AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Employment
Agreement”) is entered into as of the 29th day of December,
2008, between Developers Diversified Realty Corporation, an Ohio
corporation (the “Company”), and David M. Jacobstein
(the “Executive”).
WHEREAS,
the Company desires to employ the Executive, and the Executive
desires to be employed by the Company, on the terms and subject to
the conditions set forth herein; and
WHEREAS,
the Company and the Executive desire for this Employment Agreement
to amend and supersede any prior employment agreements between the
Company and the Executive.
NOW,
THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
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(a)
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The
Company hereby employs the Executive, and the Executive hereby
accepts such employment, on the terms and subject to the conditions
hereinafter set forth.
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(b)
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During the term of this Employment
Agreement, the Executive shall be and have the titles given to him
from time to time by the Chief Executive Officer of the Company and
shall devote such part of his business time as may be reasonably
necessary to perform diligently such duties as may be reasonably
requested from time to time by the Chief Executive Officer or the
Board of Directors of the Company (the “Board”);
provided, however, that in no event shall the Executive be required
to devote more than 20 hours per month to the performance of such
duties.
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(a)
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The
period of employment of the Executive by the Company shall be
deemed to have commenced on May 8, 2007 (the “Effective
Date”) and shall, subject to earlier termination as provided
in this Employment Agreement, continue until December 31,
2010. Notwithstanding the foregoing, this Employment Agreement may
be terminated by the Company with “cause” (as
hereinafter defined) at any time and without cause upon not less
than ninety (90) days prior written notice to the
Executive.
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(b)
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For
service as an employee of the Company, the Executive shall be
entitled to the full protection of the applicable indemnification
provisions of the articles of incorporation and code of
regulations of the Company, as the same may be amended from time to
time.
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(c)
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If
there occurs a material breach by the Company of any of its
obligations under this Employment Agreement, which breach has not
been cured in all material respects within thirty (30) days
after the Executive gives notice thereof to the Company (such
notice to be given within the 90-day period commencing on the date
of such material breach), then
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Page 1
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in
such event the Executive shall have the right to terminate his
employment with the Company, but such termination shall not be
considered a voluntary resignation or termination of such
employment or of this Employment Agreement by the Executive but
rather a discharge of the Executive by the Company without
“cause” (as defined in
Paragraph 5(a)(ii)).
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(d)
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Notwithstanding anything in this
Agreement to the contrary, if there shall occur a “Change in
Control” (as that term is defined in the Amended and Restated
Change in Control Agreement, dated December 29, 2008, between
the Company and the Executive (the “Change in Control
Agreement”), payments to the Executive will be governed by
the Change in Control Agreement and the Executive shall not be
entitled to any additional benefits under this Employment Agreement
except as to that portion of any unpaid salary and other benefits
accrued and earned by him hereunder up to and including the
effective date of the Change in Control. It is expressly understood
that the foregoing shall have no effect upon the parties’
respective rights and obligations under Paragraph 5(e) of
this Employment Agreement or the Performance Units Agreement dated
January 2, 2002.
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3.
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Compensation.
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During the term of this Employment
Agreement, the Company shall pay or provide, as the case may be, to
the Executive the compensation and other benefits and rights set
forth in this Paragraph 3.
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(a)
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The
Company shall pay to the Executive a base salary payable in
accordance with the Company’s usual pay practices (and in any
event no less frequently than monthly) of Six Hundred Thousand
Dollars ($600,000) per annum.
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(b)
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The
Company shall provide to the Executive such life, disability,
medical, hospitalization, vision and dental insurance for himself,
his spouse and eligible family members as may be in effect on the
date hereof.
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(c)
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The
Executive shall participate in all retirement and other benefit
plans of the Company generally available from time to time to
employees of the Company and for which the Executive qualifies
under the terms thereof (and nothing in this Agreement shall or
shall be deemed to in any way affect the Executive’s rights
and benefits thereunder except as expressly provided
herein).
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(d)
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The
Executive shall be entitled to participate in any equity or other
employee benefit plan that is generally available to senior
executive officers, as distinguished from general management, of
the Company. The Executive’s participation in and benefits
under any such plan shall be on the terms and subject to the
conditions specified in the governing documents of the particular
plan. It is expressly understood and agreed that the intent of this
Paragraph 3(d) is to permit such equity and other
benefits granted or provided to the Executive prior to the
Effective Date to continue to vest during the term of this
Employment Agreement, to permit the Executive to exercise any
vested options at any time during their full term regardless of
whether that is during or after the term of this Employment
Agreement and to permit the Executive to continue participation in
the Company’s elective and equity deferred compensation plans
during the term of this Employment Agreement, and that, subject to
paragraph 5(e) of this Agreement, the Executive shall not be
granted or provided with any additional equity or employee equity
plan benefits during the term of this Employment
Agreement.
