(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008 | ||
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Ohio | 34-1723097 | |
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(State or Other Jurisdiction
of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
Title of Each Class
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Name of Each Exchange on Which Registered | |
Common Shares, Without Par Value
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New York Stock Exchange | |
Depositary Shares Representing
Class G Cumulative Redeemable Preferred Shares |
New York Stock Exchange | |
Depositary Shares Representing
Class H Cumulative Redeemable Preferred Shares |
New York Stock Exchange | |
Depositary Shares Representing
Class I Cumulative Redeemable Preferred Shares |
New York Stock Exchange |
Large accelerated
filer
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Accelerated filer o |
Non-accelerated
filer
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(Do not check if a smaller reporting company) |
Smaller reporting company o |
Report
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Item No.
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PART II | ||||||||
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81 | ||||||||
84 | ||||||||
142 | ||||||||
144 | ||||||||
144 | ||||||||
144 | ||||||||
145 | ||||||||
PART III | ||||||||
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147 | ||||||||
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PART IV | ||||||||
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2
73
74
Item 1.
BUSINESS
3
Table of Contents
4
Table of Contents
Increase cash flows and property values through strategic
leasing, re-tenanting, renovation and expansion of the
Companys portfolio to be the preeminent landlord to the
worlds most successful retailers;
Address its capital requirements through asset sales, including
sales to joint ventures, retained capital, reduce 2009 dividend
payments to the amount required to meet minimum REIT
requirements, pursue extension of existing loan facilities and
enter into new financings, and, to the extent deemed
appropriate, minimize further capital expenditures;
Access equity capital through the public markets and other
viable alternatives;
Reduce expected spending within the Companys development
and redevelopment portfolios by phasing construction until
sufficient pre-leasing is reached and financing is in place;
Selectively pursue new investment opportunities only after
significant equity and debt financings are identified and
underwritten expected returns sufficiently exceed the
Companys current cost of capital;
Pursue only those projects that meet the Companys
pre-leasing thresholds or other thresholds necessary to secure
third-party construction financing
and/or
the
Companys return thresholds;
Continue its leasing strategy of growing tenant relationships at
high level through its national account program and to increase
occupancy with high-quality tenants;
Renew tenants extension options and execute leases in a
more timely fashion;
Dedicate Company resources to monitor tenant bankruptcies,
identify potential space recapture and focus on marketing and
re-tenanting those spaces;
Increase per share cash flows through the strategic disposition
of non-core assets and utilize the proceeds to repay debt and
invest in other higher growth real estate assets and
developments;
Selectively develop or sell the Companys undeveloped
parcels or new sites in areas with attractive demographics;
Hold properties for long-term investment and place a strong
emphasis on regular maintenance, periodic renovation and capital
improvements;
Continue to manage and develop the properties of others to
generate fee income, subject to restrictions imposed by federal
income tax laws and
Explore international markets and selectively invest where the
greatest value creation opportunities exist.
5
Table of Contents
Item 1A.
RISK
FACTORS
Changes in the national, regional and local economic climate;
Local conditions, such as an oversupply of space or a reduction
in demand for real estate in the area;
The attractiveness of the properties to tenants;
Competition from other available space;
The Companys ability to provide adequate management
services and to maintain its properties;
Increased operating costs, if these costs cannot be passed
through to tenants, and
The expense of periodically renovating, repairing and reletting
spaces.
6
Table of Contents
Experience a downturn in their business that significantly
weakens their ability to meet their obligations to the Company;
Delay lease commencements;
Decline to extend or renew leases upon expiration;
Fail to make rental payments when due or
Close stores or declare bankruptcy.
7
Table of Contents
The Companys estimates on expected occupancy and rental
rates may differ from actual conditions;
The Companys estimates of the costs of any redevelopment
or repositioning of acquired properties may prove to be
inaccurate;
The Company may be unable to operate successfully in new markets
where acquired properties are located, due to a lack of market
knowledge or understanding of local economies;
The Company may be unable to successfully integrate new
properties into its existing operations or
The Company may have difficulty obtaining financing on
acceptable terms or paying the operating expenses and debt
service associated with acquired properties prior to sufficient
occupancy.
The Company may abandon development opportunities after
expending resources to determine feasibility;
Construction costs of a project may exceed the Companys
original estimates;
Occupancy rates and rents at a newly completed property may not
be sufficient to make the property profitable;
8
Table of Contents
Rental rates per square foot could be less than projected;
Financing may not be available to the Company on favorable terms
for development of a property;
The Company may not complete construction and
lease-up
on
schedule, resulting in increased debt service expense and
construction costs, and
The Company may not be able to obtain, or may experience delays
in obtaining, necessary zoning, land use, building, occupancy
and other required governmental permits and authorizations.
9
Table of Contents
The Companys credit ratings with major credit rating
agencies;
The prevailing interest rates being paid by, or the market price
for publicly traded debt issued by, other companies similar to
the Company;
The Companys financial condition, liquidity, leverage,
financial performance and prospects and
The overall condition of the financial markets.
The Companys cash flow may not satisfy required payments
of principal and interest;
The Company may not be able to refinance existing indebtedness
on its properties as necessary, or the terms of the refinancing
may be less favorable to the Company than the terms of existing
debt;
Required debt payments are not reduced if the economic
performance of any property declines;
Debt service obligations could reduce funds available for
distribution to the Companys shareholders and funds
available for development and acquisitions;
Any default on the Companys indebtedness could result in
acceleration of those obligations and possible loss of property
to foreclosure and
Necessary capital expenditures for purposes such as re-leasing
space cannot be financed on favorable terms.
10
Table of Contents
The Company would be taxed as a regular domestic corporation,
which, among other things, means that it would be unable to
deduct distributions to its shareholders in computing its
taxable income and would be subject to U.S. federal income
tax on its taxable income at regular corporate rates;
Any resulting tax liability could be substantial and would
reduce the amount of cash available for distribution to
shareholders and could force the Company to liquidate assets or
take other actions that could have a detrimental effect on its
operating results and
Unless the Company was entitled to relief under applicable
statutory provisions, it would be disqualified from treatment as
a REIT for the four taxable years following the year during
which the Company
11
Table of Contents
lost its qualification, and its cash available for distribution
to its shareholders therefore would be reduced for each of the
years in which the Company does not qualify as a REIT.
12
Table of Contents
13
Table of Contents
The extent of institutional investor interest in the Company;
The reputation of REITs generally and the reputation of REITs
with similar portfolios;
The attractiveness of the securities of REITs in comparison to
securities issued by other entities (including securities issued
by other real estate companies);
The Companys financial condition and performance;
The markets perception of the Companys growth
potential and future cash dividends;
An increase in market interest rates, which may lead prospective
investors to demand a higher distribution rate in relation to
the price paid for the Companys shares and
General economic and financial market conditions.
Item 1B.
UNRESOLVED
STAFF COMMENTS
Item 2.
PROPERTIES
14
Table of Contents
168 of these properties are anchored by a Wal-Mart, Kohls
or Target store;
These properties range in size from 6,000 square feet to
approximately 1,500,000 square feet of total GLA (with 96
properties exceeding 400,000 square feet of total GLA and
291 properties exceeding 200,000 square feet of total GLA);
Approximately 66.7% of the aggregate Company-owned GLA of these
properties is leased to national tenants, including subsidiaries
of national tenants, approximately 15.6% is leased to regional
tenants and approximately 9.8% is leased to local tenants;
Approximately 92.1% of the aggregate Company-owned GLA of these
properties was occupied as of December 31, 2008. With
respect to the properties owned by the Company, or its
unconsolidated joint ventures, as of December 31 of each of the
last five years beginning with 2004, between 92.1% and 95.3% of
the aggregate Company-owned GLA of these properties was occupied;
Three wholly-owned properties are currently being expanded by
the Company, and three properties owned by unconsolidated joint
ventures are being expanded; and
Ten wholly-owned properties are currently being developed by the
Company.
15
Table of Contents
Average
Percentage of
Annualized
Base
Total Leased
Percentage of
Approximate
Base Rent
Rent Per Sq.
Sq. Footage
Total Base
No. of
Lease Area in
Under Expiring
Foot Under
Represented
Rental Revenues
Expiration
Leases
Square Feet
Leases
Expiring
by Expiring
Represented by
Expiring
(Thousands)
(Thousands)
Leases
Leases
Expiring Leases
813
3,600
$
49,787
$
13.83
6.6
%
8.7
%
707
4,241
50,801
11.98
7.8
8.8
789
4,833
65,547
13.56
8.9
11.4
620
5,302
62,918
11.87
9.7
10.9
599
5,290
60,627
11.46
9.7
10.5
242
3,608
39,146
10.85
6.6
6.8
171
3,220
35,075
10.89
5.9
6.1
151
2,384
30,383
12.75
4.4
5.3
159
2,977
34,619
11.63
5.5
6.0
161
2,518
32,536
12.93
4.6
5.7
4,412
37,973
$
461,439
$
12.15
69.8
%
80.2
%
Average
Percentage of
Annualized
Base
Total Leased
Percentage of
Approximate
Base Rent
Rent Per Sq.
Sq. Footage
Total Base
No. of
Lease Area in
Under Expiring
Foot Under
Represented
Rental Revenues
Expiration
Leases
Square Feet
Leases
Expiring
by Expiring
Represented by
Expiring
(Thousands)
(Thousands)
Leases
Leases
Expiring Leases
1,317
4,452
$
64,372
$
14.46
7.0
%
8.9
%
1,055
5,228
75,335
14.41
8.3
10.4
1,133
5,607
90,023
16.06
8.8
12.4
1,096
5,995
90,101
15.03
9.5
12.4
972
5,281
77,640
14.70
8.3
10.7
282
4,146
48,296
11.65
6.5
6.6
152
2,897
33,974
11.73
4.6
4.7
145
3,235
34,580
10.69
5.1
4.8
135
2,844
35,130
12.35
4.5
4.8
139
2,207
30,063
13.62
3.5
4.1
6,426
41,892
$
579,514
$
13.83
66.1
%
79.8
%
16
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Alabama
Birmingham, AL
Brook Highland Plaza
5291 Highway, 280 South
35242
SC
Fee
1994/2003
1994
100%
424,360
$
4,349,367
$
10.68
84.6%
Dicks Clothing and Sporting Goods (2017), Lowes
(2023),
Stein Mart (2011), Office Max (2011), Michaels (2014),
Homegoods (2016), Books-A-Million (2010), Ross Dress For Less
(2014)
Birmingham, AL
Eastwood Festival Center
7001 Crestwood Boulevard
35210
SC
Fee
1989/1999
1995
100%
300,280
$
1,120,592
$
7.19
51.9%
Dollar Tree (2013), Burlington Coat Factory (2013), Western
Supermarkets (Not Owned), Home Depot (Not Owned)
Birmingham, AL
River Ridge
U.S. Highway 280
35242
SC
Fee (3
)
2001
2007
15%
172,304
$
2,180,854
$
17.12
73.9%
Staples (2016), Best Buy (2017), Super Target (Not Owned)
Birmingham, AL
Riverchase Promenade (I)
Montgomery Highway
35244
SC
Fee (3
)
1989
2002
14.5%
120,108
$
1,687,973
$
14.55
96.6%
Marshalls (2009), Toys R Us (Not Owned),
Goodys (Not Owned)
Cullman, AL
Lowes Home Improvement
1717 Cherokee Avenue S.W.
35055
SC
Fee
1998
2007
100%
101,287
$
682,500
$
6.74
100%
Lowes (2015)
Dothan, AL
Circuit City - Dothan
2821 Montgomery Highway
36303
SC
Fee
2004
2007
100%
33,906
$
567,926
$
16.75
100%
Circuit City (2020)
Dothan, AL
Shops on the Circle
3500 Ross Clark Circle
36303
SC
Fee
2000
2007
100%
149,085
$
1,655,277
$
11.58
95.9%
Old Navy (2010), T.J. Maxx (2010), Office Max (2016)
Florence, AL
Cox Creek Shopping Center
374-398 Cox Creek Parkway
35360
SC
Fee (3
)
2001
2007
15%
173,989
$
1,494,727
$
11.33
75.8%
Best Buy (2017), Michaels(2011), Dicks Clothing and
Sporting Goods (2017), Target (Not Owned)
Huntsville, AL
Westside Centre
6275 University Drive
35806
SC
Fee (3
)
2002
2007
15%
476,146
$
4,960,461
$
11.64
89.5%
Babies R Us (2012), Marshalls (2011), Bed Bath
& Beyond (2012), Michaels (2011), Goodys (2016),
Dicks Clothing and Sporting Goods (2017), Stein Mart
(2011), Ross Dress For Less (2013), Target (Not Owned)
17
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Opelika, AL
Pepperell Corners
2300-2600 Pepperell Parkway
36801
SC
Fee
1995
2003
100%
306,224
$
673,349
$
6.93
31.7%
Goodys (2011)
Scottsboro, AL
Scottsboro Marketplace
24833 John P. Reid Parkway
35766
SC
Fee
1999
2003
100%
40,560
$
460,176
$
11.35
100%
Goodys (2011), Wal-Mart (Not Owned)
Tuscaloosa, AL
McFarland Plaza
2600 McFarland Building East
35404
SC
Fee (3
)
1999
2007
15%
229,323
$
1,177,104
$
7.80
65.8%
Stein Mart (2009), Office Max (2015), Toys R Us
(2011)
Arizona
Ahwatukee, AZ
Foothills Towne Center (II)
4711 East Ray Road
85044
SC
Fee (3
)
1996/1997/
1999
1997
50%
647,883
$
10,487,530
$
16.23
96.2%
Jo-Ann Stores (2010), Best Buy (2014), AMC Theatres (2021),
Bassett Furniture (2010), Ashley Furniture Homestore (2011),
Barnes & Noble (2012), Babies R Us (2012),
Stein Mart (2011), Ross Dress For Less (2012), Office Max (2012)
Chandler, AZ
Mervyns Plaza
2992 North Alma School Road
85224
MV
Fee
1985
2005
50%
74,862
$
700,397
$
9.36
100%
Mervyns (2020)
Mesa, AZ
Superstition Springs Center
6505 East Southern Avenue
85206
MV
Fee
1990
2005
50%
86,858
$
1,198,104
$
13.79
100%
Mervyns (2020)
Phoenix, AZ
Deer Valley
4255 West Thunderbird Road
85053
MV
Fee
1979
2005
50%
81,009
$
852,150
$
10.52
100%
Mervyns (2020)
Phoenix, AZ
Arrowhead Crossings
7553 West Bell Road
85382
SC
Fee (3
)
1995
1996
50%
346,428
$
3,834,009
$
14.48
76.4%
Staples (2009), Homegoods (2013), Mac Frugals (2010),
Barnes & Noble (2011), T.J. Maxx (2011), DSW Shoe Warehouse
(2017), Bassett Furniture (2009), Frys (Not Owned)
Phoenix, AZ
Silver Creek Plaza
4710 East Ray Road
85044
MV
Fee
1994
2005
50%
76,214
$
0
$
0.00
0%
Phoenix, AZ
Phoenix Spectrum Mall
1703 West Bethany Home Road
85015
SC
GL (3
)
1961
2004
20%
452,065
$
7,145,771
$
11.62
95.4%
Wal-Mart (2023), Costco Wholesale (2020), Ross Dress For Less
(2013), PetSmart (2019), JCPenney (2037), Harkins Theatre
(2022), Target (Not Owned)
18
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Phoenix, AZ
Deer Valley Towne Center 2805 West Aqua Fria Freeway
85027
SC
Fee
1996
1999
100%
194,009
$
3,056,451
$
15.87
97.1%
Ross Dress For Less (2014), Office Max (2013), PetSmart (2014),
Michaels (2014), AMC Theatres (Not Owned), Target (Not Owned)
Phoenix, AZ
Paradise Village Gateway
Tatum & Shea Boulevard South
85028
SC
Fee
1997/2004
2003
67%
223,658
$
4,542,351
$
18.73
96.9%
Bed Bath & Beyond (2011), Ross Dress For Less (2012),
PetSmart (2015), Staples (2010), Albertsons (2016)
Tucson, AZ
Santa Cruz Plaza
3660 South 16th Avenue
85713
MV
Fee
1982
2005
50%
76,126
$
533,788
$
7.01
100%
Mervyns (2020)
Arkansas
Fayetteville, AR
Spring Creek Centre
464 East Joyce Boulevard
72703
SC
Fee (3
)
1997/1999/
2000/2001
1997
14.5%
262,827
$
2,553,698
$
12.01
80.9%
T.J. Maxx (2011), Best Buy (2017), Old Navy (2010), Bed Bath
& Beyond (2009), Wal-Mart Super Center (Not Owned),
Home Depot (Not Owned)
Fayetteville, AR
Steele Crossing
3533-3595 North Shiloh Drive
72703
SC
Fee (3
)
2003
2003
14.5%
50,314
$
1,025,935
$
14.81
100%
Kohls (2022), Target (Not Owned)
North Little Rock, AR
McCain Plaza
4124 East McCain Boulevard
72117
SC
Fee
1991/2004
1994
100%
295,013
$
2,024,129
$
7.17
95.7%
Bed Bath & Beyond (2013), T.J. Maxx (2012), Cinemark
(2011), Burlington Coat Factory (2014), Michaels (2014)
Russellville, AR
Valley Park Centre
3093 East Main Street
72801
SC
Fee
1992
1994
100%
266,539
$
1,576,540
$
6.51
90.8%
Hobby Lobby (2016), Stage (2010), JCPenney (2012), Belk (2021)
Brazil
Brasilia
Patio Brasil Shopping Scs Quadra 07 Bl A
70307-902
MM
Fee
1997/2001
2006
4.95%
331,300
$
11,839,094
$
36.45
98%
Lojas Americanas (Not Owned), Otoch (2009), Riachuelo (2017),
Renner (2011), Centauro (2009)
19
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Campinas
Parque Dom Pedro Avenue
Guilherme Campos, 500
01387-001
MM
Fee
2001
2006
48.73%
1,324,565
$
21,647,480
$
17.61
96%
Lojas Americanas (2014), Casas Bahia (2011), Centauro (2012),
Pet Center Marginal (2010), Marisa (2016), Star Bowling (2009),
Big (2017), Etna (2015), Alpini Veiculos (2012), Pernambucanas
(2012), Formula Academia (2014), Riachuelo (2012), Zara (2014),
Renner (2014), Fnac (2012), Multiplex P.D.Pedro (2012)
Franca
Franca Shopping Avenue
Rio Negro, 1100
14406-901
MM
Fee
1993
2006
30.65%
198,480
$
1,661,938
$
9.47
97%
C&A (2016), Casas Bahia (2009), Magazine Luiza (2010),
Lojas Americanas (2014), C&C (2011)
Sao Bernardo Do Campo
Shopping Metropole
Praca Samuel Sabatine, 200
09750-902
MM
Fee
1980/95/97
2006
39.4%
290,597
$
7,202,827
$
35.93
97%
Renner (2009), Lojas Americanas (2018)
Sao Paulo
Boavista Shopping Rua
Borba Gato, 59
04747-030
MM
Fee
2004
2006
47.52%
275,270
$
2,709,237
$
10.54
92%
C&A (2014), Marisa & Familia (2014), Americanas
Express (2017), Sonda (Not Owned)
Sao Paulo
Campo Limpo Shopping Estrada Do Campo
Limpo 459
05777-001
MM
Fee
2005
2006
9.50%
280,839
$
3,189,699
$
15.38
98%
C&A (2016), Marisa (2016), Compre Bem (2012), Casas Bahia
(2011)
Sao Paulo
Shopping Penha
Rua Dr. Joao Ribeiro, 304
03634-010
MM
Fee
1992/2004
2006
34.8%
325,183
$
5,495,500
$
17.75
96%
Marisa (2017), Magazine Luiza (2013), Sonda (2014), Lojas
Americanas (2013), Kalunga (2010), C&A (2014)
Sao Paulo
Plaza Sul
Praca Leonor Kaupa
04151-100
MM
Fee
1994
2006
14.25%
248,988
$
8,295,412
$
33.58
99%
Lojas Americanas (2011), Luigi Bertolli (2009), Camicado (2010),
Monday Academia (2009), Renner (2010)
Sao Paulo
Tivoli Shopping
Av. Santa Barbara, 777
13456-080
MM
Fee
1993/2006
2006
14.25%
234,392
$
2,842,171
$
12.34
98%
Lojas Americanas (2014), Unimed (2010), Magazine Luiza (2013),
C&A (2016), C&C (2011), Paulistao (2016)
20
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
California
Anaheim, CA
Anaheim Hills Festival Center
8100 East Santa Canyon Road
92808
MV
Fee
1992
2005
50%
77,883
$
1,354,101
$
17.39
100%
Mervyns (2020)
Antioch, CA
County East Shopping Center
2602 Somersville Road
94509
MV
Fee
1970
2005
50%
75,339
$
0
$
0.00
0%
Buena Park, CA
Buena Park Mall and
Entertainment 100 Buena Park
90620
SC
Fee (3
)
1965
2004
20%
735,130
$
9,589,000
$
17.92
71.7%
Circuit City (2018), DSW Shoe Warehouse (2013), Ross Dress For
Less (2015), Bed Bath & Beyond (2011), 24 Hour Fitness
(2022), Kohls (2024), Krikorian Premier Theatres (2023),
Michaels(2014), Sears (Not Owned), Wal-Mart (Not Owned)
Burbank, CA
Burbank Town Center
245 East Magnolia Boulevard
91502
MV
GL
1991
2005
50%
89,182
$
1,657,357
$
18.58
100%
Mervyns (2020)
Chino, CA
Chino Town Square Shopping
5517 Philadelphia
91710
MV
Fee
1986
2005
50%
81,282
$
905,210
$
11.14
100%
Mervyns (2020)
Clovis, CA
Sierra Vista Mall
1000 Shaw Avenue
93612
MV
GL
1988
2005
50%
75,088
$
742,846
$
9.89
100%
Mervyns (2020)
Culver City, CA
Circuit City - Culver City
5660 Sepulveda Boulevard
90230
SC
Fee
1998
2007
100%
32,873
$
680,062
$
20.69
100%
Circuit City (2018)
El Cajon, CA
Westfield Shopping Town
565 Fletcher Parkway
92020
MV
GL
1989
2005
50%
85,744
$
1,304,225
$
15.21
100%
Mervyns (2020)
Fairfield, CA
Westfield Solano Mall
1451 Gateway Boulevard
94533
MV
Fee
1981
2005
50%
89,223
$
0
$
0.00
0%
Folsom, CA
Folsom Square
1010 East Bidwell Street
95630
MV
Fee
2003
2005
50%
79,080
$
1,201,287
$
15.19
100%
Mervyns (2020)
Foothill Ranch, CA
Foothill Ranch Town Centre
26732 Portola Parkway
92610
MV
Fee
1993
2005
50%
77,934
$
0
$
0.00
0%
Garden Grove, CA
Garden Grove Center
13092 Harbor Boulevard
92843
MV
Fee
1982
2005
50%
83,746
$
783,171
$
9.35
100%
Mervyns (2020)
Lancaster, CA
Valley Central - Discount
44707-44765 Valley Central Way
93536
SC
Fee (3
)
1990
2001
21%
353,483
$
3,075,684
$
15.01
58%
Marshalls (2012), Staples (2013), Cinemark (2017), 99 Cents Only
(2014), Michaels (2018), Costco (Not Owned)
21
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Lompac, CA
Mission Plaza
1600 North H Street
93436
MV
Fee
1992
2005
50%
62,523
$
365,056
$
5.84
100%
Mervyns (2020)
Long Beach, CA
The Pike
95 South Pine Avenue
90802
SC
GL
2005
1
*
100%
281,535
$
5,810,300
$
19.86
94.8%
Cinemark (2017), Borders (2016), Club V2O (2019), Gameworks
(2017)
Madera, CA
Madera
1467 Country Club Drive
93638
MV
Fee
1990
2005
50%
59,720
$
209,050
$
3.50
100%
Mervyns (2020)
North Fullerton, CA
North Fullerton
200 Imperial Highway
92835
MV
Fee
1991
2005
50%
76,360
$
803,334
$
10.52
100%
Mervyns (2020)
Northridge, CA
Northridge Plaza
8800 Corbin Avenue
91324
MV
GL
1980
2005
50%
75,326
$
564,563
$
7.49
100%
Mervyns (2020)
Oceanside, CA
Ocean Place Cinemas
401-409 Mission Avenue
92054
SC
Fee
2000
2000
100%
79,884
$
1,330,878
$
16.66
100%
Regal Cinemas (2014)
Palmdale, CA
Antelope Valley Mall
1305 West Rancho Vista Boulevard
93551
MV
Fee
1992
2005
50%
76,550
$
862,762
$
11.27
100%
Mervyns (2020)
Pasadena, CA
Paseo Colorado
280 East Colorado Boulevard
91101
LC
Fee
2001
2003
100%
556,271
$
11,519,938
$
21.97
94.3%
Gelsons Market (2021), Loehmanns (2015), Equinox
(2017), Macys (2010), Pacific Theatres (2016), DSW Shoe
Warehouse (2011)
Pleasant Hill, CA
Downtown Pleasant Hill
2255 Contra Costa Boulevard #101
94520
SC
Fee(3
)
1999/2000
2001
20%
345,930
$
6,431,048
$
19.72
94.3%
Lucky Supermarket (2020), Michaels (2010), Borders (2015), Ross
Dress For Less (2010), Bed Bath & Beyond (2010), Century
Theatre (2016)
Porterville, CA
Porterville Market Place
1275 West Henderson Avenue
93257
MV
Fee
1991
2005
50%
76,378
$
535,910
$
7.02
100%
Mervyns (2020)
Redding, CA
Shasta Center
1755 Hilltop Drive
96002
MV
Fee
1984
2005
50%
61,363
$
645,214
$
10.51
100%
Mervyns (2020)
Richmond, CA
Hilltop Plaza
3401 Blume Drive
94803
SC
Fee(3
)
1996/2000
2002
20%
245,774
$
3,858,794
$
16.07
97.7%
99 Cents Only Stores (2011), PetSmart (2012), Ross Dress For
Less (2013), Barnes & Noble (2011), Century Theatre (2016)
San Diego, CA
Southland Plaza Shopping
575 Saturn Boulevard
92154
MV
Fee
1982
2005
50%
75,207
$
1,054,841
$
14.03
100%
Mervyns (2020)
San Diego, CA
College Grove Shopping Center
3450 College Avenue
92115
MV
Fee
1991
2005
50%
73,872
$
880,775
$
11.92
100%
Mervyns (2020)
22
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
San Francisco, CA
Van Ness Plaza 125
1000 Van Ness Avenue
94109
SC
Fee
1998
2002
100%
123,755
$
3,971,743
$
38.48
83.4%
AMC Theatre (2030), Crunch Fitness (2009)
Santa Maria, CA
Town Center West
201 Town Center West
93458
MV
Fee
1988
2005
50%
84,886
$
793,784
$
9.35
100%
Mervyns (2020)
Santa Rosa, CA
Santa Rosa Plaza
600 Santa Rosa Plaza
95401
MV
Fee
1981
2005
50%
90,348
$
1,588,628
$
17.58
100%
Mervyns (2020)
Slatten Ranch, CA
Slatten Ranch Shopping Center
5849 Lone Tree Way
94531
MV
Fee
2002
2005
50%
78,819
$
1,381,693
$
17.53
100%
Mervyns (2020)
Sonora, CA
Sonora Crossroad Shopping
1151 Sanguinetti Road
95370
MV
Fee
1993
2005
50%
62,214
$
763,009
$
12.26
100%
Mervyns (2020)
Tulare, CA
Arbor Faire Shopping Center
1675 Hillman Street
93274
MV
Fee
1991
2005
50%
62,947
$
588,970
$
9.36
100%
Mervyns (2020)
Ukiah, CA
Ukiah
437 North Orchard Avenue
95482
MV
Fee
1990
2005
50%
58,841
$
343,831
$
5.84
100%
Mervyns (2020)
Valencia, CA
Mervyns Valencia
24235 Magic Mountain Parkway
91355
SC
GL
1986
2006
100%
75,590
$
989,420
$
13.09
100%
Mervyns (2020)
West Covina, CA
West Covina Shopping Center
2753 East Eastland Center Drive
91791
MV
GL
1979
2005
50%
79,800
$
1,607,730
$
20.15
100%
Mervyns (2020)
Colorado
Aurora, CO
Pioneer Hills
5400-5820 South Parker
80012
SC
Fee (3
)
2003
2003
14.5%
127,215
$
2,321,316
$
18.12
91.8%
Bed Bath & Beyond (2012), Office Depot (2017),
Wal-Mart
(Not Owned), Home Depot (Not Owned)
Broomfield, CO
Flatiron Marketplace Garden
1 West Flatiron Circle
80021
SC
Fee
2001
2003
100%
252,035
$
4,085,632
$
20.91
77.5%
Nordstrom Rack (2011), Best Buy (2016), Office Depot
(2016), Great Indoors (Not Owned)
Denver, CO
Centennial Promenade
9555 East County Line Road
80223
SC
Fee
1997/2002
1997
100%
408,337
$
7,004,611
$
17.74
96.7%
Golfsmith Golf Center (2012), Soundtrack (2017), Ross Dress For
Less (2013), Office Max (2012), Michaels (2012), Toys
R Us (2011), Borders (2017), Loehmanns
(2012),
Recreational Equipment (Not Owned), Home Depot (Not Owned)
23
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Denver, CO
Tamarac Square
7777 East Hampden
80231
SC
Fee
1976
2001
100%
183,611
$
1,902,467
$
13.59
69.9%
Regency Theatres Tamarac Square (2009)
Denver, CO
University Hills
2730 South Colorado Boulevard
80222
SC
Fee
1997
2003
100%
244,383
$
3,792,744
$
17.89
86.7%
Pier 1 Imports (2014), Office Max (2012), King Soopers
(2017)
Fort Collins, CO
Mulberry & Lemay Crossing
Mulberry Street & South Lemay Avenue
80525
SC
Fee
2004
2003
100%
18,988
$
393,944
$
23.89
86.8%
Wal-Mart (Not Owned), Home Depot (Not Owned)
Highland Ranch, CO
Circuit City - Highland Ranch
8575 South Quebec Street
80130
SC
Fee
1998
2007
100%
43,480
$
443,625
$
10.20
100%
Circuit City (2018)
Littleton, CO
Aspen Grove
7301 South Santa Fe
80120
LC
Fee
2002
1
*
100%
231,450
$
6,028,977
$
27.45
88.9%
Parker, CO
Flatacres Marketcenter
South Parker Road
80134
SC
GL (3
)
2003
2003
14.5%
116,644
$
2,084,091
$
15.23
100%
Bed Bath & Beyond (2014), Gart Sports (2014),
Michaels(2013), Kohls (Not Owned)
Parker, CO
Parker Pavilions
11153-11183 South Parker Road
80134
SC
Fee (3
)
2003
2003
14.5%
89,631
$
1,447,663
$
18.66
81.4%
Office Depot (2016), Home Depot (Not Owned), Wal-Mart (Not Owned)
Connecticut
Manchester, CT
Manchester Broad Street
286 Broad Street
06040
SC
Fee
1995/2003
2007
100%
68,509
$
1,075,480
$
15.70
100%
Stop & Shop (2028)
Plainville, CT
Connecticut Commons
I-84 & Route 9
06062
SC
Fee (3
)
1999/2001
1
*
15%
463,338
$
5,983,672
$
11.78
92.7%
Lowes (2019), Loews Cinema (2019), Kohls
(2022), DSW Shoe Warehouse (2015), Dicks Clothing and
Sporting Goods (2020), PetSmart (2015), A.C. Moore (2014), Old
Navy
(2011), Marshalls (2018)
Waterbury, CT
Naugatuck Valley Shopping Center
950 Wolcott Street
06705
SC
Fee (3
)
2003
2007
15%
232,085
$
3,775,480
$
17.76
81.9%
Wal-Mart (2027), Bobs Stores (2017), Stop & Shop
(2021), Staples (2018)
Windsor Court, CT
Windsor Court Shopping Center
1095 Kennedy Road
06095
SC
Fee
1993
2007
100%
78,480
$
1,401,225
$
17.85
100%
Stop & Shop (2013)
Delaware
Dover, DE
Kmart Shopping Center
515 North Dupont Highway
19901
SC
Fee (3
)
1973
2008
25.25%
84,180
$
301,000
$
2.86
100%
Kmart (2009)
24
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Florida
Apopka, FL
Piedmont Plaza
2302-2444 E Semoran Boulevard
32703
SC
Fee (3
)
2004
2007
14.5%
148,075
$
1,081,245
$
8.22
88.8%
Bealls (2019), Albertsons (Not Owned)
Bayonet Point, FL
Point Plaza
US 19 & State Route 52
34667
SC
Fee
1985/2003
1/2
*
100%
209,714
$
1,386,913
$
6.61
100%
Publix Super Markets (2010), Bealls (2014), T.J. Maxx
(2010)
Boynton Beach, FL
Meadows Square
Hypoluxo Road North Congress Avenue
33461
SC
Fee (3
)
1986
2004
20%
106,224
$
1,251,109
$
14.00
84.2%
Publix Super Markets (2011)
Boynton Beach, FL
Boynton Commons
333-399 Congress Avenue
33426
SC
Fee (3
)
1998
2007
15%
210,488
$
3,160,798
$
15.16
99%
Barnes & Noble (2013), PetSmart (2014), Sports Authority
(2013), Bed Bath & Beyond (2014)
Boynton Beach, FL
Aberdeen Square
4966 Le Chalet Boulevard
33426
SC
Fee (3
)
1990
2007
20%
70,555
$
694,723
$
10.41
94.5%
Publix Super Markets (2010)
Boynton Beach, FL
Village Square at Golf
3775 West Woolbright Road
33436
SC
Fee (3
)
1983/2002
2007
20%
126,486
$
1,736,796
$
14.05
88.6%
Publix Super Markets (2013)
Bradenton, FL
Lakewood Ranch Plaza
1755 Lakewood Ranch Boulevard
34211
SC
Fee (3
)
2001
2007
20%
69,484
$
946,301
$
12.26
96.7%
Publix Super Markets (2021)
Bradenton, FL
Cortez Plaza
Cortez Road West & U.S. Highway 41
34207
SC
Fee
1966/1988
2007
100%
288,540
$
3,068,998
$
10.88
97.8%
Publix Super Markets (2010), Burlington Coat Factory
(2013), PetSmart (2012), Circuit City (2010)
Bradenton, FL
Creekwood Crossing
7395 52nd Place East
34203
SC
Fee (3
)
2001
2007
20%
180,746
$
2,078,415
$
10.58
89.4%
Bealls (2016), Bealls Outlet (2014), Lifestyle
Family
Fitness (2014), Macys Furniture & Mattress Clearance
Center
(2009)
Brandon, FL
Kmart Shopping Center
1602 Brandon Boulevard
33511
SC
GL
1972/1997/
2003
2
*
100%
161,900
$
801,248
$
3.65
100%
Kmart (2012), Kane Furniture (2022)
Brandon, FL
Lake Brandon Plaza
Causeway Boulevard
33511
SC
Fee (3
)
1999
2003
14.5%
148,267
$
1,932,929
$
11.96
100%
CompUSA (2017), Jo-Ann Stores (2017), Babies R Us
(2013),
Publix Super Markets (2019)
Brandon, FL
Lake Brandon Village
Causeway Boulevard
33511
SC
Fee (3
)
1997/2004
2003
14.5%
113,986
$
1,121,612
$
14.23
69.2%
Sports Authority (2018), PetSmart (2020), Lowes (Not
Owned)
25
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Casselberry, FL
Casselberry Commons
1455 South Semoran Boulevard
32707
SC
Fee(3
)
1973/1998
2007
20%
228,967
$
2,071,019
$
9.09
87.2%
Publix Super Markets (2012), Ross Dress For Less (2013),
Stein Mart (2015)
Clearwater, FL
Clearwater Collection
21688-21800 U.S. Highway 19 North
33765
SC
Fee
1995/2005
2007
100%
132,023
$
1,483,948
$
12.57
89.4%
L.A. Fitness International (2022), Floor & Decor (2017)
Crystal River, FL
Crystal Springs Shopping Center
6760 West Gulf to Lake
34429
SC
Fee (3
)
2001
2007
20%
66,986
$
688,817
$
11.05
93%
Publix Super Markets (2021)
Crystal RIver, FL
Crystal River Plaza
420 Sun Coast Highway
33523
SC
Fee
1986/2001
1/2
*
100%
169,101
$
867,967
$
7.68
66.8%
Bealls (2012), Bealls Outlet (2011)
Dania Beach, FL
Bass Pro Outdoor World
200 Gulf Stream Way
33004
SC
Fee
1999
2007
100%
165,000
$
1,600,000
$
9.70
100%
Bass Pro Outdoor World (2014)
Dania, FL
Sheridan Square
401-435 East Sheridan Street
33004
SC
Fee (3
)
1991
2007
20%
67,475
$
643,004
$
10.31
92.4%
Publix Super Markets (2010)
Davie, FL
Paradise Promenade
5949-6029 Stirling Road
33314
SC
Fee (3
)
2004
2007
20%
74,493
$
1,154,841
$
16.11
96.2%
Publix Super Markets (2023)
Daytona Beach, FL
Volusia
1808 West International Speedway
32114
SC
Fee
1984
2001
100%
76,087
$
838,139
$
13.42
82.1%
Marshalls (2010)
Deerfield Beach, FL
Hillsboro Square
Hillsboro Boulevard & Highway One
33441
SC
Fee (3
)
1978/2002
2007
15%
145,329
$
2,238,273
$
15.97
96.4%
Publix Super Markets (2022), Office Depot (2023)
Englewood, FL
Rotonda Plaza
5855 Placida Road
34224
SC
Fee
1991
2004
100%
46,835
$
438,152
$
10.06
93%
Kash n Karry (2011)
Fort Meyers, FL
Market Square
13300 South Cleveland
Avenue
33919
SC
Fee (3
)
2004
2007
15%
107,179
$
1,708,296
$
14.45
100%
American Signature (2014), Total Wine & More (2016), DSW
Shoe Warehouse (2016), Target (Not Owned)
Fort Meyers, FL
Cypress Trace
Cypress Lake Drive & U.S. 41
33907
SC
Fee (3
)
2004
2007
15%
276,288
$
2,755,151
$
10.04
99.3%
Bealls (2010), Stein Mart (2013), Bealls Outlet
(2010),
Ross Dress For Less (2012)
Fort Walton Beach, FL
Shoppes at Paradise Pointe
U.S. Highway 98 & Perry Avenue
32548
SC
Fee (3
)
1987/2000
2007
20%
83,936
$
994,286
$
13.40
88.4%
Publix Super Markets (2021)
Gulf Breeze, FL
Gulf Breeze Marketplace
3749-3767 Gulf Breeze Parkway
32561
SC
Fee
1998
2003
100%
29,827
$
494,236
$
16.57
100%
Wal-Mart (Not Owned), Lowes (Not Owned)
Hernando, FL
Shoppes of Citrus Hills
2601 Forest Ridge Boulevard
34442
SC
Fee (3
)
1994/2003
2007
20%
68,927
$
717,255
$
10.70
97.3%
Publix Super Markets (2014)
26
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Hialeah, FL
Paraiso Plaza
3300-3350 West 80th Street
33018
SC
Fee (3
)
1997
2007
20%
60,712
$
766,537
$
14.01
90.1%
Publix Super Markets (2017)
Jacksonville, FL
Jacksonville Regional
3000 Dunn Avenue
32218
SC
Fee
1988
1995
100%
219,735
$
1,333,820
$
6.73
90.2%
JCPenney (2012), Winn Dixie Stores (2014)
Jacksonville, FL
Arlington Plaza
926 Arlington Road
32211
SC
Fee
1990/1999
2004
100%
182,098
$
601,727
$
7.54
43.8%
Food Lion (2010)
Lake Mary, FL
Shoppes at Lake Mary
4155 West Lake Mary Boulevard
32746
SC
Fee (3
)
2001
2007
15%
73,343
$
1,531,899
$
20.68
100%
Staples (2015)
Lake Wales, FL
Shoppes on the Ridge
Highway 27 & Chalet Suzanne Road
33859
SC
Fee (3
)
2003
2007
20%
115,671
$
1,198,314
$
12.56
82.5%
Publix Super Markets (2023)
Lakeland, FL
Highlands Plaza
2228 Lakelands Highland Road
33803
SC
Fee
1990
2004
100%
102,572
$
858,358
$
8.86
94.5%
Winn Dixie Stores (2017)
Lakeland, FL
Lakeland Marketplace
Florida Lakeland
33803
SC
Fee
2006
2003
100%
77,582
$
581,865
$
7.50
100%
Largo, FL
Colonial Promenade
Bardmoor Center
10801 Starkey Road
33777
SC
Fee (3
)
1991
2007
20%
152,667
$
1,865,873
$
12.48
96.5%
Publix Super Markets (2011)
Largo, FL
Kmart Shopping Center
1000 Missouri Avenue
33770
SC
Fee (3
)
1969
2008
25%
116,805
$
214,921
$
1.84
100%
Kmart (2012)
Lauderhill, FL
Universal Plaza
7730 West Commercial
33351
SC
Fee (3
)
2002
2007
15%
49,505
$
1,048,954
$
23.02
92%
Target (Not Owned)
Melbourne, FL
Melbourne Shopping Center
1301-1441 South Babcock
32901
SC
Fee (3
)
1960/1999
2007
20%
204,202
$
1,351,620
$
6.89
93.1%
Big Lots (2014), Publix Super Markets (2019)
Miami, FL
The Shops of Midtown
3401 North Miami Avenue
33127
SC
Fee
2006
1
*
100%
247,599
$
5,047,817
$
20.27
90.5%
Circuit City (2022), Loehmanns (2018), Marshalls (2017),
Ross Dress For Less (2018), Target (2027), West Elm (2019)
Miami, FL
Plaza Del Paraiso
12100 S.W. 127th Avenue
33186
SC
Fee (3
)
2003
2007
20%
82,441
$
1,162,796
$
13.38
93.4%
Publix Super Markets (2023)
Miramar, FL
River Run
Miramar Parkway & Palm Avenue
33025
SC
Fee (3
)
1989
2007
20%
93,643
$
971,424
$
12.79
81.1%
Publix Super Markets (2014)
Naples, FL
Carillon Place
5010 Airport Road North
33942
SC
Fee (3
)
1994
1995
14.5%
267,796
$
3,157,833
$
12.35
95.5%
Wal-Mart (2014), T.J. Maxx (2014), Circuit City (2015),
Ross Dress For Less (2010), Bealls (2015), Office Max
(2010)
27
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Naples, FL
Countryside
4025 Santa Barbara
34104
SC
Fee (3
)
1997
2007
20%
73,986
$
851,713
$
11.51
100%
Sweetbay Supermarkets (2017)
Newport Richey, FL
Shoppes of Golden Acres
9750 Little Road
34654
SC
Fee (3
)
2002
2007
20%
130,643
$
1,276,767
$
13.96
70%
Publix Super Markets (2022)
Ocala, FL
Heather Island
7878 S.E. Maricamp
34472
SC
Fee (3
)
2005
2007
20%
70,970
$
736,383
$
10.55
98.3%
Publix Super Markets (2020)
Ocala, FL
Steeplechase Plaza
8585 State Road 200
34481
SC
Fee
1993
2007
100%
92,180
$
937,612
$
9.74
100%
Publix Super Markets (2013)
Ocala, FL
Ocala West
2400 S.W. College Road
32674
SC
Fee
1991
2003
100%
105,276
$
830,208
$
8.30
95%
Sports Authority (2012), Hobby Lobby (2016)
Ocoee, FL
West Oaks Town Center
9537-49 West Colonial
34761
SC
Fee (3
)
2000
2007
20%
66,539
$
1,128,641
$
18.36
92.4%
Michaels (2010)
Orange Park, FL
The Village Shopping Center
950 Blanding Boulevard
32065
SC
Fee
1993/2000
2004
100%
72,511
$
697,556
$
9.82
97.9%
Bealls (2014), Albertsons (Not Owned)
Orlando, FL
Chickasaw Trail
2300 South Chickasaw
Trail
32825
SC
Fee (3
)
1994
2007
20%
75,492
$
807,906
$
11.58
92.4%
Publix Super Markets (2014)
Orlando, FL
Circuit City Plaza
Good Homes Road & Colonial Drive
32818
SC
Fee (3
)
1999
2007
15%
78,625
$
994,110
$
15.12
83.6%
Staples (2015)
Orlando, FL
Conway Plaza
4400 Curry Ford Road
32812
SC
Fee (3
)
1985/1999
2007
20%
117,723
$
1,002,974
$
9.49
89.8%
Publix Super Markets (2019)
Orlando, FL
Sand Lake Corners
8111-8481 John Young Parkway
32819
SC
Fee (3
)
1998/2000
2007
15%
197,716
$
2,350,965
$
12.47
95.4%
Bealls (2014), PetSmart (2014), Staples (2014), Wal-Mart
(Not Owned), Lowes (Not Owned)
Orlando, FL
Skyview Plaza
7801 Orange Blossom Trail
32809
SC
Fee (3
)
1994/1998
2007
20%
281,260
$
2,580,758
$
9.55
96.1%
Publix Super Markets (2013), Office Depot (2008), Kmart
(2009), Circuit City (2013)
Ormond Beach, FL
Ormond Towne Square
1458 West Granada Boulevard
32174
SC
Fee
1993
1994
100%
234,042
$
2,017,796
$
8.96
96.2%
Bealls (2018), Ross Dress For Less (2016), Publix Super
Markets (2013)
Oviedo, FL
Oviedo Park Crossing
Route 417 & Red Bug Lake Road
32765
SC
Fee (3
)
1999
1
*
20%
186,212
$
1,682,591
$
10.82
83.5%
Office Max (2014), Ross Dress For Less (2010),
Michaels(2014), T.J. Maxx (2010), Lowes (Not Owned)
Palm Beach Garden, FL
Northlake Commons
Northlake Boulevard
33403
SC
Fee (3
)
1987/2003
2007
20%
146,825
$
2,002,632
$
16.07
84.9%
Ross Dress For Less (2014), Tiger Direct (2018), Home Depot (Not
Owned)
28
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Palm Harbor, FL
The Shoppes of Boot Ranch
300 East Lakeroad
34685
SC
Fee
1990
1995
100%
52,395
$
957,541
$
19.33
94.5%
Albertsons (Not Owned), Target (Not Owned)
Palm Harbor, FL
Publix Brooker Creek
36301 East Lake Road
34685
SC
Fee (3
)
1994
2007
20%
77,596
$
907,609
$
11.85
98.7%
Publix Super Markets (2014)
Pembroke Pines, FL
Flamingo Falls
2000-2216 North Flamingo Road
33028
SC
Fee (3
)
2001
2007
20%
108,565
$
2,432,870
$
22.75
98.5%
Pensacola, FL
Palafox Square
8934 Pensacola Boulevard
32534
SC
Fee
1988/1997/
1999
1/2
*
100%
17,150
$
252,813
$
14.74
100%
Wal-Mart (Not Owned)
Plant City, FL
Plant City Crossing
SWC of Interstate 4 & Thonotosassa Road
33563
SC
Fee
2001
2007
100%
85,252
$
1,009,421
$
12.26
96.6%
Publix Super Markets (2021)
Plant City, FL
Lake Walden Square
105-240 West Alexander
33566
SC
Fee (3
)
1992
2007
14.5%
158,347
$
1,358,162
$
9.81
83.2%
Kash n Karry (2012), Premiere Cinemas (2013)
Plantation, FL
The Fountains
801 South University Drive
33324
SC
Fee
1989
2007
100%
223,281
$
2,555,512
$
17.27
65.3%
Marshalls (2014), Kohls (Not Owned)
Plantation, FL
Vision Works
801 South University Drive
33324
SC
Fee
1989
2007
100%
6,891
$
159,170
$
23.10
100%
Santa Rosa Beach, FL
Watercolor Crossing
110 Watercolor Way
32459
SC
Fee (3
)
2003
2007
20%
43,207
$
674,060
$
16.05
97.2%
Publix Super Markets (2024)
Sarasota, FL
Sarasota Pavilion
6511 Tamaimi Trail
34231
SC
Fee (3
)
1999
2007
15%
324,985
$
3,905,623
$
12.00
98.3%
Stein Mart (2009), Publix Super Markets (2010), Michaels (2014),
Old Navy (2010), Marshalls (2013), Bed Bath & Beyond
(2015), Ross Dress For Less (2012), Books-A-Million (2011)
Spring Hill, FL
Mariner Square
13050 Cortez Boulevard.
34613
SC
Fee
1988/1997
1/2
*
100%
188,347
$
1,553,721
$
8.32
95.6%
Bealls (2011), Ross Dress For Less (2014), Wal-Mart (Not
Owned)
St. Petersburg, FL
Kmart Plaza
3951 34th Street South
33711
SC
Fee (3
)
1973
2008
25%
94,500
$
277,400
$
2.94
100%
Kmart (2013)
St. Petersburg, FL
Gateway Market Center
7751-8299 9th Street North
33702
SC
Fee (3
)
2000
2007
15%
231,106
$
2,045,678
$
9.31
95.1%
T.J. Maxx (2014), Publix Super Markets (2019), Bealls
(2021), PetSmart (2013), Office Depot (2014), Target (Not Owned)
Tallahassee, FL
Capital West
4330 West Tennessee Street
32312
SC
Fee
1994/2004
2003
100%
79,451
$
646,711
$
8.14
100%
Bealls Outlet (2009), Office Depot (2017), Wal-Mart (Not
Owned)
Tallahassee, FL
Killearn Shopping Center
3479-99 Thomasville Road
32309
SC
Fee(3
)
1980
2007
20%
95,229
$
1,023,285
$
11.14
96.4%
Publix Super Markets (2011)
29
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Tallahassee, FL
Southwood Village
NWC Capital Circle & Blairstone Road
32301
SC
Fee (3
)
2003
2007
20%
62,840
$
758,374
$
12.55
96.2%
Publix Super Markets (2023)
Tamarac, FL
Midway Plaza
University Drive & Commercial Boulevard
33321
SC
Fee (3
)
1985
2007
20%
227,209
$
2,808,731
$
13.55
91.2%
Ross Dress For Less (2013), Publix Super Markets (2011)
Tampa, FL
New Tampa Commons
33647
SC
Fee
2005
2007
100%
10,000
$
336,221
$
33.62
100%
Tampa, FL
North Pointe Plaza
15001-15233
North Dale Mabry
33618
SC
Fee (3
)
1990
1/2
*
20%
104,460
$
1,300,345
$
12.94
96.2%
Publix Super Markets (2010), Wal-Mart (Not Owned)
Tampa, FL
Walks at Highwood Preserve I 18001 Highwoods Preserve
Parkway
33647
SC
Fee (3
)
2001
2007
15%
169,081
$
2,831,210
$
21.31
78.6%
Michaels (2012), Circuit City (2017)
Tampa, FL
Town N Country Promenade
7021-7091 West Waters Avenue
33634
SC
Fee
1990
1/2
*
100%
134,463
$
1,211,206
$
9.40
95.8%
Kash n Karry (2010), Bealls Outlet (2014), Wal-Mart
(Not Owned)
Tarpon Springs, FL
Tarpon Square
41232 U.S. 19, North
34689
SC
Fee
1974/1998
1/2
*
100%
198,797
$
1,451,420
$
7.00
100%
Kmart (2009), Big Lots (2012), Staples (2013)
Tequesta, FL
Tequesta Shoppes
105 North U.S. Highway 1
33469
SC
Fee
1986
2007
100%
109,760
$
1,093,688
$
10.89
91.5%
Stein Mart (2017)
Vairico, FL
Brandon Boulevard Shoppes
1930 State Route 60 East
33594
SC
Fee
1994
2007
100%
85,377
$
922,113
$
11.62
92.9%
Publix Super Markets (2014)
Vairico, FL
Shoppes at Lithia
3461 Lithia Pinecrest Road
33594
SC
Fee (3
)
2003
2007
20%
71,430
$
1,045,200
$
15.64
93.6%
Publix Super Markets (2023)
Venice, FL
Jacaranda Plaza
1687 South Bypass
34293
SC
Fee (3
)
1974
2008
25%
84,180
$
256,500
$
3.05
100%
Kmart (2009)
Vero Beach, FL
Circuit City - Vero Beach
6560 20th Street
32966
SC
Fee
2001
2007
100%
33,243
$
530,000
$
15.94
100%
Wesley Chapel, FL
Shoppes of New Tampa
1920 County Road 581
33543
SC
Fee (3
)
2002
2007
20%
158,602
$
1,972,649
$
12.98
95.9%
Publix Super Markets (2022), Bealls (2017)
West Palm Beach, FL
Paradise Place
4075 N. Haverhill Road
33417
SC
Fee (3
)
2003
2007
15%
89,120
$
909,707
$
11.01
92.7%
Publix Super Markets (2023)
Winter Park, FL
Winter Park Palms
4270 Aloma Avenue
32792
SC
Fee (3
)
1990
2007
14.5%
112,292
$
887,733
$
10.95
72.2%
Publix Super Markets (2010)
Georgia
Athens, GA
Athens East
4375 Lexington Road
30605
SC
Fee
2000
2003
100%
24,000
$
323,904
$
15.00
90%
Wal Mart (Not Owned)
Atlanta, GA
Brookhaven Plaza
3974 Peachtree Road N.E.
30319
SC
Fee (3
)
1993
2007
20%
65,320
$
1,186,135
$
16.93
100%
Kroger (2018)
Atlanta, GA
Cascade Corners
3425 Cascade Road
30311
SC
Fee(3
)
1993
2007
20%
66,844
$
475,836
$
7.12
100%
Kroger (2020)
30
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Atlanta, GA
Pleasant Hill Plaza
1630 Pleasant Hill Road
30136
SC
Fee
1990
1994
100%
99,025
$
674,769
$
11.00
62%
Wal-Mart (Not Owned)
Atlanta, GA
Perimeter Pointe
1155 Mount Vernon Highway
30136
SC
Fee (3
)
1995/2002
1995
14.5%
343,155
$
5,464,451
$
15.12
100%
Stein Mart (2010), Babies R Us (2012), Sports
Authority (2012), L.A. Fitness (2016), Office Depot (2012),
Homegoods (2018), United Artists Theatre (2015)
Atlanta, GA
Abernathy Square
6500 Roswell Road
30328
SC
Fee
1983/1994
2007
100%
127,616
$
2,223,604
$
19.74
85.1%
Publix Super Markets (2014)
Atlanta, GA
Cascade Crossing
3695 Cascade Road S.W.
30331
SC
Fee (3
)
1994
2007
20%
63,346
$
605,375
$
9.56
100%
Publix Super Markets (2014)
Augusta, GA
Goodys Shopping Center
2360 Georgetown Road
30906
SC
Fee (3
)
1999
2007
15%
22,560
$
0
$
0.00
0%
Super Wal-Mart (Not Owned)
Austell, GA
Burlington Plaza
3753-3823 Austell Road S.W.
