Exhibit 10.33
PERFORMANCE UNITS AGREEMENT
Developers Diversified Realty Corporation, an Ohio corporation (the
"Company"), has granted to Xxxxx X. Xxxxxxxx (the "Grantee"), 30,000 units (the
"Performance Units") the value of which will be determined by the performance of
the Company's Common Shares, without par value (the "Common Shares"). The
Performance Units have been granted pursuant to the Developers Diversified
Realty Corporation 1996 Equity-Based Award Plan (the "Plan") and are subject to
all provisions of the Plan, which are hereby incorporated herein by reference,
and to the following provisions of this Agreement (capitalized terms not defined
herein are used as defined in the Plan):
ss.1. CONVERSION OF PERFORMANCE UNITS. The Performance Units will be
converted to a number of Common Shares or the equivalent amount of cash, at the
Company's option, relating to the initial 30,000 common shares, based on
Annualized Total Shareholder Return (as defined below) from the period beginning
January 1, 2002 and ending December 31, 2006 (the "Measurement Period") as
indicated below:
Annualized Total Common Shares
Shareholder Return Awarded
------------------ -------------
Not Applicable 30,000
11% 40,000
12% 50,000
13% 70,000
14% 90,000
15% 110,000
16% 150,000
18% 200,000
Annualized Total Shareholder Return will be measured by assuming a
hypothetical investment of $100 in the Common Shares on the first day of the
Measurement Period (the "Initial Investment") and calculating the value of that
investment as of the last day of the Measurement Period, assuming dividends paid
on the Common Shares are reinvested into additional Common Shares (the "Total
Return"); the difference between the Total Return and the Initial Investment
will be divided by the Initial Investment and the resulting number further
divided by the number of years in the Measurement Period to determine the
Annualized Total Shareholder Return. For example, if the Total Return is $170
the Annualized Total Shareholder Return is:
(170-100)/100=70%
70/5=14%
ss.2. VESTING. The Common Shares into which the Performance Units are
converted (the "Common Share Award") will not be transferable by the Grantee and
will be subject to forfeiture, in whole or in part, if the Grantee is not
continuously employed by the Company or any Subsidiary or Affiliate until the
date (each date, the applicable "Vesting Date")
set forth below. If the Grantee has been continuously employed by the Company or
any Subsidiary or Affiliate, the Common Shares shall become transferable,
subject to Section 3 herein and be no longer subject to forfeiture as follows:
Vesting Date No. of Shares Vesting
------------ --------------------
January 1, 2007 30,000 Common Shares
January 1, 2008 20% of the Common Share Award
remaining after the initial 30,000 Common
Shares have vested
January 1, 2009 an additional 20% of the Common Share
Award remaining after the initial 30,000
Common Shares have vested
January 1 , 2010 an additional 20% of the Common Share
Award remaining after the initial 30,000
Common Shares have vested
January 1, 2011 an additional 20% of the Common Share
Award remaining after the initial 30,000
Common Shares have vested
January 1, 2012 the final 20% of the Common Share Award
remaining after the initial 30,000 Common
Shares have vested
Prior to each Vesting Date, any unvested portion of the Common Share Award
to be awarded in common shares will be treated as restricted Common Shares (the
"Restricted Shares") and certificates representing the Restricted Shares, if
any, will be issued in the name of the Grantee, but held by the Company until
the Vesting Date. The purchase price of the Restricted Shares, if any, is $-0-.
The Grantee agrees to execute and deliver a stock power with respect to any
Restricted Shares for the purpose of transferring back to the Company any
Restricted Shares that do not become vested. The Company will deliver the
certificates representing the applicable portion of the Common Share Award to
the Grantee within a reasonable period of time after the respective Vesting
Date.
In the event of the Grantee's death or "permanent disability" prior to
December 31, 2012, any Restricted Shares that exist on the date of such death or
permanent disability will be governed by Sections 7(b)(8) and 7(b)(9) of the
Plan. In the event of a "change in control" prior to December 31, 2011, any
Restricted Shares that exist on the date of such change in control will be
governed by Section 11(a)(3) of the Plan.
ss.3. TRANSFERABILITY. Prior to the end of the Measurement Period, the
Performance Units will not be transferable by the Grantee and after the
Measurement Period but prior to the applicable Vesting Date, the Restricted
Shares will not be transferable by the
- 2 -
Grantee. Thereafter, the vested portions of the Common Share Award will be
transferable by the Grantee in accordance with any applicable Federal and State
laws and subject to the relevant restrictions on transfer included in Section 6
of this Agreement.
ss.4. TERMINATION OF EMPLOYMENT. If, prior to January 1, 2007, the
Company terminates the employment of the Grantee with or without "cause", as
defined in the Employment Agreement between the Company and the Grantee, dated
April 2, 1999, as amended from time to time, the Grantee shall be entitled to
receive on the date on which the Grantee's employment terminates, 30,000 Common
Shares or the equivalent amount of cash, at the Company's option, reduced by the
number of Common Shares or the equivalent amount of cash that have previously
vested under Section 2 of this Agreement. It is agreed that, except as provided
in the preceding sentence, the Grantee is only entitled to receive the
annualized Total Shareholder Return on the Performance Units if employed by the
Company or any Subsidiary or Affiliate during the entire Measurement Period and
that the Grantee will forfeit any Restricted Shares that exist on the date that
the Grantee ceases to be employed by the Company for any reason other than in
the event of death, permanent disability or change in control as set forth in
Section 2 of this Agreement.
ss.5. SHAREHOLDER RIGHTS AND RESTRICTIONS. Except with regard to the
disposition of Restricted Shares, the Grantee will generally have all rights of
a shareholder with respect to the Restricted Shares from the date of grant,
including, without limitation, the right to receive dividends with respect to
such Restricted Shares and the right to vote such Restricted Shares.
ss.6. LEGEND. The Grantee is aware that the Restricted Shares have not
been registered under the Securities Act of 1933, as amended, nor have they been
registered under any state securities law. The Grantee agrees to the imprinting
of a legend on the certificate representing the Restricted Shares to the
following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND UNDER APPLICABLE
STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE DISTRIBUTION THEREOF. THESE
SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (I)
A REGISTRATION STATEMENT UNDER THE ACT, OR UNDER RELEVANT STATE SECURITIES LAWS,
IS IN EFFECT AS TO THESE SECURITIES, OR (II) THERE IS AN OPINION OF COUNSEL,
SATISFACTORY TO THE CORPORATION, THAT AN EXEMPTION THEREFROM IS AVAILABLE. THIS
CERTIFICATE MUST BE SURRENDERED TO THE CORPORATION OR ITS TRANSFER AGENT AS A
CONDITION PRECEDENT TO THE SALE, PLEDGE OR OTHER TRANSFER OF ANY INTEREST IN ANY
SECURITIES REPRESENTED BY THIS CERTIFICATE."
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
DATE OF GRANT:
January 2, 2002 By: /s/ Xxxxx X. Xxxxxxxxxx
-------------------------
Xxxxx X. Xxxxxxxxxx, President
- 3 -
ACCEPTANCE OF AGREEMENT
The Grantee hereby: (a) acknowledges that he 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 Units granted to him under this Agreement
subject to all provisions of the Plan and this Agreement; (c) represents and
warrants to the Company that he is acquiring the Performance Units and the
underlying Common Shares for his own account, for investment, and not with a
view to or any present intention of selling or distributing the Performance
Units 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 Common Shares acquired
upon conversion of the Performance Units will be made unless the Common 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:
/s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Xxxxx X. Xxxxxxxx
Grantee's Social Security Number: ###-##-####
- 4 -