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Page 2
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(e)
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The
Company shall reimburse the Executive or provide him with an
expense allowance during the term of this Employment Agreement for
travel, entertainment and other expenses reasonably and necessarily
incurred by the Executive in connection with the Company’s
business. The Executive shall furnish such documentation with
respect to reimbursement to be paid hereunder as the Company shall
reasonably request.
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(f)
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The
Company shall provide to the Executive a new vehicle of the
Executive’s choice for the exclusive use of the Executive,
together with automobile, theft, casualty and liability insurance,
and payment or reimbursement of the Executive for all maintenance,
repair and gasoline.
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(g)
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The
Company shall reimburse the Executive or provide him with an
expense account during the term of this Employment Agreement of up
to $5,000 per annum for financial planning, tax return and
financial statement preparation services and shall reimburse the
Executive for legal and related consulting fees (up to $5,000)
related to the review of this Agreement.
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4.
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Payment in the Event of Death or
Disability.
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(a)
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Except as otherwise provided in
Paragraph 4(a)(i), in the event of the Executive’s death
or if the Company terminates the Executive’s employment by
reason of the Executive becoming “disabled” (as
hereinafter defined) during the term of this Employment Agreement,
the Company shall pay to the Executive (or his successors and
assigns in the event of his death) an amount equal to the balance
of the base salary payable to the Executive during the remaining
term of this Agreement and shall continue the benefits described in
Paragraph 3(b) for the Executive (except in the case of
death) and the Executive’s family for a period of
one (1) year.
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(i)
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The
Company will not be obligated to pay or provide any of the amounts
or benefits specified in Paragraph 4(a) unless either (A) the
Company is deemed to have waived the obligation to provide a
Release as provided in Paragraph 6(b) or (B) the Executive or
the Executive’s personal representative has timely executed a
Release as contemplated by Paragraph 6(c) and has not revoked such
Release during any applicable revocation period.
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(ii)
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The
Company will pay the balance of the base salary specified in
Paragraph 4(a) during the seven-day period that follows
whichever of the following is applicable: (A) the end of the
21-day period described in Paragraph 6(a) if the Company fails to
present a Release and covering message to the Executive (or the
Executive’s personal representative) within such 21-day
period; or (B) the end of any revocation period applicable to
the Release executed by the Executive as described in
Paragraph 6 (provided that the Executive has not revoked the
Release during such revocation period).
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(b)
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For
purposes of this Employment Agreement, the Executive shall become
“disabled” only in the event of a permanent disability,
Executive’s “disability” shall be deemed to have
occurred after one hundred twenty (120) days in the aggregate
during any consecutive twelve (12) month period, or after
ninety (90) consecutive days, during which one hundred twenty
(120) or ninety (90) days, as the case may be, the
Executive, by reason of his physical or mental disability or
illness, shall have been unable to discharge his duties under this
Employment Agreement. The date of disability shall be such one
hundred twentieth (120th) or ninetieth (90th) day, as the case may
be. In the
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Page 3
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event either the Company or the
Executive, after receipt of notice of the Executive’s
disability from the other, dispute that the Executive’s
permanent disability shall have occurred, the Executive shall
promptly submit to a physical examination by the chief of medicine
of any major accredited hospital in the Cleveland, Ohio, area and,
unless such physician shall issue his written statement to the
effect that in his opinion, based on his diagnosis, the Executive
is capable of resuming his employment and devoting his full time
and energy to discharging his duties within thirty (30) days
after the date of such statement, such permanent disability shall
be deemed to have occurred.
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(a)
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The
employment of the Executive under this Employment Agreement, and
the terms hereof, may be terminated by the Company:
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(i)
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on
the death of the Executive or if the Executive becomes disabled (as
previously defined);
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(ii)
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for
cause at any time by action of the Board. For purposes hereof, the
term “cause” shall mean:
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(A)
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The
Executive’s fraud, commission of a felony or of an act or
series of acts which result in material injury to the business
reputation of the Company, commission of an act or series of
repeated acts of dishonesty which are materially inimical to the
best interests of the Company, or the Executive’s willful and
repeated failure to perform his duties under this Employment
Agreement, which failure has not been cured within fifteen
(15) days after the Company gives notice thereof to the
Executive; or
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(B)
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The
Executive’s material breach of any material provision of this
Employment Agreement, which breach has not been cured in all
substantial respects within ten (10) days after the Company
gives notice thereof to the Executive; or
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(iii)
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without cause pursuant to written
notice provided to the Executive not less than ninety
(90) days in advance of the Termination Date.