30106-1106
SC
Fee (3
)
1973
2008
25%
146,950
$
487,041
$
3.39
97.8%
Burlington Coat Factory (2014)
Buford, GA
Marketplace at Millcreek I
Mall of Georgia Boulevard
30519
SC
Fee (3
)
2003
2007
15%
403,106
$
4,552,852
$
12.86
87.8%
Toys R Us (2015), R.E.I. (2013), Borders (2020),
Office Max (2014), PetSmart (2015), Michaels (2010), DSW Shoe
Warehouse (2013), Ross Dress For Less (2013), Marshalls (2012)
Canton, GA
Hickory Flat Village
6175 Hickory Flat Highway
30115
SC
Fee (3
)
2000
2007
20%
74,020
$
962,939
$
13.32
97.6%
Publix Super Markets (2020)
Canton, GA
Riverstone Plaza
1451 Riverstone Parkway
30114
SC
Fee (3
)
1998
2007
20%
302,131
$
3,538,948
$
11.63
97.4%
Goodys (2010), Michaels (2012), Ross Dress For Less
(2012),
Belk (2017), Publix Super Markets (2018)
Cartersville, GA
Bartow Marketplace
215 Marketplace Boulevard
30121
SC
Fee (3
)
1995
2007
15%
375,067
$
2,450,678
$
6.59
99.2%
Wal-Mart (2015), Lowes (2015)
Chamblee, GA
Chamblee Plaza
Peachtree Industrial Boulevard
30341
SC
Fee
1976
2003
100%
147,016
$
668,716
$
12.24
37.2%
Columbus, GA
Bradley Park Crossing 1591 Bradley Park Drive Columbia
31904
SC
Fee
1999
2003
100%
119,786
$
1,339,143
$
11.41
98%
Goodys (2011), PetSmart (2015), Michaels (2009), Target
(Not Owned)
Cumming, GA
Sharon Greens
1595 Peachtree Parkway
30041
SC
Fee (3
)
2001
2007
20%
98,301
$
1,109,793
$
12.34
91.5%
Kroger (2021)
31
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Cumming, GA
Cumming Marketplace
Marketplace Boulevard
30041
SC
Fee
1997/1999
2003
100%
308,557
$
3,344,883
$
11.75
88.2%
Lowes (2019), Michaels (2010), Office Max (2013), Wal-Mart
(Not Owned), Home Depot (Not Owned)
Decatur, GA
Flat Shoals Crossing
3649 Flakes Mill Road
30034
SC
Fee (3
)
1994
2007
20%
69,699
$
711,118
$
10.20
100%
Publix Super Markets (2013)
Decatur, GA
Hairston Crossing
2075 South Hairston Road
30035
SC
Fee (3
)
2002
2007
20%
57,884
$
701,163
$
12.11
100%
Publix Super Markets (2022)
Douglasville, GA
Douglasville Marketplace
6875 Douglas Boulevard
30135
SC
Fee
1999
2003
100%
86,158
$
1,461,499
$
10.54
100%
Best Buy (2015), Babies R Us (2011), Lowes
(Not Owned)
Douglasville, GA
Douglas Pavilion
2900 Chapel Hill Road
30135
SC
Fee (3
)
1998
2007
15%
267,010
$
2,980,628
$
11.56
96.6%
PetSmart (2014), Office Max (2013), Marshalls (2014),
Goodys (2013), Ross Dress For Less (2012),
Hudsons
Furniture Showroom (2014), Target (Not Owned)
Douglasville, GA
Market Square
9503-9579 Highway 5
30135
SC
Fee (3
)
1974/1990
2007
20%
121,766
$
1,413,068
$
11.86
93.3%
Office Depot (2013)
Duluth, GA
Venture Pointe I
2050 West Liddell Road
30096
SC
Fee (3
)
1996
2007
15%
335,420
$
2,408,764
$
8.39
85.6%
Hobby Lobby (2011), Babies R Us (2014), Ashley
Furniture Homestore (2012), Golfsmith Golf Center (2012),
Kohls (2022), Costco (Not Owned), Super Target (Not Owned)
Duluth, GA
Sofa Express
3480 Steve Reynolds Boulevard
30096
SC
Fee
2004
2007
100%
20,000
$
0
$
0.00
0%
Duluth, GA
Pleasant Hill
2205 Pleasant Hill
30096
SC
Fee (3
)
1997/2000
2007
15%
282,137
$
3,591,471
$
12.91
98.6%
Barnes & Noble (2012), Toys R Us (2013),
Staples (2014), JCPenney (2012), Old Navy (2009), Jo-Ann Stores
(2011)
Ellenwood, GA
Shoppes of Ellenwood
East Atlanta Road & Fairview Road
30294
SC
Fee (3
)
2003
2007
20%
67,721
$
778,235
$
13.12
87.6%
Publix Super Markets (2023)
32
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Fayetteville, GA
Fayette Pavilion I
New Hope Road & GA Highway 85
30214
SC
Fee (3
)
1995/2002
2007
15%
1,279,810
$
11,310,519
$
9.82
90%
H.H. Gregg Appliances (2018), Wal-Mart (2016), Bed Bath &
Beyond (2013), Sports Authority (2012), T.J. Maxx (2009), Publix
Super Markets (2016), Belk (2015), Best Buy (2013),
Hudsons Furniture Showroom (2016), Old Navy (2010), Ross
Dress For Less (2012), Toys R Us (2010), Cinemark
(2018), Marshalls (2011), PetSmart (2016), Kohls (2022),
Jo-Ann Stores (2012), Dicks Clothing and Sporting Goods
(2016), Target (Not Owned), Home Depot (Not Owned)
Flowery Branch, GA
Clearwater Crossing
7380 Spout Springs Road
30542
SC
Fee (3
)
2003
2007
20%
90,566
$
1,082,925
$
12.85
93%
Kroger (2023)
Gainesville, GA
Rite Aid
599 South Enota Drive
30501
SC
Fee
1997
2007
100%
10,594
$
178,016
$
16.80
100%
Hiram, GA
Hiram Pavilion I
5220 Jimmy Lee Smith Parkway
30141
SC
Fee (3
)
2002
2007
15%
363,695
$
2,825,070
$
10.11
76.8%
Ross Dress For Less (2012), Michaels (2012), Marshalls (2011),
Kohls (2022), Target (Not Owned)
Kennesaw, GA
Barrett Pavilion I
740 Barrett Parkway
30144
SC
Fee (3
)
1998
2007
15%
439,784
$
6,593,189
$
15.96
90.2%
AMC Theatre (2019), Homegoods (2013), The School Box (2010),
Golfsmith Golf Center (2013), H.H. Gregg Appliances (2018),
Jo-Ann Stores (2011), Old Navy (2010), Rei (2018), Total Wine
& More (2017), Target (Not Owned)
Kennesaw, GA
Town Center Commons
725 Earnest Barrett Parkway
30144
SC
Fee
1998
2007
100%
72,108
$
986,345
$
14.99
91.3%
JCPenney (2013), Dicks Clothing and Sporting Goods (Not
Owned)
Lawrenceville, GA
Five Forks Village
850 Dogwood Road
30044
SC
Fee (3
)
1990
2003
10%
89,064
$
447,152
$
16.06
31.3%
33
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Lawrenceville, GA
Rite Aid
1545 Lawrenceville Highway
30044
SC
Fee
1997
2007
100%
9,504
$
184,328
$
19.39
100%
Lawrenceville, GA
Springfield Park
665 Duluth Highway
30045
SC
Fee
1992/2000
2007
100%
105,321
$
933,601
$
10.11
75.7%
Hobby Lobby (2011)
Lilburn, GA
Five Forks Crossing
3055 Five Forks Trickum Road
30047
SC
Fee (3
)
2000/2001
2003
10%
73,910
$
717,812
$
9.71
100%
Kroger (2012)
Lithonia, GA
Stonecrest Marketplace
Turner Hill Road and Mall Parkway
30038
SC
Fee (3
)
2002
2007
15%
264,584
$
2,942,984
$
12.80
86.9%
Staples (2017), Babies R Us (2018), DSW Shoe
Warehouse (2013), Ross Dress For Less (2013), Marshalls (2012)
Lithonia, GA
The Shops at Turner Hill
8200 Mall Parkway
30038
SC
Fee (3
)
2004
2003
14.5%
113,675
$
1,560,075
$
13.19
95.4%
Best Buy (2018), Bed Bath & Beyond (2013), Toys
R Us (2012), Sams Club (Not Owned)
Loganville, GA
Midway Plaza
910 Athens Highway
30052
SC
Fee (3
)
1995
2003
20%
91,196
$
1,044,574
$
11.45
100%
Kroger (2016)
Macon, GA
Eisenhower Annex
4685 Presidential Parkway
31206
SC
Fee
2002
2007
100%
55,505
$
688,453
$
12.40
100%
H.H. Gregg Appliances (2036)
Macon, GA
Eisenhower Outlot (Davids Bridal)
4685 Presidential Parkway
31206
SC
Fee (3
)
2004
2007
15%
14,000
$
247,665
$
19.42
91.1%
Macon, GA
Eisenhower Crossing I
4685 Presidential Parkway
31206
SC
Fee (3
)
2002
2007
15%
400,556
$
4,311,437
$
11.79
89.3%
Kroger (2022), Staples (2016), Michaels (2011), Ross Dress For
Less (2012), Bed Bath & Beyond (2012), Old Navy (2011),
Marshalls (2011), Dicks Clothing and Sporting Goods
(2017), Target (Not Owned)
Macon, GA
Kmart
1901 Paul Walsh Drive
31206
SC
Fee
2000
2007
100%
102,098
$
0
$
0.00
0%
Marietta, GA
Towne Center Prado
2609 Bells Ferry Road
30066
SC
Fee (3
)
1995/2002
1995
14.5%
316,786
$
4,041,430
$
12.92
97.3%
Stein Mart (2012), Ross Dress For Less (2013), Publix Super
Markets (2015), Crunch Fitness (2011)
Marietta, GA
Rite Aid
731 Whitlock Avenue
30064
SC
Fee
1997
2007
100%
10,880
$
183,507
$
16.87
100%
Marietta, GA
Blockbuster
1748 Powder Springs
30064
SC
Fee (3
)
1994
2007
20%
6,500
$
128,960
$
19.84
100%
34
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
McDonough, GA
McDonough Marketplace (LP-II) N.E. Corner
175 & Highway 20
30253
SC
Fee (3
)
2003
2003
14.5%
53,158
$
831,109
$
13.77
94.7%
Office Depot (2016), Lowes (Not Owned), Wal-Mart (Not
Owned)
McDonough, GA
Shoppes at Lake Dow
900-938 Highway 81 East
30252
SC
Fee (3
)
2002
2007
20%
73,145
$
870,478
$
12.89
92.3%
Publix Super Markets (2022)
Morrow, GA
Southlake Pavilion
1912 Mount Zion Road
30260
SC
Fee (3
)
1996/2001
2007
15%
530,066
$
4,476,109
$
13.04
64.8%
Ross Dress For Less (2012), Barnes & Noble (2013), Ashley
Furniture Homestore (2012), L.A. Fitness (2017), Staples (2015),
Old Navy (2011), H.H. Gregg Appliances (2018), Sears (2012),
Target (Not Owned)
Newnan, GA
Newnan Crossing
955-1063 Bullsboro Drive
30264
SC
Fee
1995
2003
100%
156,497
$
1,283,643
$
8.36
98.1%
Lowes (2015), Belk (Not Owned), Wal-Mart (Not Owned)
Newnan, GA
Newnan Pavilion
1074 Bullsboro Drive
30265
SC
Fee (3
)
1998
2007
15%
263,705
$
3,353,273
$
12.18
91.1%
Office Max (2013), PetSmart (2015), Home Depot (2019), Ross
Dress For Less (2012), Kohls (2022)
Norcross, GA
Jones Bridge Square
5075 Peachtree Parkway
30092
SC
Fee
1999
2007
100%
83,363
$
857,412
$
10.29
100%
Ingles (2019)
Rome, GA
Circuit City - Rome
2700 Martha Berry Highway N.E.
30165
SC
Fee
2001
2007
100%
33,056
$
420,000
$
12.71
100%
Circuit City (2021)
Roswell, GA
Sandy Plains Village I
Georgia Highway
92 & Sandy Plains Road
30075
SC
Fee
1978/1995
2007
100%
177,599
$
1,435,004
$
10.23
79%
Kroger (2010), Stein Mart (2009)
Roswell, GA
Stonebridge Square
610-20 Crossville Road
30075
SC
Fee (3
)
2002
2007
15%
160,104
$
1,707,168
$
14.09
75.7%
Kohls (2022)
Smyrna, GA
Heritage Pavilion
2540 Cumberland Boulevard
30080
SC
Fee (3
)
1995
2007
15%
262,971
$
3,105,106
$
12.63
93.5%
PetSmart (2016), Ross Dress For Less (2016), American Signature
(2018), T.J. Maxx (2010), Marshalls (2011)
Snellville, GA
Rite Aid
3295 Centerville Highway
30039
SC
Fee
1997
2007
100%
10,594
$
199,601
$
18.84
100%
Snellville, GA
Presidential Commons
1630-1708
Scenic Highway
30078
SC
Fee
2000
2007
100%
371,586
$
3,864,584
$
10.98
91.9%
Jo-Ann Stores (2014), Kroger (2018), Stein Mart (2013),
Home Depot (2023)
35
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Stone Mountain, GA
Deshon Plaza
380 North Deshon Road
30087
SC
Fee (3
)
1994
2007
20%
64,055
$
706,838
$
11.03
100%
Publix Super Markets (2014)
Suwanee, GA
Suwanee Crossroads
Lawrenceville Road & Satellite Boulevard
30024
SC
Fee (3
)
2002
2007
15%
69,600
$
733,165
$
17.16
61.4%
Super Wal-Mart (Not Owned)
Suwanee, GA
Johns Creek Town Center
3630 Peachtree Parkway Suwanee
30024
SC
Fee
2001/2004
2003
100%
285,336
$
3,735,980
$
13.57
96.5%
Borders (2021), PetSmart (2020), Kohls (2022),
Michaels(2011), Staples (2016), Shoe Gallery (2014)
Suwanee, GA
The Shops at Johns Creek
4090 Johns Creek Parkway
30024
SC
Fee (3
)
1997
2007
20%
18,200
$
359,504
$
19.75
100%
Sylvania, GA
BI-LO - Sylvania
1129 West Ogeechee Street
30467
SC
Fee
2002
2007
100%
36,000
$
378,000
$
10.50
100%
BI-LO (2023)
Tucker, GA
Cofer Crossing
4349-4375 Lawrenceville Highway
30084
SC
Fee(3
)
1998/2003
2003
20%
130,832
$
835,781
$
8.15
72.8%
Kroger (2019), Wal-Mart (Not Owned)
Tyrone, GA
Southampton Village
NWC of Highway 74 & Swanson Road
30290
SC
Fee (3
)
2003
2007
20%
77,956
$
923,248
$
12.76
92.8%
Publix Super Markets (2023)
Union City, GA
Shannon Square
4720 Jonesboro Road
30291
SC
Fee
1986
2003
100%
100,002
$
528,588
$
7.65
69.1%
Wal-Mart (Not Owned)
Warner Robins, GA
Warner Robins Place
2724 Watson Boulevard
31093
SC
Fee
1997
2003
100%
107,941
$
1,348,764
$
12.00
97.8%
T.J. Maxx (2010), Staples (2016), Wal-Mart (Not Owned),
Lowes (Not Owned)
Warner Robins, GA
City Crossing
Watson Boulevard & Carl Vinson
Parkway
31093
SC
Fee(3
)
2001
2007
15%
190,433
$
1,659,423
$
11.33
76.9%
Michaels(2011), Ross Dress For Less (2012), Old Navy
(2011), Home Depot (Not Owned)
Warner Robins, GA
Lowes Home Improvement
2704 Watson Boulevard
31093
SC
Fee
2000
2007
100%
131,575
$
910,000
$
6.92
100%
Lowes (2017)
Woodstock, GA
Woodstock Place
10029 Highway 928
30188
SC
GL
1995
2003
100%
44,691
$
388,950
$
11.01
79.1%
Woodstock, GA
Woodstock Square
120-142 Woodstock Square
30189
SC
Fee(3
)
2001
2007
15%
218,859
$
2,878,003
$
13.15
100%
Office Max (2017), Old Navy (2012), Kohls (2022), Super
Target (Not Owned)
Idaho
Idaho Falls, ID
Country Club Mall
1515 Northgate Mile
83401
SC
Fee
1976/1992/
1997
1998
100%
148,593
$
830,546
$
7.45
75%
Office Max (2011), World Gym (2008), Fred Meyer, Inc. (Not
Owned)
36
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Meridian, ID
Meridian Crossroads
Eagle & Fairview Road
83642
SC
Fee
1999/2001/
2002/2003
1
*
100%
461,023
$
6,600,607
$
12.89
100%
Bed Bath & Beyond (2011), Old Navy (2010), ShopKo (2020),
Office Depot (2010), Ross Dress For Less (2012), Marshalls
(2012), Sportsmans Warehouse (2015), Babies R
Us (2014), Craft Warehouse (2013), Wal-Mart (Not Owned)
Nampa, ID
Nampa Gateway Center
1200 North Happy Valley Road
83687
SC
Fee
2008
1
*
100%
103,109
$
92,500
$
0.90
100%
JCPenney (2027)
Illinois
Deer Park, IL
Deer Park Town Center
20530 North Rand Road
60010
LC
Fee(3
)
2000/2004
1
*
25.75%
292,139
$
8,960,205
$
29.64
95.5%
Gap (2010), Crate & Barrel (2018), Century Theatre (2019),
Barnes & Noble (Not Owned)
McHenry, IL
The Shops at Fox River
3340 Shoppers Drive
60050
SC
Fee
2006
1
*
100%
224,552
$
2,713,999
$
14.93
80.9%
Dicks Clothing and Sporting Goods (2018), PetSmart (2017),
Bed Bath & Beyond (2017), Best Buy (2018)
Mount Vernon, IL
Times Square Mall
42nd & Broadway
62864
MM
Fee
1974/1998/
2000
1993
100%
269,328
$
1,013,957
$
4.36
81.7%
Sears (2013), Goodys (2015), JCPenney (2012)
Orland Park, IL
Marley Creek Square
179th Street & Wolf Road
60467
SC
Fee(3
)
2006
2006
50%
57,927
$
778,029
$
20.09
66.9%
Orland Park, IL
Home Depot Center
15800 Harlem Avenue
60462
SC
Fee
1987/1993
2004
100%
149,498
$
1,469,735
$
10.48
93.8%
Home Depot (2012)
Rockford, IL
Walgreens - Rockford
2525 South Alpine Road
61108
SC
Fee
1998/1999
2007
100%
14,725
$
350,000
$
23.77
100%
Roscoe, IL
Hilander Village
4860 Hononegah Road
61073
SC
Fee(3
)
1994
2007
20%
125,623
$
1,030,131
$
9.61
85.3%
Kroger (2020)
Schaumburg, IL
Woodfield Village Green 1430 East
Golf Road
60173
SC
Fee(3
)
1993/1998/
2002
1995
14.5%
508,673
$
8,591,760
$
17.26
97.9%
Circuit City (2009), Off 5th (2011), PetSmart (2014),
Homegoods (2014), Office Max (2010), Container Store
(2011), Filenes Basement (2014), Marshalls (2014),
Nordstrom Rack (2014), Borders (2010), Expo Design Center
(2019), Costco (Not Owned)
37
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Skokie, IL
Village Crossing
5507 West Touhy Avenue
60077
SC
Fee(3
)
1989
2007
15%
434,973
$
7,564,780
$
18.79
91.1%
Michaels(2013), Bed Bath & Beyond (2013), Office Max
(2015), Best Buy (2014), Crown Theatres (2021), Barnes &
Noble (2012), PetSmart (2019)
Indiana
Bedford, IN
Town Fair Center
1320 James Avenue
47421
SC
Fee
1993/1997
2
*
100%
223,431
$
1,153,104
$
6.20
83.2%
Kmart (2018), Goodys (2013), JCPenney (2013)
Evansville, IN
East Lloyd Commons
6300 East Lloyd Expressway
47715
SC
Fee
2005
2007
100%
159,682
$
2,128,800
$
13.82
96.5%
Gordmans (2015), Michaels(2015), Best Buy (2016)
Highland, IN
Highland Grove Shopping Center Highway 41 & Main Street
46322
SC
Fee(3
)
1995/2001
1996
20%
312,546
$
3,158,223
$
11.51
87.8%
Marshalls (2011), Kohls (2016), Office Max (2012), Jewel
(Not Owned), Target (Not Owned)
Indianapolis, IN
Glenlake Plaza
2629 East 65th Street
46220
SC
Fee(3
)
1980
2007
20%
102,549
$
784,890
$
9.15
83.6%
Kroger (2020)
Lafayette, IN
Park East Marketplace
4205 - 4315 Commerce Drive
47905
SC
Fee
2000
2003
100%
35,100
$
279,107
$
14.76
53.9%
Wal-Mart (Not Owned)
South Bend, IN
Broadmoor Plaza
1217 East Ireland Road
46614
SC
Fee(3
)
1987
2007
20%
114,968
$
1,274,309
$
11.59
95.6%
Kroger (2020)
Iowa
Cedar Rapids, IA
Northland Square
303 -367 Collins Road, N.E.
52404
SC
Fee
1984
1998
100%
187,068
$
1,885,609
$
10.08
100%
T.J. Maxx (2010), Office Max (2010), Barnes & Noble (2010),
Kohls (2021)
Ottumwa, IA
Quincy Place Mall
1110 Quincy Avenue
52501
MM
Fee
1990/1999/
2002
1/2
*
100%
241,427
$
1,275,295
$
6.47
81.6%
Herbergers (2010), JCPenney (2010), Goodys (2014),
Target (Not Owned)
Kansas
Leawood, KS
Town Center Plaza
5000 West 119th Street
66209
LC
Fee
1996/2002
1998
100%
309,423
$
8,209,005
$
27.28
94.8%
Barnes & Noble (2016), Macys (2104)
Merriam, KS
Merriam Town Center
5700 Antioch Road
66202
SC
Fee(3
)
1998/2004
1
*
14.5%
351,244
$
4,199,393
$
12.33
96.9%
Cinemark (2018), Office Max (2013), PetSmart (2019), Hen
House (2018), Marshalls (2014), Dicks Clothing and
Sporting Goods (2016), Home Depot (Not Owned)
38
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Overland Park, KS
Overland Pointe Marketplace
Intersection 135 & Antioch Road
66213
SC
Fee(3
)
2001/2004
2003
14.5%
42,632
$
886,738
$
17.63
98.3%
Babies R Us (2015), Home Depot (Not Owned),
Sams Club (Not Owned)
Wichita, KS
Eastgate Plaza
South Rock Road
67207
SC
Fee
1955
2002
100%
205,114
$
1,958,102
$
12.20
81.1%
Burlington Coat Factory (2017), Office Max (2010), T.J. Maxx
(2011), Barnes & Noble (2012), Toys R Us (Not
Owned)
Kentucky
Lexington, KY
North Park Marketplace
524 West New Circle
40511
SC
Fee
1998
2003
100%
46,647
$
687,946
$
14.75
100%
Staples (2016), Wal-Mart (Not Owned)
Lexington, KY
South Farm Marketplace
Man-O-War Boulevard & Nichol
40503
SC
Fee
1998
2003
100%
27,643
$
621,548
$
22.48
100%
Lowes (Not Owned), Wal-Mart (Not Owned)
Louisville, KY
Outer Loop Plaza
7505 Outer Loop Highway
40228
SC
Fee
1973/1989/
1998
2004
100%
120,777
$
621,982
$
6.04
85.3%
Valu Discount (2009)
Richmond, KY
Carriage Gate
833-847 Eastern By-Pass
40475
SC
Fee
1992
2003
100%
147,929
$
618,660
$
5.50
76%
Office Depot (2016), Hobby Lobby (2018), Dunhams Sporting
Goods (2015), Ballards (Not Owned)
Louisiana
Covington, LA
Covington Corners
782 North Highway 190
70433
SC
Fee
1999
2007
100%
15,590
$
249,440
$
16.00
100%
Maine
Brunswick, ME
Cooks Corners
172 Bath Road
04011
SC
GL
1965
1997
100%
301,853
$
2,269,139
$
8.06
89.1%
Hoyts Cinemas (2010), Big Lots (2013), T.J. Maxx (2010), Sears
(2012)
Maryland
Bowie, MD
Duvall Village
4825 Glenn Dale Road
20720
SC
Fee
1998
2007
100%
88,022
$
1,452,226
$
16.74
98.6%
Super Fresh (2020)
Glen Burnie, MD
Harundale Plaza
7440 Ritchie Highway
21061
SC
Fee(3
)
1999
2007
20%
217,619
$
2,738,388
$
12.58
100%
A & P Company (2019), A.J. Wright (2009), Burlington Coat
Factory (2018)
Hagerstown, MD
Valley Park Commons
1520 Wesel Boulevard
21740
SC
Fee
1993/2006
2007
100%
86,190
$
1,114,255
$
13.73
94.2%
Office Depot (2016)
Salisbury, MD
The Commons
East North Point Drive
21801
SC
Fee
2000
2006
100%
126,135
$
1,812,894
$
13.75
100%
Best Buy (2013), Michaels(2009), Home Depot (Not Owned),
Target (Not Owned)
39
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Upper Marlboro, MD
Largo Towne Center
950 Largo Center Drive
20774
SC
Fee(3
)
1991
2007
20%
260,797
$
3,754,170
$
12.33
97.8%
Shoppers Food Warehouse (2009), Marshalls (2011), Regency
Furniture (2017)
White Marsh, MD
Costco Plaza
9919 Pulaski Highway
21220
SC
Fee(3
)
1987/1992
2007
15%
187,331
$
1,654,093
$
8.12
100%
Costco Wholesale (2011), PetSmart (2010), Pep Boys (2012),
Sports Authority (2011), Home Depot (Not Owned)
Massachusetts
Everett, MA
Gateway Center
1 Mystic View Road
02149
SC
Fee
2001
1
*
100%
222,236
$
4,738,699
$
17.09
100%
Home Depot (2031), Bed Bath & Beyond (2011), Old Navy
(2011), Office Max (2020), Babies R Us (2013),
Michaels(2012), Costco (Not Owned), Target (Not Owned)
Framingham, MA
Shoppers World
1 Worcester Road
01701
SC
Fee(3
)
1994
1995
14.5%
769,276
$
14,682,596
$
18.79
100%
Toys R Us (2020), Macys (2020), T.J. Maxx
(2010), Babies R Us (2013), DSW Shoe Warehouse
(2017), A.C. Moore (2012), Marshalls (2011), Bobs Stores
(2011), Sports Authority (2015), PetSmart (2011), Best Buy
(2014), Barnes & Noble (2011), AMC Theatre (2014),
Kohls (2010)
West Springfield, MA
Riverdale Shops
935 Riverdale Street
01089
SC
Fee(3
)
1985/2003
2007
20%
273,532
$
3,407,088
$
12.99
95.9%
Kohls (2024), Stop & Shop (2016)
Worcester, MA
Sams Club
301 Barber Avenue
01606
SC
Fee
1998
2007
100%
107,929
$
1,116,581
$
10.35
100%
Sams Club (2013)
Michigan
Bad Axe, MI
Huron Crest Plaza
850 North Van Dyke Road
48413
SC
Fee
1991
1993
100%
63,415
$
144,425
$
8.86
25.7%
Wal-Mart (Not Owned)
Benton Harbor, MI
Fairplain Plaza
1000 Napier Avenue
49022
SC
Fee(3
)
1998
2006
20%
260,166
$
2,267,059
$
11.03
79%
Office Depot (2008), T.J. Maxx (2014), PetSmart (2018), Target
(Not Owned), Kohls (Not Owned)
Cheboygan, MI
Kmart Shopping Plaza
1109 East State
49721
SC
Fee
1988
1994
100%
70,076
$
261,399
$
3.73
100%
Kmart (2010)
40
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Dearborn Heights, MI
Walgreens
8706 North Telegraph Road
48127
SC
Fee
1998/1999
2007
100%
13,905
$
385,510
$
27.72
100%
Detroit, MI
Belair Centre
8400 East Eight Mile Road
48234
SC
GL
1989/2002
1998
100%
343,619
$
1,857,951
$
9.33
62.8%
Phoenix Theaters (2013), Kids R Us (2013), Forman
Mills
(2012), Target (Not Owned)
Gaylord, MI
Pine Ridge Square
1401 West Main Street
49735
SC
Fee
1991/2004
1993
100%
188,386
$
595,323
$
4.61
68.6%
Dunhams Sporting Goods (2011), Big Lots (2010),
Bosmanss Mercantile (2018)
Grand Rapids, MI
Green Ridge Square
3390-B Alpine Avenue N.W.
