EX-10.1



 





Exhibit 10.1




CHANGE IN CONTROL AGREEMENT




     THIS CHANGE IN CONTROL AGREEMENT (this “Agreement”), is between Developers Diversified Realty
Corporation, an Ohio corporation (the “Employer”), and Christa Vesy (“Executive”) made as of this 9th day of April, 2007.



RECITALS




     WHEREAS, Executive is presently employed by Employer as its Senior Vice President and Chief
Accounting Officer;



     WHEREAS, Employer wishes to induce Executive to continue as its Senior Vice President and
Chief Accounting Officer and, accordingly, to provide certain employment security to Executive in
the event of a “Change in Control” (as hereinafter defined);



     WHEREAS, Employer believes that it is in the best interest of its shareholders for Executive
to continue in her position on an objective and impartial basis and without distraction or conflict
of interest as a result of a possible or actual Change in Control; and



     WHEREAS, In consideration of this Agreement Executive is willing to continue as Employer’s
Senior Vice President and Chief Accounting Officer;



     NOW THEREFORE, IN CONSIDERATION OF EXECUTIVE CONTINUING AS THE SENIOR VICE PRESIDENT AND
CHIEF ACCOUNTING OFFICER OF EMPLOYER AND OF THE MUTUAL PROMISES HEREIN CONTAINED, EXECUTIVE AND
EMPLOYER, INTENDING TO BE LEGALLY BOUND, HEREBY AGREE AS FOLLOWS:



ARTICLE I




DEFINITIONS




	 	 	 	 	 
	1.	 	A “Change in Control” for the purpose of this Agreement means the occurrence of any of the
following:
	 
	 	 	 	 
	 

	 	(a)
	 	the Board of Directors or shareholders of the Employer approve a consolidation
or merger in which the Employer is not the surviving corporation, the sale of
substantially all of the assets of the Employer, or the liquidation or dissolution of
the Employer;
	 
	 	 	 	 
	 

	 	(b)
	 	any person or other entity (other than the Employer or a Subsidiary or any
Employer employee benefit plan (including any trustee of any such plan acting in its
capacity as trustee)) purchases any Shares (or securities convertible into Shares)
pursuant to a tender or exchange offer without the prior consent of the Board of
Directors, or becomes the beneficial owner of securities of the Employer representing
20% or more of the voting power of the Employer’s outstanding securities;






 









 






	 	 	 	 	 
	 

	 	(c)
	 	during any two-year period, individuals who at the beginning of such period
constitute the entire Board of Directors cease to constitute a majority of the Board of
Directors, unless the election or the nomination for election of each new director is
approved by at least two-thirds of the directors then still in office who were
directors at the beginning of that period; or
	 
	 	 	 	 
	 

	 	(d)
	 	A record date is established for determining shareholders of Employer entitled
to vote upon (i) a merger or consolidation of Employer with another real estate
investment trust, partnership, corporation or other entity in which Employer is not the
surviving or continuing entity or in which all or a substantial part of the outstanding
shares are to be converted into or exchanged for cash, securities or other property,
(ii) a sale or other disposition of all or substantially all of the assets of Employer
or (iii) the dissolution of Employer.
	 
	 	 	 	 
	2.	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	 	 	 
	3.	 	“Shares” means the Common Shares, without par value, of the Employer.
	 
	 	 	 	 
	4.	 	“Subsidiary” means any corporation (other than the Employer) in an unbroken chain of
corporations beginning with the Employer if each of the corporations (other than the last
corporation in the unbroken chain) owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in that chain.
	 
	 	 	 	 
	5.	 	A “Triggering Event” for the purpose of this Agreement will be deemed to have occurred if:
	 
	 	 	 	 
	 

	 	(a)
	 	Within two years from the date on which the Change in Control occurred,
Employer terminates the employment of Executive, other than in the case of a
Termination For Cause, as herein defined;
	 
	 	 	 	 
	 

	 	(b)
	 	Within two years from the date on which the Change in Control occurred,
Employer reduces Executive’s title, responsibilities, power or authority in comparison
with the Executive’s title, responsibilities, power or authority at the time of the
Change in Control;
	 
	 	 	 	 
	 

	 	(c)
	 	Within two years from the date on which the Change in Control occurred,
Employer assigns Executive duties which are inconsistent with the duties assigned to
Executive on the date on which the Change in Control occurred and which duties Employer
persists in assigning to Executive despite the prior written objection of Executive;
	 
	 	 	 	 
	 

