Exhibit 10.31
PERFORMANCE UNITS AGREEMENT
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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):
Section 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, 2000 and ending December 31, 2004 (the "Measurement
Period") as indicated below:
Annualized Total Common Shares
Shareholder Return Awarded
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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%
Section 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
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January 1, 2005 30,000 Common Shares
January 1, 2006 20% of the Common Share Award
remaining after the initial 30,000 Common
Shares have vested
January 1, 2007 an additional 20% of the Common Share
Award remaining after the initial 30,000
Common Shares have vested
January 1 , 2008 an additional 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 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 January 1, 2010, 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 January 1, 2010, any
Restricted Shares that exist on the date of such change in control will be
governed by Section 11(a)(3) of the Plan.
Section 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 Grantee. Thereafter,
the vested portions of the Common Share Award will be transferable by the
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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.
Section 4. TERMINATION OF EMPLOYMENT. If, prior to January 1,
2005, 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.
Section 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.
Section 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:
March 1, 2000 By: /s/ Xxxxx X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxxxxx, President
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ACCEPTANCE OF AGREEMENT
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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
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Xxxxx X. Xxxxxxxx
Grantee's Social Security Number: ###-##-####
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