49504
SC
Fee
1989
1995
100%
133,538
$
1,614,065
$
12.29
98.4%
T.J. Maxx (2011), Office Depot (2010), Target (Not Owned), Toys
R Us (Not Owned)
Grand Rapids, MI
Green Ridge Square
3410 Alpine Avenue
49504
SC
Fee
1991/1995
2004
100%
91,749
$
1,002,669
$
11.98
91.2%
Circuit City (2010), Bed Bath & Beyond (2015)
Grandville, MI
Grandville Marketplace
Intersection 44th Street & Canal
Avenue
49418
SC
Fee(3
)
2003
2003
14.5%
201,726
$
2,283,003
$
12.99
84.1%
Circuit City (2017), Gander Mountain (2016), Office Max
(2013), Lowes (Not Owned)
Houghton, MI
Copper Country Mall
Highway M26
49931
MM
Fee
1981/1999
1/2
*
100%
257,863
$
462,000
$
4.42
40.5%
JCPenney (2010), Office Max (2014)
Howell, MI
Grand River Plaza 3599 East Grand River
48843
SC
Fee
1991
1993
100%
214,501
$
1,511,475
$
7.42
94.9%
Elder-Beerman (2011), Dunhams Sporting Goods (2011),
Office Max (2017), T.J. Maxx (2017)
Lansing, MI
Marketplace at Delta Township 8305 West Saginaw Highway 196
Ramp
48917
SC
Fee
2000/2001
2003
100%
135,697
$
1,443,522
$
11.10
95.9%
Michaels(2011), Gander Mountain (2015), Staples (2016), PetSmart
(2016), Wal-Mart (Not Owned), Lowes (Not Owned)
Livonia, MI
Walgreens - Livonia
29200 6 Mile Road
48152
SC
Fee
1998/1999
2007
100%
13,905
$
269,061
$
19.35
100%
Milan, MI
Milan Plaza
531 West Main Street
48160
SC
Fee(3
)
1955
2007
20%
65,764
$
305,268
$
4.64
100%
Kroger (2020)
Mount Pleasant, MI
Indian Hills Plaza
4208 East Blue Grass Road
48858
SC
Fee
1990
2
*
100%
249,680
$
813,197
$
7.80
41.7%
T.J. Maxx (2014), Kroger (2011)
Port Huron, MI
Walgreens
NWC 10th Street & Oak Street
48060
SC
Fee
2000
2007
100%
15,120
$
359,856
$
23.80
100%
41
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Sault St. Marie, MI
Cascade Crossing
4516 I-75 Business Spur
49783
SC
Fee
1993/1998
1994
100%
270,761
$
1,700,474
$
6.47
97.1%
Wal-Mart (2012), JCPenney (2013), Dunhams Sporting Goods
(2011), Glens Market (2013)
Westland, MI
Walgreens
7210 North Middlebelt
48185
SC
Fee
2005
2007
100%
13,905
$
285,053
$
20.50
100%
Minnesota
Bemidji, MN
Paul Bunyan Mall
1201 Paul Bunyan Drive
56601
MM
Fee
1977/1998
2
*
100%
297,803
$
1,654,150
$
5.78
96.2%
Kmart (2012), Herbergers (2010), JCPenney (2013)
Brainerd, MN
Westgate Mall
14136 Baxter Drive
56425
MM
Fee
1985/1998
1/2
*
100%
260,319
$
1,477,039
$
8.89
63.8%
Herbergers (2013), Movies 10 (2011)
Coon Rapids, MN
Riverdale Village
12921 Riverdale Drive
55433
SC
Fee(3
)
2003
1
*
14.5%
551,867
$
9,181,673
$
15.73
94.7%
Kohls (2020), Jo-Ann Stores (2010), Borders (2023), Old
Navy (2012), Sears (2017), Sportsmans Warehouse (2017),
Best Buy (2013), JCPenney (2024), DSW Shoe Warehouse (2016),
Costco (Not Owned)
Eagan, MN
Eagan Promenade
1299 Promenade Place
55122
SC
Fee(3
)
1997/2001
1997
50%
278,211
$
3,778,749
$
13.58
100%
Byerlys (2016), PetSmart (2018), Barnes & Noble
(2012), Office Max (2013), T.J. Maxx (2013), Bed Bath &
Beyond
(2012), Ethan Allen Furniture (Not Owned)
Maple Grove, MN
Maple Grove Crossing
Weaver Lake Road & I-94
55369
SC
Fee(3
)
1995/2002
1996
50%
265,957
$
3,059,883
$
11.51
100%
Kohls (2016), Barnes & Noble (2011), Gander Mountain
(2011), Michaels(2012), Bed Bath & Beyond (2012), Cub
Foods
(Not Owned)
St. Paul, MN
Midway Marketplace
1450 University Avenue West
55104
SC
Fee(3
)
1995
1997
14.5%
324,354
$
2,698,033
$
8.32
100%
Wal-Mart(2022), Cub Foods(2015), PetSmart(2011), LA Fitness
International(2023), Borders Books And Music(Not Owned),
HerbergerS(Not Owned)
42
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Mississippi
Gulfport, MS
Crossroads Center
Crossroads Parkway
39503
SC
GL
1999
2003
100%
423,507
$
5,617,321
$
11.56
99.7%
Academy Sports (2015), Bed Bath & Beyond (2014), Ross Dress
For Less (2015), Goodys (2011), T.J. Maxx (2009), Cinemark
(2019), Office Depot (2014), Belk (2024), Barnes & Noble
(2015)
Jackson, MS
The Junction
6351 I-55 North 3
39213
SC
Fee
1996
2003
100%
107,780
$
1,153,778
$
11.01
97.2%
PetSmart (2012), Office Depot (2016), Target (Not Owned),
Home Depot (Not Owned)
Oxford, MS
Oxford Place
2015-2035 University Avenue
38655
SC
Fee(3
)
2000
2003
20%
13,200
$
325,604
$
14.47
98.3%
Kroger (2020)
Starkville, MS
Starkville Crossings
882 Highway 12 West
39759
SC
Fee
1999/2004
1994
100%
133,691
$
927,006
$
6.93
100%
JCPenney (2010), Kroger (2042), Lowes (Not Owned)
Tupelo, MS
Big Oaks Crossing
3850 North Gloster Street
38801
SC
Fee
1992
1994
100%
348,236
$
2,048,219
$
5.93
99.1%
Sams Club (2012), Goodys (2012), Wal-Mart (2012)
Missouri
Arnold, MO
Jefferson County Plaza
Vogel Road
63010
SC
Fee(3
)
2002
1
*
50%
42,091
$
542,534
$
15.04
85.7%
Home Depot (Not Owned), Target (Not Owned)
Brentwood,MO
The Promenade at Brentwood1
Brentwood Promenade Court
63144
SC
Fee
1998
1998
100%
299,584
$
4,148,608
$
13.85
100%
Target (2023), Bed Bath & Beyond (2014), PetSmart (2014),
Lane Home Furnishings (2013)
Des Peres, MO
Olympic Oaks Village
12109 Manchester Road
63121
SC
Fee
1985
1998
100%
92,372
$
1,483,022
$
16.69
96.2%
T.J. Maxx (2011)
Fenton, MO
Fenton Plaza
Gravois & Highway 141
63206
SC
Fee
1970/1997
1/2
*
100%
93,420
$
979,021
$
11.31
91.4%
High Ridge, MO
Gravois Village Plaza
4523 Gravois Village Plaza
63049
SC
Fee
1983
1998
100%
114,992
$
552,934
$
5.46
88.1%
Kmart (2013)
Independence, MO
Independence Commons
900 East 39th Street
64057
SC
Fee(3
)
1995/1999
1995
14.5%
386,066
$
5,037,447
$
13.27
98.3%
Kohls (2016), Bed Bath & Beyond (2012), Marshalls
(2012), Best Buy (2016), Barnes & Noble (2011), AMC Theatre
(2015)
43
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Kansas City, MO
Ward Parkway Center
8600 Ward Parkway
64114
SC
Fee(3
)
1959/2004
2003
20%
388,387
$
5,702,959
$
14.13
93.8%
Dicks Clothing and Sporting Goods (2016), 24 Hour
Fitness
(2023), PetSmart (2016), Staples (2018), Target (2023), AMC
Theatre (2011), Off Broadway Shoes (2015), T.J. Maxx (2013),
Dillards (2014)
Springfield,MO
Morris Corners
1425 East Battlefield
65804
SC
GL
1989
1998
100%
56,033
$
451,660
$
9.82
82.1%
Toys R Us (2013)
St. John, MO
St. John Crossings
9000-9070 St. Charles Rock Road
63114
SC
Fee
2003
2003
100%
88,450
$
1,051,698
$
11.69
95.5%
Shop n Save (2022)
St. Louis, MO
Plaza at Sunset Hills
10980 Sunset Plaza
63128
SC
Fee
1997
1998
100%
415,435
$
5,455,080
$
12.71
93.8%
Toys R Us (2013), Bed Bath & Beyond (2012),
Marshalls (2012), Home Depot (2023), PetSmart (2012), Borders
(2011)
St. Louis, MO
Southtowne
Kings Highway & Chippewa
63109
SC
Fee
2004
1998
100%
86,764
$
1,346,438
$
16.11
96.3%
Office Max(2014)
Nevada
Carson City, NV
Eagle Station
3871 South Carson Street
89701
MV
Fee
1983
2005
50%
60,494
$
0
$
0.00
0%
Las Vegas, NV
Loma Vista Shopping Center
4700 Meadows Lane
89107
MV
Fee
1979
2005
50%
75,687
$
795,906
$
10.52
100%
Mervyns (2020)
Las Vegas, NV
Nellis Crossing Shopping
1300 South Nellis Boulevard
89104
MV
Fee
1986
2005
50%
76,016
$
711,009
$
9.35
100%
Mervyns (2020)
Reno, NV
Sierra Town Center
6895 Sierra Center Parkway
89511
MV
Fee
2002
2005
50%
79,239
$
0
$
0.00
0%
Reno, NV
Reno Riverside
East First Street & Sierra
89505
SC
Fee
2000
2000
100%
52,474
$
698,335
$
13.31
100%
Century Theatres (2014)
S.W. Las Vegas, NV
Grand Canyon Parkway
4265 South Grand Canyon Drive
89147
MV
Fee
2003
2005
50%
79,294
$
0
$
0.00
0%
New Jersey
Brick, NJ
Brick Center Plaza
51 Chambers Bridge Road
08723
SC
Fee
1999
2007
100%
114,028
$
1,809,059
$
15.87
100%
Best Buy (2015), Bed Bath & Beyond 2010)
East Hanover, NJ
East Hanover Plaza
154 State Route 10
07936
SC
Fee
1994
2007
100%
97,500
$
1,764,383
$
18.10
100%
Branch Brook Pool & Patio (2017), Sports Authority (2012)
East Hanover, NJ
Lowes Theatre Complex
145 State Route 10
07936
SC
Fee
1993
2007
100%
20,737
$
1,029,642
$
22.72
89.7%
Lowes East Hanover Cinemas (2022)
44
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Edgewater, NJ
Edgewater Town Center
905 River Road
07020
LC
Fee
2000
2007
100%
77,508
$
1,680,307
$
22.33
97.1%
Whole Foods (2020)
Freehold, NJ
Freehold Marketplace
NJ Highway 33 & West Main Street
(Route 537)
07728
SC
Fee
2005
1
*
100%
234,454
$
570,000
24.30
100%
Sams Club (Not Owned),
Wal-Mart (Not Owned)
Hamilton, NJ
Hamilton Marketplace
NJ State Highway 130 & Klockner Road
08691
SC
Fee
2004
2003
100%
468,240
$
8,590,135
$
15.73
99.7%
Staples (2015), Kohls (2023), Linens N Things
(2014),
Michaels(2014), Ross Dress For Less (2014), ShopRite
(2028), Barnes & Noble (2014), BJs Wholesale (Not
Owned), Lowes (Not Owned), Wal-Mart (Not Owned)
Lumberton, NJ
Crossroads Plaza
1520 Route 38
08036
SC
Fee(3
)
2003
2007
20%
89,627
$
1,597,144
$
17.82
100%
ShopRite (2024), Lowes (Not Owned)
Lyndhurst, NJ
Lewandowski Commons
434 Lewandowski Street
07071
SC
Fee(3
)
1998
2007
20%
78,097
$
1,687,116
$
22.71
95.1%
Stop & Shop (2020)
Mays Landing, NJ
Hamilton Commons 4215 Black Horse
Pike
08330
SC
Fee
2001
2004
100%
398,910
$
6,139,343
$
15.89
96.9%
Regal Cinemas (2021), Ross Dress For Less (2012), Bed Bath
& Beyond (2017), Marshalls (2012), Sports Authority
(2015),
Circuit City (2020)
Mays Landing, NJ
Wrangleboro Consumer Square
2300 Wrangleboro Road
08330
SC
Fee
1997
2004
100%
843,019
$
9,126,887
$
12.09
89.5%
Borders (2017), Best Buy (2017), Kohls (2018), Staples
(2012), Babies R Us (2013), BJs Wholesale Club
(2016),
Dicks Clothing and Sporting Goods (2013), Michaels(2013),
Target (2023), PetSmart (2013)
45
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Mount Laurel, NJ
Centerton Square
Centerton Road & Marter Avenue
08054
SC
Fee(3
)
2005
1
*
10%
280,067
$
6,698,119
$
18.68
100%
Wegmans Food Markets (2024), Bed Bath & Beyond
(2015), PetSmart (2015), DSW Shoe Warehouse (2015), Jo-Ann
Stores (2015), T.J. Maxx (2015), Sports Authority (2016),
Target(Not Owned), Costco (Not Owned)
Princeton, NJ
Nassau Park Pavilion
Route 1 & Quaker Bridge Road
02071
SC
Fee
1995
1997
100%
289,375
$
5,255,194
$
20.08
90.5%
Borders (2011), Best Buy (2012), Linens N Things (2011),
PetSmart (2011), Babies R Us (2016), Target (Not
Owned), Sams Club (Not Owned), Home Depot (Not Owned),
Wal-Mart (Not Owned)
Princeton, NJ
Nassau Park Pavilion
Route 1 & Quaker Bridge Road
02071
SC
Fee
1999/2004
1
*
100%
202,622
$
3,997,878
$
15.70
98.7%
Dicks Clothing and Sporting Goods (2015), Michaels(2009),
Wegmans Food Markets (2024), Kohls (2019), Target
(Not Owned)
Union, NJ
Route 22 Retail Center
2700 U.S. Highway 22 East
07083
SC
Fee
1997
2007
100%
103,453
$
1,508,206
$
18.54
78.6%
Circuit City (2018), Babies R Us (2018), Target (Not
Owned)
West Long Branch, NJ
Monmouth Consumer Square
310 State Highway #36
07764
SC
Fee
1993
2004
100%
292,999
$
4,101,372
$
14.12
99.1%
Sports Authority (2012), Barnes & Noble (2010), PetSmart
(2014), Home Depot (2013)
West Paterson, NJ
West Falls Plaza
1730 Route 46
07424
SC
Fee(3
)
1995
2007
20%
81,261
$
1,917,571
$
21.75
100%
A & P Company (2021)
New Mexico
Los Alamos, NM
Mari Mac Village
800 Trinity Drive
87533
SC
Fee
1978/1997
1/2
*
100%
93,021
$
681,141
$
7.32
100%
Smiths Food & Drug (2012)
New York
Amherst, NY
7370 Transit Road
14031
SC
Fee(3
)
1992
2004
14.5%
16,030
$
0
$
0.00
0%
46
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Amherst, NY
Boulevard Consumer Square
1641-1703 Niagara Falls Boulevard
14228
SC
Fee
1998/2001/
2003
2004
100%
547,403
$
7,652,324
$
13.27
96%
Target (2019), Babies R Us (2015), Barnes &
Noble (2014), Best Buy (2016), Bed Bath & Beyond (2018),
A.C. Moore (2013), Lowes (2030)
Amherst, NY
Burlington Plaza
1551 Niagara Falls Boulevard
14228
SC
GL
1978/1982/
1990/1998
2004
100%
199,504
$
2,096,108
$
10.73
98%
Burlington Coat Factory (2014), Jo-Ann Stores (2014)
Amherst, NY
Sheridan Harlem Plaza
4990 Harlem Road
14226
SC
Fee
1960/1973/
1982/1988
2004
100%
58,413
$
593,043
$
12.22
83.1%
Amherst, NY
Tops Plaza - Amherst
3035 Niagara Falls Boulevard
14226
SC
Fee(3
)
1986
2004
20%
145,192
$
1,153,249
$
8.38
94.8%
Tops Markets (2010)
Amherst, NY
Tops Plaza - Transit/North French
9660 Transit Road
14226
SC
Fee
1998
2004
100%
114,177
$
1,151,118
$
10.35
97.4%
Tops Markets (2016)
Amherst, NY
Rite Aid
2545 Millersport Highway
14068
SC
Fee
2000
2007
100%
10,908
$
250,489
$
22.96
100%
Arcade, NY
Tops Plaza-Arcade
Route 39
14009
SC
Fee
1995
2004
10%
65,915
$
668,504
$
10.14
100%
Tops Markets (2015)
Avon, NY
Tops Plaza-Avon
270 East Main Street
14414
SC
Fee(3
)
1997/2002
2004
10%
63,288
$
479,857
$
8.26
91.8%
Tops Markets (2017)
Batavia, NY
BJs Plaza
8326 Lewiston Road
14020
SC
Fee(3
)
1996
2004
14.5%
95,846
$
847,004
$
8.84
100%
BJs Wholesale Club (2016)
Batavia, NY
Batavia Commons
419 West Main Street
14020
SC
Fee(3
)
1990
2004
14.5%
49,431
$
410,389
$
9.36
88.7%
Batavia, NY
Martins Plaza
8351 Lewiston Road
14020
SC
Fee(3
)
1994
2004
14.5%
37,140
$
496,328
$
14.04
95.2%
Martins (Not Owned)
Big Flats, NY
Big Flats Consumer Square 830 County
Route 64
14814
SC
Fee
1993/2001
2004
100%
641,264
$
5,268,023
$
9.35
87.9%
Wal-Mart (2013), Sams Club (2013), Tops Markets (2013),
Bed Bath & Beyond (2014), Michaels (2010), Old Navy (2009),
Staples (2011), Barnes & Noble (2011), T.J. Maxx (2013)
Buffalo, NY
Elmwood Regal Center
1951 - 2023 Elmwood Avenue
14207
SC
Fee
1997
2004
100%
133,940
$
1,674,783
$
14.77
84.6%
Regal Cinemas (2017), Office Depot (2012)
Buffalo, NY
Marshalls Plaza
2150 Delaware Avenue
14216
SC
Fee
1960/1975/
1983/1995
2004
100%
82,196
$
860,369
$
11.46
91.4%
Marshalls (2009)
47
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Buffalo, NY
Rite Aid
1625 Broadway Street
14212
SC
Fee
2000
2007
100%
12,739
$
280,861
$
22.05
100%
Buffalo, NY
Delaware Consumer Square
2636-2658 Delaware Avenue
14216
SC
GL
1995
2004
100%
238,531
$
2,074,503
$
9.09
95.7%
A.J. Wright (2012), Office Max (2012), Target (2015)
Cheektowaga, NY
Borders Books
2015 Walden Avenue
14225
SC
Fee(3
)
1994
2004
14.5%
26,500
$
609,500
$
23.00
100%
Borders (2015)
Cheektowaga, NY
Union Road Plaza
3637 Union Road
14225
SC
Fee(3
)
1979/1982/
1997/2003
2004
14.5%
174,438
$
1,113,927
$
6.93
92.2%
Dicks Clothing and Sporting Goods (2015)
Cheektowaga, NY
Rite Aid
2401 Gennesee Street
14225
SC
Fee
2000
2007
100%
10,908
$
335,592
$
30.77
100%
Cheektowaga, NY
Thruway Plaza
2195 Harlem Road
14225
SC
Fee
1965/1995/
1997/2004
2004
100%
371,512
$
2,762,120
$
7.43
100%
Wal-Mart (2017), Movieland 8 Theatres (2019), Tops Markets
(2019), A.J. Wright (2015), Value City Furniture (2014), M
& T Bank (2017), Home Depot (Not Owned)
Cheektowaga, NY
Tops Plaza - Union Road
3825-3875 Union Road
14225
SC
Fee(3
)
1978/1989/
1995/2004
2004
20%
151,357
$
1,527,156
$
12.07
83.6%
Tops Markets (2013)
Cheektowaga, NY
Union Consumer Square
3733 - 3735 Union Road
14225
SC
Fee(3
)
1989/1998/
2004
2004
14.5%
386,548
$
4,635,635
$
12.21
98.2%
Marshalls (2009), Office Max (2010), Sams Club (2024),
Circuit City (2016), Jo-Ann Stores (2015), Bed Bath &
Beyond (2018)
Cheektowaga, NY
Walden Place
2130-2190 Walden Avenue
14225
SC
Fee(3
)
1994/1999
2004
14.5%
68,002
$
653,083
$
11.81
81.3%
Ollies Bargain Outlet (2012)
Cheektowaga, NY
Consumer Square
1700 - 1750 Walden Avenue
14225
SC
Fee(3
)
1997/1999/
2004
2004
14.5%
255,964
$
1,965,003
$
8.97
85.5%
Office Depot (2009), Michaels(2013), Target (2015)
Chili, NY
Chili Plaza
800 Paul Road
14606
SC
Fee
1998
2004
100%
116,868
$
753,623
$
6.06
100%
Sears (2019)
Clarence, NY
Eastgate Plaza
Transit & Greiner Roads
14031
SC
GL(3
)
1995/1997/
1999/2001
2004
14.5%
520,876
$
3,901,820
$
8.24
91%
BJs Wholesale Club (2021), Dicks Clothing and
Sporting
Goods (2011), Michaels(2010), Wal-Mart (2019)
Clarence, NY
Jo-Ann Plaza
4101 Transit Road
14221
SC
Fee(3
)
1994
2004
14.5%
92,720
$
743,588
$
8.02
100%
Office Max (2009), Jo-Ann Stores (2015), Big Lots (2015), Home
Depot (Not Owned)
48
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Dansville, NY
Tops Plaza - Dansville
23-65 Franklin Street
14437
SC
Fee
2001
2004
100%
71,640
$
659,869
$
9.99
92.2%
Tops Markets (2021)
Dewitt, NY
Dewitt Commons
3401 Erie Boulevard East
13214
SC
Fee
2001/2003
2004
100%
306,177
$
3,157,257
$
10.39
99.3%
Toys R Us (2018), Old Navy (2011), Marshalls (2019),
Bed Bath & Beyond (2018), A.C. Moore (2014), Syracuse
Orthopedic Specialist (2017)
Dewitt, NY
Michaels - Dewitt
3133 Erie Boulevard
13214
SC
Fee
2002
2004
100%
38,413
$
480,166
$
12.50
100%
Michaels (2010)
Dunkirk, NY
Rite Aid
1166 Central Avenue
14048
SC
GL
2000
2007
100%
10,908
$
210,569
$
19.30
100%
Elimira, NY
Tops Plaza - Elmira
Hudson Street
14904
SC
Fee(3
)
1997
2004
10%
98,330
$
1,111,325
$
11.30
100%
Tops Markets (2017)
Gates, NY
Westgate Plaza
2000 Chili Avenue
14624
SC
Fee
1998
2004
100%
334,752
$
3,252,271
$
9.94
97.8%
Wal-Mart (2021), Staples (2015)
Greece, NY
Jo-Ann/PetSmart Plaza
3042 West Ridge Road
14626
SC
Fee
1993/1999
2004
100%
75,916
$
820,315
$
10.81
100%
PetSmart (2010), Jo-Ann Stores (2015)
Hamburg, NY
BJs Plaza
4408 Milestrip Road
14075
SC
GL
1990/1997
2004
100%
175,965
$
1,771,563
$
10.32
97.5%
Office Max (2010), BJs Wholesale Club (2010)
Hamburg, NY
McKinley Place
3701 McKinley Parkway
14075
SC
Fee
2001
2004
100%
128,944
$
1,543,651
$
12.18
98.3%
Dicks Clothing and Sporting Goods (2011), Rosas
Home
Store (2009)
Hamburg, NY
Home Depot Plaza-Hamburg
4405 Milestrip Road
14219
SC
GL
1999/2000
2004
100%
139,413
$
1,353,228
$
10.38
93.5%
Home Depot (2012)
Hamburg, NY
McKinley Milestrip Center
3540 McKinley Parkway
14075
SC
Fee
1999
2004
100%
106,774
$
1,350,521
$
13.52
93.6%
Old Navy (2010), Jo-Ann Stores (2015)
Hamburg, NY
South Park Plaza - Tops
6150 South Park Avenue
14075
SC
Fee(3
)
1990/1992
2004
10%
84,000
$
730,500
$
8.70
100%
Tops Markets (2015)
Hamlin, NY
Tops Plaza - Hamlin 1800 Lake Road
14464
SC
Fee(3
)
1997
2004
10%
60,488
$
431,055
$
8.37
85.2%
Tops Markets (2017)
Horseheads, NY
Southern Tier Crossing
Ann Page Road & Interstate 86
14845
SC
Fee
2008
1
*
100%
118,958
$
1,658,198
$
13.94
100%
Circuit City (2018), Dicks Clothing and Sporting Goods
(2019), Wal-Mart (Not Owned), Kohls (Not Owned)
Irondequoit, NY
Culver Ridge Plaza
2255 Ridge Road East
14622
SC
Fee(3
)
1972/1984/
1997
2004
20%
226,768
$
2,229,599
$
11.45
85.9%
Regal Cinema (2022), A.J. Wright (2014)
49
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Ithaca, NY
Tops Plaza - Ithaca
614 - 722 South Meadow
14850
SC
Fee
1990/1999/
2003
2004
100%
229,320
$
3,745,409
$
16.64
98.1%
Office Depot (2014), Tops Markets (2022), Michaels(2013), Barnes
& Noble (2018)
Jamestown, NY
Tops Plaza - Jamestown
75 Washington Street
14702
SC
Fee(3
)
1997
2004
20%
98,001
$
926,450
$
11.75
80.5%
Tops Markets (2018)
Lancaster, NY
Transit Wehrle Retail Center
6703-6733 Transit Road
14221
SC
Fee(3
)
1997
2004
14.5%
105,249
$
1,029,761
$
8.77
99.7%
Regal Cinemas (2017)
Leroy, NY
Tops Plaza -Leroy
128 West Main Street
14482
SC
Fee(3
)
1997
2004
20%
62,747
$
556,364
$
9.47
93.6%
Tops Markets (2017)
Lockport, NY
Wal-Mart/Tops Plaza - Lockport 5789 & 5839 Transit Road
& Hamm
14094
SC
GL
1993
2004
100%
296,582
$
2,742,291
$
9.34
99%
Wal-Mart (2015), Tops Markets (2021), Sears (2011)
N. Tonawanda, NY
Mid-City Plaza
955-987 Payne Avenue
14120
SC
Fee
1997/1960/
1976/1980
2004
100%
224,949
$
2,142,688
$
11.82
80.6%
Tops Markets (2024)
New Hartford, NY
Consumer Square
4725 - 4829 Commercial Drive
13413
SC
Fee(3
)
2002
2004
14.5%
514,717
$
6,348,225
$
12.33
100%
Barnes & Noble (2013), Bed Bath & Beyond (2018), Best
Buy (2013), Staples (2018), Michaels(2013), Wal-Mart (2022),
T.J. Maxx (2012)
New Hartford, NY
Hannaford Plaza
40 Kellogg Road
13413
SC
Fee
1998
2004
100%
127,777
$
1,185,530
$
12.70
73.1%
Hannaford Brothers(2018)
Niagara Falls, NY
Regal Cinemas - Niagara Falls 720 & 750 Builders Way
14304
SC
Fee
1994/2000
2004
100%
43,170
$
577,615
$
13.38
100%
Regal Cinemas (2019)
Niskayuna, NY
Mohawk Commons
402 - 442 Balltown Road
12121
SC
Fee
2002
2004
100%
399,901
$
4,709,348
$
11.57
100%
Price Chopper (2022), Lowes (2022), Marshalls (2012),
Barnes & Noble (2014), Bed Bath & Beyond (2019),
Target
(Not Owned)
Norwich, NY
P & C Plaza
54 East Main Street
13815
SC
GL(3
)
1997
2004
10%
85,453
$
1,133,385
$
13.45
98.6%
Tops Markets (2018)
Olean, NY
Wal-Mart Plaza - Olean
3142 West State Street
14760
SC
Fee
1993/2004
2004
100%
363,509
$
2,364,278
$
6.69
97.2%
Wal-Mart (2023), Eastwynn Theatres (2014), BJs Wholesale
Club (2014), Home Depot (Not Owned)
Ontario, NY
Tops Plaza - Ontario
6254-6272 Furnace Road
14519
SC
Fee(3
)
1998
2004
20%
77,040
$
698,613
$
10.12
89.6%
Tops Markets (2019)
Orchard Park, NY
Crossroads Centre
3245 Southwestern Boulevard
14127
SC
Fee(3
)
2000
2004
20%
167,805
$
1,878,226
$
11.84
94.6%
Tops Markets (2022), Stein Mart (2012)
50
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Plattsburgh, NY
Plattsburgh Consumer Square Route 3 - Cornelia Road
12901
SC
Fee
1993/2004
2004
100%
491,513
$
3,374,096
$
7.31
93.9%
Sams Club (2013), Wal-Mart (2020), T.J. Maxx (2013),
PetSmart (2014), Michaels (2011)
Rochester, NY
Panorama Plaza
1601 Penfield Road
14625
SC
Fee(3
)
1959/1965/
1972/1980
2004
20%
279,219
$
3,173,430
$
13.31
85.4%
Tops Markets (2014), Staples (2018)
Rome, NY
Freedom Plaza
205-211 Erie Boulevard West
13440
SC
Fee
1978/2000/
2001
2004
100%
194,467
$
1,228,712
$
6.05
100%
Staples (2015), JCPenney (2017), Tops Markets (2021),
Marshalls (2016)
Tonawanda, NY
Youngmann Plaza
750 Young Street
14150
SC
Fee(3
)
1985/2003
2004
10%
306,421
$
2,354,329
$
7.51
96.9%
BJs Wholesale Club (2010), Big Lots (2012), Gander
Mountain (2015), Tops Markets (2021)
Tonawanda, NY
Office Depot Plaza
2309 Eggert Road
14150
SC
Fee
1976/1985/
1996
2004
100%
121,846
$
1,013,514
$
10.48
79.3%
Best Fitness (2025), Office Depot (2011)
Tonawanda, NY
Sheridan/Delaware Plaza
1692-1752 Sheridan Drive
14223
SC
Fee
1950/1965/
1975/1986
2004
100%
188,200
$
1,362,021
$
7.24
100%
Bon Ton Home Store (2010), Tops Markets (2020)
Tonawanda, NY
Tops Plaza - Niagara Street
150 Niagara Street
14150
SC
Fee(3
)
1997
2004
10%
97,014
$
1,058,970
$
12.05
90.6%
Tops Markets (2017)
Victor, NY
Victor Square
2-10 Commerce Drive
14564
SC
Fee
2000
2004
100%
56,134
$
617,176
$
17.91
61.4%
Warsaw, NY
Tops Plaza - Warsaw
2382 Route 19
14569
SC
Fee(3
)
1998
2004
20%
74,105
$
547,564
$
8.74
84.5%
Tops Markets (2015)
West Seneca, NY
Home Depot Plaza
1881 Ridge Road
14224
SC
GL
1975/1983/
1987/1995
2004
100%
139,453
$
1,393,933
$
10.30
97%
Home Depot (2016)
West Seneca, NY
Seneca Ridge Plaza 3531 Seneca Street
14224
SC
Fee
1980/1996/
2004
2004
100%
62,403
$
255,692
$
6.88
59.6%
Office Depot (2018)
Williamsville, NY
Williamsville Place
5395 Sheridan Drive
14221
SC
Fee
1986/1995/
2003
2004
100%
102,917
$
1,179,435
$
14.31
80.1%
Williamsville, NY
Premier Place
7864 - 8020 Transit Road
14221
SC
Fee(3
)
1986/1994/
1998
2004
14.5%
141,639
$
1,214,298
$
10.78
79.5%
Premier Liquors (2010), Stein Mart (2013)
North Carolina
Apex, NC
Beaver Creek Crossings South 1335 West Williams Street
27502
SC
Fee
2006
1
*
100%
283,266
$
4,607,160
$
15.60
99.1%
Dicks Clothing and Sporting Goods (2017), Consolidated
Theatres (2026), T.J. Maxx (2016), Circuit City (2022),
Borders (2022)
51
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Apex, NC
Beaver Creek Commons
1335 West Williams Street
27502
SC
Fee(3
)
2005
1
*
10%
110,429
$
2,159,927
$
18.68
77%
Office Max (2014), Lowes (Not Owned), Target (Not Owned)
Asheville, NC
Oakley Plaza
Fairview Road at Interstate 240
28801
SC
Fee(3
)
1988
2007
100%
118,699
$
934,539
$
8.48
92.9%
Babies R Us (2011), BI-LO (2016)
Asheville, NC
River Hills
299 Swannanoa River Road
28805
SC
Fee(3
)
1996
2003
14.5%
190,970
$
1,886,432
$
11.37
86.9%
Carmike Cinemas (2017), Circuit City (2017), Dicks
Clothing and Sporting Goods (2017), Michaels (2013), Office Max
(2011)
Cary, NC
Circuit City - Cary
1401 Piney Plains Road
27511
SC
Fee
2000
2007
100%
27,891
$
526,500
$
18.88
100%
Circuit City (2022)
Cary, NC
Mill Pond Village
3434-3490 Kildaire Farm Road
27512
SC
Fee
2004
2007
100%
84,364
$
1,219,090
$
14.97
92.1%
Lowes Foods (2021)
Chapel Hill, NC
Meadowmont Village
West Barbee Chapel Road
27517
SC
Fee(3
)
2002
2007
20%
132,745
$
2,456,909
$
20.91
88.5%
Harris Teeter Supermarkets (2022)
Charlotte, NC
Camfield Corners
8620 Camfield Street
28277
SC
Fee
1994
2007
100%
69,910
$
869,351
$
12.88
96.6%
BI-LO (2014)
Clayton, NC
Clayton Corners
U.S. Highway 70 West
27520
SC
Fee(3
)
1999
2007
20%
125,653
$
1,387,987
$
11.51
96%
Lowes Foods (2019)
Concord, NC
Rite Aid - Concord
Highway #29 at Pitts School
28027
SC
Fee
2002
2007
100%
10,908
$
227,814
$
20.89
100%
Cornelius, NC
The Shops at the Fresh Market
20601 Torrence Chapel Road
28031
SC
Fee
2001
2007
100%
131,242
$
1,044,213
$
9.72
81.8%
Stein Mart (2013)
Durham, NC
Patterson Place
3616 Witherspoon Boulevard
27707
SC
Fee(3
)
2004
2007
20%
161,017
$
2,091,493
$
14.33
90.6%
DSW Shoe Warehouse (2016), A.C. Moore (2014), Bed Bath &
Beyond (2020)
Durham, NC
Oxford Commons
3500 Oxford Road
27702
SC
Fee
1990/2001
1/2
*
100%
208,014
$
1,366,288
$
6.98
94.1%
Food Lion (2010), Burlington Coat Factory (2012), Wal-Mart (Not
Owned)
Durham, NC
South Square
4001 Durham Chapel
27707
SC
Fee(3
)
2005
2007
20%
107,812
$
1,612,970
$
14.92
97.2%
Office Depot (2010), Ross Dress For Less (2015), Target
(Not Owned)
Fayetteville, NC
Cross Pointe Center
5075 Morganton Road
28314
SC
Fee
1985/2003
2003
100%
226,089
$
1,913,392
$
8.46
100%
T.J. Maxx(2011), Bed Bath & Beyond(2014)
52
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Fayetteville, NC
Fayetteville Pavilion
2061 Skibo Road
28314
SC
Fee(3
)
1998/2001
2007
20%
272,385
$
2,713,492
$
11.43
87.2%
Dicks Clothing and Sporting Goods (2017), PetSmart (2016),
Creative Basket Expressions (2020), Marshalls (2014), Michaels
(2014)
Fuquay Varina, NC
Sexton Commons
1420 North Main Street
27526
SC
Fee(3
)
2002
2007
20%
49,097
$
777,531
$
15.84
100%
Harris Teeter Supermarkets (2021)
Greensboro, NC
Adams Farm
5710 High Point Road
27407
SC
Fee
2004
2007
100%
112,010
$
906,328
$
10.54
76.8%
Harris Teeter Supermarkets (2013)
Greensboro, NC
Golden Gate
East Cornwallis Drive
27405
SC
Fee
1962/2002
2007
100%
153,113
$
1,137,872
$
8.52
87.2%
Harris Teeter Supermarkets (2011), Staples (2016), Food
Lion (2012)
Greensboro, NC
Shopes at Wendover Village I 4203-4205 West Wendover Avenue
27407
SC
Fee
2004
2007
100%
35,895
$
947,003
$
26.38
100%
Costco (Not Owned)
Greensboro, NC
Wendover II
West Wendover Avenue
27407
SC
Fee(3
)
2004
2007
20%
135,004
$
1,745,841
$
16.51
78.3%
A.C. Moore (2014), Circuit City (2020)
Huntersville, NC
DDRTC Birkdale Village LLC 8712 Lindholm Drive, Suite 206
28078
LC
Fee(3
)
2003
2007
15%
301,045
$
6,577,959
$
24.96
87.1%
Barnes & Noble (2013), Dicks Clothing and Sporting
Goods (2018)
Huntersville, NC
Rosedale Shopping Center
9911 Rose Commons Drive
28078
SC
Fee(3
)
2000
2007
20%
119,197
$
1,960,458
$
16.45
100%
Harris Teeter Supermarkets (2020)
Indian Trail, NC
Union Town CenterIndependence &
Faith Church Road
28079
SC
Fee
1999
2004
100%
96,160
$
710,064
$
9.40
78.5%
Food Lion (2020)
Jacksonville, NC
Gateway Plaza - Jacksonville
SEC Western Boulevard & Gateway South
28546
SC
Fee(3
)
2001
2007
15%
101,413
$
1,154,275
$
11.38
100%
Bed Bath & Beyond (2013), Ross Dress For Less (2013),
Lowes (Not Owned), Target (Not Owned)
Matthews, NC
Sycamore Commons
Matthews Townshop Parkway &
Northeast Parkway
28105
SC
Fee(3
)
2002
2007
15%
265,535
$
4,571,779
$
17.55
98.1%
Michaels (2012), Bed Bath & Beyond (2012), Dicks
Clothing and Sporting Goods (2017), Old Navy (2011), Circuit
City (2023), Costco (Not Owned), Lowes (Not Owned)
Mooresville, NC
Mooresville Consumer Square I
355 West Plaza Drive
28117
SC
Fee
1999
2004
100%
472,182
$
4,109,097
$
9.65
90.1%
Wal-Mart (2019), Gander Mountain (2021)
53
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Mooresville, NC
Winslow Bay Commons
Bluefield Road and Highway 150
28117
SC
Fee(3
)
2003
2007
15%
255,798
$
3,152,594
$
13.39
86.8%
Ross Dress For Less (2014), Dicks Clothing and Sporting
Goods (2019), T.J. Maxx (2013), Michaels(2013), Super
Target (Not Owned)
New Bern, NC
Rivertowne Square
3003 Claredon Boulevard
28561
SC
Fee
1989/1999
1/2
*
100%
68,130
$
636,063
$
9.55
97.8%
Goodys (2012), Wal-Mart (Not Owned)
Raleigh, NC
Alexander Place
Glenwood Avenue & Brier Creek
Parkway
27617
SC
Fee(3
)
2004
2007
15%
188,254
$
2,562,094
$
14.21
95.8%
Kohls (2025), H.H. Gregg Appliances (2022), Super Wal-Mart
(Not Owned)
Raleigh, NC
Capital Crossing
2900-2950 East Mill Brook Road
27613
SC
Fee
1995
2007
100%
83,248
$
888,670
$
10.68
99.9%
Lowes Foods (2015), Staples (2011)
Raleigh, NC
Rite Aid
U.S. Highway 401 & Perry Creek Road
27616
SC
Fee
2003
2007
100%
10,908
$
284,571
$
26.09
100%
Raleigh, NC
Wakefield Crossing
Wakefield Pines Drive & New Falls of Neuse
27614
SC
Fee
2001
2007
100%
75,927
$
889,181
$
13.08
89.6%
Food Lion (2022)
Salisbury, NC
Alexander Pointe
850 Jake Alexander Boulevard
28144
SC
Fee(3
)
1997
2007
20%
57,710
$
640,344
$
11.37
97.6%
Harris Teeter Supermarkets (2017)
Siler City, NC
Chatham Crossing
U.S. Highway 64 West
27344
SC
Fee(3
)
2002
2007
15%
31,979
$
400,460
$
13.36
93.7%
Super Wal-Mart (Not Owned)
Southern Pines, NC
Southern Pines Marketplace
U.S. Highway 15-501
28387
SC
Fee(3
)
2002
2007
15%
57,404
$
440,216
$
10.21
75.1%
Stein Mart (2016)
Wake Forest, NC
Capital Plaza
11825 Retail Drive
27587
SC
Fee(3
)
2004
2007
15%
46,793
$
587,448
$
13.60
92.3%
Super Target (Not Owned), Home Depot (Not Owned)
Washington, NC
Pamlico Plaza
536 Pamlico Plaza
27889
SC
Fee
1990/1999
1/2
*
100%
80,269
$
559,503
$
7.08
98.5%
Goodys (2009), Office Depot (2014), Wal-Mart (Not Owned)
Wilmington, NC
University Centre
South College Road & New Centre Drive
28403
SC
Fee
1989/2001
1/2
*
100%
411,887
$
3,625,630
$
9.46
93%
Lowes (2014), Old Navy (2011), Bed Bath & Beyond
(2012), Ross Dress For Less (2012), Steve & Barrys
(2014), Badcock Home Furniture & More (2009), Sams
Club (Not Owned)
Wilmington, NC
Oleander Shopping Center
3804 Oleander Drive
28401
SC
GL
1989
2007
100%
51,888
$
578,191
$
11.14
100%
Lowes Foods (2015)
54
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Wilson, NC
Forest Hills Centre
1700 Raleigh Road N.W.
27896
SC
Fee
1989
2007
100%
73,280
$
586,231
$
9.36
85.4%
Harris Teeter Supermarkets (2010)
Winston Salem, NC
Harper Hill Commons
5049 Country Club Road
27104
SC
Fee(3
)
2004
2007
20%
55,394
$
1,122,896
$
19.97
81.5%
Harris Teeter Supermarkets (2024)
Winston Salem, NC
Oak Summit
East Hanes Mill Road
27105
SC
Fee(3
)
2003
2007
15%
142,394
$
1,788,169
$
12.56
100%
Goodys (2016), Staples (2016), PetSmart (2020), Super
Wal-Mart (Not Owned)
Winston Salem, NC
Shops at Oliver Crossing
Peters Creek Parkway Oliver Crossing
27127
SC
Fee(3
)
2003
2007
20%
76,512
$
856,512
$
12.54
89.3%
Lowes Foods (2023)
Winston Salem, NC
Wal-Mart Supercenter
4550 Kester Mill Road
27103
SC
Fee
1998
2007
100%
204,931
$
1,403,777
$
6.85
100%
Wal-Mart (2017)
North Dakota
Dickinson, ND
Prairie Hills Mall
1681 Third Avenue
58601
MM
Fee
1978
1/2
*
100%
267,506
$
1,054,601
$
4.58
86.1%
Kmart (2013), Herbergers (2010), JCPenney (2013)
Ohio
Alliance, OH
Wal-Mart Supercenter
2700 West State Street
44601
SC
Fee
1998
2007
100%
200,084
$
1,190,500
$
5.95
100%
Wal-Mart (2017)
Ashtabula, OH
Ashtabula Commons
1144 West Prospect Road
44004
SC
Fee
2000
2004
100%
57,874
$
895,720
$
15.48
100%
Tops Markets (2021)
Aurora, OH
Barrington Town Center
70-130 Barrington Town Square
44202
SC
Fee
1996/2004
1
*
100%
102,683
$
968,002
$
9.90
91.8%
Cinemark (2011), Heinens (Not Owned)
Boardman, OH
Southland Crossings
I-680 & U.S. Route 224
44514
SC
Fee
1997
1
*
100%
506,254
$
4,233,095
$
8.34
98.9%
Lowes (2016), Babies R Us (2014), Staples
(2012),
Dicks Clothing and Sporting Goods (2012), Wal-Mart (2017),
PetSmart (2013), Giant Eagle (2018)
Canton, OH
Belden Park Crossings
5496 Dressler Road
44720
SC
Fee(3
)
1995/2001/
2003
1
*
14.5%
478,106
$
5,243,937
$
11.14
98.5%
Value City Furniture (2011), H.H. Gregg Appliances (2011),
Jo-Ann Stores (2013), PetSmart (2013), Dicks Clothing and
Sporting Goods (2010), DSW Shoe Warehouse (2012), Kohls
(2016), Target (Not Owned)
Chillicothe, OH
Chillicothe Place
867 North Bridge Street
45601
SC
GL(3
)
1974/1998
1/2
*
20%
106,262
$
1,046,216
$
9.85
100%
Kroger (2041), Office Max (2013)
55
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Chillicothe, OH
Chillicothe Place (Lowes)
867 North Bridge Street
45601
SC
Fee
1998
1981
100%
130,497
$
822,132
$
6.30
100%
Lowes (2015)
Cincinnati, OH
Glenway Crossing
5100 Glencrossing Way
45238
SC
Fee
1990
1993
100%
235,433
$
1,637,759
$
8.80
79.1%
Steve & Barrys (2014), Michaels(2011)
Cincinnati, OH
Kroger - Cincinnati
6401 Colerain Avenue
45239
SC
Fee
1998
2007
100%
56,634
$
556,486
$
9.83
100%
Kroger (2015)
Cincinnati, OH
Tri-County Mall
11700 Princeton Pike
45246
SC
Fee(3
)
1960/1990/
1992
2005
18%
758,031
$
11,868,101
$
19.00
87.1%
Dillards (2018), Sears (2019), Krazy City (2023),
Macys
(Not Owned)
Cleveland, OH
Kmart Plaza
14901-14651 Lorain Avenue
44111-3196
SC
Fee(3
)
1982
2008
25.25%
109,350
$
737,545
$
7.30
92.4%
Kmart (2012)
Columbus, OH
Consumer Square West
3630 Soldano Boulevard
43228
SC
Fee
1989/2003
2004
100%
356,515
$
2,102,676
$
7.13
82.7%
Kroger (2014), Target (2011)
Columbus, OH
Easton Market
3740 Easton Market
43230
SC
Fee
1998
1998
100%
509,611
$
5,874,783
$
12.53
92%
Staples (2013), PetSmart (2014), Golfsmith Golf Center
(2013), Michaels(2013), Dicks Clothing and Sporting Goods
(2013), DSW Shoe Warehouse (2012), Kittles Home
Furnishings (2012), Bed Bath & Beyond (2014), T.J. Maxx
(2014)
Columbus, OH
Lennox Town Center
1647 Olentangy River Road
43212
SC
Fee(3
)
1997
1998
50%
352,913
$
3,586,126
$
10.16
100%
Target (2016), Barnes & Noble (2012), Staples (2011), AMC
Theatre (2021)
Columbus, OH
Sun Center
3622-3860 Dublin Granville Road
43017
SC
Fee(3
)
1995
1998
79.45%
305,428
$
3,654,396
$
12.03
99.5%
Babies R Us (2011), Michaels(2013), Ashley Furniture
Homestore (2012), Stein Mart (2012), Whole Foods (2016), Staples
(2010)
Columbus, OH
Hilliard Rome Commons
1710-60 Hilliard Rome Road
43026
SC
Fee(3
)
2001
2007
20%
110,871
$
1,454,153
$
13.59
96.5%
Giant Eagle (2022)
Dublin, OH
Dublin Village Center
6561-6815 Dublin Center Drive
43017
SC
Fee
1987
1998
100%
213,162
$
516,729
$
4.29
56.5%
AMC Theatre (2009), B.J.s Wholesale Club (Not Owned)
Dublin, OH
Perimeter Center
6644-6804 Perimeter Loop Road
43017
SC
Fee
1996
1998
100%
137,556
$
1,605,599
$
11.78
99.1%
Giant Eagle (2014)
Elyria, OH
Elyria Shopping Center
841 Cleveland
44035
SC
Fee
1977
2
*
100%
92,125
$
601,720
$
6.53
100%
Giant Eagle (2010)
56
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Gallipolis, OH
Gallipolis Marketplace
2145 Eastern Avenue
45631
SC
Fee
1998
2003
100%
25,950
$
357,858
$
13.79
100%
Wal-Mart (Not Owned)
Grove City, OH
Derby Square Shopping Center
2161-2263 Stringtown Road
43123
SC
Fee(3
)
1992
1998
20%
128,250
$
1,156,351
$
9.65
93.5%
Giant Eagle (2016)
Huber Heights, OH
North Heights Plaza
8280 Old Troy Pike
45424
SC
Fee
1990
1993
100%
182,749
$
1,696,124
$
12.64
73.4%
H.H. Gregg Appliances (2023), Dicks Clothing and Sporting
Goods (2019), Wal-Mart (Not Owned)
Lebanon, OH
Countryside Place
1879 Deerfield Road
45036
SC
Fee
1990/2002
1993
100%
17,000
$
0
$
0.00
0%
Erb Lumber (Not Owned), Wal-Mart (Not Owned)
Macedonia, OH
Macedonia Commons Macedonia Commons
Boulevard
44056
SC
Fee(3
)
1994
1994
50%
236,682
$
3,179,832
$
12.32
100%
Tops Markets (2019), Kohls (2016), Wal-Mart (Not Owned)
Macedonia, OH
Macedonia Commons (Phase II)8210
Macedonia Commons
44056
SC
Fee
1999
1/2
*
100%
169,481
$
1,601,734
$
9.45
100%
Cinemark (2019), Home Depot (2020)
North Olmsted, OH
Great Northern Plaza
2589-26437 Great Northern
44070
SC
Fee(3
)
1958/1998/
2003
1997
14.5%
625,835
$
7,475,794
$
14.14
84.1%
DSW Shoe Warehouse (2015), Best Buy (2010), Bed Bath &
Beyond (2012), PetSmart (2018), Home Depot (2019), K & G
Menswear (2013), Jo-Ann Stores (2009), Marcs (2012),
Remington College (Not Owned)
Solon, OH
Uptown Solon
Kruse Drive
44139
SC
Fee
1998
1
*
100%
183,255
$
2,896,581
$
15.98
98.9%
Mustard Seed Market & Café (2019), Bed Bath &
Beyond
(2009), Borders (2019)
Solon, OH
Kmart Plaza
6221 Som Center
44139-2912
SC
Fee(3
)
1977
2008
25.25%
84,180
$
299,819
$
3.56
100%
Kmart (2013)
Steubenville, OH
Lowes Home Improvement
4115 Mall Drive
43952
SC
Fee
1998
2007
100%
130,497
$
871,236
$
6.68
100%
Lowes (2016)
Stow, OH
Stow Community Shopping Center
Kent Road
44224
SC
Fee
1997/2000
1
*
100%
362,057
$
3,677,589
$
10.21
99.4%
Bed Bath & Beyond (2011), Giant Eagle (2017),
Kohls
(2019), Office Max (2011), Hobby Lobby (2018), Target (Not Owned)
Tiffin, OH
Tiffin Mall
870 West Market Street
44883
MM
Fee
1980/2004
1/2
*
100%
170,868
$
538,043
$
4.84
65.1%
Cinemark (2011), JCPenney (2010)
57
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Toledo, OH
Springfield Commons Shopping
South Holland-Sylvania Road
43528
SC
Fee(3
)
1999
1
*
20%
241,129
$
2,799,159
$
11.11
99.3%
Kohls(2019), Gander Mountain (2014), Bed Bath &
Beyond (2010), Old Navy (2010)
Toledo, OH
Dicks Sporting Goods
851 West Alexis Road
43612
SC
Fee
1995
2004
100%
80,160
$
501,000
$
6.25
100%
Dicks Clothing and Sporting Goods (2016)
West Chester, OH
Kroger - West Chester
7172 Cincinnati-Dayton Road
45069
SC
Fee
1998
2007
100%
56,634
$
349,154
$
6.17
100%
Kroger (2018)
Westlake, OH
West Bay Plaza
30100 Detroit Road
44145
SC
Fee
1974/1997/
2000
1/2
*
100%
162,330
$
1,372,560
$
8.54
99%
Marcs (2009), Kmart (2009)
Willoughby Hills, OH
Shoppes at Willoughby Hills
Chardon Road
44092
SC
Fee(3
)
1985
2007
15%
373,318
$
3,122,852
$
9.38
89.2%
Giant Eagle (2019), Cinemark (2010), A.J. Wright (2011),
Office Max (2009), Sams Club (2014)
Xenia, OH
West Park Square
1700 West Park Square
45385
SC
Fee
1994/1997/
2001
1
*
100%
112,361
$
613,860
$
8.12
67.3%
Kroger (2019), Wal-Mart (Not Owned)
Zanesville, OH
Kmart Shopping Center
3515 North Maple Avenue
43701-7001
SC
Fee(3
)
1973
2008
25.25%
84,180
$
223,160
$
2.65
100%
Kmart (2009)
Oklahoma
Enid, OK
Kmart Plaza
4010 West Owen Garriot Road
73703-4899
SC
Fee(3
)
1983
2008
25.25%
84,000
$
188,160
$
2.24
100%
Kmart(2013), United Supermarkets(Not Owned)
Oklahoma City, OK
CVS Pharmacy
2323 North Martin Luther King Boulevard
73102
SC
Fee
1997
2007
100%
9,504
$
159,358
$
16.77
100%
Oregon
Portland, OR
Tanasbourne Town Center
N.W. Evergreen Parkway & N.W. Ring Road
97006
SC
Fee(3
)
1995/2001
1996
50%
309,617
$
4,986,626
$
18.73
86%
Ross Dress For Less (2013), Michaels(2014), Barnes & Noble
(2011), Office Depot (2010), Haggans (2021), Nordstrom
(Not Owned), Target (Not Owned), Mervyns (Not Owned)
Pennsylvania
Allentown, PA
B.J.s Wholesale Club
1785 Airport Road South
18109
SC
Fee
1991
2004
100%
112,230
$
863,266
$
7.69
100%
B.J.s Wholesale Club (2011)
Allentown, PA
West Valley Marketplace
1091 Mill Creek Road
18106
SC
Fee
2001/2004
2003
100%
259,239
$
2,745,843
$
10.59
100%
Wal-Mart (2021)
Camp Hill, PA
Camp Hill Center
3414 Simpson Ferry Road
17011
SC
Fee
1978/2002
2007
100%
62,888
$
288,000
$
10.03
45.6%
Michaels (2013)
58
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Carlisle, PA
Carlisle Commons Shopping Center
Ridge Street & Noble Boulevard
17013
SC
Fee(3
)
2001
2007
15%
393,033
$
3,132,539
$
8.75
91.1%
Wal-Mart (2022), T.J. Maxx (2012), Ross Dress For Less
(2014), Regal Cinemas (2010)
Cheswick, PA
Rite Aid
851 West Alexis Road
15024
SC
Fee
2000
2007
100%
10,908
$
248,609
$
22.79
100%
Connelsville, PA
Rite Aid
100 Memorial Boulevard
15425
SC
Fee
1999
2007
100%
10,908
$
312,181
$
28.62
100%
E. Norriton, PA
Kmart Plaza
2692 Dekalb Pike
19401
SC
Fee
1975/1997
1/2
*
100%
173,876
$
1,223,372
$
7.08
92.9%
Kmart (2010), Big Lots (2010)
Erie, PA
Peach Street Square
1902 Keystone Drive
16509
SC
GL
1995/1998/
2003
1
*
100%
557,769
$
4,997,713
$
8.89
95.8%
Lowes (2015), PetSmart (2015), Circuit City (2020),
Kohls (2016), Wal-Mart (2015), Cinemark (2011), Erie
Sports (2018), Home Depot (Not Owned)
Erie, PA
Rite Aid
4145 Buffalo Road
16510
SC
Fee
1999
2007
100%
10,908
$
230,486
$
21.13
100%
Erie, PA
Rite Aid
404 East 26th Street
16503
SC
Fee
1999
2007
100%
10,908
$
260,047
$
23.84
100%
Erie, PA
Rite Aid
353 East 6th Street
16507
SC
Fee
1999
2007
100%
10,908
$
266,969
$
24.47
100%
Erie, PA
Erie Marketplace
6660-6750 Peach Street
16509
SC
Fee(3
)
2003
2003
14.5%
107,537
$
1,076,117
$
9.40
98.8%
Marshalls (2013), Bed Bath & Beyond (2013), Babies
R Us (2014), Target (Not Owned)
Erie, PA
Rite Aid
5440 Peach Street
16508
SC
Fee
2000
2007
100%
10,908
$
336,691
$
30.87
100%
Erie, PA
Rite Aid
2923 West 26th Street
16506
SC
Fee
1999
2007
100%
10,908
$
332,311
$
30.46
100%
Erie, PA
Rite Aid
2184 West 12th Street
16505
SC
GL
1999
2007
100%
10,908
$
373,661
$
34.26
100%
59
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Homestead, PA
Waterfront Market Amity
149 West Bridge Street
15120
LC
Fee(3
)
2003
2007
15%
764,824
$
11,701,972
$
15.61
98%
Loews Cinema (2020), Dicks Clothing and Sporting
Goods
(2012), Best Buy (2013), Michaels(2011), Filenes Basement
(2012), Office Depot (2017),T.J. Maxx (2011), Old Navy (2011),
DSW Warehouse (2015), Marshalls (2010), Barnes And
Noble (2012), Dave And Busters (2020), Macys (Not Owned),
Target (Not Owned)
Irwin, PA
Rite Aid
3550 Route 130
15642
SC
Fee
1999
2007
100%
10,908
$
262,741
$
24.09
100%
King of Prussia, PA
Overlook at King of Prussia
301 Goddard Boulevard
19046
SC
Fee (3
)
2002
2007
15%
105,615
$
4,855,050
$
25.82
100%