	 	(d)
	 	Within two years from the date on which the Change in Control occurred,
Employer (i) reduces Executive’s base compensation, her incentive opportunity bonus
percentages of salary, her group health, life, disability or other insurance programs
(including any such benefits provided to Executive’s family), her pension, retirement
or profit-sharing benefits or any benefits provided by any of Employer’s equity-based
award plans, or any substitute therefor, (ii) establishes criteria and factors to be
achieved for the payment of bonus compensation that are substantially different than
the criteria and factors established for other similar executive officers of the
Employer, (iii) fails to pay Executive any bonus compensation to which Executive is
entitled through the achievement of the criteria and factors established for the
payment of such bonus, or (iv) excludes the Executive from any plan, program or
arrangement in which similar executive officers of Employer are included; or
	 
	 	 	 	 




 




Page 2




 









 








	 	 	 	 	 
	 

	 	(e)
	 	Within two years from the date on which the Change in Control occurred,
Employer requires Executive to be based at or generally work from any location more
than fifty miles from the geographical center of Cleveland, Ohio.
	 
	 	 	 	 
	6.	 	A “Termination For Cause” for the purposes of this Agreement will be deemed to have occurred
if, and only if, Executive has committed a felony under the laws of the United States of
America, or of any state or territory thereof, and has been convicted of that felony, or has
pled guilty or nolo contendere with respect to that felony, and the commission of that felony
resulted in, or was intended to result in, a loss (monetary or otherwise) to Employer or its
clients, customers, directors, officers or employees.
	 
	 	 	 	 
	7.	 	“Executive’s Annual Bonus” means Executive’s annual bonus at the time of a Triggering Event
or on the date on which the Change in Control occurred, whichever is higher, calculated on the
basis of the maximum bonus available to Executive and the assumption that all performance
goals have been or will be achieved by Employer and Executive in the year in which such
Triggering Event or such Change in Control, as the case may be, occurred.
	 
	 	 	 	 
	8.	 	“Executive’s Annual Salary” means Executive’s annual base salary at the time of a Triggering
Event or on the date on which the Change in Control occurred, whichever is higher.






ARTICLE II




SEVERANCE PAYMENT




	 	 	 	 	 
	1.	 	Upon the occurrence of a Triggering Event, Employer shall pay to Executive a lump sum
severance benefit which will be in addition to any other compensation or remuneration to which
Executive is, or becomes, entitled to receive from Employer. This lump sum severance payment
will be paid by Employer to Executive within five business days after the occurrence of a
Triggering Event in immediately available funds in an amount equal to the sum of (i) two times
Executive’s Annual Bonus plus (ii) two times Executive’s Annual Salary. In addition, Employer
shall, at its expense, provide Executive, and her family, with life, disability, medical,
hospitalization, vision, dental and accidental death and dismemberment insurance in an amount
not less than that provided at the time of the Triggering Event or, if greater, on the date on
which the Change in Control occurred, until the earlier of (i) in the event that Executive
shall become employed by another employer after a Triggering Event, the date on which
Executive shall be eligible to receive benefits from such employer which are substantially
equivalent to or greater than the benefits Executive and his family received from Employer or
(ii) the second anniversary of the date of the Triggering Event. Notwithstanding the
foregoing, in the event that it is determined that any payment to be made hereunder is
considered “nonqualified deferred compensation” subject to Section 409A of the American Jobs
Creation Act of 2004, payment under this Section will be delayed for six months following
termination of employment.
	 
	 	 	 	 
	2.	 	Employer shall provide Executive, at Employer’s expense, with outplacement services and
support, the scope and provider of which will be selected by Executive, for a period of one
year following the date of the Triggering Event.
	 
	 	 	 	 
	3.	 	If all or any portion of the amounts payable to Executive under this Agreement or pursuant to
the Executive’s employment (including, without limitation, the issuance of common shares of
Employer; the granting or vesting of restricted shares; and the granting, vesting, exercise or
	 
	 	 	 	 




 




Page 3






 









 








	 	 	 	 	 
	 	 	termination of options, but excluding any units or awards granted or vested pursuant to any
Performance Unit Agreement between the Executive and the Company or any Outperformance
Long-Term Incentive Plan Agreement between the Executive and the Company) constitutes
“excess parachute payments” within the meaning of Section 280G of the Code that are subject
to the excise tax imposed by Section 4999 of the Code (or any similar tax or assessment),
the amounts payable to Executive shall be increased to the extent necessary to place
Executive in the same after-tax position as the Executive would have been in had no such tax
been imposed on any such amount paid or payable to Executive under this Agreement, the
Executive’s employment or any other amount that Executive may receive pursuant thereto
(other than pursuant to a Performance Unit Agreement or an Outperformance Long-Term
Incentive Plan Agreement). The determination of the amount of any such tax and the
incremental payment required hereby in connection therewith shall be made by the accounting
firm employed by Executive within thirty (30) calendar days after the severance payment is
made pursuant to Paragraph 1 of this Article II and said incremental payment shall be made
within five (5) calendar days after determination has been made. If, after the date upon
which the payment required by this Article II, Paragraph 3 has been made, it is determined
(pursuant to final regulations or published rulings of the Internal Revenue Service, final
judgment of a court of competent jurisdiction, Internal Revenue Service audit assessment or
otherwise) that the amount of excise or other similar taxes payable by Executive is greater
than the amount initially so determined, then Employer shall pay Executive an amount equal
to the sum of: (i) such additional excise or other taxes, plus (ii) any interest,
fines and penalties resulting from such underpayment, plus (iii) an amount necessary
to reimburse Executive for any income, excise or other tax assessment payable by Executive
with respect to the receipt of the amounts specified in (i) and (ii) above, and the
reimbursement provided by this clause (iii), in the manner described above in this Article
II, Paragraph 3. Payment thereof shall be made within five (5) calendar days after the date
upon which such subsequent determination is made.






