been
satisfied for the Performance Period and shall determine the number of
Performance Shares that shall become Vested hereunder and under the Agreement on
the basis of the following, subject to Section 4 of this Statement of Management
Objectives:

 

(a)

Below Threshold.  If, upon the conclusion of the Performance Period, RTSR for
the Performance Period falls below the threshold level, as set forth in the
Performance Matrix, no Performance Shares shall become Vested.

 

(b)

Threshold.  If, upon the conclusion of the Performance Period, RTSR for the
Performance Period equals the threshold level, as set forth in the Performance
Matrix, 50% of the Performance Shares (rounded up to the nearest whole number of
Performance Shares) shall become Vested.

 

(c)

Between Threshold and Target.  If, upon the conclusion of the Performance
Period, RTSR for the Performance Period exceeds the threshold level, but is less
than the target level, as set forth in the Performance Matrix, a percentage
between 50% and 100% (determined on the basis of straight-line mathematical
interpolation) of the Performance Shares (rounded up to the nearest whole number
of Performance Shares) shall become Vested.

 

(d)

Target.  If, upon the conclusion of the Performance Period, RTSR for the
Performance Period equals the target level, as set forth in the Performance
Matrix, 100% of the Performance Shares shall become Vested.

 

(e)

Between Target and Maximum.  If, upon the conclusion of the Performance Period,
RTSR for the Performance Period exceeds the target level, but is less than the
maximum level, as set forth in the Performance Matrix, a percentage between 100%
and 200% (determined on the basis of straight-line mathematical interpolation)
of the Performance Shares (rounded up to the nearest whole number of Performance
Shares) shall become Vested.

 

(f)

Equals or Exceeds Maximum.  If, upon the conclusion of the Performance Period,
RTSR for the Performance Period equals or exceeds the maximum level, as set
forth in the Performance Matrix, 200% of the Performance Shares (rounded up to
the nearest whole number of Performance Shares) shall become Vested.

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4.

Absolute TSR Modifier.  Notwithstanding anything in this Statement of Management
Objectives to the contrary, the number of Performance Shares that become Vested
pursuant to Section 3 of this Statement of Management Objectives will be reduced
by one third (1/3) in the event that the Company’s Total Shareholder Return for
the Performance Period is negative.

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