United Artists Theatre (2025), Nordstrom Rack (2012), Best
Buy (2017)
Monaca, PA
Township Marketplace
115 Wagner Road
15061
SC
GL (3
)
1999/2004
2003
14.5%
298,589
$
3,059,159
$
10.99
93.2%
Lowes (2017), Michaels (2018), Cinemark (2019)
Monroeville, PA
Rite Aid
4111 William Penn Highway
15146
SC
Fee
1998
2007
100%
12,738
$
484,028
$
38.00
100%
Monroeville, PA
Rite Aid
2604 Monroeville Boulevard
15146
SC
Fee
1999
2007
100%
10,908
$
295,339
$
27.08
100%
Mount Nebo, PA
Mount Nebo Pointe
Mount Nebo Road & Lowries Run Road
15237
SC
Fee (3
)
2005
1
*
10%
99,447
$
1,257,103
$
14.38
81%
Sportsmans Warehouse (2020), Sams Club (Not Owned),
Target (Not Owned)
New Castle, PA
Rite Aid
31 North Jefferson Street
16101
SC
Fee
1999
2007
100%
10,908
$
261,740
$
24.00
100%
Pittsburgh, PA
Rite Aid
1804 Golden Mile Highway
15239
SC
Fee
1999
2007
100%
10,908
$
326,940
$
29.97
100%
Pittsburgh, PA
Rite Aid
2501 Saw Mill Run Boulevard
15227
SC
Fee
1999
2007
100%
10,908
$
342,233
$
31.37
100%
Pottstown, PA
Kmart Shopping Center
2200 East High Street
19464
SC
Fee (3
)
1973
2008
25.25%
84,180
$
275,000
$
3.27
100%
Kmart (2009)
Willow Grove, PA
Kmart Shopping Center
2620 Moreland Road
19090
SC
Fee (3
)
1973
2008
25.25%
94,500
$
341,125
$
3.61
100%
Kmart (2009)
Puerto Rico
Arecibo, PR
Plaza Del Atlantico
PR # Km 80.3
00612
MM
Fee
1980/1993
2005
100%
215,451
$
3,242,974
$
15.47
90%
Kmart (2013), Capri del Atlantico (2013)
60
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Bayamon, PR
Plaza Del Sol
Roadd PR#29 & PR#167, Hato Tejas
00961
MM
Fee
1998/2003/
2004
2005
100%
526,397
$
17,012,196
$
32.52
94.8%
Wal-Mart (2022), Science Park Cinema (2019), Bed Bath &
Beyond (2017), Home Depot (Not Owned)
Bayamon, PR
Rexville Plaza
PR #167, Km 18.8
00961
SC
Fee
1980/2002
2005
100%
126,023
$
1,592,167
$
11.52
96.6%
Pueblo Xtra (2009), Tiendas Capri (2013)
Bayamon, PR
Plaza Rio HondoPR#22, PR#167
00936
MM
Fee
1982/2001
2005
100%
481,499
$
13,074,490
$
25.73
97.3%
Tiendas Capri (2009), Best Buy (2021), Kmart (2013), Pueblo Xtra
(2012), Rio Hondo Cinemas (2023), Marshalls (2015)
Carolina, PR
Plaza Escorial
Carretera #3, Km 6.1
00987
SC
Fee
1997
2005
100%
420,462
$
7,793,068
$
14.65
99.8%
Office Max (2015), Wal-Mart (2024), Plaza Escorial Cinemas
(2019), Sams Club (2024), Home Depot (Not Owned)
Cayey, PR
Plaza Cayey
State Road #1 & PR #735
00736
SC
Fee
1999/2004
2005
100%
261,126
$
3,073,186
$
8.65
98%
Wal-Mart (2021), Plaza Cayey Centro Cinema (2018)
Fajardo, PR
Plaza Fajardo
Road PR #3 Int PR #940
00738
SC
Fee
1992
2005
100%
245,319
$
4,140,297
$
16.58
100%
Wal-Mart (2012), Pueblo Xtra (2012)
Guayama, PR
Plaza Wal-Mart
Road PR #3 Km 135.0
00784
SC
Fee
1994
2005
100%
163,598
$
1,689,989
$
10.69
96.6%
Wal-Mart (2018)
Hatillo, PR
Plaza Del Norte
Road#2 Km 81.9
00659
MM
Fee
1992
2005
100%
510,979
$
10,002,125
$
25.35
78.9%
Sears (2014), Toys R Us (2018), JCPenney (2012),
Wal-Mart (2012), Circuit City (2019)
Humacao, PR
Plaza Palma Real
State Road #3, Km 78.20
00791
SC
Fee
1995
2005
100%
345,489
$
6,679,674
$
20.00
87.4%
Pep Boys (2015), JCPenney (2019), Capri Stores (2011),
Wal-Mart (2020), Office Max (2018)
Isabela, PR
Plaza Isabela
State Road #2 & # 454
00662
SC
Fee
1994
2005
100%
238,410
$
3,537,575
$
14.09
97.3%
Coop (2014), Wal-Mart (2019)
San German, PR
Camino Real
State Road PR #122
00683
SC
Fee
1991
2005
100%
22,356
$
339,950
$
5.14
100%
Pep Boys (2015)
San German, PR
Plaza Del Oeste
Road PR #2 Int PR #122
00683
SC
Fee
1991
2005
100%
174,172
$
2,360,667
$
12.21
99.4%
Kmart (2016), Pueblo Xtra (2011)
San Juan, PR
Senorial Plaza
PR #53 & PR #177
00926
MM
Fee
1978/
Mutiple
2005
100%
168,664
$
2,444,990
$
16.09
84.3%
Kmart (2010), Pueblo Xtra (2015)
Vega Baja, PR
Plaza Vega Baja
Road PR #2 Int PR #155
00693
SC
Fee
1990
2005
100%
180,488
$
1,923,689
$
10.61
96.9%
Kmart (2015), Pueblo Xtra (2010)
Rhode Island
61
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Middletown, RI
Middletown Village
1315 West Main Street
02842
SC
Fee
2003
2007
100%
98,161
$
1,201,704
$
17.13
71.5%
Barnes & Noble (2019), Michaels (2018)
Warwick, RI
Warwick Center
1324 Bald Hill Road
02886
SC
Fee (3
)
2004
2007
15%
159,958
$
2,136,965
$
17.50
76.4%
Dicks Clothing and Sporting Goods (2018), Barnes &
Noble (2018), DSW Shoe Warehouse (2014)
South Carolina
Aiken, SC
Aiken Exchange
Whiskey Road & Brook Haven Drive
29803
SC
Fee (3
)
2004
2007
15%
101,558
$
334,898
$
8.62
38.3%
PetSmart (2019), Target (Not Owned)
Anderson, SC
Anderson Central
651 Highway 28 Bypass
29624
SC
Fee (3
)
1999
2007
15%
223,211
$
1,415,807
$
6.54
96.9%
Wal-Mart (2019)
Anderson, SC
North Hill Commons
3521 Clemson Boulevard
29621
SC
Fee (3
)
2000
2007
15%
43,149
$
431,962
$
10.01
100%
Michaels (2013), Target (Not Owned)
Camden, SC
Springdale Plaza
1671 Springdale Drive
29020
SC
Fee
1990/2000
1993
100%
180,127
$
1,069,522
$
7.54
78.7%
Belk (2015), Wal-Mart Super Center (Not Owned)
Charleston, SC
Ashley Crossing
2245 Ashley Crossing Drive
29414
SC
Fee
1991
2003
100%
188,883
$
736,846
$
11.63
31.2%
Food Lion (2011)
Columbia, SC
Columbiana Station OEA
Harbison Boulevard & Bower Parkway
29212
SC
Fee (3
)
1999
2007
15%
379,733
$
4,637,604
$
16.21
75.3%
Circuit City (2020), Dicks Clothing and Sporting Goods
(2016), Michaels (2010), PetSmart (2015), H.H. Gregg
Appliances (2015)
Columbia, SC
Target Super Center
10204 Two Notch Road
29229
SC
Fee (3
)
2002
2007
15%
83,400
$
187,275
$
6.71
33.5%
Michaels (2012), Target (Not Owned)
Columbia, SC
Harbison Court
Harbison Boulevard
29212
SC
Fee (3
)
1991
2002
14.5%
236,765
$
2,914,126
$
12.86
95.7%
Barnes & Noble (2011), Ross Dress For Less (2014),
Marshalls (2012), Office Depot (2011), Babies R Us
(Not Owned)
Conway, SC
Gateway Plaza - Conway
2701 Church Street
29526
SC
Fee
2002
2007
100%
62,428
$
598,782
$
9.99
96%
Goodys (2017)
Easley, SC
Center Pointe Plaza II
Calhoun Memorial Highway & Brushy Creek Road
29642
SC
GL(3
)
2004
2007
20%
72,287
$
646,147
$
11.06
80.8%
Publix Super Markets (2023), Home Depot (Not Owned)
Fort Mill, SC
Rite Aid
2907 West Highway 160
29708
SC
Fee
2002
2007
100%
13,824
$
309,853
$
22.41
100%
Gaffney, SC
Rite Aid
1320 West Floyd Baker Boulevard
29341
SC
Fee
2003
2007
100%
13,818
$
291,984
$
21.13
100%
62
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Greenville, SC
Rite Aid3679 Augusta Road
29605
SC
Fee
2001
2007
100%
10,908
$
283,423
$
25.98
100%
Greenville, SC
Wal-Mart Supercenter
1451 Woodruff Road
29607
SC
Fee
1998
2007
100%
200,084
$
1,272,534
$
6.36
100%
Wal-Mart (2018)
Greenville, SC
The Point
1140 Woodruff Road
29601
SC
Fee (3
)
2005
2007
20%
104,641
$
1,775,747
$
16.97
100%
Whole Foods (2026), Circuit City (2021)
Greenwood, SC
BI-LO - Northside Plaza
U.S. Highway 25 & Northside Drive
29649
SC
Fee
1999
2007
100%
41,581
$
334,437
$
8.04
100%
BI-LO (2019)
Lexington, SC
Lexington Place
U.S. Highway 378 & Old Cherokee Road
29072
SC
Fee
2003
2007
100%
83,167
$
864,796
$
10.40
100%
Ross Dress For Less (2014), T.J. Maxx (2013), Publix (Not
Owned), Kohls (Not Owned)
Mount Pleasant, SC
Wando Crossing
1500 Highway 17 North
29465
SC
Fee
1992/2000
1995
100%
209,810
$
2,526,139
$
12.60
95.5%
Circuit City (2018), Office Depot (2010), T.J. Maxx (2013),
Marshalls (2011), Wal-Mart (Not Owned)
Mount Pleasant, SC
BI-LO at Shelmore
672 Highway 17 By-Pass
29464
SC
Fee
2002
2007
100%
64,368
$
920,894
$
14.31
100%
BI-LO (2023)
Myrtle Beach, SC
Plaza at Carolina Forest
3735 Renee Drive
29579
SC
Fee (3
)
1999
2007
20%
116,657
$
1,644,197
$
13.39
95.7%
Kroger (2010)
North Charleston, SC
North Pointe Plaza
7400 Rivers Avenue
29406
SC
Fee
1989/2001
2
*
100%
294,471
$
2,048,906
$
7.02
99.2%
Wal-Mart (2009), Office Max (2014)
North Charleston, SC
North Charleston Center
5900 Rivers Avenue
29406
SC
Fee
1980/1993
2004
100%
235,501
$
1,243,210
$
7.41
71.3%
Northern Tool (2016), Big Lots (2011), Home Decor
Liquidators (2012)
Orangeburg, SC
North Road Plaza
2795 North Road
29115
SC
Fee
1994/1999
1995
100%
50,760
$
568,393
$
11.20
100%
Goodys (2013), Wal-Mart (Not Owned)
Piedmont, SC
Rite Aid - Piedmont
915 Anderson Street
29601
SC
Fee
2000
2007
100%
10,908
$
181,052
$
16.60
100%
Simpsonville, SC
Fairview Station
621 Fairview Road
29681
SC
Fee
1990
1994
100%
142,086
$
885,125
$
6.28
99.2%
Ingles (2011), Kohls (2015)
Spartanburg, SC
Rite Aid - Blackstock
1510 W.O. Ezell Boulevard
29301
SC
Fee
2001
2007
100%
10,908
$
271,599
$
24.90
100%
Spartanburg, SC
Northpoint Marketplace
8642-8760 Asheville Highway
29316
SC
Fee
2001
2007
100%
102,252
$
632,624
$
7.23
82.6%
Ingles (2021)
Spartanburg, SC
Rite Aid - Spartanburg
780 North Pine Street
29301
SC
Fee
2002
2007
100%
10,908
$
283,656
$
26.00
100%
Taylors, SC
North Hampton Market
6019 Wade Hampton
29687
SC
Fee (3
)
2004
2007
20%
114,935
$
1,100,896
$
10.84
88.3%
Hobby Lobby (2019), Target (Not Owned)
Taylors, SC
Hampton Point
3033 Wade Hampton Boulevard
29687
SC
Fee
1993
2007
100%
58,316
$
458,027
$
8.06
97.4%
BI-LO (2018)
63
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Woodruff, SC
Rite Aid - Woodruff
121 North Main Street
29388
SC
Fee
2002
2007
100%
13,824
$
288,178
$
20.85
100%
South Dakota
Watertown, SD
Watertown Mall
1300 9th Avenue
56401
MM
Fee
1977
1/2
*
100%
240,262
$
1,322,851
$
6.63
83.1%
Dunhams Sporting Goods (2011), Herbergers (2014),
JCPenney (2013), Hy-Vee Supermarket (Not Owned)
Tennessee
Brentwood, TN
Cool Springs Pointe
I-65 & Moores Lane
37027
SC
Fee (3
)
1999/2004
2000
14.5%
201,414
$
2,208,987
$
13.54
81%
Best Buy (2014), Ross Dress For Less (2015), DSW Shoe
Warehouse (2009)
Chattanooga, TN
Overlook at Hamilton Place
2288 Gunbarrel Road
37421
SC
Fee
1992/2004
2003
100%
207,244
$
1,805,781
$
8.78
99.2%
Best Buy (2014), Hobby Lobby (2014), Fresh Market (2014)
Columbia, TN
Columbia Square
845 Nashville Highway
38401
SC
Fee (3
)
1993
2003
10%
68,948
$
458,900
$
7.62
87.4%
Kroger (2022)
Farragut, TN
Farragut Pointe
11132 Kingston Pike
37922
SC
Fee (3
)
1991
2003
10%
71,311
$
470,938
$
7.54
87.6%
Food City (2011)
Goodlettsville, TN
Northcreek Commons
101-139 Northcreek Boulevard
37072
SC
Fee (3
)
1987
2003
20%
84,441
$
733,139
$
8.91
97.5%
Kroger (2012)
Hendersonville, TN
Lowes Home Improvement Center - Hendersonville
1050 Lowes Road
37075
SC
Fee
1999
2003
100%
133,144
$
1,222,439
$
9.18
100%
Lowes (2019)
Jackson, TN
West Towne Commons
41 Stonebrook Place
38305
SC
Fee (3
)
1992
2007
20%
62,925
$
579,341
$
9.21
100%
Kroger (2020)
Johnson City, TN
Johnson City MarketplaceFranklin &
Knob Creek Roads
37604
SC
GL
2005
2003
100%
11,749
$
531,918
$
15.23
100%
Kohls (2026)
Knoxville, TN
Pavilion of Turkey Creek I
10936 Parkside Drive
37922
SC
Fee (3
)
2001
2007
15%
280,776
$
3,169,800
$
13.11
86.1%
Ross Dress For Less (2014), Office Max (2017), Old Navy
(2011), Goodys (2015), Target (Not Owned), Wal-Mart (Not
Owned)
64
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Knoxville, TN
Town & Country
North Peters Road & Town & Country
Circle
37923
SC
Fee (3
)
1985/1997
2007
15%
638,437
$
6,180,411
$
10.25
94.4%
Goodys (2013), Jo-Ann Stores (2013), Circuit City (2014),
Staples (2019), Best Buy (2019), Food City (2026), Lowes
(2017), Carmike Cinemas (2020), Dicks Clothing and
Sporting Goods (2017)
Memphis, TN
American Way
4075 American Way
38118
SC
Fee (3
)
1988
2007
20%
121,222
$
899,534
$
8.15
91.1%
Kroger (2020)
Morristown, TN
Crossroads Square
130 Terrace Lane
37816
SC
Fee (3
)
2004
2007
20%
68,500
$
610,500
$
9.25
96.4%
T.J. Maxx (2014)
Murfreesboro, TN
Towne Centre
Old Fort Parkway
37129
SC
Fee (3
)
1998
2003
14.5%
108,023
$
1,367,278
$
12.66
100%
T.J. Maxx (2010), Books-A-Million(2009), Toys R Us
(Not Owned), Lowes (Not Owned), Target (Not Owned)
Nashville, TN
Willowbrook Commons
61 East Thompson Lane
37211
SC
Fee (3
)
2005
2007
20%
93,600
$
719,155
$
8.66
88.7%
Kroger (2029)
Nashville, TN
Bellevue Place
7625 Highway 70 South
37221
SC
Fee (3
)
2003
2007
15%
77,180
$
859,950
$
12.15
91.7%
Michaels (2012), Bed Bath & Beyond (2012), Home Depot (Not
Owned)
Nashville, TN
The Marketplace
Charlotte Pike
37209
SC
Fee (3
)
1998
2003
14.5%
167,795
$
1,672,820
$
10.05
99.2%
Lowes (2019), Wal Mart (Not Owned)
Oakland, TN
Oakland Market Place
7265 U.S. Highway 64
38060
SC
Fee (3
)
2004
2007
20%
64,600
$
420,847
$
6.97
93.5%
Kroger (2028)
Texas
Allen, TX
Watters Creek
Bethany Road
75013
LC
Fee (3
)
2008
1
*
10%
244,911
$
5,806,978
$
22.75
100%
United Market Street (2028), Borders (2018)
Austin, TX
The Shops at Tech Ridge
Center Ridge Drive
78728
SC
Fee (3
)
2003
2003
25.75%
282,798
$
3,444,656
$
14.62
82.4%
Ross Dress For Less (2014), Toys R Us (2014), Hobby
Lobby (2018), Best Buy (2017), Super Target (Not Owned)
Baytown, TX
Lowes Home Improvement - Baytown
5002 Garth Road
77521
SC
Fee
1998
2007
100%
125,357
$
873,828
$
6.97
100%
Lowes (2015)
Fort Worth, TX
CVS Pharmacy
2706 Jacksboro Highway
76114
SC
Fee
1997
2007
100%
10,908
$
239,784
$
21.98
100%
Fort Worth, TX
CVS Pharmacy
4551 Sycamore School Road
76133
SC
Fee
1997
2007
100%
9,504
$
149,248
$
15.70
100%
Frisco, TX
Frisco Marketplace
7010 Preston Road
75035
SC
Fee (3
)
2003
2003
14.5%
20,959
$
752,050
$
20.33
100%
Kohls (2023)
65
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Garland, TX
Garland Plaza
3265 Broadway Boulevard
75043
SC
Fee
1994
2007
100%
70,576
$
0
$
0.00
0%
Grand PrairIe, TX
Kroger - Grand Prairie
2525 West Interstate 20
75052
SC
Fee
1998
2007
100%
60,835
$
433,615
$
7.13
100%
Kroger (2018)
Houston, TX
Lowes Home Improvement - Houston
19935 Katy Freeway
77094
SC
Fee
1998
2007
100%
131,644
$
917,000
$
6.97
100%
Lowes (2017)
Irving, TX
MacArthur Marketplace
Market Place Boulevard
75063
SC
Fee (3
)
2004
2003
14.5%
146,941
$
2,107,168
$
10.85
100%
Kohls (2021), Hollywood Theaters (2016), Office Max
(2014), Sams Club (Not Owned), Wal-Mart (Not Owned)
Lewisville, TX
Lakepointe Crossings
South Stemmons Freeway
75067
SC
Fee (3
)
1991
2002
14.5%
315,008
$
2,840,134
$
10.79
84.1%
99 Cents Only Store (2009), PetSmart (2009), Best Buy
(2010), Academy Sports (2016), Mardel Christian Bookstore
(2012), Conns Appliance (Not Owned), Garden Ridge (Not
Owned), Toys R Us (Not Owned)
McKinney, TX
McKinney Marketplace
U.S. Highway 75 & El Dorado Parkway
75070
SC
Fee (3
)
2000
2003
14.5%
118,967
$
1,239,848
$
10.78
96.6%
Kohls (2021), Albertsons (Not Owned)
Mesquite, TX
Marketplace at Towne Center
Southbound Frontage Road I 635
75150
SC
Fee (3
)
2001
2003
14.5%
170,625
$
2,215,973
$
14.68
82.2%
PetSmart (2017), Michaels(2012), Ross Dress For Less (2013),
Home Depot (Not Owned), Kohls (Not Owned)
North Richland Hills, TX
CVS Pharmacy
4808 Davis Boulevard
76180
SC
Fee
1997
2007
100%
10,908
$
237,324
$
21.76
100%
Pasadena, TX
Kroger Junction
2619 Red Bluff Road
77506
SC
Fee (3
)
1984
2007
20%
80,753
$
446,479
$
6.19
89.3%
Kroger (2020)
Richardson, TX
CVS Pharmacy
2090 Arapahoe Boulevard
75081
SC
Fee
1997
2007
100%
10,560
$
206,585
$
19.56
100%
Rowlett, TX
Rowlett Plaza
8800 Lakeview Parkway
75088
SC
Fee
1995/2001
2007
100%
63,117
$
0
$
0.00
0%
San Antonio, TX
Ingram Park
6157 N.W. Loop 410
78238
MV
Fee
1985
2005
50%
76,597
$
0
$
0.00
0%
66
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
San Antonio, TX
Bandera Pointe
North State Loop
1604 Bandera Road
78227
SC
Fee
2001/2002
2002
100%
278,815
$
4,285,314
$
16.06
91.6%
Lowes (2020), T.J. Maxx (2011), Old Navy (2011), Ross
Dress For Less (2012), Barnes & Noble (2011), Kohls
(Not
Owned), Raquetball & Fitness (Not Owned), Credit Union (Not
Owned), Chuck E Cheese (Not Owned), Target (Not Owned)
San Antonio, TX
Village at Stone Oak
22610 U.S. Highway 281 North
78258
SC
Fee
2007
1
*
100%
300,834
$
4,946,638
$
16.35
97.1%
Hobby Lobby (2022), T.J. Maxx (2017)
San Antonio, TX
Westover Marketplace
State Highway 151 at Loop 410
78209
SC
Fee (3
)
2005
1
*
10%
218,257
$
3,195,057
$
14.58
97.8%
PetSmart (2016), Sportsmans Warehouse (2015), Ross
Dress
For Less (2016), Target (Not Owned), Lowes (Not Owned)
San Antonio, TX
Terrell Plaza
1201 Austin Highway
78209
SC
Fee (3
)
1958/1986
2007
50%
170,333
$
1,164,162
$
6.94
98.5%
Big Lots (2010)
Tyler, TX
CVS Pharmacy
1710 West Gentry Parkway
75702
SC
Fee
1997
2007
100%
9,504
$
134,773
$
14.18
100%
Utah
Midvale, UT
Family Center at Fort Union 50
900 East Fourt Union Boulevard
84047
SC
Fee
1973/2000
1998
100%
641,957
$
8,022,197
$
13.58
92%
Babies R Us (2014), Office Max (2012), Smiths
Food &
Drug (2024), Media Play (2016), Bed Bath & Beyond (2014),
Wal-Mart (2015), Ross Dress For Less (2016), Michaels
(2017)
Ogden, UT
Family Center at Ogden 5-Points
21-129 Harrisville Road
84404
SC
Fee
1977
1998
100%
162,316
$
797,109
$
5.69
86.3%
Harmons (2012)
Orem, UT
Family Center at Orem
1300 South Street
84058
SC
Fee
1991
1998
100%
150,667
$
1,677,708
$
11.14
100%
Toys R Us (2011), Media Play (2015), Office Depot
(2008), Jo-Ann Stores (2012), R.C. Willey (Not Owned)
67
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Riverdale, UT
Family Center at Riverdale
1050 West Riverdale Road
84405
SC
Fee
1995/2003
1998
100%
593,398
$
5,001,984
$
8.66
95.9%
Macys (2011), Office Max (2010), Gart Sports (2012),
Sportsmans Warehouse (2009), Target (2017), Media Play
(2009), Circuit City (2016)
Riverdale, UT
Family Center at Riverdale
1050 West Riverdale Road
84405
SC
Fee
2005
1
*
100%
46,597
$
476,421
$
10.22
100%
Jo-Ann Stores (2015), Super Wal-Mart (Not Owned), Sams
Club (Not Owned)
Salt Lake City, UT
Family Place at 33rd South
3300 South Street
84115
SC
Fee
1978
1998
100%
34,209
$
216,409
$
9.08
69.7%
Taylorsville, UT
Family Center at Taylorsville
5600 South Redwood
84123
SC
Fee
1982/2003
1998
100%
697,630
$
6,367,218
$
10.89
83.1%
ShopKo (2014), Jo-Ann Stores (2015), Gart Sports (2017), 24
Hour Fitness (2017), PetSmart (2018), Bed Bath & Beyond
(2015), Ross Dress For Less (2014), Media Play (2009),
Harmons Superstore (Not Owned)
Vermont
Berlin, VT
Berlin Mall
282 Berlin Mall Road.,
Unit #28
05602
MM
Fee
1986/1999
2
*
100%
174,624
$
1,508,464
$
9.63
89.7%
Wal-Mart (2014), JCPenney (2009)
Virginia
Chester, VA
Bermuda Square
12607-12649 Jefferson Davis
23831
SC
Fee
1978
2003
100%
114,589
$
1,457,608
$
13.19
92.6%
Ukrops (2013)
Fairfax, VA
Fairfax Towne Center
12210 Fairfax Towne Center
22033
SC
Fee (3
)
1994
1995
14.5%
253,298
$
4,167,839
$
18.28
90%
Safeway (2019), T.J. Maxx (2009), Bed Bath & Beyond (2010),
United Artists Theatre (2014)
Glen Allen, VA
Creeks at Virginia Center
9830-9992 Brook Road
23059
SC
Fee (3
)
2002
2007
15%
266,308
$
3,899,001
$
14.71
99.5%
Barnes & Noble (2011), Circuit City (2022), Bed Bath &
Beyond (2012), Michaels (2011), Dicks Clothing and
Sporting Goods (2017)
Lynchburg, VA
Candlers Station
3700 Candlers Mountain Road
24502
SC
Fee
1990
2003
100%
270,765
$
1,739,225
$
9.72
66.2%
Cinemark (2015), Staples (2013), T.J. Maxx (2011) Toys
R
Us (Not Owned)
68
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Lynchburg, VA
Wards Crossing
Wards Road & Wards Ferry Road
24502
SC
Fee (3
)
2001
2007
15%
80,937
$
1,161,822
$
14.92
96.2%
Bed Bath & Beyond (2013), Michaels (2011), Target (Not
Owned), Dicks Clothing and Sporting Goods (Not Owned),
PetSmart (Not Owned)
Martinsville, VA
Liberty Fair Mall
240 Commonwealth Boulevard
24112
MM
Fee (3
)
1989/1997
1/2
*
50%
435,057
$
2,748,239
$
6.98
89.9%
Goodys (2011), Belk (2012), JCPenney (2009), Sears (2009),
Office Max (2012), Kroger (2017)
Midlothian, VA
Chesterfield Crossings
Highway 360 & Warbro Road
23112
SC
Fee (3
)
2000
2007
15%
79,802
$
1,126,797
$
14.15
87.6%
Ben Franklin Crafts (2015), Wal-Mart (Not Owned)
Midlothian, VA
Commonwealth Center
4600-5000 Commonwealth Center
Parkway
23112
SC
Fee (3
)
2002
2007
15%
165,413
$
2,227,617
$
13.81
97.5%
Stein Mart (2011), Michaels (2011), Barnes & Noble (2012)
Newport News, VA
Denbigh Village
Warwick Boulevard & Denbigh
Boulevard
23608
SC
Fee
1998/2006
2007
100%
324,450
$
2,513,298
$
8.15
88.3%
Burlington Coat Factory (2013), Kroger (2017)
Newport News, VA
Jefferson Plaza
121 Jefferson Avenue
23602
SC
Fee (3
)
1999
2007
15%
47,341
$
320,486
$
17.60
38.5%
Costco (Not Owned)
Richmond, VA
Downtown Short Pump
11500-900 West Broad Street
23233
SC
Fee
2000
2007
100%
126,055
$
2,475,280
$
21.29
92.2%
Barnes & Noble (2011), Regal Cinemas (2021)
Springfield, VA
Loisdale Center
6646 Loisdale Road
22150
SC
Fee
1999
2007
100%
120,742
$
2,469,392
$
20.45
100%
Barnes & Noble (2015), DSW Shoe Warehouse (2015), Bed Bath
& Beyond (2015), Circuit City (2020)
Springfield, VA
Spring Mall Center
6717 Spring Mall Road
22150
SC
Fee
1995/2001
2007
100%
56,511
$
998,611
$
17.67
100%
Michaels (2010), Tile Shop (2018)
Sterling, VA
Cascade Marketplace
NEC of Cascades Parkway & Route 7
20165
SC
Fee
1998
2007
100%
101,606
$
1,547,669
$
15.23
100%
Staples (2013), Sports Authority (2016)
Virginia Beach, VA
Kroger Plaza
1800 Republic Drive
23454
SC
Fee (3
)
1997
2007
20%
63,324
$
240,788
$
3.80
100%
Kroger (2020)
Waynesboro, VA
Waynesboro Commons
109 Lee Dewitt Boulevard
22980
SC
Fee (3
)
1993
2007
20%
52,415
$
388,310
$
8.96
82.6%
Kroger (2018)
69
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Winchester, VA
Apple Blossom Corners
2190 South Pleasant Valley
22601
SC
Fee (3
)
1990/1997
2
*
20%
240,560
$
2,470,504
$
10.26
98.5%
Martins Food Store (2040), Kohls (2018), Office
Max
(2012), Books-A-Million (2013)
Wytheville, VA
Wytheville Commons
215-295 Commonwealth Drive
24382
SC
Fee (3
)
2004
2007
15%
90,239
$
1,078,914
$
11.96
100%
Goodys (2016), Lowes (Not Owned), Super Wal-Mart
(Not
Owned)
Washington
Kirkland, WA
Totem Lake Upper
Totem Lakes Boulevard
98034
SC
Fee (3
)
1999/2004
2004
20%
253,867
$
2,232,000
$
16.84
55.5%
Guitar Center (2009), Ross Dress For Less (2015)
Olympia, WA
Circuit City - Olympia
2815 Capital Mall Drive S.W.
98502
SC
Fee
1998
2007
100%
35,776
$
443,929
$
12.41
100%
Circuit City (2018)
West Virginia
Barboursville, WV
Barboursville Center
5-13 Mall Road
25504
SC
GL
1985
1998
100%
70,900
$
198,950
$
4.51
62.3%
Discount Emporium (2006), Value City (Not Owned)
Morgantown, WV
Glenmark Center
Interstate 68 & Pierpont Road
26508
SC
Fee
1999/2000
2007
100%
111,278
$
1,222,729
$
9.90
100%
Shop n Save (2009), Michaels (2011)
Weirton, WV
Rite Aid
1360 Cove Road
26062
SC
Fee
2000
2007
100%
10,908
$
221,870
$
20.34
100%
Wisconsin
Brookfield, WI
Shoppers World Brookfield
North 124th Street & West Capital Drive
53005
SC
Fee (3
)
1967
2003
14.5%
182,722
$
1,445,801
$
7.91
100%
T.J. Maxx (2010), Marshalls Mega Store (2009), Office Max
(2010), Burlington Coat Factory (2012)
Brown Deer, WI
Brown Deer Center
North Green BayRoad
53209
SC
Fee (3
)
1967
2003
14.5%
266,716
$
2,034,560
$
7.77
98.1%
Kohls (2023), Michaels (2012), Office Max
(2010), T.J. Maxx (2012), Old Navy (2012)
Brown Deer, WI
Marketplace of Brown DeerNorth
Green Bay Road
53209
SC
Fee (3
)
1989
2003
14.5%
143,372
$
1,184,414
$
8.26
100%
Marshalls Mega Store (2009), Pick n Save (2010)
Milwaukee, WI
Point Loomis
South 27th Street
53221
SC
Fee
1962
2003
100%
160,533
$
707,569
$
4.41
100%
Kohls (2012), Pick n Save (2012)
Oshkosh, WI
Walgreens - Oshkosh
South 27th Street
54902
SC
Fee
2005
2007
100%
13,905
$
305,910
$
22.00
100%
70
Table of Contents
Developers Diversified Realty
Corporation
Shopping Center Property List at December 31, 2008
Company-
Average
Owned
Base
Type of
Year
DDR
Gross
Total
Rent
Zip
Property
Ownership
Developed/
Year
Ownership
Leasable
Annualized
(per SF)
Percent
Center/Property
Location
Code
(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
(2)
Occupied
Anchor Tenants (Lease Expiration)
Racine, WI
Village Center Outlot
Washington Avenue Village Center Drive
53406
SC
Fee (3
)
2003
2007
20%
227,887
$
2,461,641
$
10.93
98.8%
Jewel (2022), Kohls (2023)
West Allis, WI
West Allis Center
West Cleveland Avenue & South 108
53214
SC
Fee
1968
2003
100%
246,081
$
1,463,410
$
5.64
100%
Kohls (2018), Marshalls Mega Store (2009), Pick n
Save (2013)
1*
Property developed by the Company.
2*
Original IPO Property.
(1)
SC indicates a power
center or a community shopping center, LC indicates
a lifestyle center, MM indicates an enclosed Mall,
and MV indicates a Mervyns site.
(2)
Calculated as total annualized base
rentals divided by Company-owned GLA actually leased as of
December 31, 2008.
(3)
One of the two hundred eighty-five
(285) properties owned through unconsolidated joint
ventures, which serve as collateral for joint venture mortgage
debt aggregating approximately $5.8 billion (of which the
Companys proportionate share is $1,216.1 million) as
of December 31, 2008, and which is not reflected in the
consolidated indebtedness.
71
Table of Contents
Developers Diversified Realty
Corporation
Service Merchandise Joint Venture Property List at
December 31, 2008
Company-
Owned
Average
Year
DDR
Gross
Total
Base
Zip
Type of
Ownership
Developed/
Year
Ownership
Leaseable
Annualized
Rent
Percent
Center/Property
Location
Code
Property(1)
Interest(3)
Redeveloped
Acquired
Interest
Area (SF)
Base Rent
(Per SF)(2)
Leased
Anchor Tenants (Lease Expiration)
930 A Old Monrovia Road
35806
SC
Fee
1984
2002
20
%
54,200
$
381,500
$
7.04
100
%
H.H. Gregg Appliances (2014)
6233 East Southern Boulevard
85206
SC
Fee
1991
2002
20
%
53,312
$
782,765
$
14.68
100
%
Ashley Furniture Homestore (2013)
67 Newton Road
06810
SC
Lease
1978
2002
20
%
51,750
$
543,000
$
10.49
100
%
Homegoods (2012), Namco Pool Supplies (2012)
1520 Pleasant Valley Road
06040
SC
GL
1993
2002
20
%
49,905
$
509,579
$
10.21
100
%
Michaels (2014), PetSmart (2014)
1380 North Dupont Highway
19901
SC
Fee
1992
2002
20
%
50,001
$
352,047
$
7.04
100
%
Furniture & More (2009), PetSmart (2011)
825 Cortez Road West
34207
SC
Lease
1995
2002
20
%
53,638
$
330,870
$
6.17
100
%
Bed Bath & Beyond (2018), Michaels (2014)
3257 N.W. Federal Highway
34957
SC
GL
1989
2002
20
%
50,000
$
195,368
$
7.31
53.5
%
Office Depot (2011)
2405 Southwest 27th Avenue
32671
SC
Lease
1981
2002
20
%
54,816
$
314,140
$
5.73
100
%
Kimco Ocala (2012), Bealls Outlet (2012)
7175 West Colonial Drive
32818
SC
Fee
1989
2005
20
%
51,550
$
0
$
0.00
0
%
7303 Plantation Road
32504
SC
Fee
1976
2004
20
%
64,053
$
800,663
$
12.50
100
%
American Water Works (2015)
2500 66th Street North
33710
SC
Fee
1975
2002
20
%
76,438
$
1,099,479
$
13.27
Jo-Ann Stores (2014), Homegoods (2016)
2075 Market Street
30136
SC
Fee
1983
2002
20
%
56,225
$
325,901
$
5.80
100
%
Mega Amusement (2013)
7600 South Lacrosse Avenue
60459
SC
Fee
1984
2002
20
%
27,213
$
162,000
$
11.73
50.8
%
5561 Northwest Highway
60014
SC
Fee
1989
2002
20
%
50,092
$
335,300
$
8.02
83.4
%
Big Lots (2012)
1508 Butterfield Road
60515
SC
Lease
1973
2002
20
%
35,943
$
0
$
0.00
0
%
16795 South Torrence Avenue
60438
SC
Fee
1986
2002
20
%
51,177
$
391,948
$
8.26
92.7
%
Pay/Half (2017)
72
Table of Contents
Developers Diversified Realty
Corporation
Service Merchandise Joint Venture Property List at
December 31, 2008
Company-
Owned
Average
Year
DDR
Gross
Total
Base
Zip
Type of
Ownership
Developed/
Year
Ownership
Leaseable
Annualized
Rent
Percent
Center/Property
Location
Code
Property(1)
Interest(3)
Redeveloped
Acquired
Interest
Area (SF)
Base Rent
(Per SF)(2)
Leased
Anchor Tenants (Lease Expiration)
300 North Green River Road
47715
SC
Lease
1978
2002
20
%
60,000
$
384,738
$
9.23
69.5
%
Bed Bath & Beyond (2014)
1555 New Circle Road
40509
SC
Lease
1978
2002
20
%
60,000
$
367,684
$
6.13
100
%
Homegoods (2014), The Tile Shop (2013)
4601 Outer Loop Road
40219
SC
Fee
1973
2002
20
%
49,410
$
309,701
$
6.27
100
%
PetSmart (2018), A.J. Wright (2014)
5109 Hinkleville Road
42001
SC
Fee
1984
2002
20
%
52,500
$
0
$
0.00
0
%
9501 Cortana Mall
70815
SC
Fee
1997
2004
20
%
90,000
$
148,900
$
1.65
100
%
Flor-Line Associates (2013)
2950 East Texas Street
71111
SC
Fee
1982
2003
20
%
58,500
$
0
$
0.00
0
%
1636 Martin Luther King Boulevard
70360
SC
Fee
1992
2002
20
%
49,721
$
324,689
$
8.12
80.4
%
Best Buy (2015), Bed Bath & Beyond (2018)
34 Cambridge Street
01803
SC
Lease
1978
2002
20
%
70,800
$
898,814
$
12.70
100
%
E & A Northeast (2014), Off Broadway Shoes (2014)
58 Swansea Mall Drive
02777
SC
GL
1985
2002
20
%
49,980
$
307,380
$
6.15
100
%
Pricerite Supermarket (2016)
7638 Nankin Road
48185
SC
Fee
1980
2002
20
%
50,000
$
0
$
0.00
0
%
1000 Turtle Creek Drive
39402
SC
Fee
1995
2002
20
%
50,809
$
406,472
$
8.00
100
%
Circuit City (2020)
4701 Faircenter Parkway
89102
SC
Lease
1990
2004
20
%
24,975
$
174,825
$
7.00
100
%
Michaels (2011)
271 South Broadway
03079
SC
Lease
1985
2003
20
%
50,110
$
604,779
$
12.07
100
%
Bed Bath & Beyond (2011), A.C. Moore (2016)
651 Route 17 East
06117
SC
Lease
1978
2003
20
%
54,850
$
958,740
$
19.52
89.6
%
Homegoods (2013)
Route 23 West Belt Plaza
07470
SC
Lease
1978
2002
20
%
49,157
$
797,714
$
16.23
100
%
Homegoods (2010), PetSmart (2015)
Table of Contents
Developers Diversified Realty
Corporation
Service Merchandise Joint Venture Property List at
December 31, 2008
Company-
Owned
Average
Year
DDR
Gross
Total
Base
Zip
Type of
Ownership
Developed/
Year
Ownership
Leaseable
Annualized
Rent
Percent
Center/Property
Location
Code
Property(1)
Interest(3)
Redeveloped
Acquired
Interest
Area (SF)
Base Rent
(Per SF)(2)
Leased
Anchor Tenants (Lease Expiration)
88-25 Dunning Road
10940
SC
Lease
1989
2002
20
%
50,144
$
430,608
$
8.59
100
%
Homegoods (2010), PetSmart (2010)
U.S. 17 Millbrook
27604
SC
Fee
1994
2002
20
%
50,000
$
457,028
$
9.14
100
%
A.C. Moore (2010), K & G Menswear (2014)
5537 Northwest Expressway
73132
SC
Fee
1985
2002
20
%
50,000
$
0
$
0.00
0
%
7400 Rivers Avenue
29418
SC
Fee
1989
2002
20
%
50,000
$
333,612
$
6.67
100
%
DDR (2011), Dollar Tree (2013)
5301 Hickory Hollow Parkway
37013
SC
Fee
1984
2002
20
%
59,319
$
558,821
$
9.42
100
%
Office Depot (2010), Bed Bath & Beyond (2018)
1735 Galleria Boulevard
37064
SC
Fee
1992
2002
20
%
60,000
$
705,606
$
11.76
100
%
H.H. Gregg Appliances (2010), Wild Oats
Markets (2014)
9333 Kingston Pike
37922
SC
Fee
1986
2002
20
%
50,092
$
262,983
$
5.25
100
%
Hobby Lobby (2010)
6731 Garth Road
77521
SC
Fee
1981
2002
20
%
52,288
$
0
$
0.00
0
%
3520 McCann Road
75605
SC
Fee
1978
2004
20
%
40,524
$
324,192
$
8.00
100
%
Stage (2015)
6600 U.S. Expressway 83
78503
SC
Fee
1993
2002
20
%
63,445
$
530,664
$
8.36
100
%
Michaels (2012), Bed Bath & Beyond (2018)
1300 East Beltline
75081
SC
Fee
1978
2002
20
%
62,463
$
454,600
$
7.28
100
%
Staples (2011), Conns Appliance (2014)
15235 South West Freeway
77478
SC
GL
1992
2002
20
%
50,000
$
350,000
$
7.00
100
%
Conns Appliance (2018)
4300 Portsmouth Boulevard
23321
SC
GL
1990
2002
20
%
50,062
$
384,683
$
7.68
100
%
PetSmart (2016), Michaels (2011)
(1)
SC indicates a power center or a
community shopping center.
(2)
Calculated as total annualized base
rentals divided by Company-owned GLA actually leased as of
December 31, 2008.
(3)
See footnote 3 of the Shopping
Center Property List on page 64 describing indebtedness.
Table of Contents
Developers Diversified Realty
Corporation
Business Center Property List at December 31, 2008
Company-
Owned
Year
DDR
Gross
Total
Average
Zip
Type of
Ownership
Developed/
Year
Ownership
Leasable
Annualized
Base
Percent
Center/Property
Location
Code
Property(1)
Interest
Redeveloped
Acquired
Interest
Area (SF)
Rent
Rent (Per SF)(2)
Leased
Maryland
1
Silver Springs, MD(I)
Tech Center 29 Phase I
2120-2162 Tech Road
20904
IND
Fee
1970
2001
100%
175,410
$
1,523,239
$
9.39
79.3%
2
Silver Springs, MD(II)
Tech Center 29 Phase II
2180 Industrial Parkway
20904
IND
Fee
1991
2001
100%
58,280
$
248,329
$
13.95
17.9%
3
Silver Springs, MD(III)
Tech Center 29 Phase III
12200 Tech Road
20904
OFF
Fee
1988
2001
100%
55,422
$
1,335,138
$
24.09
100%
Ohio
4
Twinsburg, OH
Heritage Business I
9177 Dutton Drive
44087
IND
Fee
1990
2
*
100%
35,866
$
96,932
$
8.31
32.5%
Pennsylvania
5
Erie, PA
38th Street Plaza
2301 West 38th Street
16506
IND
GL
1973
2
*
100%
96,000
$
328,650
$
6.02
56.9%
Utah
6
Salt Lake City, UT
The Hermes Building 455 East 500 South Street
84111
IND
Fee
1985
1998
100%
53,476
$
683,673
$
16.41
77.5%
2*
Original IPO Property transferred
to American Industrial Properties (AIP) in 1998 and
reacquired in 2001 through AIP merger.
(1)
These properties are classified in
the Companys business center segment. OFF
indicates office property and IND indicates
industrial property.
(2)
Calculated as total annualized base
rentals divided by Company-owned GLA actually leased as of
December 31, 2008.
75
Table of Contents
Item 3.
LEGAL
PROCEEDINGS
Item 4.
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
56
Chairman of the Board of Directors and Chief Executive Officer
44
President and Chief Operating Officer
30
Senior Executive Vice President of Finance and Chief Investment
Officer
53
Senior Executive Vice President of Leasing and Development
56
Executive Vice President Corporate Transactions and
Governance
57
Executive Vice President International
51
Executive Vice President of Development
49
Executive Vice President of Property Management
50
Executive Vice President and Chief Financial Officer
52
Executive Vice President of Leasing
38
Senior Vice President and Chief Accounting Officer
76
Table of Contents
77
Table of Contents
78
Table of Contents
82
83
Item 5.
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
High
Low
Dividends
$
44.31
$
32.20
$
0.69
45.66
34.44
0.69
41.55
27.60
0.69
31.50
1.73
$
72.33
$
61.43
$
0.66
66.70
50.75
0.66
56.85
46.28
0.66
59.27
37.42
0.66
79
Table of Contents
(c) Total
(d) Maximum
Number of
Number (or
Shares
Approximate
Purchased as
Dollar Value) of
Part of Publicly
Shares that May
(a) Total Number
(b) Average
Announced
Yet Be Purchased
of Shares
Price Paid per
Plans or
Under the Plans or
Purchased
Share
Programs
Programs (Millions)
$
$
$
$
80
Table of Contents
Item 6.
SELECTED
FINANCIAL DATA
(Amounts in thousands, except per share data)
For the Years Ended December 31,
2008 (1)
2007 (1)
2006 (1)
2005 (1)
2004 (1)
$
931,472
$
933,136
$
773,351
$
673,221
$
526,130
354,838
320,081
256,199
223,908
175,093
79,864
242,032
214,445
180,377
152,491
114,686
676,734
534,526
436,576
376,399
289,779
5,473
8,772
9,050
9,973
4,197
(244,212
)
(258,149
)
(208,536
)
(171,361
)
(117,208
)
11,552
(12,433
)
(15,819
)
(3,019
)
(446
)
(2,532
)
(1,779
)
(255,439
)
(252,396
)
(199,932
)
(163,920
)
(114,790
)
(701
)
146,214
136,843
132,902
121,561
17,719
43,229
30,337
34,873
40,895
(106,957
)
11,188
(18,218
)
(8,893
)
(6,852
)
(4,331
)
17,434
14,669
2,497
(276
)
(1,467
)
(61,317
)
185,894
160,784
160,647
156,658
81
Table of Contents
For the Years Ended December 31,
2008 (1)
2007 (1)
2006 (1)
2005 (1)
2004 (1)
1,409
9,043
9,406
17,189
22,902
(4,830
)
12,259
11,051
16,667
8,561
(3,421
)
21,302
20,457
33,856
31,463
(64,738
)
207,196
181,241
194,503
188,121
6,962
68,851
72,023
88,140
84,642
(3,001
)
$
(57,776
)
$
276,047
$
253,264
$
282,643
$
269,762
$
(100,045
)
$
225,113
$
198,095
$
227,474
$
219,056
$
(0.80
)
$
1.68
$
1.63
$
1.79
$
1.97
(0.03
)
0.18
0.19
0.31
0.33
(0.03
)
$
(0.83
)
$
1.86
$
1.82
$
2.10
$
2.27
119,843
120,879
109,002
108,310
96,638
$
(0.80
)
$
1.67
$
1.62
$
1.77
$
1.95
(0.03
)
0.18
0.19
0.31
0.32
(0.03
)
$
(0.83
)
$
1.85
$
1.81
$
2.08
$
2.24
119,987
121,497
109,613
109,142
99,024
$
2.07
$
2.64
$
2.36
$
2.16
$
1.94
Table of Contents
At December 31,
2008
2007
2006
2005
2004
$
9,106,635
$
8,984,671
$
7,447,459
$
7,029,337
$
5,603,424
7,897,732
7,960,623
6,586,193
6,336,514
5,035,193
583,767
638,111
291,685
275,136
288,020
9,018,325
9,089,816
7,179,753
6,862,977
5,583,547
5,917,364
5,591,014
4,248,812
3,891,001
2,718,690
2,684,685
2,998,825
2,496,183
2,570,281
2,554,319
For the Years Ended December 31,
2008 (1)
2007 (1)
2006 (1)
2005 (1)
2004 (1)
$
424,568
$
414,616
$
340,692
$
355,423
$
292,226
(464,341
)
(1,148,316
)
(203,047
)
(339,443
)
(1,134,601
)
22,698
755,491
(139,922
)
(35,196
)
880,553
$
(100,045
)
$
225,113
$
198,095
$
227,474
$
219,056
236,344
214,396
185,449
169,117
130,536
(17,719
)
(43,229
)
(30,337
)
(34,873
)
(40,895
)
68,355
84,423
44,473
49,302
46,209
1,145
2,275
2,116
2,916
2,607
(4,244
)
(17,956
)
(21,987
)
(58,834
)
(68,179
)
3,001
183,836
465,022
377,809
355,102
292,335
42,269
50,934
55,169
55,169
50,706
$
226,105
$
515,956
$
432,978
$
410,271
$
343,041
121,030
122,716
110,826
110,700
99,147
(1)
As described in the consolidated
financial statements, the Company acquired 11 properties in 2008
(all of which were acquired through unconsolidated joint
ventures), 317 properties in 2007 (including 68 of which were
acquired through unconsolidated joint ventures), 20 properties
in 2006 (including 15 of which were acquired through
unconsolidated joint ventures and four of which the Company
acquired through its joint venture partners interest), 52
properties in 2005 (including 36 of which were acquired through
unconsolidated joint ventures and one of which the Company
acquired through its joint venture partners interest), and
112 properties in 2004 (18 of which were acquired through
unconsolidated joint ventures and one of which the Company
acquired through its joint venture partners interest). The
Company sold 22 properties in 2008 including the sale of a
consolidated joint venture interest, 74 properties in 2007
(seven of which were
Table of Contents
owned through unconsolidated joint
ventures), 15 properties in 2006 (nine of which were owned
through unconsolidated joint ventures), 47 properties in 2005
(12 of which were owned through unconsolidated joint ventures),
and 28 properties in 2004 (13 of which were owned through
unconsolidated joint ventures). All amounts have been presented
in accordance with Statement of Financial Accounting Standards
(SFAS) No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. In accordance
with that standard, long-lived assets that were sold or
classified as held for sale as a result of disposal activities
have been classified as discontinued operations for all periods
presented.
(2)
Management believes that Funds From
Operations (FFO), which is a non-GAAP financial
measure, provides an additional and useful means to assess the
financial performance of a Real Estate Investment Trust
(REIT.) It is frequently used by securities
analysts, investors and other interested parties to evaluate the
performance of REITs, most of which present FFO along with net
income as calculated in accordance with GAAP. FFO applicable to
common shareholders is generally defined and calculated by the
Company as net income, adjusted to exclude: (i) preferred
share dividends, (ii) gains from disposition of depreciable
real estate property, except for those sold through the
Companys merchant building program, which are presented
net of taxes, (iii) extraordinary items and
(iv) certain non-cash items. These non-cash items
principally include real property depreciation, equity income
from joint ventures and adding the Companys proportionate
share of FFO from its unconsolidated joint ventures, determined
on a consistent basis. Management believes that FFO provides the
Company and investors with an important indicator of the
Companys operating performance. This measure of
performance is used by the Company for several business purposes
and for REITs it provides a recognized measure of performance
other than GAAP net income, which may include non-cash items
(often significant). Other real estate companies may calculate
FFO in a different manner.
(3)
Represents weighted average shares
and operating partnership units, or OP Units, at the end of the
respective period.
Item 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The Company is subject to general risks affecting the real
estate industry, including the need to enter into new leases or
renew leases on favorable terms to generate rental revenues, and
the current economic downturn may adversely affect the ability
of the Companys tenants, or new tenants, to enter into new
leases or the ability of the Companys existing
tenants to renew their leases at rates at least as
favorable as their current rates;
The Company could be adversely affected by changes in the local
markets where its properties are located, as well as by adverse
changes in national economic and market conditions;
The Company may fail to anticipate the effects on its properties
of changes in consumer buying practices, including catalog sales
and sales over the Internet and the resulting retailing
practices and
84
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space needs of its tenants or a general downturn in its
tenants businesses, which may cause tenants to close
stores;
The Company is subject to competition for tenants from other
owners of retail properties, and its tenants are subject to
competition from other retailers and methods of distribution.
The Company is dependent upon the successful operations and
financial condition of its tenants, in particular of its major
tenants, and could be adversely affected by the bankruptcy of
those tenants;
The Company relies on major tenants, which makes us vulnerable
to changes in the business and financial condition of, or demand
for our space, by such tenants;
The Company may not realize the intended benefits of acquisition
or merger transactions. The acquired assets may not perform as
well as the Company anticipated, or the Company may not
successfully integrate the assets and realize the improvements
in occupancy and operating results that the Company anticipates.