ARTICLE III




SETOFF




     No amounts otherwise due or payable under this Agreement will be subject to setoff or
counterclaim by either party hereto.



ARTICLE IV




ATTORNEY’S FEES




     All attorney’s fees and related expenses incurred by Executive in connection with or relating
to the enforcement by her of her rights under this Agreement will be paid for by Employer.



ARTICLE V




SUCCESSORS AND PARTIES IN INTEREST




     This Agreement will be binding upon and will inure to the benefit of Employer and its
successors and assigns, including, without limitation, any corporation which acquires, directly or
indirectly, by



      


 




Page 4




 









 





purchase, merger, consolidation or otherwise, all or substantially all of the business or assets of
Employer. Without limitation of the foregoing, Employer will require any such successor, by
agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that it is required to be performed by
Employer. This Agreement will be binding upon and will inure to the benefit of Executive, her
heirs at law and her personal representatives.



ARTICLE VI




ATTACHMENT




     Neither this Agreement nor any benefits payable hereunder will be subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge or to execution, attachment,
levy or similar process at law, whether voluntary or involuntary.



ARTICLE VII




EMPLOYMENT CONTRACT




     This Agreement will not in any way constitute an employment agreement between Employer and
Executive and it will not oblige Executive to continue in the employ of Employer, nor will it
oblige Employer to continue to employ Executive, but it will merely require Employer to pay
severance benefits to Executive under certain circumstances, as aforesaid. In addition, this
Agreement will be considered terminated, and of no further force and effect, if Executive ceases to
be a Board-elected officer or an appointed officer or a key employee (as determined by the Board of
Directors of Employer in its sole discretion and reflected in the minutes of Board of Directors
after notice to such Executive) of Employer prior to a Change in Control of Employer.



ARTICLE VIII




RIGHTS UNDER OTHER PLANS AND AGREEMENTS




     The severance benefits herein provided will be in addition to, and are not intended to reduce,
restrict or eliminate, any benefit to which Executive may otherwise be entitled by virtue of her
termination of employment or otherwise.



      


 




Page 5






 









 








ARTICLE IX




NOTICES




     All notices and other communications required to be given hereunder shall be in writing and
will be deemed to have been delivered or made when mailed, by certified mail, return receipt
requested, if to Executive, to the last address which Executive shall provide to Employer, in
writing, for this purpose, but if Executive has not then provided such an address, then to the last
address of Executive then on file with Employer; and if to Employer, then to the last address which
Employer shall provide to Executive, in writing, for this purpose, but if Employer has not then
provided Executive with such an address, then to:



Corporate Secretary

Developers Diversified Realty Corporation

3300 Enterprise Parkway

Beachwood, Ohio 44122




ARTICLE X




GOVERNING LAW AND JURISDICTION




     This Agreement will be governed by, and construed in accordance with, the laws of the State of
Ohio, except for the laws governing conflict of laws. If either party institutes a suit or other
legal proceedings, whether in law or equity, Executive and Employer hereby irrevocably consent 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.



ARTICLE XI




ENTIRE AGREEMENT




     This Agreement constitutes the entire understanding between Employer and Executive concerning
the subject matter hereof and supersedes all prior written or oral agreements or understandings
between the parties hereto. No term or provision of this Agreement may be changed, waived, amended
or terminated except by a written instrument.



      


 




Page 6




 









 





     IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Agreement, the parties
have hereunto set their hands as of the date and year first above written.



	 	 	 
	DEVELOPERS DIVERSIFIED REALTY CORPORATION
	 
	 	 
	By
	 	/s/ Nan Zieleniec
	 

	 	 
	 

	 	NAN ZIELENIEC

SVP, HR
	 
	 	 
	/s/ Christa Vesy
	CHRISTA VESY
	 
	 	 




 




Page 7