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The
exercise by the Company of its rights of termination under this
Paragraph 5 shall be the Company’s sole remedy if such
right to terminate arises. Upon any termination of this Employment
Agreement, the Executive shall be deemed to have resigned from all
offices and directorships held by the Executive in the
Company.
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(b)
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In
the event of a termination claim by the Company to be for
“cause” pursuant to Paragraph 5(a)(ii), the
Executive shall have the right to have the justification for said
termination determined by arbitration in Cleveland, Ohio. In order
to exercise such right, the Executive shall serve on the Company
within thirty (30) days after termination a written request
for arbitration. The Company immediately shall request the
appointment of an arbitrator by the American Arbitration
Association and thereafter the question of “cause”
shall be determined under the rules of the American Arbitration
Association, and the decision of the arbitrator shall be final and
binding upon both parties. The parties shall use all reasonable
efforts to facilitate and expedite the arbitration and shall act to
cause the arbitration to be completed as promptly as possible.
During the pendency of the arbitration, the Executive shall
continue to receive all compensation and benefits to
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Page 4
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which he is entitled hereunder, and
if at any time during the pendency of such arbitration the Company
fails to pay and provide all compensation and benefits to the
Executive in a timely manner the Company shall be deemed to have
automatically waived whatever rights it then may have had to
terminate the Executive’s employment for cause. Expenses of
the arbitration shall be borne equally by the parties except as
otherwise determined by the arbitrator.
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(c)
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In
the event of termination for any of the reasons set forth in
subparagraph (a) of this Paragraph 5, except as
otherwise provided in Paragraphs 3(d), 4(a) and 5(d), the
Executive shall be entitled to no further compensation or other
benefits under this Employment Agreement, except as to that portion
of any unpaid salary and other benefits accrued and earned by him
hereunder up to and including the effective date of such
termination.
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(d)
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Except as provided in
Paragraph 5(d)(i), in the event of the termination by the
Company of the Executive without “cause” (other than as
described in Paragraph 2(d), or in the event of a termination
by the Executive for reasons set forth in Paragraph 2(c), the
Company shall pay to the Executive an amount equal to the balance
of the base salary payable to the Executive during the remaining
term of this Agreement and shall continue the benefits described in
Paragraph 3(b) during the remaining term of this
Agreement.
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(i)
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The
Company will not be obligated to pay or provide any of the amounts
or benefits specified in Paragraph 5(d) unless either (A) the
Company is deemed to have waived the obligation to provide a
Release as provided in Paragraph 6(b) or (B) the Executive has
timely executed a Release as contemplated by Paragraph 6(c)
and has not revoked such Release during any applicable revocation
period.
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(ii)
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The
Company will pay the balance of the base salary specified in
Paragraph 5(d) during the seven-day period that follows whichever
of the following is applicable: (A) the end of the 21-day
period described in Paragraph 6(a) if the Company fails to present
a Release and covering message to the Executive (or the
Executive’s personal representative) within such 21-day
period; or (B) the end of any revocation period applicable to
the Release executed by the Executive as described in
Paragraph 6 (provided that the Executive has not revoked the
Release during such revocation period).
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(e)
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Notwithstanding any provision to the
contrary contained in this Employment Agreement, the Change in
Control Agreement or any other agreement to which the Executive is
a party or by which he is bound, concurrently with the termination
of this Agreement for any reason other than “cause,”
including, without limitation, natural termination on the date the
term of this Agreement expires, all of the Executive’s
restricted shares, options, performance units and other
equity-based awards which by their respective terms are not vested
at the time of such termination shall fully and immediately vest at
such time.
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(f)
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For
all purposes of this Employment Agreement, the term
“Termination Date” means the date on which the
Executive’s employment with the Company
terminates.
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6.
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Release. This Paragraph 6 will apply
only upon termination of the Executive’s employment
(x) by reason of death or disability (as contemplated by
Paragraph 4) or (y) by the Company without
“cause” or by the Executive for reasons set forth in
Paragraph 2(c) (as contemplated by Paragraph 5(d)).
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(a)
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Presentation of Release by the
Company. If this Paragraph 6 applies, the Company may present
to the Executive (or in the case of the Executive’s death or
legal incapacity, to the Executive’s personal
representative), not later than 21 days after the Termination
Date, a form of release (a “Release”) of all current
and future claims, known or unknown, arising on or before the date
on which the Release is to be executed, that the Executive or the
Executive’s assigns have or may have against the Company or
any subsidiary, and the directors, officers, and affiliates of any
of them, in such form as may reasonably be presented by the Company
together with a covering message
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