The acquisition of certain assets may subject the Company to
liabilities, including environmental liabilities;
The Company may fail to identify, acquire, construct or develop
additional properties that produce a desired yield on invested
capital, or may fail to effectively integrate acquisitions of
properties or portfolios of properties. In addition, the Company
may be limited in its acquisition opportunities due to
competition, the inability to obtain financing on reasonable
terms or any financing at all and other factors;
The Company may fail to dispose of properties on favorable
terms. In addition, real estate investments can be illiquid,
particularly as prospective buyers may experience increased
costs of financing or difficulties obtaining financing, and
could limit the Companys ability to promptly make changes
to its portfolio to respond to economic and other conditions;
The Company may abandon a development opportunity after
expending resources if it determines that the development
opportunity is not feasible due to a variety of factors,
including a lack of availability of construction financing on
reasonable terms, the impact of the current economic environment
on prospective tenants ability to enter into new leases or
pay contractual rent, or the inability by the Company to obtain
all necessary zoning and other required governmental permits and
authorizations;
The Company may not complete development projects on schedule as
a result of various factors, many of which are beyond the
Companys control, such as weather, labor conditions,
governmental approvals, material shortages or general economic
downturn resulting in limited availability of capital, increased
debt service expense and construction costs and decreases in
revenue;
The Companys financial condition may be affected by
required debt service payments, the risk of default and
restrictions on its ability to incur additional debt or enter
into certain transactions under its credit facilities and other
documents governing its debt obligations. In addition, the
Company may encounter difficulties in obtaining permanent
financing or refinancing existing debt. Borrowings under the
Companys revolving credit facilities are subject to
certain representations and warranties and customary events of
default, including any event that has had or could reasonably be
expected to have a material adverse effect on the Companys
business or financial condition;
Changes in interest rates could adversely affect the market
price of the Companys common shares, as well as its
performance and cash flow;
Debt
and/or
equity financing necessary for the Company to continue to grow
and operate its business may not be available or may not be
available on favorable terms or at all;
Recent disruptions in the financial markets could affect our
ability to obtain financing on reasonable terms and have other
adverse effects on us and the market price of our common shares;
The Company is subject to complex regulations related to its
status as a real estate investment trust, or REIT, and would be
adversely affected if it failed to qualify as a Real Estate
Investment Trust (REIT);
85
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The Company must make distributions to shareholders to continue
to qualify as a REIT, and if the Company must borrow funds to
make distributions, those borrowings may not be available on
favorable terms or at all;
Joint venture investments may involve risks not otherwise
present for investments made solely by the Company, including
the possibility that a partner or co-venturer may become
bankrupt, may at any time have different interests or goals than
those of the Company and may take action contrary to the
Companys instructions, requests, policies or objectives,
including the Companys policy with respect to maintaining
its qualification as a REIT. In addition, a partner or
co-venturer may not have access to sufficient capital to satisfy
its funding obligations to the joint venture. The partner could
default on the loans outside of the Companys control.
Furthermore, if the current constrained credit conditions in the
capital markets persist or deteriorate further, the Company
could be required to reduce the carrying value of its equity
method investments if a loss in the carrying value of the
investment is other than a temporary decline pursuant to
Accounting Principles Board (APB) No. 18, The
Equity Method of Accounting for Investments in Common Stock
(APB 18);
The Company may not realize anticipated returns from its real
estate assets outside the United States. The Company expects to
continue to pursue international opportunities that may subject
the Company to different or greater risks than those associated
with its domestic operations. The Company owns assets in Puerto
Rico, an interest in an unconsolidated joint venture that owns
properties in Brazil and an interest in consolidated joint
ventures that will develop and own properties in Canada, Russia
and Ukraine;
International development and ownership activities carry risks
that are different from those the Company faces with the
Companys domestic properties and operations. These risks
include:
Adverse effects of changes in exchange rates for foreign
currencies;
Changes in foreign political or economic environments;
Challenges of complying with a wide variety of foreign laws
including tax laws and addressing different practices and
customs relating to corporate governance, operations and
litigation;
Different lending practices;
Cultural and consumer differences;
Changes in applicable laws and regulations in the United States
that affect foreign operations;
Difficulties in managing international operations and
Obstacles to the repatriation of earnings and cash;
Although the Companys international activities are
currently a relatively small portion of its business, to the
extent the Company expands its international activities, these
risks could significantly increase and adversely affect its
results of operations and financial condition;
The Company is subject to potential environmental liabilities;
The Company may incur losses that are uninsured or exceed policy
coverage due to its liability for certain injuries to persons,
property or the environment occurring on its properties and
The Company could incur additional expenses in order to comply
with or respond to claims under the Americans with Disabilities
Act or otherwise be adversely affected by changes in government
regulations, including changes in environmental, zoning, tax and
other regulations.
86
Table of Contents
Strong tenant relationships with the nations leading
retailers, maintained through a national tenant account program;
The recent creation of an internal anchor store redevelopment
department solely dedicated to aggressively identify
opportunities towards releasing vacant anchor space created by
recent bankruptcies and store closings;
Tenant credit underwriting team to measure tenant health and
manage potential rent relief requests in the best interest of
the property;
Diverse banking relationships to allow access to secured,
unsecured, public and private capital;
An experienced funds management team dedicated to generating
consistent returns for institutional partners;
A focused dispositions team which was recently expanded and
dedicated to finding buyers for non-core assets;
Right-sized development and redevelopment departments equipped
with disciplined standards for development and
An ancillary income department to creatively generate revenue at
a low cost of investment and create cash flow streams from empty
or underutilized space.
Eliminated the common dividend for the fourth quarter of 2008
and reduced the 2009 common dividend to the minimum required to
maintain REIT status;
Sold assets in 2008 that generated $136 million in net
proceeds to the Company
Maintained a significant pool of unencumbered assets;
87
Table of Contents
Raised net proceeds of $43 million through the sale of
common stock via the Companys continuous equity program;
Purchased a portion of the Companys outstanding senior
unsecured notes at a discount to par and
Raised new debt proceeds of $1.2 billion.
% of Total
Shopping Center
% of Company-Owned
Base Rental Revenues
Shopping Center GLA
1.
Wal-Mart/Sams Club
4.3
%
7.3
%
2.
T.J. Maxx/Marshalls/A.J. Wright/Homegoods
2.1
2.4
3.
Mervyns(1)
1.9
1.7
4.
Lowes Home Improvement
1.9
3.2
5.
PetSmart
1.9
1.5
6.
Bed Bath & Beyond
1.6
1.4
7.
Circuit City(1)
1.6
1.1
8.
Kohls
1.4
2.0
9.
Michaels
1.4
1.3
10.
Rite Aid Corporation
1.4
0.7
(1)
Leases terminated effective for
2009.
88
Table of Contents
Wholly-Owned Properties
Joint Venture Properties
% of
% of
% of
% of
Shopping Center
Company-Owned
Shopping Center
Company-Owned
Base Rental
Shopping Center
Base Rental
Shopping Center
Revenues
GLA
Revenues
GLA
5.1
%
8.6
%
1.9
%
3.2
%
2.3
3.8
0.7
1.0
2.0
2.4
2.7
3.2
1.8
1.4
2.5
2.3
1.8
1.2
1.3
1.1
1.7
0.9
0.1
0.1
1.7
1.4
1.7
1.7
1.3
0.9
1.2
1.1
1.3
1.1
1.5
1.6
1.3
1.2
1.6
1.7
1.2
1.2
1.6
1.5
1.2
1.8
2.1
3.5
0.9
0.9
1.7
1.8
0.4
0.6
2.6
3.5
0.2
0.2
3.5
3.5
(1)
Lease terminated effective for 2009
89
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90
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91
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92
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93
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94
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95
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96
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2008
2007
$ Change
% Change
$
638,078
$
645,955
$
(7,877
)
(1.2
)%
198,919
203,126
(4,207
)
(2.1
)
22,294
19,518
2,776
14.2
62,890
50,840
12,050
23.7
9,291
13,697
(4,406
)
(32.2
)
$
931,472
$
933,136
$
(1,664
)
(0.2
)%
97
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Increase
(Decrease)
$
3.3
17.8
3.8
(29.0
)
0.4
(4.2
)
$
(7.9
)
(1)
Straight-line rental revenue
decreased $4.2 million, or 36.3%, for the year ended
December 31, 2008, as compared to the same period in 2007.
This decrease was due in part to a decrease in straight-line
rent recognized on the Mervyns portfolio in the fourth quarter
of 2008.
98
Table of Contents
Increase
(Decrease)
$
5.5
2.6
(10.7
)
(1.6
)
$
(4.2
)
Increase
(Decrease)
$
7.0
(1.3
)
2.7
(0.4
)
3.6
0.5
$
12.1
Year Ended
December 31,
2008
2007
$
6.3
$
5.0
2.0
7.9
1.0
0.8
$
9.3
$
13.7
(1)
Includes acquisition fees of
$6.3 million earned from the formation of the DDRTC Core
Retail Fund LLC in February 2007, excluding the
Companys retained ownership interest. The Companys
fee was earned in conjunction with services rendered by the
Company in connection with the acquisition of the IRRETI real
estate assets. Financing fees are earned in connection with the
formation and refinancing of unconsolidated joint ventures,
excluding the Companys retained ownership interest. The
Companys fees are earned in conjunction with the closing
and are based upon amount of the financing transaction by the
joint venture.
99
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2008
2007
$ Change
% Change
$
146,346
$
131,409
$
14,937
11.4
%
110,773
107,428
3,345
3.1
79,864
79,864
100.0
97,719
81,244
16,475
20.3
242,032
214,445
27,587
12.9
$
676,734
$
534,526
$
142,208
26.6
%
Operating
and
Real Estate
Maintenance
Taxes
Depreciation
$
5.9
$
2.2
$
10.8
2.9
3.5
10.5
2.3
2.4
6.1
(6.6
)
(4.8
)
(1.3
)
0.1
0.2
10.3
1.3
$
14.9
$
3.3
$
27.6
100
Table of Contents
2008
2007
$ Change
% Change
$
5,473
$
8,772
$
(3,299
)
(37.6
)%
(244,212
)
(258,149
)
13,937
(5.4
)
11,552
11,552
100.0
(12,433
)
(12,433
)
100.0
(15,819
)
(3,019
)
(12,800
)
424.0
$
(255,439
)
$
(252,396
)
$
(3,043
)
1.2
%
Year Ended,
December 31,
2008
2007
$
5.8
$
5.4
4.7
%
5.4
%
At December 31,
2008
2007
4.2
%
5.2
%
101
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2008
2007
$ Change
% Change
$
17,719
$
43,229
$
(25,510
)
(59.0
)%
(106,957
)
(106,957
)
100.0
11,188
(18,218
)
29,406
(161.4
)
17,434
14,669
2,765
18.8
(Decrease)
$
(9.4
)
(16.1
)
$
(25.5
)
$
47.3
31.7
9.0
10.8
3.3
3.2
1.7
$
107.0
102
Table of Contents
Decrease
$
9.7
17.5
0.9
1.3
$
29.4
(1)
Preferred operating partnership
units (Preferred OP Units) were issued in February
2007 as part of the financing of the IRRETI merger. These units
were redeemed in June 2007.
(2)
Primarily as result of the
write-off of straight-line rent and impairment charges on the
assets of this joint venture. See discussion above.
2008
2007
$ Change
% Change
$
1,409
$
9,043
$
(7,634
)
(84.4
)%
(4,830
)
12,259
(17,089
)
(139.4
)
$
(3,421
)
$
21,302
$
(24,723
)
(116.1
)%
103
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2008
2007
$ Change
% Change
$
6,962
$
68,851
$
(61,889
)
(89.9
)%
Year Ended
December 31,
2008
2007
$
$
1.8
50.3
6.2
14.0
0.8
2.8
$
7.0
$
68.9
(1)
This disposition is not classified
as discontinued operations due to the Companys continuing
involvement through its retained ownership interest and
management agreements.
(2)
The Company transferred two
wholly-owned assets. The Company did not record a gain on the
contribution of 54 assets, as these assets were recently
acquired through the merger with IRRETI.
(3)
The Company transferred three
recently developed assets.
(4)
These dispositions did not meet the
criteria for discontinued operations as the land did not have
any significant operations prior to disposition.
(5)
These gains and losses are
primarily attributable to the subsequent leasing of units
related to master lease and other obligations originally
established on disposed properties, which are no longer required.
2008
2007
$ Change
% Change
$
(57,776
)
$
276,047
$
(333,823
)
(120.9
)%
104
Table of Contents
$
(19.9
)
(79.9
)
(16.5
)
(27.6
)
(3.3
)
13.9
11.6
(12.4
)
(12.8
)
(25.5
)
(107.0
)
29.4
2.8
(7.6
)
(17.1
)
(61.9
)
$
(333.8
)
(1)
Decrease primarily related to
assets sold to joint ventures in 2007 and increased level of bad
debt expense.
(2)
Includes non-cash change of
$15.8 million relating to the termination of an equity
award plan.
(3)
Increase primarily related to the
IRRETI merger.
(4)
Decrease primarily due to a
reduction of promoted income associated with 2007 joint venture
asset sales and impairment charges at two unconsolidated joint
ventures in 2008.
2007
2006
$ Change
% Change
$
645,955
$
539,831
$
106,124
19.7
%
203,126
168,935
34,191
20.2
19,518
19,434
84
0.4
50,840
30,294
20,546
67.8
13,697
14,857
(1,160
)
(7.8
)
$
933,136
$
773,351
$
159,785
20.7
%
105
Table of Contents
Increase (Decrease)
$
7.0
106.8
7.3
(11.6
)
0.5
(3.9
)
$
106.1
106
Table of Contents
Increase
(Decrease)
$
27.0
5.3
(3.3
)
5.2
$
34.2
Increase
(Decrease)
$
11.4
3.0
3.3
2.3
(0.2
)
0.7
$
20.5
Year Ended
December 31,
2007
2006
$
5.0
$
14.0
7.9
0.4
0.8
0.5
$
13.7
$
14.9
(1)
For the year ended
December 31, 2006, the Company executed lease terminations
on four vacant Wal-Mart spaces in the Companys
consolidated portfolio.
(2)
Included acquisition fees of
$6.3 million earned from the formation of the DDRTC Core
Retail Fund LLC joint venture in February 2007, excluding
the Companys retained ownership interest. The
Companys fee was earned in conjunction with services
rendered by the Company in connection with the acquisition of
the IRRETI real estate assets. Financing fees are earned in
connection with the formation and refinancing of unconsolidated
joint ventures, excluding the Companys retained ownership
interest. The Companys fees are earned in conjunction with
the closing and are based upon the amount of the financing
transaction by the joint venture.
107
Table of Contents
2007
2006
$ Change
% Change
$
131,409
$
106,015
$
25,394
24.0
%
107,428
89,505
17,923
20.0
81,244
60,679
20,565
33.9
214,445
180,377
34,068
18.9
$
534,526
$
436,576
$
97,950
22.4
%
Operating
and
Real Estate
Maintenance
Taxes
Depreciation
$
4.0
$
1.2
$
3.5
15.2
17.7
32.7
5.4
1.2
0.9
(1.7
)
(2.2
)
(3.5
)
0.1
0.1
2.4
0.4
$
25.4
$
17.9
$
34.1
108
Table of Contents
2007
2006
$ Change
% Change
$
8,772
$
9,050
$
(278
)
(3.1
)%
(258,149
)
(208,536
)
(49,613
)
23.8
(3,019
)
(446
)
(2,573
)
576.9
$
(252,396
)
$
(199,932
)
$
(52,464
)
26.2
%
Year Ended
December 31,
2007
2006
$
5.4
$
4.1
5.4
%
5.8
%
At December 31,
2007
2006
5.2
%
5.8
%
2007
2006
$ Change
% Change
$
43,229
$
30,337
$
12,892
42.5
%
(18,218
)
(8,893
)
(9,325
)
104.9
14,669
2,497
12,172
487.5
109
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Increase
(Decrease)
$
6.3
(0.7
)
6.5
0.5
0.3
$
12.9
One 50% effectively owned shopping center
Four 25.5% effectively owned shopping centers
One 20.75% effectively owned shopping center
Two sites formerly occupied by Service Merchandise
One 10% effectively owned shopping center
(Increase)
Decrease
$
(9.7
)
(0.1
)
0.3
0.2
$
(9.3
)
(1)
Preferred OP Units were issued in
February 2007 as part of the financing of the IRRETI merger.
These units were redeemed in June 2007.
110
Table of Contents
2007
2006
$ Change
% Change
$
9,043
$
9,406
$
(363
)
(3.9
)%
12,259
11,051
1,208
10.9
$
21,302
$
20,457
$
845
4.1
%
2007
2006
$ Change
% Change
$
68,851
$
72,023
$
(3,172
)
(4.4
)%
Year Ended
December 31,
2007
2006
$
1.8
$
50.3
0.6
9.2
38.9
6.1
14.0
14.8
2.8
2.4
$
68.9
$
72.0
(1)
This disposition was not classified
as discontinued operations due to the Companys continuing
involvement through its retained ownership interest and
management agreements.
(2)
The Company transferred two
wholly-owned assets. The Company did not record a gain on the
contribution of 54 assets, as these assets were recently
acquired through the merger with IRRETI.
(3)
The Company transferred three
recently developed assets.
(4)
The Company transferred a newly
developed expansion area adjacent to a shopping center owned by
the joint venture.
(5)
The Company transferred newly
developed expansion areas adjacent to four shopping centers
owned by the joint venture in 2006. The Company did not record a
gain on the contribution of three assets in 2007, as these
assets were recently acquired through the merger with IRRETI.
(6)
The Company transferred six
recently developed assets.
(7)
The Company transferred 51 retail
sites previously occupied by Service Merchandise.
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(8)
These dispositions did not meet the
criteria for discontinued operations as the land did not have
any significant operations prior to disposition.
(9)
These gains and losses were
primarily attributable to the subsequent leasing of units
related to master lease and other obligations originally
established on disposed properties, which were no longer
required.
2007
2006
$ Change
% Change
$
276,047
$
253,264
$
22,783
9.0
%
$
116.6
(20.6
)
(34.1
)
(0.3
)
(49.6
)
(2.6
)
12.9
(9.3
)
12.2
(0.4
)
1.2
(3.2
)
$
22.8
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For the Years Ended
2008
2007
2006
$
(100,045
)
$
225,113
$
198,095
236,344
214,396
185,449
(17,719
)
(43,229
)
(30,337
)
68,355
84,423
44,473
1,145
2,275
2,116
(4,244
)
(17,956
)
(21,987
)
183,836
465,022
377,809
42,269
50,934
55,169
$
226,105
$
515,956
$
432,978
(1)
Includes straight-line rental
revenues of approximately $8.0 million, $12.1 million
and $16.0 million in 2008, 2007 and 2006, respectively
(including discontinued operations).
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(2)
Joint ventures FFO is
summarized as follows (in thousands):
For the Years Ended
2008
2007
2006
$
24,951
$
169,195
$
92,624
241,651
193,437
83,017
(7,350
)
(91,111
)
(22,013
)
$
259,252
$
271,521
$
153,628
$
68,355
$
84,423
$
44,473
(a)
Includes straight-line rental
revenues of $6.3 million, $9.3 million and
$5.1 million in 2008, 2007 and 2006, respectively. The
Companys proportionate share of straight-line rental
revenues was $0.8 million, $1.4 million and
$0.9 million in 2008, 2007 and 2006, respectively. These
amounts include discontinued operations.
(b)
The gain or loss on disposition of
recently developed shopping centers, generally owned by the
TRS, is included in FFO, as the Company considers these
properties part of the merchant building program. These
properties were either developed through the Retail Value
Investment Program with Prudential Real Estate Investors, or
were assets sold in conjunction with the formation of the joint
venture that holds the designation rights for the Service
Merchandise properties. For the year ended December 31,
2007, an aggregate gain of $5.8 million was recorded, of
which $1.8 million was the Companys proportionate
share. For the year ended December 31, 2006, a loss of
$1.3 million was recorded, of which $0.3 million was
the Companys proportionate share.
(c)
The Companys share of joint
venture net income has been increased by $0.4 million,
reduced by $1.2 million and increased by $1.6 million
for the years ended December 31, 2008, 2007 and 2006,
respectively. These amounts are related to basis differences in
depreciation and adjustments to gain on sales. During the year
ended December 31, 2007, the Company received
$14.3 million of promoted income, of which
$13.6 million related to the sale of assets from DDR Markaz
LLC to Domestic Retail Fund, which is included in the
Companys proportionate share of net income and FFO. During
the year ended December 31, 2006, the Company received
$5.5 million of promoted income from the disposition of a
joint venture asset in Kildeer, Illinois.
At December 31, 2008, 2007 and
2006, the Company owned unconsolidated joint venture interests
relating to 329, 317 and 167 operating shopping center
properties, respectively.
(3)
The amount reflected as gain on
disposition of real estate and real estate investments from
continuing operations in the consolidated statements of
operations includes residual land sales, which management
considers to be the disposition of non-depreciable real property
and the sale of newly developed shopping centers, for which the
Company maintained continuing involvement. These dispositions
are included in the Companys FFO and therefore are not
reflected as an adjustment to FFO. For the years ended
December 31, 2008, 2007 and 2006, net gains resulting from
residual land sales aggregated $6.2 million,
$14.0 million and $14.8 million, respectively. For the
years ended December 31, 2008, 2007 and 2006, merchant
building gains, net of tax, aggregated $0.4 million,
$49.1 million and $46.3 million, respectively.
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$
1.325
(1.027
)
(0.008
)
(0.007
)
$
0.283
115
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Retained Equity
With regard to retained
capital, the Company has adjusted its dividend policy to the
minimum required to maintain its REIT status. The Company did
not pay a dividend in January 2009 as it
116
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had already distributed sufficient funds to comply with its 2008
tax requirements. Moreover, the Company expects to fund a
portion of its 2009 dividend payout through common shares and
has the flexibility to distribute up to 90% of dividends in
shares. This new policy is consistent with the Companys
top priorities to improve liquidity and lower leverage. This
change in dividend payment is expected to save in excess of
$300 million of retained capital in 2009.
Issuance of Common Shares
The Company has
several alternatives to raise equity through the sale of its
common shares. In December 2008, the Company issued
$41.9 million of equity capital through its continuous
equity program. The Company intends to continue to issue
additional shares under this program in 2009. On February 23,
2009, the Company entered into purchase agreements with an
investor for the sale of 30 million of the Companys
common shares and warrants for 10 million of the Companys
common shares for additional potential cash in the future. The
sale of the common shares and warrants is subject to shareholder
approval and the satisfaction or waiver of customary and other
conditions. There can be no assurances the Company will be able
to obtain such approval or satisfy such conditions. The Company
intends to use the estimated $112.5 million in gross
proceeds received from this strategic investment in 2009 to
reduce leverage.
Debt Financing and Refinancing
The Company
had approximately $372.8 million of consolidated debt
maturities during 2009, excluding obligations where there is an
extension option. The largest debt maturity in 2009 related to
the repayment of senior unsecured notes in the amount of
$227.0 million in January 2009. Funding of this repayment
was primarily through retained capital and Revolving Credit
Facilities. The remaining $145.8 million in maturities is
related to various loans secured by certain shopping centers.
The Company plans to refinance approximately $80 million of
this remaining indebtedness related to two assets. Furthermore,
the Company has received lender approval to extend three
mortgage loans aggregating $29.6 million. All three loans
are scheduled to mature in the first quarter of 2009. The
Company is planning to either repay the remaining maturities
with its Revolving Credit Facility or financings discussed below
or seek extensions with the existing lender.
Asset Sales
During the months of January and
February 2009, the Company and its consolidated joint ventures
sold seven assets generating in excess of $65.8 million in
gross proceeds. During 2008, the Company and its joint ventures
sold 23 assets generating aggregate gross proceeds of almost
$200 million, of which the Companys proportionate
share aggregated $136.1 million. The Company is also in
various stages of discussions with third parties for the sale of
additional assets with aggregate values in excess of
$500 million, including four assets that are under contract
or subject to letters of intent, aggregating $30 million,
of which the Companys share is approximately
$14 million.
Debt Repurchases
Given the current economic
environment, the Companys publicly traded debt securities
are trading at significant discounts to par. During the fourth
quarter of 2008 and in January 2009, the Company repurchased
approximately $77.1 million of debt securities at a
discount to par aggregating $15.2 million. Although
$48 million of this debt repurchase reflected above related
to unsecured debt maturing in January 2009 at a small discount,
the debt with maturities in 2010 and beyond are trading at much
wider discounts. The Company intends to utilize the proceeds
from retained capital, equity issuances, secured financing and
asset sales, as discussed above, to repurchase its debt
securities at a discount to par to further improve its leverage
ratios.
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Year Ended December 31,
2008
2007
2006
$
424,568
$
414,616
$
340,692
(464,341
)
(1,148,316
)
(203,047
)
22,698
755,491
(139,922
)
118
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119
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2008
2007
2006
$
10.9
$
3,048.7
(5)
$
370.2
(9)
27.8
32.7
73.1
419.5
428.5
246.0
11.6
12.5
11.7
6.3
(2)
13.0
(2)
10.2
(2)
(41.3
)
434.8
3,535.4
711.2
(312.9
)(3)
(2,001.3
)(6)
(289.8
)(10)
121.9
1,534.1
421.4
111.4
(4)
4,987.4
(7)
729.9
(11)
52.8
21.9
315.8
142.7
139.6
(12)
18.4
9.8
9.1
(106.2
)
48.5
392.2
5,210.3
878.6
(61.9
)(4)
(204.3
)(8)
(409.0
)(13)
330.3
5,006.0
469.6
452.2
6,540.1
891.0
(253.5
)
(2,825.5
)
(401.0
)
$
198.7
$
3,714.6
$
490.0
(1)
In 2009, the Company anticipates
recurring capital expenditures, including tenant improvements,
of approximately $13 million associated with its
wholly-owned and consolidated portfolio and $19 million
associated with its unconsolidated joint venture portfolio.
(2)
Includes certain information
technology projects, expansion of the Companys
headquarters and fractional ownership interests in corporate
planes.
(3)
Includes 22 asset dispositions as
well as outparcel sales.
(4)
Reflects the acquisition of a
shopping center by a newly formed joint venture and the
respective sale of this asset by an unrelated joint venture.
(5)
Includes the merger with IRRETI,
the redemption of OP units and the acquisition of an additional
interest in a property in San Francisco, California.
(6)
Includes the sale of three assets
to TRT DDR Venture I, 56 assets to Domestic Retail Fund,
three assets to DDR Macquarie Fund and other shopping center
assets and outparcel sales.
(7)
Includes the formation of the DDRTC
Core Retail Fund LLC joint venture and acquisition of an
additional 73% interest in Metropole Shopping Center by Sonae
Sierra Brazil BV Sarl.
(8)
Includes the sale of seven shopping
centers previously owned by DDR Markaz LLC to Domestic Retail
Fund and the sale of vacant land.
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(9)
Includes the transfer to the
Company from joint ventures (KLA/SM LLC and Salisbury,
Maryland), final earnout adjustments for acquisitions,
redemption of OP Units and the consolidation of a joint venture
asset pursuant to EITF
04-05.
(10)
Includes asset dispositions, the
sale of assets formerly owned by the KLA/SM LLC joint venture to
Service Holdings LLC, the sale of properties to DDR Macquarie
Fund and DDR MDT PS LLC, plus the transfer of newly developed
expansion areas adjacent to four shopping centers and the sale
of several outparcels.
(11)
Reflects the DPG Realty Holdings
LLC acquisition and adjustments to accounting presentation from
previous acquisitions.
(12)
Includes the acquisition of land in
Allen, Texas, and Bloomfield Hills, Michigan, for the
development of shopping centers by the Coventry II Fund.
(13)
Includes asset dispositions, the
transfer to DDR of the KLA/SM LLC joint venture assets, five
assets located in Phoenix, Arizona (two properties); Pasadena,
California; Salisbury, Maryland and Apex, North and Carolina.
121
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122
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Expected
Owned
Net Cost
GLA
($ Millions)
Description
228,943
$
66.9
Mixed Use
137,527
48.0
Lifestyle Center
272,610
79.7
Community Center
391,351
148.8
Mixed Use
431,689
126.7
Community Center
56,343
26.7
Community Center
210,855
54.5
Community Center
350,987
55.0
Community Center
72,830
16.9
Community Center
443,092
77.2
Community Center
2,596,227
$
700.4
*
Consolidated 50% joint venture
123
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$
472.6
46.1
181.7
$
700.4
DDRs
Effective
Expected
Ownership
Owned
Net Cost
Percentage
GLA
($ Millions)
Description
20.0
%
158,632
$
43.7
Community Center
10.0
%
623,782
189.8
Lifestyle Center
10.0
%
797,665
171.2
Lifestyle Center
47.4
%
477,630
98.2
Enclosed Mall
2,057,709
$
502.9
Anticipated
DDRs
JV Partners
Proceeds from
Proportionate
Proportionate
Construction
Share
Share
Loans
Total
$
70.8
$
173.4
$
235.5
$
479.7
13.7
28.9
21.2
63.8
(10.0
)
(40.2
)
9.6
(40.6
)
$
74.5
$
162.1
$
266.3
$
502.9
Redevelop shopping center to include Kohls and additional
junior tenants
Construct 25,400 sf of small shop space and retail space
Redevelop 18,000 sf of small shop space and construct an
outparcel building
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DDRs
Effective
Ownership
Percentage
Description
20
%
Large-scale re-development of enclosed mall to open-air format
21
%
Relocate Wal-Mart and redevelop former Wal-Mart space
20
%
Construct 89,000 square feet of anchor space and retail
shops
Company-Owned
Square Feet
Sales Price
Net Gain
(Thousands)
(Millions)
(Millions)
981
$
111.8
$
1,330
291
20.7
(5,819
)
1,272
$
132.5
$
(4,489
)
(1)
The Company sold 21 shopping center
properties in various states.
(2)
Represents the sale of a
consolidated joint venture asset. The Companys ownership
was 55.84% and the amount reflected above represents the
proceeds received by the Company.
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Company-Owned
Gross
Square Feet
Purchase Price
(Thousands)
(Millions)
17,273
$
3,054.4
13.8
207
16.9
17,480
$
3,085.1
126
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(1)
Reflects the Companys
purchase price associated with the acquisition of its
partners approximate 25% ownership interest.
(2)
The Company purchased a 50% equity
interest through its investment in this joint venture. This
asset is consolidated into the Company in accordance with
FIN 46.
Company-
Gross
Owned
Purchase
Square Feet
Price
(Thousands)
(Millions)
2,277
$
30.4
15,638
2,998.6
99
5.4
78
20.9
24.6
18,092
$
3,079.9
(1)
The Company acquired a 20% equity
interest in this joint venture, consisting of 28 properties in
nine states. The Companys equity interest in these
properties was acquired as part of the IRRETI merger (see 2007
Strategic Real Estate Transactions).
(2)
The Company purchased a 15% equity
interest in this joint venture, consisting of 66 properties in
14 states. This investment was acquired as part of the
IRRETI merger (see 2007 Strategic Real Estate Transactions).
(3)
The DDRTC Core Retail Fund LLC
joint venture acquired one shopping center asset.
(4)
The DDR SAU Retail
Fund LLC joint venture acquired one shopping center asset.
(5)
Reflects the Companys
purchase price associated with the acquisition of its
partners 73% ownership interest.
Company-Owned
Square Feet
Sales Price
Net Gain
(Thousands)
(Millions)
(Millions)
6,301
$
589.4
$
12.3
8,342
1,201.3
1.8
682
161.5
50.3
515
49.8
15,840
$
2,002.0
$
64.4
(1)
The Company sold 67 shopping center
properties in various states.
127
Table of Contents
(2)
The Company contributed 54 assets
acquired through the acquisition of IRRETI and two assets from
the Companys wholly-owned portfolio to the joint venture.
The Company retained a 20% effective interest in these assets.
The amount includes 100% of the selling price; the Company
eliminated the portion of the gain associated with its 20%
ownership interest (see 2007 Strategic Real Estate Transactions).
(3)
The Company contributed three
wholly-owned assets to the joint venture. The Company retained
an effective 10% ownership interest in these assets. The amount
includes 100% of the selling price; the Company deferred the
portion of the gain associated with its 10% ownership interest
(see 2007 Strategic Real Estate Transactions).
(4)
The Company contributed three
wholly-owned assets to the joint venture. The Company retained
an effective 14.5% ownership interest in these assets. The
amount includes 100% of the selling price. The Company did not
record a gain on the contribution of these assets, as they had
been recently acquired through the merger with IRRETI.
Companys
Companys
Proportionate
Effective
Company-Owned
Share of
Ownership
Square Feet
Sales Price
Gain
Percentage
(Thousands)
(Millions)
(Millions)
25.50
%
61.0
$
8.2
$
0.3
20.00
%
356.4
27.2
1.3
417.4
$
35.4
$
1.6
128
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Company-
Owned
Gross Purchase
Square Feet
Price
(Thousands)
(Millions)
197
$
15.6
557
55.9
76
12.4
126
1.5
324
4.4
Development Asset
22.4
1,280
$
112.2
(1)
Reflects the Companys
purchase price, net of debt assumed, associated with the
acquisition of its partners 50% ownership interest.
129
Table of Contents
(2)
Reflects the Companys
purchase price, net of prepayment of debt, associated with the
acquisition of its partners 75% ownership interest.
(3)
Reflects the Companys
purchase price associated with the acquisition of its
partners 80% and 20% ownership interests in two separate
phases, respectively.
(4)
Reflects the Companys
purchase price associated with the acquisition of its
partners 50% ownership interest.
Company-
Owned
Square Feet
Gross Purchase
(Thousands)
Price (Millions)
74
$
11.0
58
12.2
223
27.1
Development Asset
68.4
668
194.4
Development Asset
10.9
3,469
180.3
4,492
$
504.3
(1)
The Company purchased a 50% equity
interest through its investment in the DDR MDT MV LLC (MV
LLC).
(2)
The Company purchased a 10% equity
interest through its investment in the Coventry II Fund.
(3)
The Company purchased a 20% equity
interest through its investment in the Coventry II Fund.
There is approximately 89,000 sq. ft. under
redevelopment.
(4)
The Company purchased an 18% equity
interest through its investment in the Coventry II Fund.
There is approximately 160,000 sq. ft. under
redevelopment.
(5)
The Company purchased an initial
50% interest in an entity which owned a 93% interest in nine
properties located in Sao Paulo, Brazil.
Company-Owned
Square Feet
Sales Price
Net Gain
(Thousands)
(Millions)
(Millions)
822
$
54.8
$
11.1
1,024
24.7
9.2
644
122.7
38.9
2,490
$
202.2
$
59.2
130
Table of Contents
(1)
The Company sold six shopping
center properties located in three states.
(2)
The Company contributed four newly
developed expansion areas adjacent to shopping centers currently
owned by DDR Macquarie Fund. The Company retained a 14.5%
effective interest in these assets. The amount includes 100% of
the selling price; the Company eliminated the portion of the
gain associated with its 14.5% ownership interest (see 2006
Strategic Real Estate Transactions).
(3)
The Company contributed six
wholly-owned assets to the joint venture. The Company did not
retain an ownership interest in the joint venture, but
maintained a promoted interest. The amount includes 100% of the
selling price (see 2006 Strategic Real Estate Transactions).
Companys
Proportionate
Companys Effective
Company-Owned
Share of
Ownership
Square Feet
Sales Price
Gain (loss)
Percentage
(Thousands)
(Millions)
(Millions)
25.50
%
432
$
20.0
$
(0.5
)
50.00
%
235
22.0
0.2
20.75
%
41
8.1
1.2
10.00
%
162
47.3
7.3
(1)
24.63
%
52
3.2
20.00
%
1.4
922
$
102.0
$
8.2
(1)
Includes promoted income.
Effective
Company-Owned
Unconsolidated
Ownership
Square Feet
Total Debt
Percentage (1)
Assets Owned
(Thousands)
(Millions)
47.4
%
Nine shopping centers, one shopping center under development and
a management company in Brazil
3,510
$
57.3
20.0
63 shopping center assets in several states
8,250
967.8
20.0
29 shopping center assets located in several states
2,375
226.2
15.0
66 assets in several states
15,747
1,771.0
25.0
50 shopping centers in several states
12,077
1,236.7
131
Table of Contents
(1)
Ownership may be held through
different investment structures. Percentage ownerships are
subject to change, as certain investments contain promoted
structures.
132
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2008
2007
2006
$
41.9
(1)
$
1,140.8
(2)
$
484.2
(3)
41.9
1,625.0
116.9
104.3
11.1
350.0
30.0
17.5
446.5
132.3
600.0
(4)
250.0
(7)
750.0
(5)
400.0
(6)
180.0
(6)
484.4
2,330.8
573.4
$
526.3
$
3,955.8
$
573.4
(1)
The Company issued 8.3 million
shares for approximately $41.9 million in December 2008.
(2)
Approximately 5.7 million
shares, aggregating approximately $394.2 million, were
issued to IRRETI shareholders in February 2007. The Company
issued 11.6 million common shares in February 2007 for
approximately $746.6 million upon the settlement of the
forward sale agreements entered into in December 2006.
(3)
Issuance of 20 million
preferred OP Units with a liquidation preference of $25 per
unit, aggregating $500 million of the net assets of the
Companys consolidated subsidiary in February 2007. In
accordance with the terms of the agreement, the preferred OP
Units were redeemed at 97.0% of par in June 2007.
(4)
Issuance of 3.00% convertible
senior unsecured notes due 2012. The notes have an initial
conversion rate of approximately 13.3783 common shares per
$1,000 principal amount of the notes, which represents an
initial conversion price of approximately $74.75 per common
share and a conversion premium of approximately 20.0% based on
the last reported sale price of $62.29 per common share on
March 7, 2007. The initial conversion rate is subject to
adjustment under certain circumstances. Upon closing of the sale
of the notes, the Company repurchased $117.0 million of its
common shares. In connection with the offering, the Company
entered into an option agreement, settled in the Companys
common shares, with an investment bank that had the economic
impact of effectively increasing the initial conversion price of
the notes to $87.21 per common share, which represents a 40%
premium based on the March 7, 2007 closing price of $62.29
per common share. The cost of this arrangement was approximately
$32.6 million and has been recorded as an equity
transaction in the Companys consolidated balance sheet.
(5)
This facility bore interest at
LIBOR plus 0.75% and was repaid in June 2007.
(6)
This facility bears interest at
LIBOR plus 0.70% and matures in February 2011. This facility
allows for a one-year extension option.
(7)
Issuance of 3.50% convertible
senior unsecured notes due 2011. The notes have an initial
conversion rate of approximately 15.3589 common shares per
$1,000 principal amount of the notes, which represents an
initial conversion price of approximately $65.11 per common
share and a conversion premium of approximately 22.5% based on
the last reported sale price of $53.15 per common share on
August 22, 2006. The initial conversion rate is subject to
adjustment under certain circumstances. Upon closing of the sale
of the notes, the Company repurchased $48.3 million of its
common shares. In connection with the offering, the Company
entered into an option arrangement, settled in the
Companys common shares, with an investment bank that had
the economic impact of effectively increasing the initial
conversion price of the notes to $74.41 per common share, which
represents a 40.0% premium based on the August 22, 2006
closing price of $53.15 per common share. The cost of this
arrangement was approximately $10.3 million and has been
recorded as an equity transaction in the Companys
consolidated balance sheet.
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Operating
Debt
Leases
$
399,685
$
5,317
1,983,887
5,008
1,609,142
4,947
1,041,529
4,493
432,348
4,017
450,773
141,652
$
5,917,364
$
165,434
135
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$
0.1
0.3
0.5
$
0.9
136
Table of Contents
137
Table of Contents
138
Table of Contents
139
Table of Contents
140
Table of Contents
141
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ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
December 31, 2008
December 31, 2007
Weighted-
Weighted-
Weighted
Weighted
Average
Average
Average
Average
Amount
Maturity
Interest
Percentage
Amount
Maturity
Interest
Percentage
(Millions)
(Years)
Rate
of Total
(Millions)
(Years)
Rate
of Total
$
4,426.2
3.0
5.1
%
74.8
%
$
4,533.1
3.9
5.1
%
81.1
%
$
1,491.2
2.7
1.7
%
25.2
%
$
1,057.9
4.1
5.3
%
18.9
%
(1)
Adjusted to reflect the
$600 million of variable-rate debt that LIBOR was swapped
to a fixed-rate of 5.0% at December 31, 2008 and 2007.
December 31, 2008
December 31, 2007
Joint
Companys
Weighted-
Weighted-
Joint
Companys
Weighted
Weighted
Venture
Proportionate
Average
Average
Venture
Proportionate
Average
Average
Debt
Share
Maturity
Interest
Debt
Share
Maturity
Interest
(Millions)
(Millions)
(Years)
Rate
(Millions)
(Millions)
(Years)
Rate
$
4,581.6
$
982.3
5.3
5.5
%
$
4,516.4
$
860.5
5.9
5.3
%
$
1,195.3
$
233.8
1.2
2.2
%
$
1,035.4
$
173.6
1.5
5.5
%
142
Table of Contents
December 31, 2007
Fixed-rate
4.90%
5.22%
5.25%
5.79%
5.09%
5.47%
December 31, 2008
December 31, 2007
100 Basis
100 Basis
Point
Point
Increase
Decrease
in Market
in Market
Carrying
Fair
Interest
Carrying
Fair
Interest
Value
Value
Rates
Value
Value
Rates
(Millions)
(Millions)
(Millions)
(Millions)
(Millions)
(Millions)
$
4,426.2
$
3,384.8
(1)
$
3,328.9
(2)
$
4,533.1
$
4,421.0
(1)
$
4,525.0
(2)
$
982.3
$
911.0
$
878.8
$
860.5
$
880.1
(3)
$
927.0
(4)
143
Table of Contents
(1)
Includes the fair value of interest
rate swaps, which was a liability of $21.7 million and
$17.8 million at December 31, 2008 and 2007,
respectively.
(2)
Includes the fair value of interest
rate swaps, which was a liability of $26.1 million and
$32.0 million at December 31, 2008 and 2007,
respectively.
(3)
Includes the Companys
proportionate share of the fair value of interest rate swaps
that was a liability of $3.0 million at December 31,
2007.
(4)
Includes the Companys
proportionate share of the fair value of interest rate swaps
that was a liability of $7.5 million at December 31,
2007.
Item 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
Item 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Item 9A.
CONTROLS
AND PROCEDURES
144
Table of Contents
Item 9B.
OTHER
INFORMATION
145
Table of Contents
149
150
151
152
153
F-62
F-63
F-64
F-65
F-66
F-67
F-68
F-69
F-70
F-71
F-72
F-75
Item 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Corporate Governance Guidelines that guide the Board of
Directors in the performance of its responsibilities to serve
the best interests of the Company and its shareholders;
Written charters of the Audit Committee, Executive Compensation
Committee and Nominating and Corporate Governance Committee;
Code of Ethics for Senior Financial Officers that applies to the
chief executive officer, chief financial officer, chief
accounting officer, controllers, treasurer and chief internal
auditor, if any, of the Company and
Code of Business Conduct and Ethics that governs the actions and
working relationships of the Companys employees, officers
and directors with current and potential customers, consumers,
fellow employees, competitors, government and self-regulatory
agencies, investors, the public, the media and anyone else with
whom the Company has or may have contact.
Item 11.
EXECUTIVE
COMPENSATION
Item 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
146
Table of Contents
Number of Securities
Remaining Available for
Number of Securities
Future Issuance Under
to Be Issued upon
Weighted-Average
Equity Compensation
Exercise of
Exercise Price of
Plans (excluding
Outstanding Options,
Outstanding Options,
securities reflected in
Warrants and Rights
Warrants and Rights
column (a))
(a)
(b)
(c)
2,185,708
(2)
$
42.32
3,883,908
31,666
$
17.70
N/A
2,217,374
$
41.97
3,883,908
(1)
Includes information related to the
Companys 1992 Employees Share Option Plan, 1996
Equity Based Award Plan, 1998 Equity Based Award Plan, 2002
Equity Based Award Plan, 2004 Equity Based Award Plan and 2008
Equity Based Award Plan.
(2)
Does not include
590,489 shares of restricted stock, as these shares have
been reflected in the Companys total shares outstanding.
Does not include 103,700 shares reserved for issuance under
outperformance unit agreements.
(3)
Represents options issued to
directors of the Company. The options granted to the directors
were at the fair market value at the date of grant and are fully
vested.
Item 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Item 14.
PRINCIPAL
ACCOUNTING FEES AND SERVICES
Item 15.
EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
a.) 1.
Financial Statements
147
Table of Contents
2.
Financial Statement Schedules
b)
Exhibits
The following exhibits are filed as part of or incorporated by
reference into, this report:
Exhibit No.
Form 10-K
Filed Herewith or
Under Reg.S-K
Exhibit
Incorporated Herein by
1
1
.1
Sales Agency Financing Agreement, dated December 3, 2008,
by and between the Company and BNY Mellon Capital Markets, LLC
Current Report on Form 8-K (Filed with the SEC on December 3,
2008)
2
2
.1
Agreement and Plan of Merger, dated October 20, 2006, by
and among the Company, Inland Retail Real Estate Trust, Inc. and
DDR IRR Acquisition LLC
Current Report on Form 8-K (Filed October 23, 2006)
2
2
.2
Purchase and Sale Agreement, dated July 9, 2008, by and
between the Company and Wolstein Business Enterprises, L.P.
Current Report on Form 8-K (Filed with the SEC on July 15, 2008)
3
3
.1
Second Amended and Restated Articles of Incorporation of the
Company
Form S-3ASR Registration Statement No. 333-152083 (Filed with
the SEC on
July 2, 2008)
3
3
.2
Amended and Restated Code of Regulations of the Company
Quarterly Report on Form 10-Q (Filed with the SEC on August 9,
2007)
4
4
.1
Specimen Certificate for Common Shares
Form S-3 Registration No. 33-78778 (Filed with the SEC on May
10, 1994)
4
4
.2
Specimen Certificate for 8.0% Class G Cumulative Redeemable
Preferred Shares
Form 8-A Registration Statement (Filed with the SEC on March 25,
2003)
4
4
.3
Specimen Certificate for Depositary Shares Relating to 8.0%
Class G Cumulative Redeemable Preferred Shares
Form 8-A Registration Statement (Filed with the SEC on March 25,
2003)
4
4
.4
Specimen Certificate for
7
3
/
8
%
Class H Cumulative Redeemable Preferred Shares
Form 8-A Registration Statement (Filed with the SEC on July 17,
2003)
4
4
.5
Specimen Certificate for Depositary Shares Relating to
7
3
/
8
%
Class H Cumulative Redeemable Preferred Shares
Form 8-A Registration Statement (Filed with the SEC on July 17,
2003)
4
4
.6
Specimen Certificate for 7.50% Class I Cumulative
Redeemable Preferred Shares
Form 8-A Registration Statement (Filed with the SEC on May 4,
2004)
4
4
.7
Specimen Certificate for Depositary Shares Relating to 7.50%
Class I Cumulative Redeemable Preferred Shares
Form 8-A Registration Statement (Filed with the SEC on May 4,
2004)
148
Table of Contents
Exhibit No.
Form 10-K
Filed Herewith or
Under Reg.S-K
Exhibit
Incorporated Herein by
4
4
.8
Indenture, dated May 1, 1994, by and between the Company
and Chemical Bank, as Trustee
Form S-3 Registration No. 333-108361 (Filed with the SEC on
August 29, 2003)
4
4
.9
Indenture, dated May 1, 1994, by and between the Company
and National City Bank, as Trustee (NCB Indenture)
Form S-3 Registration No. 333-108361 (Filed with the SEC on
August 29, 2003)
4
4
.10
First Supplement to NCB Indenture
Form S-3 Registration No. 333-108361 (Filed with the SEC on
August 29, 2003)
4
4
.11
Second Supplement to NCB Indenture
Form S-3 Registration No. 333-108361 (Filed with the SEC on
August 29, 2003)
4
4
.12
Third Supplement to NCB Indenture
Form S-4 Registration No. 333-117034 (Filed with the SEC on June
30, 2004)
4
4
.13
Fourth Supplement to NCB Indenture
Form S-4 Registration No. 333-117034 (Filed with the SEC on June
30, 2004)
4
4
.14
Fifth Supplement to NCB Indenture
Annual Report on Form 10-K (Filed with the SEC on February 21,
2007)
4
4
.15
Sixth Supplement to NCB Indenture
Annual Report on Form 10-K (Filed with the SEC on February 21,
2007)
4
4
.16
Seventh Supplement to NCB Indenture
Current Report on Form 8-K (Filed with the SEC on September 1,
2006)
4
4
.17
Eight Supplement to NCB Indenture
Current Report on Form 8-K (Filed with the SEC on March 16, 2007)
4
4
.18
Form of Fixed Rate Senior Medium-Term Note
Annual Report on Form 10-K (Filed with the SEC on March 30,
2000; File No.
001-11690)
4
4
.19
Form of Floating Rate Senior Medium- Term Note
Annual Report on Form 10-K (Filed with the SEC on March 30,
2000; File No.
001-11690)
4
4
.20
Form of Fixed Rate Subordinated Medium-Term Note
Annual Report on Form 10-K (Filed with the SEC on March 30,
2000; File No.
001-11690)
4
4
.21
Form of Floating Rate Subordinated Medium-Term Note
Annual Report on Form 10-K (Filed with the SEC on March 30,
2000; File No.
