FORM OF
[AMENDED AND RESTATED] CHANGE IN CONTROL AGREEMENT
THIS [AMENDED
AND RESTATED] CHANGE IN CONTROL AGREEMENT (this
“Agreement”), is entered into as of the ___ day of
, 20___, between Developers Diversified Realty Corporation, an Ohio
corporation (the “Employer”), and
(“Executive”).
WHEREAS, Executive
is presently employed by Employer [and, as of
, 20___, will be employed by employer] as its
;
WHEREAS, Employer
wishes to induce Executive to continue [in its employ, after
, 20___,] as its
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 [his/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
[, after
, 20___,] as Employer’s
[./; and]
[WHEREAS,
Employer and Executive desire for this Amended and Restated Change
in Control Agreement to amend and supersede any and all Change in
Control Agreements between Employer and Executive that were entered
into prior to the date hereof (the “Prior Change in Control
Agreements”).]
NOW THEREFORE, IN
CONSIDERATION OF EXECUTIVE CONTINUING [, AFTER
, 20___,] AS THE
OF EMPLOYER AND OF THE MUTUAL PROMISES HEREIN CONTAINED, EXECUTIVE
AND EMPLOYER, INTENDING TO BE LEGALLY BOUND, HEREBY AGREE AS
FOLLOWS:
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1.
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A
“Change in Control” for the purpose of this Agreement
means the occurrence of any of the following:
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(a)
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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;
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(b)
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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;
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Page 1
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(c)
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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
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(d)
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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.
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2.
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“Code” means the
Internal Revenue Code of 1986, as amended.
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3.
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“Shares” means the
Common Shares, without par value, of the Employer.
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4.
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“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.
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5.
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A
“Triggering Event” for the purpose of this Agreement
will be deemed to have occurred if:
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(a)
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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;
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(b)
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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 Executive’s title, responsibilities, power or
authority at the time of the Change in Control and Executive
thereafter terminates Executive’s employment with Employer
within such two year period;
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(c)
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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 and Executive thereafter
terminates Executive’s employment with Employer within such
two year period;
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(d)
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Within two years from the date on
which the Change in Control occurred, Employer (i) reduces
Executive’s base compensation, [his/her] incentive
opportunity bonus percentages of salary, [his/her] group
health, life, disability or other insurance programs (including any
such benefits provided to Executive’s family),
[his/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
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Page 2
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bonus, or (iv) excludes
Executive from any plan, program or arrangement in which similar
executive officers of Employer are included and Executive
thereafter terminates Executive’s employment with Employer
within such two year period; or
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(e)
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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 [or
whichever remote office location has been approved for the
Executive at the time of the Change in Control] and Executive
thereafter terminates Executive’s employment with Employer
within such two year period.
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6.
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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.
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7.
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“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.
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8.
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“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.
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9.
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“Termination Date” means
the date on which Executive’s employment with Employer
terminates.
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1.
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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 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 Executive’s family, with
life, [disability, medical, hospitalization, vision,
dental/health, disability] 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
(x) 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 Executive’s family received from Employer or
(y) the second anniversary of the date of the Triggering
Event.
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(a)
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Except as otherwise provided in
Section B.2 of the Tax Provision Exhibit attached to this
Agreement as Exhibit A, Employer will pay the lump sum
severance benefit pursuant to Article II, Paragraph 1 to
Executive in immediately available funds during the Seventh Month
after the Termination Date (as defined in Section B.1 of the
Tax Provision Exhibit). To assure compliance with Section 409A
of the Code, the timing of the provision of the insurance benefits
described in Article II, Paragraph 1 will be subject
to
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Sections B.1 and B.3 of the Tax Provision
Exhibit if and to the extent either of those sections is applicable
according to its terms.
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2.
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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. To
assure compliance with Section 409A of the Code, the timing of
the provision of outplacement services described in this
Article II, Paragraph 2 will be subject to
Sections B.1 and B.3 of the Tax Provision Exhibit if and to
the extent either of those sections is applicable according to its
terms.
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All of the terms
of the Tax Provision Exhibit attached to this Agreement as
Exhibit A are hereby incorporated in this Agreement as fully
as if those terms were included in the main text of this
Agreement.
No amounts
otherwise due or payable under this Agreement will be subject to
setoff or counterclaim by either party hereto.
All
attorney’s fees and related expenses incurred by Executive at
any time from the date of this Agreement through the fifth
anniversary of Executive’s death in connection with or
relating to the enforcement by [him/her] of [his/her]
rights under this Agreement will be paid for by Employer. To assure
compliance with Section 409A of the Code, the timing of the
provision of payment of fees and expenses described in this
Article V will be subject to Sections B.1 and B.3 of the
Tax Provision Exhibit if and to the extent either of those sections
is applicable according to its terms.
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 purchase,
merger, consolidation or otherwise, all or substantially all of the
business or assets of Emplo
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