001-11690)
4
4
.22
Form of 3.875% Note due 2009
Current Report on Form 8-K (Filed with the SEC on January 22,
2004)
4
4
.23
Form of 5.25% Note due 2011
Form S-4 Registration No. 333-117034 (Filed with the SEC on June
30, 2004)
4
4
.24
Form of 3.00% Convertible Senior Note due 2012
Current Report on Form 8-K (Filed with the SEC on March 16, 2007)
4
4
.25
Form of 3.50% Convertible Senior Note due 2011
Current Report on Form 8-K (Filed with the SEC on September 1,
2006)
4
4
.26
Seventh Amended and Restated Credit Agreement, dated
June 29, 2006, by and among the Company and JPMorgan
Securities, Inc. and Banc of America Securities LLC, and other
lenders named therein
Current Report on Form 8-K (Filed with the SEC on July 6, 2006)
4
4
.27
First Amendment to the Seventh Amended and Restated Revolving
Credit Agreement, dated March 30, 2007, by and among the
Company and JPMorgan Chase Bank, N.A and other lenders named
therein
Current Report on Form 8-K (Filed with the SEC on February 26,
2007)
Table of Contents
Exhibit No.
Form 10-K
Filed Herewith or
Under Reg.S-K
Exhibit
Incorporated Herein by
4
4
.28
Second Amendment to the Seventh Amended and Restated Revolving
Credit Agreement, dated December 7, 2007, by and among the
Company and JPMorgan Chase Bank, N.A and other lenders named
therein
Current Report on Form 8-K (Filed with the SEC on December 12,
2007)
4
4
.29
Third Amendment to the Seventh Amended and Restated Revolving
Credit Agreement, dated December 26, 2007, by and among the
Company and JPMorgan Chase Bank, N.A and other lenders named
therein
Current Report on Form 8-K (Filed with the SEC on December 28,
2007)
4
4
.30
First Amended and Restated Secured Term Loan Agreement, dated
June 29, 2006, by and among the Company and Keybanc Capital
Markets and Banc of America Securities, LLC and other lenders
named therein
Current Report on Form 8-K (Filed with the SEC on July 6, 2006)
4
4
.31
Second Amendment to the First Amended and Restated Secured Term
Loan Agreement, dated March 30, 2007, by and among the
Company, Keybanc Capital Markets and Banc of America Securities,
LLC and other lenders named therein
Quarterly Report on Form 10-Q (Filed with the SEC on May 10,
2007)
4
4
.32
Third Amendment to the First Amended and Restated Secured Term
Loan Agreement, dated December 10, 2007, by and among the
Company, Keybanc Capital Markets and Banc of America Securities,
LLC and other lenders named therein
Current Report on Form 8-K (Filed with the SEC on December 12,
2007)
4
4
.33
Form of Indemnification Agreement
Annual Report on Form 10-K (Filed with the SEC on March 15, 2004)
4
4
.34
Registration Rights Agreement, dated March 3, 2007, by and
among the Company and the Initial Purchasers named therein
Current Report on Form 8-K (Filed with the SEC on March 16, 2007)
4
4
.35
Registration Rights Agreement, dated August 28, 2006, by
and among the Company and the Initial Purchasers named therein
Current Report on Form 8-K (Filed with the SEC on September 1,
2006)
10
10
.1
Stock Option Plan*
Form S-8 Registration No. 33-74562 (Filed with the SEC on
January 28, 1994)
10
10
.2
Amended and Restated Directors Deferred Compensation Plan*
Form S-8 Registration No. 333-147270 (Filed with the SEC on
November 9, 2007)
10
10
.3
Elective Deferred Compensation Plan (Amended and Restated as of
January 1, 2004)*
Annual Report on Form 10-K (Filed with the SEC on March 15, 2004)
10
10
.4
Developers Diversified Realty Corporation Equity Deferred
Compensation Plan*
Form S-3 Registration No. 333-108361 (Filed with the SEC on
August 29, 2003)
10
10
.5
Developers Diversified Realty Corporation Equity Deferred
Compensation Plan, restated as of January 1, 2009*
Filed herewith
10
10
.6
Developers Diversified Realty Corporation Equity-Based Award
Plan*
Annual Report on Form 10-K (Filed with the SEC on March 15, 2004)
10
10
.7
Amended and Restated 1998 Developers Diversified Realty
Corporation Equity-Based Award Plan*
Form S-8 Registration No. 333-76537 (Filed with the SEC on April
19, 1999)
10
10
.8
2002 Developers Diversified Realty Corporation Equity-Based
Award Plan*
Quarterly Report on Form 10-Q (Filed with the SEC on August 14,
2002)
Table of Contents
Exhibit No.
Form 10-K
Filed Herewith or
Under Reg.S-K
Exhibit
Incorporated Herein by
10
10
.9
2004 Developers Diversified Realty Corporation Equity-Based
Award Plan*
Form S-8 Registration No. 333-117069 (Filed with the SEC on July
1, 2004)
10
10
.10
2008 Developers Diversified Realty Corporation Equity-Based
Award Plan*
Current Report on Form 8-K (Filed with the SEC on May 15, 2008)
10
10
.11
Form of Restricted Share Agreement under the 1996/1998/2002/2004
Developers Diversified Realty Corporation Equity-Based Award
Plan*
Annual Report on Form 10-K (Filed with the SEC on March 16, 2005)
10
10
.12
Form of Restricted Share Agreement for Executive Officers under
the 2004 Developers Diversified Realty Corporation Equity-Based
Award Plan*
Quarterly Report on Form 10-Q (Filed with the SEC on November 9,
2006)
10
10
.13
Form of Incentive Stock Option Grant Agreement for Executive
Officers under the 2004 Developers Diversified Realty
Corporation Equity-Based Award Plan*
Quarterly Report on Form 10-Q (Filed with the SEC on November 9,
2006)
10
10
.14
Form of Incentive Stock Option Grant Agreement for Executive
Officers (with accelerated vesting upon retirement) under the
2004 Developers Diversified Realty Corporation Equity-Based
Award Plan*
Quarterly Report on Form 10-Q (Filed with the SEC on November 9,
2006)
10
10
.15
Form of Non-Qualified Stock Option Grant Agreement for Executive
Officers under the 2004 Developers Diversified Realty
Corporation Equity-Based Award Plan*
Quarterly Report on Form 10-Q (Filed with the SEC on November 9,
2006)
10
10
.16
Form of Non-Qualified Stock Option Grant Agreement for Executive
Officers (with accelerated vesting upon retirement) under the
2004 Developers Diversified Realty Corporation Equity-Based
Award Plan*
Quarterly Report on Form 10-Q (Filed with the SEC on November 9,
2006)
10
10
.17
Form of Directors Restricted Shares Agreement, dated
January 1, 2000*
Form S-11 Registration No. 333-76278 (Filed with SEC on January
4, 2002; see
Exhibit 10(ff) therein)
10
10
.18
Performance Units Agreement, dated March 1, 2000, by and
between the Company and Scott A. Wolstein*
Annual Report on Form 10-K (Filed with the SEC on March 8, 2002)
10
10
.19
Performance Units Agreement, dated January 2, 2002, by and
between the Company and Scott A. Wolstein*
Annual Report on Form 10-K (Filed with the SEC on March 8, 2002)
10
10
.20
Performance Units Agreement, dated January 2, 2002, between
the Company and David M. Jacobstein*
Quarterly Report on Form 10-Q (Filed with the SEC on May 15,
2002)
10
10
.21
Performance Units Agreement, dated January 2, 2002, by and
between the Company and Daniel B. Hurwitz*
Quarterly Report on Form 10-Q (Filed with the SEC on May 15,
2002)
10
10
.22
Amended and Restated Employment Agreement, dated
December 29, 2008, by and between the Company and Joan U.
Allgood*
Filed herewith
10
10
.23
Amended and Restated Employment Agreement, dated
December 29, 2008, by and between the Company and Richard
E. Brown*
Filed herewith
10
10
.24
Amended and Restated Employment Agreement, dated
December 29, 2008, by and between the Company and Timothy
J. Bruce*
Filed herewith
Table of Contents
Exhibit No.
Form 10-K
Filed Herewith or
Under Reg.S-K
Exhibit
Incorporated Herein by
10
10
.25
Employment Agreement, dated October 15, 2008, by and
between the Company and Daniel B. Hurwitz*
Current Report on Form 8-k (Filed with the SEC on October 21,
2008)
10
10
.26
Amended and Restated Employment Agreement, dated
December 29, 2008, by and between the Company and David M.
Jacobstein*
Filed herewith
10
10
.27
Amended and Restated Employment Agreement, dated
December 29, 2008, by and between the Company and David J.
Oakes*
Filed herewith
10
10
.28
Amended and Restated Employment Agreement, dated
December 29, 2008, by and between the Company and William
H. Schafer*
Filed herewith
10
10
.29
Amended and Restated Employment Agreement, dated
December 29, 2008, by and between the Company and Robin R.
Walker-Gibbons*
Filed herewith
10
10
.30
Employment Agreement, dated October 15, 2008, by and
between the Company and Scott A. Wolstein*
Current Report on Form 8-k (Filed with the SEC on October 21,
2008)
10
10
.31
Amended and Restated Employment Agreement, dated
December 29, 2008, by and between the Company and John S.
Kokinchak*
Filed herewith
10
10
.32
Employment Agreement, dated December 29, 2008, by and
between the Company and Paul Freddo*
Filed herewith
10
10
.33
Change in Control Agreement, dated October 15, 2008, by and
between the Company and Scott A. Wolstein*
Current Report on Form 8-k (Filed with the SEC on October 21,
2008)
10
10
.34
Change in Control Agreement, dated October 15, 2008, by and
between the Company and Daniel B. Hurwitz*
Current Report on Form 8-k (Filed with the SEC on October 21,
2008)
10
10
.35
Amended and Restated Change in Control Agreement, dated
December 29, 2008, by and between the Company and David M.
Jacobstein*
Filed herewith
10
10
.36
Form of Change in Control Agreement, entered into with certain
officers of the Company*
Filed herewith
10
10
.37
Outperformance Long-Term Incentive Plan Agreement, dated
August 18, 2006, by and between the Company and Scott A.
Wolstein*
Quarterly Report on Form 10-Q (Filed with the SEC on November 9,
2006)
10
10
.38
Outperformance Long-Term Incentive Plan Agreement, dated
August 18, 2006, by and between the Company and Daniel B.
Hurwitz*
Quarterly Report on Form 10-Q (Filed with the SEC on November 9,
2006)
10
10
.39
Outperformance Long-Term Incentive Plan Agreement, dated
February 23, 2006, by and between the Company and Joan U.
Allgood*
Quarterly Report on Form 10-Q (Filed with the SEC on November 9,
2006)
10
10
.40
Outperformance Long-Term Incentive Plan Agreement, dated
February 23, 2006, by and between the Company and Richard
E. Brown*
Quarterly Report on Form 10-Q (Filed with the SEC on November 9,
2006)
Table of Contents
Exhibit No.
Form 10-K
Filed Herewith or
Under Reg.S-K
Exhibit
Incorporated Herein by
10
10
.41
Outperformance Long-Term Incentive Plan Agreement, dated
February 23, 2006, by and between the Company and Timothy
J. Bruce*
Quarterly Report on Form 10-Q (Filed with the SEC on November 9,
2006)
10
10
.42
Outperformance Long-Term Incentive Plan Agreement, dated
February 23, 2006, by and between the Company and William
H. Schafer*
Quarterly Report on Form 10-Q (Filed with the SEC on November 9,
2006)
10
10
.43
Outperformance Long-Term Incentive Plan Agreement, dated
February 23, 2006, by and between the Company and Robin R.
Walker-Gibbons*
Quarterly Report on Form 10-Q (Filed with the SEC on November 9,
2006)
10
10
.44
Form of Medium-Term Note Distribution Agreement
Annual Report on Form 10-K (Filed with the SEC on March 30,
2000; File No.
001-11690)
10
10
.45
Program Agreement for Retail Value Investment Program, dated
February 11, 1998, by and among Retail Value Management,
Ltd., the Company and The Prudential Insurance Company of America
Annual Report on Form 10-K (Filed with the SEC on March 15, 2004)
10
10
.46
Developers Diversified Realty Corporation
2005 Directors Deferred Compensation Plan*
Form S-8 Registration No. 333-147270 (Filed with the SEC on
November 9, 2007)
14
14
.1
Developers Diversified Realty Corporation Code of Ethics for
Senior Financial Officers
Annual Report on Form 10-K (Filed with the SEC on March 15, 2004)
21
21
.1
List of Subsidiaries
Filed herewith
23
23
.1
Consent of PricewaterhouseCoopers LLP
Filed herewith
23
23
.2
Consent of PricewaterhouseCoopers LLP (TRT DDR Venture I General
Partnership)
Annual Report on Form 10-K (Filed with the SEC on February 29,
2008)
23
23
.3
Consent of PricewaterhouseCoopers LLP (DDRTC Core Retail Fund,
LLC)
Filed herewith
23
23
.4
Consent of PricewaterhouseCoopers (Macquarie DDR Trust)
Filed herewith
31
31
.1
Certification of principal executive officer pursuant to
Rule 13a-14(a)
of the Securities Exchange Act of 1934
Filed herewith
31
31
.2
Certification of principal financial officer pursuant to
Rule 13a-14(a)
of the Securities Exchange Act of 1934
Filed herewith
32
32
.1
Certification of chief executive officer pursuant to
Rule 13a-14(b)
of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350
Filed herewith
32
32
.2
Certification of chief financial officer pursuant to
Rule 13a-14(b)
of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350
Filed herewith
99
99
.1
TRT DDR Venture I General Partnership Consolidated Financial
Statements
Annual Report on Form 10-K (Filed with the SEC on February 29,
2008)
99
99
.2
DDRTC Core Retail Fund, LLC Consolidated Financial Statements
Filed herewith
99
99
.3
Macquarie DDR Trust Consolidated Financial Statements
Filed herewith
*
Management contracts and
compensatory plans or arrangements required to be filed as an
exhibit pursuant to Item 15(b) of
Form 10-K.
Page
F-2
F-3
F-4
F-5
F-6
F-7
F-60
F-61
F-74
EX-10.5
EX-10.22
EX-10.23
EX-10.24
EX-10.26
EX-10.27
EX-10.28
EX-10.29
EX-10.31
EX-10.32
EX-10.35
EX-10.36
EX-21.1
EX-23.1
EX-23.3
EX-23.4
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-99.2
EX-99.3
F-1
Table of Contents
F-2
Table of Contents
(In thousands, except share amounts)
December 31,
2008
2007
$
2,073,947
$
2,142,942
5,890,332
5,933,890
262,809
237,117
8,227,088
8,313,949
(1,208,903
)
(1,024,048
)
7,018,185
7,289,901
879,547
664,926
5,796
7,897,732
7,960,623
583,767
638,111
29,494
49,547
111,792
58,958
164,356
199,354
75,781
18,557
26,613
31,172
128,790
133,494
$
9,018,325
$
9,089,816
$
2,452,741
$
2,622,219
1,027,183
709,459
3,479,924
3,331,678
800,000
800,000
1,637,440
1,459,336
2,437,440
2,259,336
5,917,364
5,591,014
169,014
141,629
6,967
85,851
112,165
143,616
6,205,510
5,962,110
120,120
111,767
8,010
17,114
6,333,640
6,090,991
555,000
555,000
12,864
12,679
2,770,194
3,029,176
(608,675
)
(260,018
)
13,882
22,862
(49,849
)
8,965
(8,731
)
(369,839
)
2,684,685
2,998,825
$
9,018,325
$
9,089,816
F-3
Table of Contents
(In
thousands, except per share amounts)
For the Year Ended December 31,
2008
2007
2006
$
628,664
$
635,415
$
529,204
9,414
10,540
10,627
198,919
203,126
168,935
22,294
19,518
19,434
62,890
50,840
30,294
9,291
13,697
14,857
931,472
933,136
773,351
146,346
131,409
106,015
110,773
107,428
89,505
79,864
97,719
81,244
60,679
242,032
214,445
180,377
676,734
534,526
436,576
5,473
8,772
9,050
(244,212
)
(258,149
)
(208,536
)
11,552
(12,433
)
(15,819
)
(3,019
)
(446
)
(255,439
)
(252,396
)
(199,932
)
(701
)
146,214
136,843
17,719
43,229
30,337
(106,957
)
(89,939
)
189,443
167,180
12,333
(6,253
)
(6,777
)
(9,690
)
(1,145
)
(2,275
)
(2,116
)
11,188
(18,218
)
(8,893
)
17,434
14,669
2,497
(61,317
)
185,894
160,784
1,409
9,043
9,406
(4,830
)
12,259
11,051
(3,421
)
21,302
20,457
(64,738
)
207,196
181,241
6,962
68,851
72,023
$
(57,776
)
$
276,047
$
253,264
42,269
50,934
55,169
$
(100,045
)
$
225,113
$
198,095
$
(0.80
)
$
1.68
$
1.63
(0.03
)
0.18
0.19
$
(0.83
)
$
1.86
$
1.82
$
(0.80
)
$
1.67
$
1.62
(0.03
)
0.18
0.19
$
(0.83
)
$
1.85
$
1.81
$
2.07
$
2.64
$
2.36
F-4
Table of Contents
(In thousands, except per share amounts)
Accumulated
Accumulated
Unearned
Distributions in
Deferred
Other
Compensation-
Treasury
Preferred
Common
Paid-in-
Excess of
Compensation
Comprehensive
Restricted
Stock at
Shares
Shares
Capital
Net Income
Obligation
Income/(Loss)
Stock
Cost
Total
$
705,000
$
10,895
$
1,945,245
$
(99,756
)
$
11,616
$
10,425
$
(13,144
)
$
$
2,570,281
28
(1,819
)
10,028
8,237
45
22,371
22,416
(48,313
)
(48,313
)
6
653
(150
)
509
1,628
770
(1,585
)
813
(10,337
)
(10,337
)
(1,558
)
13,144
11,586
3,446
3,446
(257,954
)
(257,954
)
(55,169
)
(55,169
)
253,264
253,264
(2,729
)
(2,729
)
(1,454
)
(1,454
)
1,587
1,587
253,264
(2,596
)
250,668
705,000
10,974
1,959,629
(159,615
)
12,386
7,829
(40,020
)
2,496,183
(28,326
)
3,739
33,059
8,472
1,160
745,485
746,645
539
378,580
15,041
394,160
(378,942
)
(378,942
)
6
(674
)
487
1,459
1,278
(3,567
)
6,250
(436
)
2,247
(32,580
)
(32,580
)
(150,000
)
5,405
(5,405
)
(150,000
)
5,224
5,224
(324,907
)
(324,907
)
(46,138
)
(46,138
)
276,047
276,047
(20,126
)
(20,126
)
(1,454
)
(1,454
)
22,716
22,716
276,047
1,136
277,183
555,000
12,679
3,029,176
(260,018
)
22,862
8,965
(369,839
)
2,998,825
1
(2,671
)
702
8,711
6,741
184
(286,220
)
327,387
41,352
(5,681
)
4,289
6,578
5,187
16,745
(13,971
)
(4,895
)
(2,121
)
24,017
24,017
(5,172
)
23,327
18,155
(248,612
)
(248,612
)
(42,269
)
(42,269
)
(57,776
)
(57,776
)
(13,293
)
(13,293
)
(643
)
(643
)
(44,878
)
(44,878
)
(57,776
)
(58,814
)
(116,590
)
$
555,000
$
12,864
$
2,770,194
$
(608,675
)
$
13,882
$
(49,849
)
$
$
(8,731
)
$
2,684,685
F-5
Table of Contents
(In thousands)
For the Year Ended December 31,
2008
2007
2006
$
(57,776
)
$
276,047
$
253,264
246,374
224,375
193,527
27,970
5,224
3,446
10,292
9,750
7,756
1,157
(5,410
)
(17,719
)
(43,229
)
(30,337
)
106,957
24,427
33,362
23,304
1,145
2,275
2,116
9,690
(2,132
)
(81,110
)
(83,074
)
67,614
(1,215
)
(47,999
)
(38,013
)
44,244
(11,955
)
9,875
(20,203
)
38,186
(2,329
)
482,344
138,569
87,428
424,568
414,616
340,692
(394,332
)
(2,789,132
)
(454,357
)
(98,113
)
(247,882
)
(206,645
)
(56,926
)
1,913
622
1,274,679
298,059
12,154
43,041
28,211
20,462
50,862
(36,047
)
1,014
6,834
(52,834
)
(58,958
)
133,546
606,547
101,578
(464,341
)
(1,148,316
)
(203,047
)
343,201
412,436
147,500
1,150,000
(750,000
)
(20,000
)
466,936
134,300
11,093
(306,309
)
(401,697
)
(153,732
)
(170,332
)
(197,000
)
587,733
244,450
(5,522
)
(5,337
)
(4,047
)
(150,000
)
41,352
746,645
(32,580
)
(4,000
)
(10,337
)
1,371
11,998
9,560
484,204
(484,204
)
28,487
(4,970
)
(4,261
)
(46
)
(683
)
(2,097
)
(1,705
)
(11,907
)
(2,347
)
(378,942
)
(48,313
)
1,250
(369,765
)
(356,464
)
(307,652
)
22,698
755,491
(139,922
)
(17,075
)
21,791
(2,277
)
(2,978
)
(622
)
49,547
28,378
30,655
$
29,494
$
49,547
$
28,378
F-6
Table of Contents
1.
Summary
of Significant Accounting Policies
F-7
Table of Contents
For the Year Ended December 31,
2008
2007
2006
$
$
$
2.9
14.4
368.9
17.5
446.5
132.9
32.5
43.0
17.1
7.0
85.9
71.3
21.7
20.1
1.1
2.8
9.1
14.9
Useful lives, ranging from 30 to 40 years
Useful lives, ranging from five to 40 years
Useful lives, which approximate lease terms, where applicable
F-8
Table of Contents
F-9
Table of Contents
F-10
Table of Contents
December 31,
2008
2007
$
31,806
$
33,000
46,986
58,958
$
111,792
$
58,958
(1)
MV LLC, which is consolidated by
the Company, owns 37 locations formerly occupied by Mervyns. The
terms of the original acquisition contained a contingent
refundable purchase price adjustment secured by a
$25.0 million letter of credit (LOC) from the
seller of the real estate portfolio, which was owned in part by
an affiliate of one of the members of the Companys board
of directors. In addition, MV LLC held a $7.7 million
Security Deposit Letter of Credit (SD LOC) from
Mervyns. These LOCs were drawn in full in 2008 due to Mervyns
filing for protection under Chapter 11 of the United States
Bankruptcy Code. Although the funds are required to be placed in
escrow with MV LLCs lender to secure the entitys
mortgage loan, these funds are available for re-tenanting
expenses or to fund debt service. The funds will be released as
the related leases are either assumed or released, or the debt
is repaid. The balance at December 31, 2008, has been
adjusted for a release of $1.1 million by the lender
relating to unencumbered assets and an increase of
$0.2 million in interest income.
(2)
In connection with MV LLCs
draw of the $25.0 million LOC, MV LLC was required under
the loan agreement to provide an additional $33.0 million
as collateral security for the entitys mortgage loan. DDR
and MDT funded the escrow requirement with proportionate capital
contributions. The funds will be released in the same manner as
the $25.0 million LOC.
F-11
Table of Contents
(3)
Under the terms of a bond issue by
the Mississippi Business Finance Corporation, the proceeds of
approximately $60.0 million from the sale of bonds were
placed in a trust in connection with a Company development
project in Mississippi. As construction is completed on the
Companys project in Mississippi, the Company will request
disbursement of these funds.
F-12
Table of Contents
F-13
Table of Contents
F-14
Table of Contents
F-15
Table of Contents
F-16
Table of Contents
F-17
Table of Contents
2.
Investments
in and Advances to Joint Ventures
Effective
Ownership
Percentage (1)
79.45
%
A shopping center in Columbus, Ohio
50.0
Five shopping centers in several states
50.0
A shopping center in Macedonia, Ohio
50.0
A shopping center in St. Louis (Arnold), Missouri
50.0
A shopping center in Columbus, Ohio
50.0
A management and development company
47.4
Nine shopping centers, one shopping center under development and
a management company in Brazil
25.75
A shopping center in Deer Park, Illinois
25.75
A shopping center in Austin, Texas
25.25
11 shopping centers in several states
25.0
A shopping center in Independence, Missouri
25.0
50 shopping centers in several states
21.0
Two shopping centers in California
20.0
A shopping center in Buena Park, California
20.0
A shopping center in Benton Harbor, Michigan
20.0
A shopping center in Merriam, Kansas
20.0
A shopping center in Phoenix, Arizona
20.0
A shopping center in Kirkland, Washington
20.0
A shopping center in Kansas City, Missouri
20.0
63 shopping centers in several states
20.0
13 neighborhood grocery-anchored retail properties in several
states
20.0
29 shopping centers located in several states
20.0
44 retail sites in several states
20.0
A shopping center in San Antonio, Texas
20.0
A shopping center in Cincinnati, Ohio
15.0
66 assets in several states
12.3
An Australian Real Estate Investment Trust
10.0
A shopping center under development in Bloomfield Hills, Michigan
10.0
A shopping center in Orland Park, Illinois
10.0
A shopping center in Allen, Texas
10.0
12 neighborhood grocery-anchored retail properties in several
states
10.0
Three shopping centers in several states
0.0
Six shopping centers in several states
(1)
Ownership may be held through
different investment structures. Percentage ownerships are
subject to change as certain investments contain promoted
structures.
F-18
Table of Contents
December 31,
2008
2007
$
2,378,033
$
2,384,069
6,353,985
6,253,167
131,622
101,115
8,863,640
8,738,351
(606,530
)
(412,806
)
8,257,110
8,325,545
412,357
207,387
8,669,467
8,532,932
136,410
124,540
12,615
13,927
315,591
365,925
$
9,134,083
$
9,037,324
$
5,776,897
$
5,551,839
64,967
8,492
237,363
201,083
6,079,227
5,761,414
3,054,856
3,275,910
$
9,134,083
$
9,037,324
$
622,569
$
614,477
For the Year Ended December 31,
2008
2007
2006
$
946,340
$
812,630
$
429,190
328,875
272,277
145,893
3,887
241,652
193,032
81,262
307,580
269,405
129,000
881,994
734,714
356,155
64,346
77,916
73,035
(15,479
)
(4,839
)
(1,176
)
(67
)
94,386
398
(31,318
)
17,482
167,463
72,257
105
(784
)
24
7,364
2,516
20,343
7,469
1,732
20,367
$
24,951
$
169,195
$
92,624
$
17,335
$
44,537
$
28,530
F-19
Table of Contents
For the Year Ended
December 31,
2008
2007
$
622.6
$
614.5
(4.6
)
114.1
(5.2
)
(3.8
)
(95.4
)
(97.2
)
1.4
2.0
65.0
8.5
$
583.8
$
638.1
(1)
The difference between the
Companys share of accumulated equity and the investments
in, and advances to, joint ventures recorded on the
Companys consolidated balance sheets primarily results
from the basis differentials, as described below, deferred
development fees, net of the portion relating to the
Companys interest notes and amounts receivable from the
unconsolidated joint ventures investments.
(2)
Basis differentials occur primarily
when the Company has purchased interests in existing
unconsolidated joint ventures at fair market values, which
differ from their proportionate share of the historical net
assets of the unconsolidated joint ventures. In addition,
certain acquisition, transaction and other costs, including
capitalized interest, and impairments of the Companys
investments that were other than temporary may not be reflected
in the net assets at the joint venture level. Basis
differentials recorded upon transfer of assets are primarily
associated with assets previously owned by the Company that have
been transferred into an unconsolidated joint venture at fair
value. This amount represents the aggregate difference between
the Companys historical cost basis and the basis reflected
at the joint venture level. Certain basis differentials
indicated above are amortized over the life of the related asset.
Differences in income also occur
when the Company acquires assets from unconsolidated joint
ventures. The difference between the Companys share of net
income, as reported above, and the amounts included in the
consolidated statements of operations is attributable to the
amortization of such basis differentials, deferred gains and
differences in gain (loss) on sale of certain assets due to the
basis differentials. The Companys share of joint venture
net income has been increased by $0.4 million, reduced by
$1.2 million and increased by $1.6 million for the
years ended December 31, 2008, 2007 and 2006, respectively,
to reflect additional basis depreciation and basis differences
in assets sold.
For the Year Ended December 31,
2008
2007
2006
$
50.3
$
40.4
$
23.7
1.6
8.5
0.5
12.0
9.6
6.1
0.8
0.5
5.4
(1)
Acquisition fees of
$6.3 million were earned from the formation of the DDRTC
Core Retail Fund LLC in 2007, excluding the Companys
retained ownership. Financing fees were earned from several
unconsolidated joint venture interests, excluding the
Companys retained ownership. The Companys fees were
earned in conjunction with services rendered by
F-20
Table of Contents
the Company in connection with the
acquisition of the IRRETI real estate assets and financings and
re-financings of unconsolidated joint ventures.
December 31,
2008
2007
$
1,759.2
$
1,802.2
1,150.7
1,177.5
14.5
%
14.5
%
26.5
36.3
10.4
9.2
F-21
Table of Contents
F-22
Table of Contents
A 10% interest in a shopping center in Kildeer, Illinois, sold
in 2006;
A 20% interest in Service Merchandise sites, six sites sold in
2007 and one site sold in 2006;
A 20.75% interest in one property in Everett, Washington, sold
in 2006;
A 25.5% interest in five properties in Kansas City, Kansas and
Kansas City, Missouri, one sold in 2007 and four sold in 2006;
An approximate 25% interest in one Service Merchandise site sold
in 2006 and
A 50% interest in a property in Fort Worth, Texas, sold in
2006.
$
47.3
31.7
9.0
10.8
3.3
3.2
1.7
$
107.0
F-23
Table of Contents
3.
Acquisitions
and Pro Forma Financial Information
$
478,197
1,078,815
9,949
41,673
$
1,608,634
F-24
Table of Contents
For the Year Ended December 31,
(Unaudited)
2007
2006
$
926,030
$
928,841
$
145,557
$
203,928
$
21,302
$
20,457
$
184,909
$
244,460
$
1.33
$
1.77
0.17
0.17
$
1.50
$
1.94
$
1.32
$
1.77
0.16
0.16
$
1.48
$
1.93
Company-
Owned
Interest
Square Feet
Acquired
(Thousands)
50%
197
75%
557
50%
126
80%/20%
324
50%
Under Development
1,204
4.
Notes
Receivable
F-25
Table of Contents
Maturity
Interest
$
6.8
$
7.0
April 2021
7.13%
4.8
6.0
February 2016
6.9%
2.8
2.5
July 2026
7.1% - 8.5%
2.0
1.9
April 2014 and April 2018
5.5%
16.4
17.4
2.1
1.2
57.3
December 2010 to September 2017
6.0% -12.0%
$
75.8
$
18.6
(1)
Interest and principal are payable
solely from the incremental real estate taxes, if any, generated
by the respective shopping center and development project
pursuant to the terms of the financing agreement.
2008
$
62,729
(5,400
)
$
57,329
(1)
Amount classified in other expense,
net in the consolidated statements of operations for the year
ended December 31, 2008.
5.
Deferred
Charges
December 31,
2008
2007
$
56,827
$
54,547
(30,214
)
(23,375
)
$
26,613
$
31,172
F-26
Table of Contents
6.
Other
Assets
December 31,
2008
2007
$
21,721
$
31,201
15,299
22,102
37,020
53,303
91,770
80,191
$
128,790
$
133,494
7.
Revolving
Credit Facilities and Term Loans
F-27
Table of Contents
8.
Fixed-Rate
Notes
F-28
Table of Contents
Maximum Common
Conversion Price
Option Price
Shares
Option Cost
$
74.56
$
82.71
1.1
$
32.6
$
64.23
$
65.17
0.5
$
10.3
9.
Mortgages
Payable and Scheduled Principal Repayments
Amount
$
399,685
1,983,887
1,609,142
1,041,529
432,348
450,773
$
5,917,364
F-29
Table of Contents
10.
Financial
Instruments
Level 1
Quoted prices in active markets that are unadjusted and
accessible at the measurement date for identical, unrestricted
assets or liabilities;
Level 2
Quoted prices for identical assets and liabilities in markets
that are inactive, quoted prices for similar assets and
liabilities in active markets or financial instruments for which
significant inputs are observable, either directly or
indirectly, such as interest rates and yield curves that are
observable at commonly quoted intervals and
Level 3
Prices or valuations that require inputs that are both
significant to the fair value measurement and unobservable.
Fair Value Measurements
at December 31, 2008
Level 1
Level 2
Level 3
Total
$
$
$
21.7
$
21.7
F-30
Table of Contents
Derivative Financial
Instruments
$
(17.1
)
(4.6
)
$
(21.7
)
F-31
Table of Contents
2008
2007
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
$
2,452,741
$
1,442,264
$
2,622,219
$
2,450,361
1,827,183
1,752,260
1,509,459
1,509,459
1,637,440
1,570,877
1,459,336
1,501,345
$
5,917,364
$
4,765,401
$
5,591,014
$
5,461,165
F-32
Table of Contents
11.
Commitments
and Contingencies
F-33
Table of Contents
Retained Equity
With regard to retained
capital, the Company has adjusted its dividend policy to the
minimum required to maintain its REIT status. The Company did
not pay a dividend in January 2009 as it had already distributed
sufficient funds to comply with its 2008 tax requirements.
Moreover, the Company expects to fund a portion of its 2009
dividend payout through common shares and has the flexibility to
distribute up to 90% of dividends in shares. This new policy is
consistent with the Companys top priorities to improve
liquidity and lower leverage. This change in dividend payment is
expected to save in excess of $300 million of retained
capital in 2009.
Issuance of Common Shares
The Company has
several alternatives to raise equity through the sale of its
common shares. As discussed in Note 12, in December 2008,
the Company issued $41.9 million of equity capital through
its continuous equity program. The Company intends to continue
to issue additional shares under this program in 2009. As
discussed in Note 22, on February 23, 2009, the Company
entered into a stock purchase agreement with Mr. Alexander Otto
for the sale of 30 million of the Companys common
shares and warrants for 10 million of the Companys
common shares for
F-34
Table of Contents
additional potential cash in the future. The sale of the common
shares and warrants is subject to shareholder approval and the
satisfaction or waiver of customary and other conditions. There
can be no assurances the Company will be able to obtain such
approval or satisfy such conditions. The Company intends to use
the estimated $112.5 million in gross proceeds received
from this strategic investment in 2009 to reduce leverage.
Debt Financing and Refinancing
The Company
had approximately $372.8 million of consolidated debt
maturities during 2009, excluding obligations where there is an
extension option. The largest debt maturity in 2009 related to
the repayment of senior unsecured notes in the amount of
$227.0 million in January 2009. Funding of this repayment
was primarily through retained capital and our Revolving Credit
Facilities. The remaining $145.8 million in maturities is
related to various loans secured by certain shopping centers.
The Company plans to refinance approximately $80 million of
this remaining indebtedness related to two assets. Furthermore,
the Company has received lender approval to extend a mortgage
loans aggregating $29.6 million. All three loans are
scheduled to mature in the first quarter of 2009. The Company is
planning to either repay the remaining maturities with its
Revolving Credit Facility or financings discussed below or seek
extensions with the existing lender.
The Company is also in active discussions with various life
insurance companies regarding the financing of assets that are
currently unencumbered. The total loan proceeds are expected to
range from $100 million to $200 million depending on
the number of assets financed. The loan-to-value ratio required
by these lenders is expected to fall within the 50% to 60% range.
Asset Sales
During the months of January and
February 2009, the Company and its consolidated joint ventures
sold seven assets generating in excess of $65.8 million in
gross proceeds. During 2008, the Company and its joint ventures
sold 23 assets generating aggregate gross proceeds of almost
$200 million, of which the Companys proportionate
share aggregated $136.1 million. The Company is also in
various stages of discussions with third parties for the sale of
additional assets with aggregate values in excess of
$500 million, including four assets that are under contract
or subject to letters of intent, aggregating $30 million,
of which the Companys share is approximately
$14 million.
Debt Repurchases
Given the current economic
environment, the Companys publicly traded debt securities
are trading at significant discounts to par. During the fourth
quarter of 2008 and in January 2009, the Company repurchased
approximately $77.1 million of debt securities at a
discount to par aggregating $15.2 million. Although
$48 million of this debt repurchase reflected above related
to unsecured debt maturing in January 2009 at a small discount,
the debt with maturities in 2010 and beyond are trading at much
wider discounts. The Company intends to utilize the proceeds
from retained capital, equity issuances, secured financing and
asset sales, as discussed above, to repurchase its debt
securities at a discount to par to further improve its leverage
ratios.
F-35
Table of Contents
December 31,
2008
2007
$
$
0.1
0.1
0.2
0.3
1.1
0.5
1.0
$
0.9
$
2.4
F-36
Table of Contents
$
568,085
522,242
465,346
397,698
336,481
1,570,923
$
3,860,775
F-37
Table of Contents
$
5,317
5,008
4,947
4,493
4,017
141,652
$
165,434
12.
Minority
Equity Interests, Operating Partnership Minority Interests,
Preferred Shares, Common Shares, Common Shares in Treasury and
Deferred Compensation Obligations
December 31,
2008
2007
$
70.2
$
74.6
15.4
3.8
20.5
34.5
12.9
$
120.1
$
111.8
F-38
Table of Contents
2008
2007
$
180,000
$
180,000
205,000
205,000
170,000
170,000
$
555,000
$
555,000
750,000 Class A Cumulative Redeemable Preferred Shares,
without par value
750,000 Class B Cumulative Redeemable Preferred Shares,
without par value
750,000 Class C Cumulative Redeemable Preferred Shares,
without par value
750,000 Class D Cumulative Redeemable Preferred Shares,
without par value
750,000 Class E Cumulative Redeemable Preferred Shares,
without par value
750,000 Class F Cumulative Redeemable Preferred Shares,
without par value
750,000 Class G Cumulative Redeemable Preferred Shares,
without par value
750,000 Class H Cumulative Redeemable Preferred Shares,
without par value
750,000 Class I Cumulative Redeemable Preferred Shares,
without par value
750,000 Class J Cumulative Redeemable Preferred Shares,
without par value
750,000 Class K Cumulative Redeemable Preferred Shares,
without par value
750,000 Non Cumulative Preferred Shares, without par value
F-39
Table of Contents
13.
Other
Revenue
For the Year Ended December 31,
2008
2007
2006
$
6,327
$
4,961
$
13,989
1,991
7,881
414
973
855
454
$
9,291
$
13,697
$
14,857
(1)
Includes acquisition fees of
$6.3 million earned from the formation of the DDRTC Core
Retail Fund LLC in February 2007, excluding the
Companys retained ownership interest. The Companys
fees were earned in conjunction with services rendered by the
Company in connection with the acquisition of the IRRETI real
estate assets. Financing fees are earned in connection with the
formation and refinancing of unconsolidated joint ventures,
excluding the Companys retained ownership interest. The
Companys fees are earned in conjunction with the closing
and are based upon the amount of the financing transaction by
the joint venture.
14.
Impairment
Charges and Impairment of Joint Venture Investments
F-40
Table of Contents
F-41
Table of Contents
Fair-Value Measurements at December 31, 2008
Level 1
Level 2
Level 3
Total
$
31.7
$
$
75.3
$
107.0
15.
Discontinued
Operations and Disposition of Real Estate and Real Estate
Investments
December 31,
2007
$
3,365
2,494
4
5,863
(67
)
$
5,796
For the Year Ended December 31,
2008
2007
2006
$
12,182
$
40,553
$
51,374
3,990
11,708
14,990
2,331
10,308
14,268
4,342
9,929
13,150
110
(434
)
(440
)
10,773
31,511
41,968
1,409
9,042
9,406
(4,830
)
12,260
11,051
$
(3,421
)
$
21,302
$
20,457
F-42
Table of Contents
Number of
Gain (loss) on
Properties
Disposition of
Sold
Real Estate
22
$
(4.8
)
67
12.3
6
11.1
For the Year Ended
December 31,
2008
2007
2006
$
$
1.8
$
50.3
0.6
9.2
38.9
6.1
6.2
14.0
14.8
0.8
2.8
2.4
$
7.0
$
68.9
$
72.0
(1)
This disposition is not classified
as discontinued operations due to the Companys continuing
involvement through its retained ownership interest and
management agreements.
(2)
The Company transferred two
wholly-owned assets. The Company did not record a gain on the
contribution of 54 assets, as these assets were recently
acquired through the merger with IRRETI.
(3)
The Company transferred three
recently developed assets.
(4)
The Company transferred a newly
developed expansion area adjacent to a shopping center owned by
the joint venture.
(5)
The Company transferred three
assets in 2007 and newly developed expansion areas adjacent to
four shopping centers owned by the joint venture in 2006. The
Company did not record a gain on the contribution of three
assets in 2007, as these assets were recently acquired through
the merger with IRRETI.
(6)
The Company transferred six
recently developed assets.
(7)
The Company transferred 51 retail
sites previously occupied by Service Merchandise.
(8)
These dispositions did not meet the
criteria for discontinued operations, as the land did not have
any significant operations prior to disposition.
(9)
These gains and losses are
primarily attributable to the subsequent leasing of units
related to master lease and other obligations originally
established on disposed properties, which are no longer required.
F-43
Table of Contents
16.
Comprehensive
(Loss) Income
For the Year Ended December 31,
2008
2007
2006
$
(57,776
)
$
276,047
$
253,264
(13,293
)
(20,126
)
(2,729
)
(643
)
(1,454
)
(1,454
)
(44,878
)
22,716
1,587
(58,814
)
1,136
(2,596
)
$
(116,590
)
$
277,183
$
250,668
17.
Transactions
with Related Parties
F-44
Table of Contents
18.
Benefit
Plans
For the Year Ended December 31,
2008
2007
2006
$3.39
$9.76
$6.50
2.0% - 2.9%
4.1% - 4.8%
4.4% - 5.1%
6.9% - 9.0%
4.0% - 4.9%
4.2% - 5.0%
3 - 5 years
3 - 5 years
3 - 4 years
22.3% - 36.3%
19.2% - 20.3%
19.8% - 20.3%
F-45
Table of Contents
Weighted-
Weighted-
Average
Average
Remaining
Aggregate
Number of Options
Exercise
Contractual
Intrinsic
Employees
Directors
Price
Term
Value
1,903
62
$
32.46
302
51.19
(679
)
(20
)
29.31
(41
)
42.85
1,485
42
$
37.28
341
65.54
(148
)
32.22
(25
)
47.21
1,653
42
$
43.37
665
37.43
(51
)
(10
)
27.01
(82
)
45.31
2,185
32
$
41.97
6.8
$
1,268
32
$
40.06
5.3
$
1,003
42
35.67
5.7
5,706
616
42
28.75
6.1
22,517
F-46
Table of Contents
Weighted-
Average
Grant Date
Options
Fair Value
650
$
7.73
665
3.39
(352
)
6.86
(46
)
5.28
917
$
5.03
Weighted
Average
Grant Date
Awards
Fair Value
146
$
54.47
132
37.10
(81
)
45.39
(4
)
48.67
193
$
46.50
F-47
Table of Contents
Range
4.4%-6.4%
7.8%-10.9%
10 years
20%-23%
Awards
385
(91
)
294
F-48
Table of Contents
Range
4.4%-5.0%
4.4%-4.5%
3-5 years
19%-21%
Range
3.4%
5.9%
5 years
21%
F-49
Table of Contents
F-50
Table of Contents
19.
Earnings
and Dividends Per Share
For the Year Ended December 31,
(In thousands, except per share amounts)
2008
2007
2006
$
(61,317
)
$
185,894
$
160,784
6,962
68,851
72,023
(42,269
)
(50,934
)
(55,169
)
$
(96,624
)
$
203,811
$
177,638
119,843
120,879
109,002
102
456
546
42
162
65
119,987
121,497
109,613
$
(0.80
)
$
1.68
$
1.63
(0.03
)
0.18
0.19
$
(0.83
)
$
1.86
$
1.82
$
(0.80
)
$
1.67
$
1.62
(0.03
)
0.18
0.19
$
(0.83
)
$
1.85
$
1.81
F-51
Table of Contents
20.
Federal
Income Taxes
For the Year Ended December 31,
2008
2007
2006
$
(11,605
)
$
47,315
$
7,770
1,611
$
1,188
$
3,410
237
1,759
490
1,848
2,947
3,900
(18,747
)
(12,962
)
(6,428
)
(2,757
)
(1,939
)
(945
)
(21,504
)
(14,901
)
(7,373
)
$
(19,656
)
$
(11,954
)
$
(3,473
)
F-52
Table of Contents
For the Year Ended December 31,
2008
2007
2006
$
(3,946
)
$
16,087
$
2,642
(580
)
2,366
388
(17,410
)
(22,180
)
(13,043
)
2,280
(8,227
)
6,540
$
(19,656
)
$
(11,954
)
$
(3,473
)
169.37
%(1)
(25.27
)%
(44.70
)%
(1)
The 2008 effective tax rate
includes the discrete impact from the release of the valuation
allowance in the third quarter 2008. Without this discrete
impact, the effective tax rate is approximately 33.97%.
For the Year Ended December 31,
2008
2007
2006
$
45,960
$
41,825
$
45,100
(729
)
(688
)
(237
)
(17,410
)
(36,037
)
$
45,231
$
23,727
$
8,826
(1)
The majority of the deferred tax
assets and valuation allowance is attributable to interest
expense, subject to limitations and basis differentials in
assets due to purchase price accounting.
F-53
Table of Contents
For the Year Ended December 31,
2008
2007
2006
$
(57,776
)
$
276,047
$
253,264
179,015
112,202
93,189
(147,606
)
(99,894
)
(80,852
)
1,598
12,384
12,161
68,856
(4,321
)
(41,695
)
3,640
32,281
33,446
13,212
9,471
(2,136
)
6,892
8,818
(9,215
)
186,821
(2,923
)
(20,950
)
(6,068
)
251,729
326,038
252,094
(1,388
)
(116,108
)
(69,977
)
$
250,341
$
209,930
$
182,117
(1)
Depreciation expense from
majority-owned subsidiaries and affiliates, which are
consolidated for financial reporting purposes but not for tax
reporting purposes, is included in the reconciliation item
Joint venture equity in earnings, net.
For the Year Ended December 31,
2008
2007
2006
$
366,049
$
353,094
$
306,929
(6,967
)
(6,967
)
(6,900
)
6,967
6,967
6,900
(1,388
)
(116,108
)
(69,977
)
(114,320
)
(27,056
)
(54,835
)
$
250,341
$
209,930
$
182,117
For the Year Ended December 31,
2008
2007
2006
$
1.7563
$
1.5089
$
1.3053
0.0098
0.8345
0.5016
0.9639
0.2266
0.5031
$
2.7300
$
2.5700
$
2.3100
F-54
Table of Contents
Gross
2008
Date
Ordinary
Capital Gain
Return of
Total
Paid
Income
Distributions
Capital
Dividends
01/08/08
$
0.4246
$
0.0023
$
0.2331
$
0.6600
04/08/08
0.4439
0.0025
0.2436
0.6900
07/08/08
0.4439
0.0025
0.2436
0.6900
10/07/08
0.4439
0.0025
0.2436
0.6900
$
1.7563
$
0.0098
$
0.9639
$
2.7300
Gross
2007
Date
Ordinary
Capital Gain
Return of
Total
Paid
Income
Distributions
Capital
Dividends
01/08/07
$
0.3464
$
0.1916
$
0.0520
$
0.5900
04/09/07
0.3875
0.2143
0.0582
0.6600
07/03/07
0.3875
0.2143
0.0582
0.6600
10/02/07
0.3875
0.2143
0.0582
0.6600
01/08/08
$
1.5089
$
0.8345
$
0.2266
$
2.5700
Gross
2006
Date
Ordinary
Capital Gain
Return of
Total
Paid
Income
Distributions
Capital
Dividends
01/08/06
$
0.3051
$
0.1173
$
0.1176
$
0.5400
04/03/06
0.3334
0.1281
0.1285
0.5900
07/05/06
0.3334
0.1281
0.1285
0.5900
10/02/06
0.3334
0.1281
0.1285
0.5900
01/08/07
$
1.3053
$
0.5016
$
0.5031
$
2.3100
21.
Segment
Information
F-55
Table of Contents
2008
Other
Shopping
Investments
Centers
Other
Total
$
6,061
$
925,411
$
931,472
(2,036
)
(334,947
)
(336,983
)
4,025
590,464
594,489
$
(577,756
)
(577,756
)
(89,238
)
(89,238
)
11,188
11,188
$
(61,317
)
$
49,707
$
9,056,928
$
9,106,635
2007
Other
Shopping
Investments
Centers
Other
Total
$
5,198
$
927,938
$
933,136
(2,077
)
(236,760
)
(238,837
)
3,121
691,178
694,299
$
(533,416
)
(533,416
)
43,229
43,229
(18,218
)
(18,218
)
$
185,894
$
101,989
$
8,882,749
$
8,984,738
2006
Other
Shopping
Investments
Centers
Other
Total
$
4,437
$
768,914
$
773,351
(1,923
)
(193,597
)
(195,520
)
2,514
575,317
577,831
$
(438,491
)
(438,491
)
30,337
30,337
(8,893
)
(8,893
)
$
160,784
$
90,772
$
7,359,921
$
7,450,693
(1)
Unallocated expenses consist of
general and administrative, interest income, interest expense,
other income/expense, tax benefit/expense and depreciation and
amortization as listed in the consolidated statements of
operations.
(2)
Includes impairment of joint
venture investments.
F-56
Table of Contents
22.
Subsequent
Events
F-57
Table of Contents
23.
Quarterly
Results of Operations (Unaudited)
First
Second
Third
Fourth
Total
$
237,940
$
229,424
$
232,909
$
231,199
$
931,472
43,424
39,927
38,515
(179,642
)
(57,776
)
32,857
29,360
27,948
(190,210
)
(100,045
)
$
0.28
$
0.25
$
0.23
$
(1.57
)
$
(0.83
)
119,148
119,390
119,795
121,019
119,843
$
0.28
$
0.25
$
0.23
$
(1.57
)
$
(0.83
)
119,349
119,568
119,882
121,019
119,987
$
217,687
$
249,398
$
230,506
$
235,545
$
933,136
62,536
127,437
43,283
42,791
276,047
48,744
111,429
32,716
32,224
225,113
$
0.42
$
0.90
$
0.27
$
0.27
$
1.86
114,851
124,455
123,329
120,786
120,879
$
0.42
$
0.89
$
0.26
$
0.27
$
1.85
115,661
125,926
123,727
121,103
121,497
F-58
Table of Contents
High
Low
Dividends
$
44.31
$
32.20
$
0.69
45.66
34.44
0.69
41.55
27.60
0.69
31.50
1.73
$
72.33
$
61.43
$
0.66
66.70
50.75
0.66
56.85
46.28
0.66
59.27
37.42
0.66
F-59
Table of Contents
SCHEDULE II
For the years ended December 31, 2008, 2007 and
2006
Balance at
Charged to
Beginning of
(Income)
Balance at
Year
Expense
Deductions
End of Year
$
34,163
$
24,343
$
19,498
$
39,008
$
17,410
$
(17,410
)
$
$
$
18,024
$
9,133
$
(7,006
)*
$
34,163
$
36,037
$
(22,180
)
$
(3,553
)
$
17,410
$
21,408
$
7,498
$
10,882
$
18,024
$
49,080
$
(13,043
)
$
$
36,037
F-60
Table of Contents
Developers Diversified Realty
Corporation
Real Estate and Accumulated Depreciation
December 31, 2008
Total
Date
(In thousands)
Cost,
of
Initial Cost
Total Cost (B)
Net
Depreciable
Construction
Buildings
Buildings
of
Lives
(C)
&
&
Accumulated
Accumulated
(Years)
Acquisition
Land
Improvements
Improvements
Land
Improvements
Total
Depreciation
Depreciation
Encumbrances
(1)
(A)
$
0
$
4,111
$
0
$
0
$
6,363
6,363
$
4,903
$
1,461
$
0
S/L 30.0
1972(C)
1,036
9,028
0
993
33,497
34,490
10,307
24,182
0
S/L 30.0
1969(C)
424
3,803
203
424
10,003
10,427
5,554
4,874
0
S/L 30.0
1974(C)
80
4,698
233
70
8,744
8,814
6,201
2,613
0
S/L 30.0
1975(C)
1,137
4,089
0
1,137
4,168
5,305
1,840
3,464
0
S/L 31.5
1995(A)
248
7,382
81
244
11,955
12,199
9,124
3,074
0
S/L 30.0
1974(C)
2,113
8,181
128
1,806
11,632
13,438
7,268
6,169
0
S/L 30.0
1985(C)
963
3,949
0
10,648
41,067
51,715
1,897
49,818
0
S/L 31.5
2006(C)
11,626
30,457
0
24,860
79,335
104,195
4,833
99,362
0
S/L 31.5
2006(C)
3,370
21,033
0
2,505
25,865
28,370
806
27,564
0
S/L 31.5
2007(C)
1,271
8,209
0
703
6,683
7,386
2,680
4,706
0
S/L 31.5
1994(A)
8,795
36,370
0
0
49,999
49,999
8,885
41,114
0
S/L 31.5
2003(A)
2,282
14,979
0
2,213
17,556
19,769
7,458
12,312
0
S/L 31.5
1994(A)
3,005
9,425
0
3,028
9,948
12,976
4,388
8,588
0
S/L 31.5
1995(A)
0
111,512
0
0
134,217
134,217
18,902
115,314
0
S/L 31.5
2005(C)
3,836
15,459
0
3,796
19,338
23,134
6,925
16,209
0
S/L 30.0
1973(C)
0
10,643
0
0
14,444
14,444
3,534
10,909
0
S/L 31.5
2000(C)
0
366
0
1,132
4,699
5,831
625
5,206
3,296
S/L 31.5
2000(C)
9,311
44,647
0
9,462
50,294
59,756
11,684
48,072
0
S/L 31.5
2001(C)
47,215
101,475
2,053
47,360
105,307
152,667
10,640
142,027
79,100
S/L 31.5
2003(A)
1,531
9,174
174
1,531
9,585
11,116
2,830
8,286
0
S/L 31.5
1999(C)
539
3,321
104
540
3,433
3,973
344
3,629
0
S/L 31.5
1999(C)
475
9,374
0
475
10,122
10,597
4,778
5,820
0
S/L 31.5
1994(A)
4,190
6,783
0
4,190
6,838
11,028
1,345
9,684
0
S/L 31.5
2003(A)
2,460
2,475
0
2,460
2,478
4,938
37
4,901
0
S/L 31.5
1994(A)
3,183
11,666
0
2,415
7,948
10,363
3,632
6,731
0
S/L 31.5
2003(A)
788
2,781
0
788
2,793
3,581
545
3,036
0
S/L 31.5
2003(A)
2,485
2,214
0
2,485
2,239
4,724
449
4,275
0
S/L 31.5
2003(A)
9,576
43,619
0
10,521
51,021
61,542
3,570
57,972
0
S/L 31.5
2006(C)
1,916
3,893
0
1,916
6,002
7,918
952
6,967
0
S/L 31.5
2003(A)
1,881
2,956
0
1,881
6,681
8,562
1,027
7,535
0
S/L 31.5
2003(A)
5,862
5,971
0
5,862
6,338
12,200
1,349
10,850
0
S/L 31.5
2003(A)
14,255
23,653
0
14,249
23,863
38,112
4,645
33,467
0
S/L 31.5
2003(A)
F-61
Table of Contents
Developers Diversified Realty
Corporation
Real Estate and Accumulated Depreciation
(continued)
December 31, 2008
Total
Date
(In thousands)
Cost,
of
Initial Cost
Total Cost (B)
Net
Depreciable
Construction
Buildings
Buildings
of
Lives
(C)
&
&
Accumulated
Accumulated
(Years)
Acquisition
Land
Improvements
Improvements
Land
Improvements
Total
Depreciation
Depreciation
Encumbrances
(1)
(A)
3,856
9,625
0
3,540
9,723
13,263
1,926
11,337
0
S/L 31.5
2003(A)
1,649
2,084
0
1,477
2,103
3,580
412
3,168
0
S/L 31.5
2003(A)
138
2,638
0
138
2,699
2,837
527
2,309
0
S/L 31.5
2003(A)
4,220
8,159
0
4,220
8,274
12,494
1,621
10,873
0
S/L 31.5
2003(A)
2,632
11,063
0
2,620
11,594
14,214
2,206
12,008
0
S/L 31.5
2003(A)
2,288
6,246
0
2,288
7,172
9,460
1,503
7,957
0
S/L 31.5
2003(A)
5,977
7,459
0
5,729
7,613
13,342
1,503
11,840
0
S/L 31.5
2003(A)
2,022
8,440
0
1,199
1,408
2,607
120
2,487
0
S/L 31.5
2003(A)
8,524
10,627
0
8,524
14,216
22,740
2,188
20,552
0
S/L 31.5
2003(A)
3,479
9,850
0
3,479
10,033
13,512
4,400
9,112
0
S/L 31.5
2003(A)
20,733
22,818
0
20,804
23,656
44,460
4,651
39,809
26,545
S/L 31.5
2003(A)
1,845
13,214
0
1,845
15,365
17,210
3,110
14,100
0
S/L 31.5
2003(A)
3,743
9,268
0
3,607
9,335
12,942
1,802
11,140
7,691
S/L 31.5
2003(A)
124
521
0
0
2,180
2,180
188
1,992
0
S/L 31.5
2003(A)
10,780
4,752
0
10,780
5,065
15,845
1,028
14,818
0
S/L 31.5
2003(A)
5,447
11,194
0
5,447
11,820
17,267
2,453
14,814
0
S/L 31.5
2003(A)
588
0
0
588
2,864
3,452
168
3,285
0
S/L 31.5
2003(A)
4,527
3,600
0
4,527
4,800
9,327
803
8,524
0
S/L 31.5
2003(A)
1,249
1,790
0
1,249
1,986
3,235
372
2,864
0
S/L 31.5
2003(A)
3,344
2,805
0
3,344
2,805
6,149
558
5,591
0
S/L 31.5
2003(A)
2,915
3,447
0
2,919
3,394
6,313
774
5,539
0
S/L 31.5
2003(A)
1,870
5,661
0
1,870
7,308
9,178
1,254
7,923
0
S/L 31.5
2003(A)
5,882
20,060
0
5,882
22,757
28,639
4,017
24,622
15,899
S/L 31.5
2003(A)
2,613
7,040
0
2,827
7,899
10,726
1,414
9,312
0
S/L 31.5
2003(A)
13,479
23,923
0
13,479
28,708
42,187
5,519
36,667
0
S/L 31.5
2003(A)
2,452
10,982
0
2,452
11,537
13,989
2,151
11,837
0
S/L 31.5
2003(A)
566
2,324
0
382
2,327
2,709
209
2,499
0
S/L 31.5
2006(A)
2,767
2,054
0
1,129
4,506
5,635
756
4,879
0
S/L 31.5
2003(A)
1,217
2,689
0
1,217
2,705
3,922
537
3,385
0
S/L 31.5
2003(A)
8,039
49,896
0
11,774
79,596
91,370
11,937
79,434
0
S/L 31.5
2003(A)
1,598
6,999
0
1,801
11,478
13,279
1,750
11,529
0
S/L 31.5
2003(A)
10,880
19,201
0
6,373
44,194
50,567
16,850
33,717
27,195
S/L 31.5
1995(C)
0
2,564
13
723
3,834
4,557
3,168
1,390
0
S/L 30.0
1973(C)
Table of Contents
Developers Diversified Realty
Corporation
Real Estate and Accumulated Depreciation
(continued)
December 31, 2008
Total
Date
(In thousands)
Cost,
of
Initial Cost
Total Cost (B)
Net
Depreciable
Construction
Buildings
Buildings
of
Lives
(C)
&
&
Accumulated
Accumulated
(Years)
Acquisition
Land
Improvements
Improvements
Land
Improvements
Total
Depreciation
Depreciation
Encumbrances
(1)
(A)
15,332
35,803
0
10,456
24,423
34,879
3,462
31,417
0
S/L 31.5
2002(A)
43
2,549
2
1,170
4,366
5,536
1,837
3,698
0
S/L 30.0
1974(C)
18,701
18,811
118
18,701
19,287
37,988
1,663
36,324
16,733
S/L 30.0
1999(A)
3,163
28,819
0
3,163
29,683
32,846
16,537
16,309
18,936
S/L 30.0
1989(C)
4,105
6,640
324
3,905
8,249
12,154
4,660
7,494
0
S/L 31.5
1990(C)
4,392
10,885
0
4,392
10,996
15,388
3,353
12,035
0
S/L 31.5
1998(C)
757
14,469
1
757
25,105
25,862
7,743
18,119
0
S/L 31.5
1993(A)
651
911
31
812
1,428
2,240
446
1,795
0
S/L 31.5
1993(A)
948
3,938
0
673
6,039
6,712
2,623
4,089
0
S/L 31.5
1994(A)
9,025
27,983
0
8,152
28,233
36,385
10,188
26,197
25,320
S/L 31.5
1997(A)
6,220
7,454
0
6,220
21,628
27,848
6,601
21,248
0
S/L 31.5
1998(C)
2,399
11,238
172
2,399
14,132
16,531
6,889
9,642
0
S/L 31.5
1993(A)
706
8,425
6
1,067
10,596
11,663
4,784
6,879
0
S/L 31.5
1993(A)
63
6,443
442
63
12,579
12,642
8,503
4,138
0
S/L 30.0
1977(C)
1,805
4,010
273
816
3,142
3,958
1,030
2,928
0
S/L 30.0
1988(C)
725
3,500
30
725
4,921
5,646
3,749
1,897
0
S/L 30.0
1978(C)
12,791
38,404
0
13,403
44,319
57,722
15,542
42,180
32,822
S/L 31.5
1998(A)
10,628
32,053
0
10,018
32,400
42,418
10,923
31,494
24,382
S/L 31.5
1998(A)
4,219
12,697
0
4,219
13,969
18,188
4,805
13,383
8,609
S/L 31.5
1998(A)
2,775
8,370
0
2,775
10,356
13,131
3,939
9,192
0
S/L 31.5
1998(A)
1,336
4,050
0
1,525
4,925
6,450
1,673
4,777
448
S/L 31.5
1998(A)
0
2,048
0
0
2,143
2,143
773
1,369
0
S/L 31.5
1998(A)
4,159
3,818
0
5,403
7,783
13,186
1,048
12,138
0
S/L 31.5
2004(C)
832
7,560
0
1,592
14,043
15,635
4,709
10,926
0
S/L 31.5
1995(C)
1,395
8,563
0
1,395
8,563
9,958
386
9,573
0
S/L 31.5
2007(A)
1,302
5,703
0
1,418
6,414
7,832
2,399
5,433
0
S/L 31.5
1998(A)
1,789
9,399
111
1,789
16,769
18,558
7,157
11,401
0
S/L 31.5
1993(A)
414
4,244
476
430
7,541
7,971
5,057
2,914
0
S/L 30.0
1983(A)
431
6,563
0
417
6,828
7,245
3,329
3,917
0
S/L 31.5
1994(A)
627
7,519
7
1,021
10,908
11,929
5,230
6,699
0
S/L 31.5
1993(A)
911
11,346
1
1,081
16,853
17,934
8,122
9,813
0
S/L 31.5
1993(A)
318
1,693
0
318
3,445
3,763
1,298
2,465
0
S/L 31.5
1995(A)
2,584
10,470
0
2,430
17,673
20,103
6,189
13,913
0
S/L 31.5
1995(A)
Table of Contents
Developers Diversified Realty
Corporation
Real Estate and Accumulated Depreciation
(continued)
December 31, 2008
Total
Date
(In thousands)
Cost,
of
Initial Cost
Total Cost (B)
Net
Depreciable
Construction
Buildings
Buildings
of
Lives
(C)
&
&
Accumulated
Accumulated
(Years)
Acquisition
Land
Improvements
Improvements
Land
Improvements
Total
Depreciation
Depreciation
Encumbrances
(1)
(A)
1,826
13,710
0
1,826
15,219
17,045
6,811
10,234
0
S/L 31.5
1994(A)
127
3,612
0
127
4,131
4,258
1,917
2,340
0
S/L 31.5
1993(A)
1,926
8,039
0
1,926
8,924
10,850
3,679
7,171
0
S/L 31.5
1995(A)
6,738
26,988
27
6,738
17,308
24,046
15,847
8,200
0
S/L 31.5
1998(A)
440
7,301
1,821
413
13,807
14,220
10,409
3,811
0
S/L 30.0
1980(C)
184
3,647
0
184
4,433
4,617
1,981
2,636
0
S/L 31.5
1993(A)
270
8,728
2
251
10,801
11,052
4,914
6,138
0
S/L 31.5
1993(A)
332
11,938
1
332
16,160
16,492
6,798
9,693
0
S/L 31.5
1993(A)
767
7,769
20
1,142
13,670
14,812
6,682
8,130
0
S/L 31.5
1993(A)
352
5,693
0
352
8,469
8,821
4,653
4,168
0
S/L 30.0
1977(C)
24,591
31,779
0
24,841
60,210
85,051
10,473
74,578
37,200
S/L 31.5
2001(C)
25,662
56,759
0
28,393
73,823
102,216
20,158
82,058
0
S/L 31.5
1998(A)
24,327
53,686
0
31,368
76,893
108,261
22,642
85,619
0
S/L 31.5
1998(A)
5,428
12,259
0
5,428
13,195
18,623
4,454
14,170
0
S/L 31.5
1998(A)
986
2,132
0
986
2,285
3,271
752
2,519
0
S/L 31.5
1998(A)
15,845
36,479
0
15,845
43,423
59,268
14,501
44,767
0
S/L 31.5
1998(A)
442
8,229
500
442
11,570
12,012
8,496
3,517
0
S/L 30.0
1977(C)
2,801
5,997
0
2,801
6,888
9,689
2,430
7,260
0
S/L 31.5
1998(A)
3,620
7,716
0
3,620
8,414
12,034
2,826
9,207
0
S/L 31.5
1998(A)
3,726
13,974
0
3,726
17,129
20,855
7,472
13,384
0
S/L 31.5
1994(A)
10,573
26,002
0
11,434
51,440
62,874
16,713
46,161
0
S/L 31.5
1995(A)
1,048
15,812
4
1,048
18,025
19,073
8,104
10,969
0
S/L 31.5
1994(A)
3,066
12,220
0
3,066
6,308
9,374
983
8,391
0
S/L 40.0
2005(A)
3,783
15,964
0
3,783
14,869
18,652
1,284
17,367
0
S/L 40.0
2005(A)
0
11,079
55
0
9,465
9,465
804
8,661
0
S/L 40.0
2005(A)
6,458
3,488
0
6,458
2,939
9,397
275
9,121
0
S/L 40.0
2005(A)
0
20,456
0
0
19,341
19,341
1,650
17,691
0
S/L 40.0
2005(A)
2,443
6,221
0
2,443
5,633
8,076
497
7,578
0
S/L 40.0
2005(A)
9,140
11,514
0
9,140
4,941
14,081
922
13,159
0
S/L 40.0
2005(A)
4,955
5,392
0
4,955
4,853
9,808
430
9,378
0
S/L 40.0
2005(A)
5,508
8,294
0
5,508
3,394
8,902
665
8,237
0
S/L 40.0
2005(A)
1,928
4,841
0
1,928
4,450
6,378
387
5,992
0
S/L 40.0
2005(A)
Table of Contents
Developers Diversified Realty
Corporation
Real Estate and Accumulated Depreciation
(continued)
December 31, 2008
Total
Date
(In thousands)
Cost,
of
Initial Cost
Total Cost (B)
Net
Depreciable
Construction
Buildings
Buildings
of
Lives
(C)
&
&
Accumulated
Accumulated
(Years)
Acquisition
Land
Improvements
Improvements
Land
Improvements
Total
Depreciation
Depreciation
Encumbrances
(1)
(A)
1,938
4,151
0
1,938
3,785
5,723
330
5,393
0
S/L 40.0
2005(A)
1,978
5,831
0
1,978
5,384
7,362
467
6,895
0
S/L 40.0
2005(A)
2,403
2,697
0
2,403
2,387
4,790
213
4,577
0
S/L 40.0
2005(A)
2,136
5,831
0
2,136
5,349
7,485
466
7,019
0
S/L 40.0
2005(A)
4,974
7,052
0
4,974
2,948
7,922
564
7,358
0
S/L 40.0
2005(A)
2,621
6,039
0
2,621
5,546
8,167
483
7,684
0
S/L 40.0
2005(A)
0
9,057
0
0
7,809
7,809
728
7,081
0
S/L 40.0
2005(A)
1,117
8,736
0
1,117
8,185
9,302
701
8,601
0
S/L 40.0
2005(A)
0
15,648
0
0
14,743
14,743
1,260
13,483
0
S/L 40.0
2005(A)
1,632
2,368
0
1,632
2,133
3,765
187
3,577
0
S/L 40.0
2005(A)
1,770
746
0
1,770
603
2,373
56
2,317
0
S/L 40.0
2005(A)
2,551
11,951
0
2,551
11,123
13,674
960
12,714
0
S/L 40.0
2005(A)
0
20,834
0
0
19,661
19,661
1,637
18,024
0
S/L 40.0
2005(A)
4,163
5,980
0
4,163
5,427
9,590
478
9,113
0
S/L 40.0
2005(A)
2,868
4,200
0
2,868
3,793
6,661
335
6,326
0
S/L 40.0
2005(A)
1,681
4,408
0
1,681
4,038
5,719
351
5,368
0
S/L 40.0
2005(A)
2,275
2,074
0
2,275
1,821
4,096
163
3,932
0
S/L 40.0
2005(A)
4,589
6,544
0
4,589
5,949
10,538
523
10,014
0
S/L 40.0
2005(A)
8,900
11,925
0
8,900
7,578
16,478
958
15,520
0
S/L 40.0
2005(A)
1,889
6,860
0
1,889
5,100
6,989
550
6,439
0
S/L 40.0
2005(A)
2,334
8,453
0
2,334
7,835
10,169
678
9,491
0
S/L 40.0
2005(A)
5,409
9,383
0
5,409
2,631
8,040
753
7,288
0
S/L 40.0
2005(A)
2,695
5,078
0
2,695
4,629
7,324
405
6,919
0
S/L 40.0
2005(A)
5,736
5,795
0
5,736
3,429
9,165
462
8,703
0
S/L 40.0
2005(A)
3,461
11,036
0
3,461
10,205
13,666
886
12,779
0
S/L 40.0
2005(A)
5,439
11,728
0
5,439
8,379
13,818
942
12,877
0
S/L 40.0
2005(A)
2,341
8,995
0
2,341
9,580
11,921
1,461
10,460
0
S/L 31.5
2004(A)
2,929
12,926
0
2,929
12,941
15,870
1,945
13,925
0
S/L 31.5
2004(A)
5,878
21,291
0
5,878
22,480
28,358
3,516
24,842
0
S/L 31.5
2004(A)
5,873
22,458
0
5,873
23,225
29,098
3,508
25,590
0
S/L 31.5
2004(A)
9,198
42,969
0
9,198
43,150
52,348
6,393
45,955
15,933
S/L 31.5
2004(A)
3,303
16,239
0
3,303
16,766
20,069
2,653
17,415
0
S/L 31.5
2004(A)
2,576
2,590
0
2,576
3,530
6,106
485
5,622
0
S/L 31.5
2004(A)
Table of Contents
Developers Diversified Realty
Corporation
Real Estate and Accumulated Depreciation
(continued)
December 31, 2008
Total
Date
(In thousands)
Cost,
of
Initial Cost
Total Cost (B)
Net
Depreciable
Construction
Buildings
Buildings
of
Lives
(C)
&
&
Accumulated
Accumulated
(Years)
Acquisition
Land
Improvements
Improvements
Land
Improvements
Total
Depreciation
Depreciation
Encumbrances
(1)
(A)
10,430
13,081
0
10,430
13,101
23,531
1,991
21,540
0
S/L 31.5
2004(A)
4,071
17,142
0
4,071
17,155
21,226
2,605
18,621
0
S/L 31.5
2004(A)
3,061
6,887
0
3,061
7,683
10,744
1,154
9,590
0
S/L 31.5
2004(A)
4,152
22,075
0
4,152
22,660
26,812
3,317
23,495
0
S/L 31.5
2004(A)
9,828
22,858
0
9,828
23,371
33,199
3,637
29,563
12,544
S/L 31.5
2004(A)
4,180
747
0
4,180
1,010
5,190
184
5,006
0
S/L 31.5
2004(A)
8,834
29,813
0
8,834
30,525
39,359
4,982
34,376
3,662
S/L 31.5
2004(A)
5,146
5,990
0
5,146
8,456
13,602
1,255
12,347
10,027
S/L 31.5
2004(A)
4,672
5,085
0
4,672
(509
)
4,163
857
3,306
0
S/L 31.5
2004(A)
14,131
51,982
0
14,131
53,716
67,847
7,885
59,963
9,597
S/L 31.5
2004(A)
22,229
52,579
0
22,279
56,185
78,464
9,852
68,612
8,289
S/L 31.5
2004(A)
4,408
4,707
0
4,408
4,707
9,115
750
8,365
0
S/L 31.5
2004(A)
49,033
107,230
0
49,033
109,194
158,227
16,436
141,791
43,475
S/L 31.5
2004(A)
10,734
34,028
0
10,767
35,296
46,063
5,697
40,366
4,458
S/L 31.5
2004(A)
5,021
6,768
0
5,021
8,335
13,356
1,172
12,184
0
S/L 31.5
2004(A)
4,956
11,370
0
1,973
3,191
5,164
493
4,671
0
S/L 31.5
2004(A)
29,729
78,602
0
28,672
73,602
102,274
11,360
90,914
20,875
S/L 31.5
2004(A)
3,901
4,922
0
3,901
4,922
8,823
751
8,071
0
S/L 31.5
2004(A)
6,010
19,044
0
6,010
19,100
25,110
2,866
22,244
0
S/L 31.5
2004(A)
1,929
5,476
0
1,929
5,515
7,444
835
6,609
0
S/L 31.5
2004(A)
4,112
4,328
0
4,112
4,425
8,537
683
7,854
0
S/L 31.5
2004(A)
9,253
23,829
0
9,253
24,121
33,374
3,640
29,734
10,124
S/L 31.5
2004(A)
3,568
29,001
0
3,620
29,555
33,175
4,304
28,872
715
S/L 31.5
2004(A)
15,471
25,600
0
15,471
26,888
42,359
4,450
37,910
4,060
S/L 31.5
2004(A)
1,454
9,284
0
1,454
11,892
13,346
2,346
10,999
0
S/L 31.5
2004(A)
1,316
3,961
0
1,316
3,961
5,277
613
4,664
0
S/L 31.5
2004(A)
4,054
11,995
0
4,054
12,053
16,107
1,808
14,299
4,204
S/L 31.5
2004(A)
1,279
13,685
0
1,279
13,743
15,022
2,079
12,943
0
S/L 31.5
2004(A)
5,090
14,874
0
5,090
14,942
20,032
2,255
17,777
0
S/L 31.5
2004(A)
36,224
56,949
0
36,224
59,240
95,464
8,788
86,676
11,349
S/L 31.5
2004(A)
9,369
40,672
0
9,369
41,558
50,927
6,233
44,694
23,783
S/L 31.5
2004(A)
4,565
5,078
0
4,565
9,239
13,804
1,189
12,615
3,571
S/L 31.5
2004(A)
2,172
2,983
0
2,172
3,195
5,367
424
4,944
1,352
S/L 31.5
2004(A)
Table of Contents
Developers Diversified Realty
Corporation
Real Estate and Accumulated Depreciation
(continued)
December 31, 2008
Total
Date
(In thousands)
Cost,
of
Initial Cost
Total Cost (B)
Net
Depreciable
Construction
Buildings
Buildings
of
Lives
(C)
&
&
Accumulated
Accumulated
(Years)
Acquisition
Land
Improvements
Improvements
Land
Improvements
Total
Depreciation
Depreciation
Encumbrances
(1)
(A)
2,527
14,711
0
2,527
14,872
17,399
2,382
15,017
0
S/L 31.5
2004(A)
14,369
43,688
0
14,369
44,410
58,779
6,125
52,655
22,869
S/L 31.5
2004(A)
2,620
2,554
0
2,620
2,848
5,468
442
5,027
0
S/L 31.5
2004(A)
3,172
7,075
0
3,172
7,368
10,540
1,153
9,386
6,634
S/L 31.5
2004(A)
1,140
6,756
0
881
5,677
6,558
844
5,714
0
S/L 31.5
2004(A)
2,143
8,109
0
2,143
8,109
10,252
1,235
9,017
0
S/L 31.5
2004(A)
659
2,426
0
4,682
19,484
24,166
273
23,893
30,618
S/L 31.5
2007(A)
1,444
9,912
0
1,444
9,916
11,360
1,473
9,888
6,608
S/L 31.5
2004(A)
20,297
51,155
0
20,297
51,916
72,213
8,128
64,085
20,804
S/L 31.5
2004(A)
2,806
4,905
0
2,806
5,041
7,847
768
7,079
0
S/L 31.5
2004(A)
9,738
26,351
0
9,738
32,044
41,782
6,370
35,412
0
S/L 31.5
2004(A)
2,374
6,433
0
2,374
6,517
8,891
955
7,936
6,297
S/L 31.5
2004(A)
4,785
16,852
1,183
4,287
34,528
38,815
15,396
23,418
24,500
S/L 31.5
1989(C)
859
10,948
24
866
15,466
16,332
8,932
7,401
0
S/L 30.0
1986(C)
703
9,104
272
1,182
15,955
17,137
7,388
9,749
0
S/L 31.5
1991(A)
1,084
4,816
266
2,096
11,051
13,147
5,234
7,913
4,521
S/L 30.0
1988(C)
432
5,908
435
432
7,907
8,339
5,767
2,572
0
S/L 30.0
1980(C)
23,681
31,809
0
13,707
42,731
56,438
7,116
49,323
0
S/L 31.5
2003(A)
7,833
35,550
0
8,082
56,549
64,631
18,087
46,544
36,573
S/L 31.5
1997(C)
57
6,864
355
51
7,799
7,850
7,596
254
0
S/L 30.0
1978(C)
780
8,204
72
441
5,285
5,726
2,717
3,008
0
S/L 31.5
1989(C)
132,074
152,441
0
132,759
155,203
287,962
19,400
268,563
0
S/L 31.5
2005(A)
28,522
76,947
0
28,601
77,432
106,033
9,836
96,197
57,500
S/L 31.5
2005(A)
16,386
74,059
0
16,386
75,214
91,600
9,513
82,088
0
S/L 31.5
2005(A)
8,175
41,094
0
8,175
42,507
50,682
5,373
45,308
0
S/L 31.5
2005(A)
3,215
24
0
3,232
24
3,256
14
3,243
0
S/L 31.5
2005(A)
19,214
25,584
0
18,629
26,235
44,864
3,390
41,474
0
S/L 31.5
2005(A)
91,645
98,007
0
91,898
101,795
193,693
12,531
181,162
109,500
S/L 31.5
2005(A)
10,338
23,285
0
10,238
26,922
37,160
3,041
34,119
0
S/L 31.5
2005(A)
4,294
11,987
0
4,294
12,237
16,531
1,586
14,945
0
S/L 31.5
2005(A)
7,965
29,898
0
8,094
30,890
38,984
3,945
35,039
0
S/L 31.5
2005(A)
101,219
105,465
0
101,219
109,884
211,103
13,617
197,486
0
S/L 31.5
2005(A)
7,076
18,684
0
7,076
18,728
25,804
2,410
23,393
0
S/L 31.5
2005(A)
Table of Contents
Developers Diversified Realty
Corporation
Real Estate and Accumulated Depreciation
(continued)
December 31, 2008
Total
Date
(In thousands)
Cost,
of
Initial Cost
Total Cost (B)
Net
Depreciable
Construction
Buildings
Buildings
of
Lives
(C)
&
&
Accumulated
Accumulated
(Years)
Acquisition
Land
Improvements
Improvements
Land
Improvements
Total
Depreciation
Depreciation
Encumbrances
(1)
(A)
1,960
18,721
0
1,960
18,922
20,882
2,412
18,470
0
S/L 31.5
2005(A)
4,376
41,199
0
4,376
41,502
45,878
5,254
40,624
0
S/L 31.5
2005(A)
6,470
20,751
0
6,470
21,117
27,587
2,714
24,874
0
S/L 31.5
2005(A)
7,121
29,783
0
7,121
36,049
43,170
11,600
31,570
0
S/L 31.5
1998(A)
6,327
44,466
0
7,343
55,589
62,932
12,651
50,280
0
S/L 31.5
2000(C)
15,352
22,813
1,601
15,352
26,545
41,897
9,002
32,894
30,000
S/L 31.5
2000(C)
5,058
11,362
0
5,222
12,549
17,771
2,956
14,814
0
S/L 31.5
2002(A)
624
13,391
0
624
14,832
15,456
6,373
9,083
0
S/L 31.5
1994(A)
907
17,160
0
907
19,228
20,135
6,968
13,167
0
S/L 31.5
1994(A)
338
8,564
103
317
16,545
16,862
7,484
9,378
0
S/L 31.5
1990(C)
991
3,118
34
878
4,476
5,354
2,268
3,085
0
S/L 31.5
1990(C)
13,002
69,086
0
13,527
79,210
92,737
14,489
78,248
46,435
S/L 31.5
1998(A)
12,249
50,709
0
12,621
53,334
65,955
10,747
55,209
42,200
S/L 31.5
2002(C)
2,210
11,671
278
2,210
13,776
15,986
7,838
8,148
0
S/L 31.5
1990(C)
3,475
37,327
0
3,475
37,981
41,456
7,860
33,597
0
S/L 31.5
2002(A)
1,217
5,796
365
1,219
9,827
11,046
4,948
6,098
0
S/L 31.5
1986(C)
3,609
11,546
0
3,609
11,708
15,317
4,064
11,253
0
S/L 31.5
1998(A)
495
1,618
0
495
1,618
2,113
552
1,561
0
S/L 31.5
1998(A)
431
1,417
2
0
1,959
1,959
647
1,312
0
S/L 31.5
1998(A)
11,087
44,494
0
12,243
49,112
61,355
15,936
45,418
0
S/L 31.5
1998(A)
6,478
29,792
0
6,478
29,681
36,159
29,654
6,505
0
S/L 31.5
2005(A)
2,990
12,252
0
2,987
13,957
16,944
4,195
12,749
0
S/L 31.5
2001(A)
3,838
4,485
0
3,834
5,059
8,893
1,291
7,602
0
S/L 31.5
2001(A)
254
1,623
0
254
1,774
2,028
427
1,601
0
S/L 31.5
2001(A)
7,484
20,980
0
7,476
25,183
32,659
6,450
26,208
6,173
S/L 31.5
2001(A)
1,232
7,881
0
1,014
7,256
8,270
304
7,966
0
S/L 31.5
2007(C)
1,613
10,791
0
5,427
54,036
59,463
985
58,478
0
S/L 31.5
2007(C)
332
1,302
0
1,884
7,021
8,905
76
8,829
0
S/L 31.5
2006(C)
4,980
11,880
0
4,980
11,880
16,860
377
16,484
12,774
S/L 31.5
2007(A)
2,940
5,192
0
2,940
5,447
8,387
314
8,073
0
S/L 31.5
2007(A)
10,185
51,815
0
10,318
52,499
62,817
3,117
59,700
0
S/L 31.5
2007(A)
7,659
15,689
0
7,650
15,670
23,320
936
22,385
0
S/L 31.5
2007(A)
Table of Contents
Developers Diversified Realty
Corporation
Real Estate and Accumulated Depreciation
(continued)
December 31, 2008
Total
Date
(In thousands)
Cost,
of
Initial Cost
Total Cost (B)
Net
Depreciable
Construction
Buildings
Buildings
of
Lives
(C)
&
&
Accumulated
Accumulated
(Years)
Acquisition
Land
Improvements
Improvements
Land
Improvements
Total
Depreciation
Depreciation
Encumbrances
(1)
(A)
1,015
8,992
0
1,015
8,992
10,007
553
9,455
0
S/L 31.5
2007(A)
1,732
4,506
0
1,732
4,506
6,238
272
5,966
0
S/L 31.5
2007(A)
2,065
20,972
0
2,065
20,974
23,039
1,249
21,789
11,409
S/L 31.5
2007(A)
10,766
31,203
0
10,766
31,262
42,028
1,911
40,116
12,198
S/L 31.5
2007(A)
5,579
15,855
0
5,579
16,259
21,838
1,018
20,819
0
S/L 31.5
2007(A)
1,707
3,338
0
1,707
3,343
5,050
208
4,841
0
S/L 31.5
2007(A)
2,108
7,400
0
2,108
8,271
10,379
561
9,818
5,200
S/L 31.5
2007(A)
6,175
9,028
0
6,175
9,029
15,204
533
14,670
0
S/L 31.5
2007(A)
3,049
10,890
0
3,049
10,892
13,941
649
13,292
0
S/L 31.5
2007(A)
6,566
15,005
0
6,566
15,057
21,623
892
20,731
0
S/L 31.5
2007(A)
2,440
9,697
0
2,440
10,209
12,649
683
11,966
6,770
S/L 31.5
2007(A)
5,012
11,162
0
5,012
11,163
16,175
679
15,496
0
S/L 31.5
2007(A)
3,153
9,455
0
3,153
9,536
12,689
565
12,124
5,450
S/L 31.5
2007(A)
4,261
21,479
0
4,261
21,554
25,815
1,292
24,522
10,300
S/L 31.5
2007(A)
3,847
23,798
0
3,847
23,998
27,845
1,443
26,401
9,280
S/L 31.5
2007(A)
6,861
11,165
0
6,861
11,165
18,026
671
17,354
6,445
S/L 31.5
2007(A)
1,631
8,402
0
1,631
8,402
10,033
506
9,527
0
S/L 31.5
2007(A)
3,804
16,805
0
3,804
16,805
20,609
1,011
19,599
10,000
S/L 31.5
2007(A)
1,217
7,038
0
1,217
7,045
8,262
459
7,804
0
S/L 31.5
2007(A)
1,795
9,933
0
1,795
9,933
11,728
591
11,138
0
S/L 31.5
2007(A)
10,064
21,272
0
10,064
21,489
31,553
1,331
30,222
11,457
S/L 31.5
2007(A)
12,002
34,736
0
11,990
34,740
46,730
2,067
44,663
18,480
S/L 31.5
2007(A)
12,627
30,572
0
12,627
30,572
43,199
1,803
41,396
0
S/L 31.5
2007(A)
4,389
9,466
0
4,389
10,145
14,534
623
13,911
0
S/L 31.5
2007(A)
8,426
18,651
0
8,426
18,651
27,077
1,109
25,968
0
S/L 31.5
2007(A)
6,090
11,745
0
6,090
11,746
17,836
701
17,134
8,015
S/L 31.5
2007(A)
2,877
9,407
0
2,877
9,408
12,285
566
11,719
0
S/L 31.5
2007(A)
3,687
9,849
0
3,687
9,858
13,545
586
12,959
5,900
S/L 31.5
2007(A)
3,571
12,190
0
3,571
12,190
15,761
718
15,043
0
S/L 31.5
2007(A)
11,634
31,341
0
11,634
31,358
42,992
1,841
41,151
13,392
S/L 31.5
2007(A)
3,007
8,489
0
3,007
8,507
11,514
508
11,006
0
S/L 31.5
2007(A)
5,739
14,301
0
5,739
14,307
20,046
860
19,187
8,424
S/L 31.5
2007(A)
2,651
8,908
0
2,651
8,924
11,575
597
10,978
5,175
S/L 31.5
2007(A)
Table of Contents
Developers Diversified Realty
Corporation
Real Estate and Accumulated Depreciation
(continued)
December 31, 2008
Total
Date
(In thousands)
Cost,
of
Initial Cost
Total Cost (B)
Net
Depreciable
Construction
Buildings
Buildings
of
Lives
(C)
&
&
Accumulated
Accumulated
(Years)
Acquisition
Land
Improvements
Improvements
Land
Improvements
Total
Depreciation
Depreciation
Encumbrances
(1)
(A)
6,913
17,301
0
6,913
17,334
24,247
1,034
23,213
8,500
S/L 31.5
2007(A)
2,842
9,807
0
2,842
9,843
12,685
591
12,093
5,150
S/L 31.5
2007(A)
4,382
15,184
0
4,382
15,277
19,659
900
18,759
0
S/L 31.5
2007(A)
3,070
13,386
0
3,070
13,463
16,533
818
15,715
6,700
S/L 31.5
2007(A)
2,728
10,665
0
2,728
10,665
13,393
640
12,753
5,478
S/L 31.5
2007(A)
3,345
11,482
0
3,345
11,496
14,841
695
14,147
0
S/L 31.5
2007(A)
2,270
4,812
0
2,270
4,963
7,233
324
6,909
0
S/L 31.5
2007(A)
1,598
8,160
0
1,598
8,240
9,838
499
9,338
0
S/L 31.5
2007(A)
4,645
10,341
0
4,645
10,341
14,986
673
14,314
0
S/L 31.5
2007(A)
607
4,094
0
607
4,094
4,701
252
4,450
0
S/L 31.5
2007(A)
7,714
30,473
0
7,714
30,585
38,299
1,805
36,495
14,000
S/L 31.5
2007(A)
2,542
7,651
0
2,542
7,651
10,193
469
9,724
0
S/L 31.5
2007(A)
1,293
6,005
0
1,293
6,005
7,298
366
6,932
0
S/L 31.5
2007(A)
4,239
4,824
0
4,239
4,824
9,063
290
8,773
0
S/L 31.5
2007(A)
1,380
4,739
0
1,380
4,739
6,119
288
5,831
0
S/L 31.5
2007(A)
4,334
10,428
0
4,334
9,408
13,742
638
13,104
0
S/L 31.5
2007(A)
9,593
17,686
0
9,593
17,686
27,279
1,075
26,203
0
S/L 31.5
2007(A)
1,032
580
0
1,032
580
1,612
35
1,577
0
S/L 31.5
2007(A)
2,653
4,667
0
2,653
4,667
7,320
284
7,035
0
S/L 31.5
2007(A)
815
2,692
0
815
2,692
3,507
165
3,342
0
S/L 31.5
2007(A)
1,073
1,586
0
1,073
1,586
2,659
95
2,564
0
S/L 31.5
2007(A)
1,457
1,057
0
1,457
1,057
2,514
64
2,450
0
S/L 31.5
2007(A)
1,397
1,142
0
1,397
1,142
2,539
67
2,473
0
S/L 31.5
2007(A)
1,622
1,050
0
1,622
1,050
2,672
64
2,609
0
S/L 31.5
2007(A)
1,523
4,065
0
1,523
4,065
5,588
249
5,339
0
S/L 31.5
2007(A)
1,303
1,494
0
1,303
1,494
2,797
90
2,708
0
S/L 31.5
2007(A)
431
3,774
0
431
3,774
4,205
235
3,970
0
S/L 31.5
2007(A)
3,667
10,940
0
3,667
10,940
14,607
672
13,934
0
S/L 31.5
2007(A)
1,107
3,165
0
1,107
3,165
4,272
191
4,081
3,223
S/L 31.5
2007(A)
1,054
1,394
0
1,054
1,423
2,477
92
2,386
0
S/L 31.5
2007(A)
5,395
10,938
0
5,395
10,938
16,333
656
15,677
0
S/L 31.5
2007(A)
2,463
2,946
0
2,463
2,946
5,409
178
5,232
3,550
S/L 31.5
2007(A)
1,411
2,727
0
1,411
2,727
4,138
165
3,973
2,477
S/L 31.5
2007(A)
Table of Contents
Developers Diversified Realty
Corporation
Real Estate and Accumulated Depreciation
(continued)
December 31, 2008
Total
Date
(In thousands)
Cost,
of
Initial Cost
Total Cost (B)
Net
Depreciable
Construction
Buildings
Buildings
of
Lives
(C)
&
&
Accumulated
Accumulated
(Years)
Acquisition
Land
Improvements
Improvements
Land
Improvements
Total
Depreciation
Depreciation
Encumbrances
(1)
(A)
1,662
3,270
0
1,662
3,270
4,932
198
4,735
0
S/L 31.5
2007(A)
1,400
2,531
0
1,400
2,531
3,931
155
3,776
2,625
S/L 31.5
2007(A)
2,264
4,581
0
2,264
4,581
6,845
277
6,568
0
S/L 31.5
2007(A)
885
2,119
0
885
2,119
3,004
128
2,877
0
S/L 31.5
2007(A)
1,249
2,127
0
1,249
2,127
3,376
128
3,248
0
S/L 31.5
2007(A)
7,156
15,010
0
7,156
15,010
22,166
931
21,236
0
S/L 31.5
2007(A)
1,229
2,428
0
1,229
2,428
3,657
146
3,511
0
S/L 31.5
2007(A)
1,740
2,417
0
1,740
2,417
4,157
145
4,013
0
S/L 31.5
2007(A)
0
1,487
0
0
1,487
1,487
91
1,396
0
S/L 31.5
2007(A)
1,483
1,917
0
1,483
1,917
3,400
116
3,285
0
S/L 31.5
2007(A)
812
16,244
0
812
16,244
17,056
1,002
16,054
0
S/L 31.5
2007(A)
2,805
5,028
0
2,805
5,028
7,833
303
7,530
0
S/L 31.5
2007(A)
3,324
10,423
0
3,324
10,423
13,747
639
13,107
0
S/L 31.5
2007(A)
1,449
3,916
0
1,449
3,916
5,365
244
5,121
0
S/L 31.5
2007(A)
395
1,697
0
395
1,697
2,092
101
1,991
0
S/L 31.5
2007(A)
863
2,225
0
863
2,225
3,088
134
2,954
0
S/L 31.5
2007(A)
1,356
2,524
0
1,356
2,524
3,880
151
3,729
0
S/L 31.5
2007(A)
1,062
2,124
0
1,062
2,124
3,186
127
3,059
0
S/L 31.5
2007(A)
958
2,223
0
958
2,223
3,181
133
3,048
0
S/L 31.5
2007(A)
1,525
2,416
0
1,525
2,416
3,941
145
3,796
0
S/L 31.5
2007(A)
0
1,486
0
0
1,486
1,486
90
1,395
0
S/L 31.5
2007(A)
1,578
2,721
0
1,578
2,721
4,299
163
4,137
0
S/L 31.5
2007(A)
1,641
2,015
0
1,641
2,015
3,656
121
3,536
0
S/L 31.5
2007(A)
852
2,418
0
852
2,418
3,270
145
3,124
0
S/L 31.5
2007(A)
2,863
2,935
0
2,863
2,935
5,798
175
5,622
0
S/L 31.5
2007(A)
1,431
2,024
0
1,431
2,024
3,455
122
3,333
0
S/L 31.5
2007(A)
1,331
2,016
0
1,331
2,016
3,347
121
3,226
0
S/L 31.5
2007(A)
1,771
2,523
0
1,771
2,523
4,294
151
4,143
0
S/L 31.5
2007(A)
1,671
2,424
0
1,671
2,424
4,095
145
3,950
0
S/L 31.5
2007(A)
1,387
2,451
0
1,387
2,451
3,838
148
3,690
0
S/L 31.5
2007(A)
1,189
2,363
0
1,189
2,363
3,552
144
3,408
0
S/L 31.5
2007(A)
1,452
1,909
0
1,452
1,909
3,361
115
3,246
0
S/L 31.5
2007(A)
5,659
14,411
0
5,659
14,411
20,070
897
19,174
0
S/L 31.5
2007(A)
Table of Contents
Developers Diversified Realty
Corporation
Real Estate and Accumulated Depreciation
(continued)
December 31, 2008
Total
Date
(In thousands)
Cost,
of
Initial Cost
Total Cost (B)
Net
Depreciable
Construction
Buildings
Buildings
of
Lives
(C)
&
&
Accumulated
Accumulated
(Years)
Acquisition
Land
Improvements
Improvements
Land
Improvements
Total
Depreciation
Depreciation
Encumbrances
(1)
(A)
2,420
7,979
0
2,420
7,979
10,399
492
9,907
0
S/L 31.5
2007(A)
589
1,687
0
589
1,687
2,276
102
2,174
0
S/L 31.5
2007(A)
1,223
2,128
0
1,223
2,128
3,351
128
3,222
0
S/L 31.5
2007(A)
1,255
2,226
0
1,255
2,226
3,481
134
3,347
0
S/L 31.5
2007(A)
1,145
2,353
0
1,145
2,353
3,498
143
3,355
0
S/L 31.5
2007(A)
1,568
10,383
0
1,568
10,383
11,951
633
11,318
0
S/L 31.5
2007(A)
860
1,913
0
860
1,913
2,773
114
2,659
0
S/L 31.5
2007(A)
701
1,276
0
701
1,276
1,977
77
1,901
0
S/L 31.5
2007(A)
1,567
73
0
1,567
73
1,640
4
1,635
0
S/L 31.5
2007(A)
2,892
3,226
0
2,892
3,226
6,118
205
5,913
0
S/L 31.5
2007(A)
4,380
8,729
0
4,380
8,729
13,109
543
12,567
0
S/L 31.5
2007(A)
1,094
1,605
0
1,094
1,605
2,699
97
2,603
0
S/L 31.5
2007(A)
1,045
1,594
0
1,045
1,594
2,639
96
2,543
0
S/L 31.5
2007(A)
1,241
211
0
1,241
211
1,452
12
1,440
0
S/L 31.5
2007(A)
316
1,384
0
316
1,219
1,535
83
1,452
0
S/L 31.5
2007(A)
2,946
3,094
0
2,946
3,094
6,040
190
5,850
0
S/L 31.5
2007(A)
1,250
3,176
0
1,250
3,176
4,426
192
4,234
2,817
S/L 31.5
2007(A)
694
2,109
0
694
2,109
2,803
127
2,676
0
S/L 31.5
2007(A)
2,800
3,148
0
2,800
3,442
6,242
298
5,944
0
S/L 31.5
2007(A)
20,697
36,751
0
20,697
39,305
60,002
2,469
57,533
0
S/L 31.5
2007(A)
8,964
18,764
0
8,964
18,800
27,764
1,166
26,598
0
S/L 31.5
2007(A)
492,046
523,078
0
492,055
523,085
1,015,140
26,650
988,483
387,374
(2)
S/L 31.5
$
2,525,663
$
5,873,157
$
12,403
$
2,543,856
(3)
$
6,562,779
(4)
$
9,106,635
$
1,208,903
$
7,897,732
$
1,565,989
(1)
S/L refers to straight-line
depreciation.
(2)
Includes $258.5 million of
mortgage debt which encumbers 37 Mervyns sites.
(3)
Includes $469.9 million of
land under development at December 31, 2008.
(4)
Includes $409.6 million of
construction in progress at December 31, 2008.
(B)
The Aggregate Cost for Federal
Income Tax purposes was approximately $9.1 billion at
December 31, 2008.
Table of Contents
2008
2007
2006
$
8,978,875
$
7,442,135
$
7,029,337
10,994
3,048,672
370,218
215,045
283,806
236,147
214,622
211,432
104,808
(5,863
)
(8,558
)
(312,901
)
(2,001,307
)
(289,817
)
$
9,106,635
$
8,978,875
$
7,442,135
2008
2007
2006
$
1,024,048
$
861,266
$
692,823
246,374
224,375
193,527
(67
)
(3,326
)
(61,519
)
(61,526
)
(21,758
)
$
1,208,903
$
1,024,048
$
861,266
F-73
Table of Contents
December 31, 2008
(Dollars amounts in thousands)
(1)
Includes a $5.4 million loan loss reserve.
F-74
Table of Contents
Year Ended
Year Ended
December 31,
December 31,
2008
2007
$
$
120,819
(5,400
)
$
115,419
$
Table of Contents
By:
F-76
2
3
4
5
6
7
8
9
10
11
12
(1) | a single lump sum; or | ||
(2) | equal or substantially equal monthly installments over a period of between 12 and 120 months, as elected by the Participant. |
13
14
15
(1) | a single lump sum; or | ||
(2) | equal or substantially equal monthly installments over a period of between 12 and 120 months, as elected- by the Participant. |
16
(a) | through reimbursement or compensation by insurance or otherwise; or | ||
(b) | by liquidation of the Participants assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; or | ||
(c) | by cessation of deferrals under the Plan. |
17
18
19
20
21
DEVELOPERS DIVERSIFIED
REALTY CORPORATION
|
||||
BY: | /s/ Nan R. Zieleniec | |||
Nan R. Zieleniec | ||||
22
1. | Employment. |
(a) | The Company hereby employs the Executive as its Executive Vice President of Corporate Transactions and Governance and Secretary, and the Executive hereby accepts such employment, on the terms and subject to the conditions hereinafter set forth. | ||
(b) | During the term of this Employment Agreement, the Executive shall be and have the titles of Executive Vice President of Corporate Transactions and Governance and Secretary and shall devote all of her business time and all reasonable efforts to her employment and perform diligently such duties as are customarily performed by Executive Vice Presidents of Corporate Transactions and Governance and Secretaries of companies similar in size to, and in a similar business as, the Company, together with such other duties as may be reasonably requested from time to time by the President or Chief Executive Officer of the Company or the Board of Directors of the Company (the Board), which duties shall be consistent with her positions previously set forth and as provided in Paragraph 2. |
2. | Term and Positions. |
(a) | The period of employment of the Executive by the Company shall, subject to earlier termination as provided in this Employment Agreement, continue until December 31, 2009, with automatic one year renewals thereafter. 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. | ||
(b) | During the term of this Employment Agreement, the Executive shall be entitled to serve as the Executive Vice President of Corporate Transactions and Governance and Secretary of the Company. For service as an officer and employee of the Company, the Executive shall be entitled to the full protection of the applicable indemnification provisions of the |
Page 1
articles of incorporation and code of regulations of the Company, as the same may be amended from time to time, and any Indemnification Agreement between the Company and the Executive that was in effect as of December 28, 2008 and as the same may be amended from time to time thereafter (the Indemnification Agreement). | |||
(c) | If: |
(i) | the Company materially changes the Executives duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without her consent; | ||
(ii) | the Executives place of employment or the principal executive offices of the Company are located more than fifty (50) miles from the geographical center of Cleveland, Ohio; or | ||
(iii) | 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; |
then in any such event the Executive shall have the right to terminate her 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)). |
(d) | The Executive shall be deemed not to have consented to any written proposal calling for a material change in her duties and responsibilities unless the Executive shall give written notice of her consent thereto to the Board within fifteen (15) days after receipt of such written proposal. If the Executive shall not have given such consent, the Company shall have the opportunity to withdraw such proposed material change by written notice to the Executive given within ten (10) days after the end of said fifteen (15) day period. | ||
(e) | Notwithstanding anything in this Employment Agreement to the contrary, if there shall occur a Change in Control and a Triggering Event (as those terms are 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)) under circumstances entitling the Executive to payments and benefits as specified in Article II, Paragraph 1 of 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 the Executive hereunder up to and including the Termination Date (as defined in Paragraph 5(f)). |
3. | Compensation. | |
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. |
(a) | The Company shall pay to the Executive a base salary payable in accordance with the Companys usual pay practices (and in any event no less frequently than monthly) of not |
Page 2
less than Three Hundred Five Thousand Dollars ($305,000) per annum, subject to such increases as the Board may approve. | |||
(b) | In addition to an annual base salary, if the Executive achieves the factors and criteria for bonus payments hereinafter described for any fiscal year of the Company throughout which the Executive is employed by the Company, then the Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of the fiscal year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. The Companys award of bonus compensation to the Executive shall be determined by the factors and criteria, including the financial performance of the Company and the performance by the Executive of her duties hereunder, that may be established from time to time for the calculation of bonus awards by the Executive Compensation Committee (the Committee) of the Board. (Note that in certain circumstances the Executive may be entitled to a pro rata bonus for a partial fiscal year of the Company as provided in Paragraph 4(a) or 5(d).) | ||
(c) | The Company shall provide to the Executive such life, disability, medical, hospitalization and dental insurance for the Executive, her spouse and eligible family members as may be determined by the Board to be consistent with industry standards. | ||
(d) | 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 Employment Agreement shall or shall be deemed to in any way affect the Executives rights and benefits thereunder except as expressly provided herein). | ||
(e) | The Executive shall be entitled to such periods of vacation and sick leave allowance each year as are determined by the Chief Executive Officer or the President of the Company in his reasonable and good faith discretion, which in any event shall be not less than four weeks per year or as otherwise provided under the Companys vacation and sick leave policy for executive officers. | ||
(f) | 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 Executives 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. | ||
(g) | The Company shall reimburse the Executive or provide the Executive 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 Companys business. The Executive shall furnish such documentation with respect to reimbursement to be paid hereunder as the Company shall reasonably request. | ||
(h) | So long as the Executive remains in the employment of the Company, the Company shall pay to the Executive an automobile allowance of $500 per month as may be adjusted from time to time. All expenses related to all automobiles owned by the Executive shall be the sole responsibility of the Executive. | ||
(i) | The Company shall bear the cost of regular membership fees, assessments and dues incurred by the Executive as a member of The Shoreby Club and shall reimburse the |
Page 3
Executive for the amount of any charge actually and reasonably incurred at The Shoreby Club in the conduct of the Companys business. |
4. | Payment in the Event of Death or Disability. |
(a) | Except as otherwise provided in Paragraph 4(a)(i), in the event of the Executives death or if the Company terminates the Executives 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 the successors and assigns of the Executive in the event of her death) an amount equal to the sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus (y) a bonus amount prorated up to and including the Termination Date and determined as specified in Paragraph 4(a)(ii) (a Pro Rata Bonus Amount), and shall continue the benefits described in Paragraph 3(c) for the Executive (except in the case of death) and the Executives family for a period of one (1) year. |
(i) | 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 Executives personal representative has timely executed a Release as contemplated by Paragraph 6(c) and has not revoked such Release during any applicable revocation period. | ||
(ii) | The Pro Rata Bonus Amount shall be determined by first calculating a pro forma full year annual bonus amount for the Executive for the entire fiscal year in which the termination occurs in the manner specified in the last sentence of this Paragraph 4(a)(ii) and then multiplying the amount of the pro forma full year annual bonus amount (so calculated) by a fraction, the numerator of which is the number of days in that portion of the fiscal year ending on the Termination Date and the denominator of which is the number of days in the entire fiscal year. The pro forma full year annual bonus amount shall be calculated on the same date and in the same manner as if the Executives employment had continued throughout the end of the fiscal year, using actual results for the entire fiscal year, and, insofar as the Executives individual performance may be a factor, assuming that the Executive had performed throughout the fiscal year at the same level at which the Executive actually performed during the fiscal year up to the Termination Date. |
(b) | The Company will pay the amount equal to one year of salary pursuant to Paragraph 4(a)(x) (i) in the event of the Executives death, as soon as practicable following the Executives death, but in no event later than March 15 of the year after the year in which the Executives death occurs (provided that neither the Executive nor the Executives estate may designate the taxable year of payment), and (ii) in the event of the Companys termination of the Executives employment by reason of the Executives becoming disabled, except as otherwise provided in Section B.2 of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B, during the Seventh Month after the Termination Date (as defined in Section B.1 of the Tax Provision Exhibit). The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 4(a)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, |
Page 4
the timing of the provision of the benefits described in Paragraph 3(c) 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. | |||
(c) | For purposes of this Employment Agreement, the Executive shall become disabled only in the event of a permanent disability. Executives 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 her physical or mental disability or illness, shall have been unable to discharge her 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 event either the Company or the Executive, after receipt of notice of the Executives disability from the other, dispute that the Executives 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 a written statement to the effect that in the physicians opinion, based on the physicians diagnosis, the Executive is capable of resuming her employment and devoting full time and energy to discharging her duties within thirty (30) days after the date of such statement, such permanent disability shall be deemed to have occurred. |
5. | Termination. |
(a) | The employment of the Executive under this Employment Agreement, and the terms hereof, may be terminated by the Company: |
(i) | on the death of the Executive or if the Executive becomes disabled (as previously defined); | ||
(ii) | for cause at any time by action of the Board. For purposes hereof, the term cause shall mean: |
(A) | The Executives 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 Executives willful and repeated failure to perform her 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 | ||
(B) | The Executives material breach of any 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 |
(iii) | without cause pursuant to written notice provided to the Executive not less than ninety (90) days in advance of the Termination Date. |
The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Companys 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) | 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 which the Executive 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 Executives employment for cause. Expenses of the arbitration shall be borne equally by the parties except as otherwise determined by the arbitrator. | ||
(c) | 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 the Executive hereunder up to and including the Termination Date. | ||
(d) | 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(e)), 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 sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (y) a Pro Rata Bonus Amount (determined in the same manner as provided in Paragraph 4(a) in the event of termination due to death or disability), and shall continue the benefits described in Paragraph 3(c) for a period of one (1) year. |
(i) | 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. |
(e) | Except as otherwise provided in Section B.2 of the Tax Provision Exhibit, (i) the Company will pay the amount equal to one year of salary pursuant to Paragraph 5(d)(x) during the Seventh Month after the Termination Date. The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 5(d)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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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(f) | For all purposes of this Employment Agreement, the term Termination Date means the date on which the Executives employment with the Company terminates. |
6. | Release. This Paragraph 6 will apply only upon termination of the Executives 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)). |
(a) | Presentation of Release by the Company . If this Paragraph 6 applies, the Company may present to the Executive (or in the case of the Executives death or legal incapacity, to the Executives 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 Executives 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 in which the Company advises the Executive (or the Executives personal representative) that the Release is being presented in accordance with this Paragraph 6 and that a failure by the Executive (or the Executives personal representative) to execute and return the Release as contemplated by Paragraph 6(c) would relieve the Company of the obligation to make payments otherwise due to the Executive (or to the Executives personal representative) under one or more portions of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(b) | Effect of Failure by the Company to Present Release . If the Company fails to present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Company will be deemed to have waived the requirement that the Executive (or the Executives personal representative) execute a Release as a condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(c) | Execution of Release by the Executive or the Executives Personal Representative . If the Company does present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Executive (or the Executives personal representative) will have until 50 days after the Termination Date (i.e., at least 29 days after presentation of the Release to the Executive (or the Executives personal representative)) within which to deliver an executed copy of the Release to the Company and thereby satisfy the condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be, provided that the Executive (or the Executives personal representative) does not revoke the execution of the Release during any applicable revocation period. | ||
(d) | Effect of Failure to Execute Release or of Revocation of Release . If the Executive (or the Executives personal representative) fails to deliver an executed copy of the Release to the Company within 50 days after the Termination Date or revokes the execution of the Release during any applicable revocation period, the Executive (or the Executives personal representative) will be deemed to have waived the right to receive all payments under either of Paragraph 4(a) or Paragraph 5(d), as the case may be, that were conditioned on the Release. |
7. | Covenants and Confidential Information. |
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(a) | The Executive acknowledges the Companys reliance and expectation of the Executives continued commitment to performance of the Executives duties and responsibilities during the term of this Employment Agreement. In light of such reliance and expectation on the part of the Company, during the term of this Employment Agreement and for a period of one (1) year thereafter (and, as to clause (ii) of this subparagraph (a), at any time during and after the term of this Employment Agreement), the Executive shall not, directly or indirectly do or suffer either of the following: |
(i) | own, manage, control or participate in the ownership, management or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor or otherwise with, any other corporation, partnership, proprietorship, firm, association or other business entity engaged in the business of, or otherwise engage in the business of, acquiring, owning, developing or managing commercial shopping centers; provided, however, that the ownership of not more than one percent (1%) of any class of publicly traded securities of any entity shall not be deemed a violation of this covenant; or | ||
(ii) | disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, the Company, any confidential information relating to the Companys operations, properties or otherwise to its particular business or other trade secrets of the Company, it being acknowledged by the Executive that all such information regarding the business of the Company compiled or obtained by, or furnished to, the Executive while the Executive shall have been employed by or associated with the Company is confidential information and the Companys exclusive property; provided, however, that the foregoing restrictions shall not apply to the extent that such information (A) is clearly obtainable in the public domain, (B) becomes obtainable in the public domain, except by reason of the breach by the Executive of the terms hereof, (C) was not acquired by the Executive in connection with the Executives employment or affiliation with the Company, (D) was not acquired by the Executive from the Company or its representatives or (E) is required to be disclosed by rule of law or by order of a court or governmental body or agency. |
(b) | The Executive will not directly or indirectly during the term of this Employment Agreement and for a period of one (1) year after the expiration of this Employment Agreement or the termination of Executives employment for any reason, solicit or induce or attempt to solicit or induce any employee(s) of the Company and/or any subsidiary, affiliated or related companies to terminate their employment with the Company and/or any subsidiary, affiliated or related companies. | ||
(c) | The Executive agrees and understands that the remedy at law for any breach by the Executive of this Paragraph 7 will be inadequate and that the damages following from such breach are not readily susceptible to being measured in monetary terms. Accordingly, it is acknowledged that, upon adequate proof of the Executives violation of any legally enforceable provision of this Paragraph 7, the Company shall be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach. Nothing in this Paragraph 7 shall be deemed to limit the Companys remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 7 which may be pursued or availed of by the Company. |
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(d) | The Executive has carefully considered the nature and extent of the restrictions upon her and the rights and remedies conferred upon the Company under this Paragraph 7, and hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to eliminate competition which otherwise would be unfair to the Company, do not stifle the inherent skill and experience of the Executive, would not operate as a bar to the Executives sole means of support, are fully required to protect the legitimate interests of the Company and do not confer a benefit upon the Company disproportionate to the detriment to the Executive. |
8. | Tax Provision Exhibit. | |
All of the terms of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B are hereby incorporated in this Employment Agreement as fully as if those terms were included in the main text of this Employment Agreement. |
9. | Miscellaneous. |
(a) | The Executive represents and warrants that the Executive is not a party to any agreement, contract or understanding, whether employment or otherwise, which would restrict or prohibit the Executive from undertaking or performing employment in accordance with the terms and conditions of this Employment Agreement. | ||
(b) | During the term of this Employment Agreement and thereafter, the Executive will provide reasonable assistance to the Company in litigation and regulatory matters that relate to events that occurred during the Executives period of employment with the Company and its predecessors, and will provide reasonable assistance to the Company with matters relating to its corporate history from the period of the Executives employment with it or its predecessors. The Executive will be entitled to reimbursement of reasonable out-of-pocket travel or related costs and expenses relating to any such cooperation or assistance that occurs following the term of employment. | ||
(c) | The provisions of this Employment Agreement are severable and if any one or more provision may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provision and any partially unenforceable provision to the extent enforceable in any jurisdiction nevertheless shall be binding and enforceable. | ||
(d) | The rights and obligations of the Company under this Employment Agreement shall inure to the benefit of, and shall be binding on, the Company and its successors and assigns, and the rights and obligations (other than obligations to perform services) of the Executive under this Employment Agreement shall inure to the benefit of, and shall be binding upon, the Executive and her heirs, personal representatives and assigns. | ||
(e) | Any controversy or claim arising out of or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Rules of the American Arbitration Association then pertaining in the City of Cleveland, Ohio, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. The arbitrator or arbitrators shall be deemed to possess the powers to issue mandatory orders and restraining orders in connection with such arbitration; provided, however, that nothing in this Paragraph 9(e) shall be construed so as to deny the Company the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Executive of any of the covenants contained in Paragraph 7 hereof. |
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(f) | Any notice to be given under this Employment Agreement shall be personally delivered in writing or shall have been deemed duly given when received after it is posted in the United States mail, postage prepaid, registered or certified, return receipt requested, and if mailed to the Company, shall be addressed to its principal place of business, attention: President, and if mailed to the Executive, shall be addressed to the Executive at her home address last known on the records of the Company, or at such other address or addresses as either the Company or the Executive may hereafter designate in writing to the other. | ||
(g) | The failure of either party to enforce any provision or provisions of this Employment Agreement shall not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party thereafter from enforcing each and every other provision of this Employment Agreement. The rights granted the parties herein are cumulative and the waiver of any single remedy shall not constitute a waiver of such partys right to assert all other legal remedies available to it under the circumstances. | ||
(h) | This Employment Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally. No modification, termination or attempted waiver shall be valid unless in writing and signed by the party against whom the same is sought to be enforced. | ||
(i) | This Employment Agreement shall be governed by and construed according to the laws of the State of Ohio. | ||
(j) | Captions and paragraph headings used herein are for convenience and are not a part of this Employment Agreement and shall not be used in construing it. | ||
(k) | Where necessary or appropriate to the meaning hereof, the singular and plural shall be deemed to include each other, and the masculine, feminine and neuter shall be deemed to include each other. |
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DEVELOPERS DIVERSIFIED REALTY CORPORATION | |||||
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By: |
/s/ Daniel B. Hurwitz
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Chief Operating Officer | |||||
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/s/ Joan U. Allgood
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Threshold | Target | Maximum | ||
20% | 40% | 80% |
Exhibits Page 1 of 5
A. | Gross-Up of Payments Deemed to be Excess Parachute Payments . |
A.1 | Acknowledgement; Determination by Accounting Firm . The Company and the Executive acknowledge that, following a Change in Ownership or Control, one or more payments or distributions to be made by the Company or an affiliated entity to or for the benefit of the Executive under this Employment Agreement or the Change in Control Agreement (including, without limitation, the issuance of common shares of the Company; the granting or vesting of restricted shares; and the granting, vesting, exercise or termination of options) (a Payment) may be determined to be an excess parachute payment that is not deductible by the Company or its affiliated entity for Federal income tax purposes and with respect to which the Executive will be subject to an excise tax because of Sections 280G and 4999, respectively, of the Internal Revenue Code. If a Change in Ownership or Control occurs, either the Executive or the Company may direct the Accounting Firm, which, subject to any inconsistent position asserted by the Internal Revenue Service, will make all determinations required to be made under this Section A.1, to determine whether any Payment will be an excess parachute payment and to communicate its determination, together with detailed supporting calculations, to the Company and to the Executive within 30 days after its receipt of the direction from the Executive or the Company, as the case may be. The Company and the Executive will cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. | ||
A.2 | Gross-Up Payments . If the Accounting Firm determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax), the Company will make additional cash payments (each, a Gross-Up Payment) to the Executive, from time to time in such amounts as are necessary to put the Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Companys obligation to make Gross-Up Payments under this Section A is not contingent on termination of the Executives employment with the Company. The Company will make each Gross-Up Payment to the Executive within 30 days of the time that the related Payment constituting an excess parachute payment is paid or provided to the Executive. | ||
A.3 | Further Gross-Up Payments as Determined by the IRS . If the Internal Revenue Service determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax) in excess of the amount, if any, previously determined by the Accounting Firm, the Company will make further Goss-Up Payments to the Executive in cash and in such amounts as are necessary to put the Executive in the same position, after payment |
Exhibits Page 2 of 5
of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Company will make any additional Gross-Up Payments required by this Section A.3 not later than the due date of any payment indicated by the Internal Revenue Service with respect to the underlying matters to which the additional Gross-Up relates. | |||
A.4 | Contest of IRS Determination by the Company . If the Company desires to contest any determination by the Internal Revenue Service with respect to the amount of excise tax under Section 4999, the Executive will, upon receipt from the Company of an unconditional written undertaking to indemnify and hold the Executive harmless (on an after tax basis) from any and all adverse consequences that might arise from the contesting of that determination, cooperate with the Company in that contest at the Companys sole expense. Nothing in this Section A will require the Executive to incur any expense other than expenses with respect to which the Company has paid to the Executive sufficient sums so that after the payment of the expense by the Executive and taking into account the payment by the Company with respect to that expense and any and all taxes that may be imposed upon the Executive as a result of the Executives receipt of that payment, the net effect is no cost to the Executive. Nothing in this Section A will require the Executive to extend the statute of limitations with respect to any item or issue in the Executives tax returns other than, exclusively, the excise tax under Section 4999. If, as the result of the contest of any assertion by the Internal Revenue Service with respect to excise tax under Section 4999, the Executive receives a refund of a Section 4999 excise tax previously paid and/or any interest with respect thereto, the Executive will promptly pay to the Company such amount as will leave the Executive, net of the repayment and all tax effects, in the same position, after all taxes and interest, that the Executive would have been in if the refunded excise tax had never been paid. To assure compliance with Section 409A, the Company will make payments to the Executive with respect to expenses as contemplated in this Section A.4 subject to and as provided in Sections B.1 and B.3. | ||
A.5 | Accounting Firm Fees and Expenses . The Company will bear and pay all fees and expenses of the Accounting Firm for services performed pursuant to this Section A (Applicable Fees and Expenses). To assure compliance with Section 409A, the Company will pay any Applicable Fees and Expenses subject to and as provided in Sections B.1 and B.3. |
B. | Compliance with Section 409A . |
B.1 | Six Month Delay on Certain Payments, Benefits, and Reimbursements . If the Executive is a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Employment Agreement that constitutes a deferral of compensation within the meaning of Section 409A, that is to be paid or provided as a result of a separation from service within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a Scheduled Time) that is on or before the date (the Six Month Date) that is exactly six months after the Termination Date (other than |
Exhibits Page 3 of 5
payments, benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Internal Revenue Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the Seventh Month after the Termination Date), except that if the Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of the Executives death and thereafter paid or provided not later than 30 days after the date of death. | |||
B.2 | Earlier Payment if Not a Specified Employee . If the Executive is not a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, any lump sum payment based on base salary that is to be made by the Company to the Executive pursuant to either of Paragraph 4(a) or 5(d) will be made by the Company to the Executive during the 30-day period that begins exactly 60 days after the Termination Date rather than during the Seventh Month after the Termination Date. | ||
B.3 | Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (a) any reimbursement of eligible expenses will be paid within 30 days following the Executives written request for reimbursement; provided that the Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that the Company can make the reimbursement within the time periods required by Section 409A; (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (c) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit. | ||
B.4 | Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Employment Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. The Company and the Executive intend that the payments and benefits provided under this Employment Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Employment Agreement is to be construed, administered, and governed in a manner that effects that intent and the Company will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Employment Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon the Executive. |
Exhibits Page 4 of 5
B.5 | Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase termination of employment and words and phrases of similar import mean a separation from service with the Company within the meaning of Section 409A. The Executive and the Company will take all steps necessary (including taking into account this Section B.5 when considering any further agreement regarding provision of services by the Executive to the Company after the Termination Date) to ensure that (a) any termination of employment under this Employment Agreement constitutes a separation from service within the meaning of Section 409A, and (b) the Termination Date is the date on which the Executive experiences a separation from service within the meaning of Section 409A. |
C. | Definitions . |
C.1 | Accounting Firm . The term Accounting Firm means the independent auditors of the Company for the fiscal year immediately preceding the earlier of (a) the year in which the Termination Date occurred, or (b) the year, if any, in which occurred the first Change of Control occurring after the date of this Employment Agreement, and that firms successor or successors; unless that firm is unable or unwilling to serve and perform in the capacity contemplated by this Employment Agreement, in which case the Company must select another accounting firm that (x) is of recognized regional or national standing and (y) is not then the independent auditors for the Company or any affiliated corporation. | ||
C.2 | Change in Ownership or Control . The term Change in Ownership or Control has the meaning given to that term (without initial caps) in the Treasury Regulations published under Section 280G. | ||
C.3 | Sections 280G, 409A, and 4999 . Each of the terms Section 280G, Section 409A, and Section 4999, respectively, means that numbered section of the Internal Revenue Code. References in this Employment Agreement to any of these sections are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to that specific section by the U.S. Department of Treasury or the Internal Revenue Service. |
Exhibits Page 5 of 5
1. | Employment. |
(a) | The Company hereby employs the Executive as its Executive Vice President of International, and the Executive hereby accepts such employment, on the terms and subject to the conditions hereinafter set forth. | ||
(b) | During the term of this Employment Agreement, the Executive shall be and have the title of Executive Vice President of International and shall devote all of his business time and all reasonable efforts to his employment and perform diligently such duties as are customarily performed by Executive Vice Presidents of International of companies similar in size to, and in a similar business as, the Company, together with such other duties as may be reasonably requested from time to time by the President or Chief Executive Officer of the Company or the Board of Directors of the Company (the Board), which duties shall be consistent with his positions previously set forth and as provided in Paragraph 2. |
2. | Term and Positions. |
(a) | The period of employment of the Executive by the Company shall, subject to earlier termination as provided in this Employment Agreement, continue until December 31, 2009, with automatic one year renewals thereafter. 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. | ||
(b) | During the term of this Employment Agreement, the Executive shall be entitled to serve as the Executive Vice President of International of the Company. For service as an officer and 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, and any |
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Indemnification Agreement between the Company and the Executive that was in effect as of December 28, 2008 and as the same may be amended from time to time thereafter (the Indemnification Agreement). | |||
(c) | If: |
(i) | the Company materially changes the Executives duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without his consent; | ||
(ii) | the Executives place of employment or the principal executive offices of the Company are located more than fifty (50) miles from the geographical center of Cleveland, Ohio; or | ||
(iii) | 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; |
then in any 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)). | |||
(d) | The Executive shall be deemed not to have consented to any written proposal calling for a material change in his duties and responsibilities unless the Executive shall give written notice of his consent thereto to the Board within fifteen (15) days after receipt of such written proposal. If the Executive shall not have given such consent, the Company shall have the opportunity to withdraw such proposed material change by written notice to the Executive given within ten (10) days after the end of said fifteen (15) day period. | ||
(e) | Notwithstanding anything in this Employment Agreement to the contrary, if there shall occur a Change in Control and a Triggering Event (as those terms are 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)) under circumstances entitling the Executive to payments and benefits as specified in Article II, Paragraph 1 of 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 the Executive hereunder up to and including the Termination Date (as defined in Paragraph 5(f)). |
3. | Compensation. | |
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. |
(a) | The Company shall pay to the Executive a base salary payable in accordance with the Companys usual pay practices (and in any event no less frequently than monthly) of not less than Two Hundred Eighty-Four Thousand Nine Hundred Sixty-Eight Dollars ($284,968) per annum, subject to such increases as the Board may approve. |
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(b) | In addition to an annual base salary, if the Executive achieves the factors and criteria for bonus payments hereinafter described for any fiscal year of the Company throughout which the Executive is employed by the Company, then the Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of the fiscal year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. The Companys award of bonus compensation to the Executive shall be determined by the factors and criteria, including the financial performance of the Company and the performance by the Executive of his duties hereunder, that may be established from time to time for the calculation of bonus awards by the Executive Compensation Committee (the Committee) of the Board. (Note that in certain circumstances the Executive may be entitled to a pro rata bonus for a partial fiscal year of the Company as provided in Paragraph 4(a) or 5(d).) | ||
(c) | The Company shall provide to the Executive such life, disability, medical, hospitalization and dental insurance for the Executive, his spouse and eligible family members as may be determined by the Board to be consistent with industry standards. | ||
(d) | 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 Employment Agreement shall or shall be deemed to in any way affect the Executives rights and benefits thereunder except as expressly provided herein). | ||
(e) | The Executive shall be entitled to such periods of vacation and sick leave allowance each year as are determined by the Chief Executive Officer or the President of the Company in his reasonable and good faith discretion, which in any event shall be not less than four weeks per year or as otherwise provided under the Companys vacation and sick leave policy for executive officers. | ||
(f) | 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 Executives 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. | ||
(g) | The Company shall reimburse the Executive or provide the Executive 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 Companys business. The Executive shall furnish such documentation with respect to reimbursement to be paid hereunder as the Company shall reasonably request. | ||
(h) | So long as the Executive remains in the employment of the Company, the Company shall pay to the Executive an automobile allowance of $500 per month as may be adjusted from time to time. All expenses related to all automobiles owned by the Executive shall be the sole responsibility of the Executive. |
4. | Payment in the Event of Death or Disability. |
(a) | Except as otherwise provided in Paragraph 4(a)(i), in the event of the Executives death or if the Company terminates the Executives 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 the successors and assigns of the |
Page 3
Executive in the event of his death) an amount equal to the sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus (y) a bonus amount prorated up to and including the Termination Date and determined as specified in Paragraph 4(a)(ii) (a Pro Rata Bonus Amount), and shall continue the benefits described in Paragraph 3(c) for the Executive (except in the case of death) and the Executives family for a period of one (1) year. |
(i) | 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 Executives personal representative has timely executed a Release as contemplated by Paragraph 6(c) and has not revoked such Release during any applicable revocation period. | ||
(ii) | The Pro Rata Bonus Amount shall be determined by first calculating a pro forma full year annual bonus amount for the Executive for the entire fiscal year in which the termination occurs in the manner specified in the last sentence of this Paragraph 4(a)(ii) and then multiplying the amount of the pro forma full year annual bonus amount (so calculated) by a fraction, the numerator of which is the number of days in that portion of the fiscal year ending on the Termination Date and the denominator of which is the number of days in the entire fiscal year. The pro forma full year annual bonus amount shall be calculated on the same date and in the same manner as if the Executives employment had continued throughout the end of the fiscal year, using actual results for the entire fiscal year, and, insofar as the Executives individual performance may be a factor, assuming that the Executive had performed throughout the fiscal year at the same level at which the Executive actually performed during the fiscal year up to the Termination Date. |
(b) | The Company will pay the amount equal to one year of salary pursuant to Paragraph 4(a)(x) (i) in the event of the Executives death, as soon as practicable following the Executives death, but in no event later than March 15 of the year after the year in which the Executives death occurs (provided that neither the Executive nor the Executives estate may designate the taxable year of payment), and (ii) in the event of the Companys termination of the Executives employment by reason of the Executives becoming disabled, except as otherwise provided in Section B.2 of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B, during the Seventh Month after the Termination Date (as defined in Section B.1 of the Tax Provision Exhibit). The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 4(a)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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. | ||
(c) | For purposes of this Employment Agreement, the Executive shall become disabled only in the event of a permanent disability. Executives 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, |
Page 4
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 event either the Company or the Executive, after receipt of notice of the Executives disability from the other, dispute that the Executives 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 a written statement to the effect that in the physicians opinion, based on the physicians diagnosis, the Executive is capable of resuming his employment and devoting 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. |
5. | Termination. |
(a) | The employment of the Executive under this Employment Agreement, and the terms hereof, may be terminated by the Company: |
(i) | on the death of the Executive or if the Executive becomes disabled (as previously defined); | ||
(ii) | for cause at any time by action of the Board. For purposes hereof, the term cause shall mean: |
(A) | The Executives 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 Executives 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 | ||
(B) | The Executives material breach of any 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 |
(iii) | without cause pursuant to written notice provided to the Executive not less than ninety (90) days in advance of the Termination Date. |
The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Companys 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. |
(b) | 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 |
Page 5
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 which the Executive 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 Executives employment for cause. Expenses of the arbitration shall be borne equally by the parties except as otherwise determined by the arbitrator. | |||
(c) | 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 the Executive hereunder up to and including the Termination Date. | ||
(d) | 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(e)), 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 sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (y) a Pro Rata Bonus Amount (determined in the same manner as provided in Paragraph 4(a) in the event of termination due to death or disability), and shall continue the benefits described in Paragraph 3(c) for a period of one (1) year. |
(i) | 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. |
(e) | Except as otherwise provided in Section B.2 of the Tax Provision Exhibit, (i) the Company will pay the amount equal to one year of salary pursuant to Paragraph 5(d)(x) during the Seventh Month after the Termination Date. The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 5(d)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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. | ||
(f) | For all purposes of this Employment Agreement, the term Termination Date means the date on which the Executives employment with the Company terminates. |
6. | Release. This Paragraph 6 will apply only upon termination of the Executives 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) | Presentation of Release by the Company . If this Paragraph 6 applies, the Company may present to the Executive (or in the case of the Executives death or legal incapacity, to the Executives 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 Executives 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 in which the Company advises the Executive (or the Executives personal representative) that the Release is being presented in accordance with this Paragraph 6 and that a failure by the Executive (or the Executives personal representative) to execute and return the Release as contemplated by Paragraph 6(c) would relieve the Company of the obligation to make payments otherwise due to the Executive (or to the Executives personal representative) under one or more portions of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(b) | Effect of Failure by the Company to Present Release . If the Company fails to present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Company will be deemed to have waived the requirement that the Executive (or the Executives personal representative) execute a Release as a condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(c) | Execution of Release by the Executive or the Executives Personal Representative . If the Company does present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Executive (or the Executives personal representative) will have until 50 days after the Termination Date (i.e., at least 29 days after presentation of the Release to the Executive (or the Executives personal representative)) within which to deliver an executed copy of the Release to the Company and thereby satisfy the condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be, provided that the Executive (or the Executives personal representative) does not revoke the execution of the Release during any applicable revocation period. | ||
(d) | Effect of Failure to Execute Release or of Revocation of Release . If the Executive (or the Executives personal representative) fails to deliver an executed copy of the Release to the Company within 50 days after the Termination Date or revokes the execution of the Release during any applicable revocation period, the Executive (or the Executives personal representative) will be deemed to have waived the right to receive all payments under either of Paragraph 4(a) or Paragraph 5(d), as the case may be, that were conditioned on the Release. |
7. | Covenants and Confidential Information. |
(a) | The Executive acknowledges the Companys reliance and expectation of the Executives continued commitment to performance of the Executives duties and responsibilities during the term of this Employment Agreement. In light of such reliance and expectation on the part of the Company, during the term of this Employment Agreement and for a period of one (1) year thereafter (and, as to clause (ii) of this subparagraph (a), at any time |
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during and after the term of this Employment Agreement), the Executive shall not, directly or indirectly do or suffer either of the following: |
(i) | own, manage, control or participate in the ownership, management or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor or otherwise with, any other corporation, partnership, proprietorship, firm, association or other business entity engaged in the business of, or otherwise engage in the business of, acquiring, owning, developing or managing commercial shopping centers; provided, however, that the ownership of not more than one percent (1%) of any class of publicly traded securities of any entity shall not be deemed a violation of this covenant; or | ||
(ii) | disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, the Company, any confidential information relating to the Companys operations, properties or otherwise to its particular business or other trade secrets of the Company, it being acknowledged by the Executive that all such information regarding the business of the Company compiled or obtained by, or furnished to, the Executive while the Executive shall have been employed by or associated with the Company is confidential information and the Companys exclusive property; provided, however, that the foregoing restrictions shall not apply to the extent that such information (A) is clearly obtainable in the public domain, (B) becomes obtainable in the public domain, except by reason of the breach by the Executive of the terms hereof, (C) was not acquired by the Executive in connection with the Executives employment or affiliation with the Company, (D) was not acquired by the Executive from the Company or its representatives or (E) is required to be disclosed by rule of law or by order of a court or governmental body or agency. |
(b) | The Executive will not directly or indirectly during the term of this Employment Agreement and for a period of one (1) year after the expiration of this Employment Agreement or the termination of Executives employment for any reason, solicit or induce or attempt to solicit or induce any employee(s) of the Company and/or any subsidiary, affiliated or related companies to terminate their employment with the Company and/or any subsidiary, affiliated or related companies. | ||
(c) | The Executive agrees and understands that the remedy at law for any breach by the Executive of this Paragraph 7 will be inadequate and that the damages following from such breach are not readily susceptible to being measured in monetary terms. Accordingly, it is acknowledged that, upon adequate proof of the Executives violation of any legally enforceable provision of this Paragraph 7, the Company shall be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach. Nothing in this Paragraph 7 shall be deemed to limit the Companys remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 7 which may be pursued or availed of by the Company. | ||
(d) | The Executive has carefully considered the nature and extent of the restrictions upon him and the rights and remedies conferred upon the Company under this Paragraph 7, and hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to eliminate competition which otherwise would be unfair to the Company, do not stifle the inherent skill and experience of the Executive, would not operate as a bar to the Executives sole means of support, are fully required to protect the legitimate interests |
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of the Company and do not confer a benefit upon the Company disproportionate to the detriment to the Executive. |
8. | Tax Provision Exhibit. | |
All of the terms of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B are hereby incorporated in this Employment Agreement as fully as if those terms were included in the main text of this Employment Agreement. |
9. | Miscellaneous. |
(a) | The Executive represents and warrants that the Executive is not a party to any agreement, contract or understanding, whether employment or otherwise, which would restrict or prohibit the Executive from undertaking or performing employment in accordance with the terms and conditions of this Employment Agreement. | ||
(b) | During the term of this Employment Agreement and thereafter, the Executive will provide reasonable assistance to the Company in litigation and regulatory matters that relate to events that occurred during the Executives period of employment with the Company and its predecessors, and will provide reasonable assistance to the Company with matters relating to its corporate history from the period of the Executives employment with it or its predecessors. The Executive will be entitled to reimbursement of reasonable out-of-pocket travel or related costs and expenses relating to any such cooperation or assistance that occurs following the term of employment. | ||
(c) | The provisions of this Employment Agreement are severable and if any one or more provision may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provision and any partially unenforceable provision to the extent enforceable in any jurisdiction nevertheless shall be binding and enforceable. | ||
(d) | The rights and obligations of the Company under this Employment Agreement shall inure to the benefit of, and shall be binding on, the Company and its successors and assigns, and the rights and obligations (other than obligations to perform services) of the Executive under this Employment Agreement shall inure to the benefit of, and shall be binding upon, the Executive and his heirs, personal representatives and assigns. | ||
(e) | Any controversy or claim arising out of or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Rules of the American Arbitration Association then pertaining in the City of Cleveland, Ohio, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. The arbitrator or arbitrators shall be deemed to possess the powers to issue mandatory orders and restraining orders in connection with such arbitration; provided, however, that nothing in this Paragraph 9(e) shall be construed so as to deny the Company the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Executive of any of the covenants contained in Paragraph 7 hereof. | ||
(f) | Any notice to be given under this Employment Agreement shall be personally delivered in writing or shall have been deemed duly given when received after it is posted in the United States mail, postage prepaid, registered or certified, return receipt requested, and if mailed to the Company, shall be addressed to its principal place of business, attention: President, and if mailed to the Executive, shall be addressed to the Executive at his home |
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address last known on the records of the Company, or at such other address or addresses as either the Company or the Executive may hereafter designate in writing to the other. | |||
(g) | The failure of either party to enforce any provision or provisions of this Employment Agreement shall not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party thereafter from enforcing each and every other provision of this Employment Agreement. The rights granted the parties herein are cumulative and the waiver of any single remedy shall not constitute a waiver of such partys right to assert all other legal remedies available to it under the circumstances. | ||
(h) | This Employment Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally. No modification, termination or attempted waiver shall be valid unless in writing and signed by the party against whom the same is sought to be enforced. | ||
(i) | This Employment Agreement shall be governed by and construed according to the laws of the State of Ohio. | ||
(j) | Captions and paragraph headings used herein are for convenience and are not a part of this Employment Agreement and shall not be used in construing it. | ||
(k) | Where necessary or appropriate to the meaning hereof, the singular and plural shall be deemed to include each other, and the masculine, feminine and neuter shall be deemed to include each other. |
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DEVELOPERS DIVERSIFIED REALTY CORPORATION | |||||
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By: |
/s/ Daniel B. Hurwitz
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Chief Operating Officer | |||||
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/s/ Richard E. Brown
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Threshold | Target | Maximum | ||
20% | 40% | 80% |
Exhibits Page 1 of 5
A. | Gross-Up of Payments Deemed to be Excess Parachute Payments . |
A.1 | Acknowledgement; Determination by Accounting Firm . The Company and the Executive acknowledge that, following a Change in Ownership or Control, one or more payments or distributions to be made by the Company or an affiliated entity to or for the benefit of the Executive under this Employment Agreement or the Change in Control Agreement (including, without limitation, the issuance of common shares of the Company; the granting or vesting of restricted shares; and the granting, vesting, exercise or termination of options) (a Payment) may be determined to be an excess parachute payment that is not deductible by the Company or its affiliated entity for Federal income tax purposes and with respect to which the Executive will be subject to an excise tax because of Sections 280G and 4999, respectively, of the Internal Revenue Code. If a Change in Ownership or Control occurs, either the Executive or the Company may direct the Accounting Firm, which, subject to any inconsistent position asserted by the Internal Revenue Service, will make all determinations required to be made under this Section A.1, to determine whether any Payment will be an excess parachute payment and to communicate its determination, together with detailed supporting calculations, to the Company and to the Executive within 30 days after its receipt of the direction from the Executive or the Company, as the case may be. The Company and the Executive will cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. | ||
A.2 | Gross-Up Payments . If the Accounting Firm determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax), the Company will make additional cash payments (each, a Gross-Up Payment) to the Executive, from time to time in such amounts as are necessary to put the Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Companys obligation to make Gross-Up Payments under this Section A is not contingent on termination of the Executives employment with the Company. The Company will make each Gross-Up Payment to the Executive within 30 days of the time that the related Payment constituting an excess parachute payment is paid or provided to the Executive. | ||
A.3 | Further Gross-Up Payments as Determined by the IRS . If the Internal Revenue Service determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax) in excess of the amount, if any, previously determined by the Accounting Firm, the Company will make further Goss-Up Payments to the Executive in cash and in such amounts as are necessary to put the Executive in the same position, after payment |
Exhibits Page 2 of 5
of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Company will make any additional Gross-Up Payments required by this Section A.3 not later than the due date of any payment indicated by the Internal Revenue Service with respect to the underlying matters to which the additional Gross-Up relates. | |||
A.4 | Contest of IRS Determination by the Company . If the Company desires to contest any determination by the Internal Revenue Service with respect to the amount of excise tax under Section 4999, the Executive will, upon receipt from the Company of an unconditional written undertaking to indemnify and hold the Executive harmless (on an after tax basis) from any and all adverse consequences that might arise from the contesting of that determination, cooperate with the Company in that contest at the Companys sole expense. Nothing in this Section A will require the Executive to incur any expense other than expenses with respect to which the Company has paid to the Executive sufficient sums so that after the payment of the expense by the Executive and taking into account the payment by the Company with respect to that expense and any and all taxes that may be imposed upon the Executive as a result of the Executives receipt of that payment, the net effect is no cost to the Executive. Nothing in this Section A will require the Executive to extend the statute of limitations with respect to any item or issue in the Executives tax returns other than, exclusively, the excise tax under Section 4999. If, as the result of the contest of any assertion by the Internal Revenue Service with respect to excise tax under Section 4999, the Executive receives a refund of a Section 4999 excise tax previously paid and/or any interest with respect thereto, the Executive will promptly pay to the Company such amount as will leave the Executive, net of the repayment and all tax effects, in the same position, after all taxes and interest, that the Executive would have been in if the refunded excise tax had never been paid. To assure compliance with Section 409A, the Company will make payments to the Executive with respect to expenses as contemplated in this Section A.4 subject to and as provided in Sections B.1 and B.3. | ||
A.5 | Accounting Firm Fees and Expenses . The Company will bear and pay all fees and expenses of the Accounting Firm for services performed pursuant to this Section A (Applicable Fees and Expenses). To assure compliance with Section 409A, the Company will pay any Applicable Fees and Expenses subject to and as provided in Sections B.1 and B.3. |
B. | Compliance with Section 409A . |
B.1 | Six Month Delay on Certain Payments, Benefits, and Reimbursements . If the Executive is a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Employment Agreement that constitutes a deferral of compensation within the meaning of Section 409A, that is to be paid or provided as a result of a separation from service within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a Scheduled Time) that is on or before the date (the Six Month Date) that is exactly six months after the Termination Date (other than |
Exhibits Page 3 of 5
payments, benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Internal Revenue Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the Seventh Month after the Termination Date), except that if the Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of the Executives death and thereafter paid or provided not later than 30 days after the date of death. | |||
B.2 | Earlier Payment if Not a Specified Employee . If the Executive is not a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, any lump sum payment based on base salary that is to be made by the Company to the Executive pursuant to either of Paragraph 4(a) or 5(d) will be made by the Company to the Executive during the 30-day period that begins exactly 60 days after the Termination Date rather than during the Seventh Month after the Termination Date. | ||
B.3 | Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (a) any reimbursement of eligible expenses will be paid within 30 days following the Executives written request for reimbursement; provided that the Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that the Company can make the reimbursement within the time periods required by Section 409A; (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (c) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit. | ||
B.4 | Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Employment Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. The Company and the Executive intend that the payments and benefits provided under this Employment Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Employment Agreement is to be construed, administered, and governed in a manner that effects that intent and the Company will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Employment Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon the Executive. |
Exhibits Page 4 of 5
B.5 | Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase termination of employment and words and phrases of similar import mean a separation from service with the Company within the meaning of Section 409A. The Executive and the Company will take all steps necessary (including taking into account this Section B.5 when considering any further agreement regarding provision of services by the Executive to the Company after the Termination Date) to ensure that (a) any termination of employment under this Employment Agreement constitutes a separation from service within the meaning of Section 409A, and (b) the Termination Date is the date on which the Executive experiences a separation from service within the meaning of Section 409A. |
C. | Definitions . |
C.1 | Accounting Firm . The term Accounting Firm means the independent auditors of the Company for the fiscal year immediately preceding the earlier of (a) the year in which the Termination Date occurred, or (b) the year, if any, in which occurred the first Change of Control occurring after the date of this Employment Agreement, and that firms successor or successors; unless that firm is unable or unwilling to serve and perform in the capacity contemplated by this Employment Agreement, in which case the Company must select another accounting firm that (x) is of recognized regional or national standing and (y) is not then the independent auditors for the Company or any affiliated corporation. | ||
C.2 | Change in Ownership or Control . The term Change in Ownership or Control has the meaning given to that term (without initial caps) in the Treasury Regulations published under Section 280G. | ||
C.3 | Sections 280G, 409A, and 4999 . Each of the terms Section 280G, Section 409A, and Section 4999, respectively, means that numbered section of the Internal Revenue Code. References in this Employment Agreement to any of these sections are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to that specific section by the U.S. Department of Treasury or the Internal Revenue Service. |
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1. | Employment. |
(a) | The Company hereby employs the Executive as its Executive Vice President of Development, and the Executive hereby accepts such employment, on the terms and subject to the conditions hereinafter set forth. | ||
(b) | During the term of this Employment Agreement, the Executive shall be and have the title of Executive Vice President of Development and shall devote all of his business time and all reasonable efforts to his employment and perform diligently such duties as are customarily performed by Executive Vice Presidents of Development of companies similar in size to, and in a similar business as, the Company, together with such other duties as may be reasonably requested from time to time by the Senior Executive Vice President, President or Chief Executive Officer of the Company or the Board of Directors of the Company (the Board), which duties shall be consistent with his positions previously set forth and as provided in Paragraph 2. |
2. | Term and Positions. |
(a) | The period of employment of the Executive by the Company shall, subject to earlier termination as provided in this Employment Agreement, continue until December 31, 2009, with automatic one year renewals thereafter. 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. | ||
(b) | During the term of this Employment Agreement, the Executive shall be entitled to serve as the Executive Vice President of Development of the Company. For service as an officer and 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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and any Indemnification Agreement between the Company and the Executive that was in effect as of December 28, 2008 and as the same may be amended from time to time thereafter (the Indemnification Agreement). | |||
(c) | If: |
(i) | the Company materially changes the Executives duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without his consent; | ||
(ii) | the Executives place of employment or the principal executive offices of the Company are located more than fifty (50) miles from the geographical center of Cleveland, Ohio; or | ||
(iii) | 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; |
then in any 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)). | |||
(d) | The Executive shall be deemed not to have consented to any written proposal calling for a material change in his duties and responsibilities unless the Executive shall give written notice of his consent thereto to the Board within fifteen (15) days after receipt of such written proposal. If the Executive shall not have given such consent, the Company shall have the opportunity to withdraw such proposed material change by written notice to the Executive given within ten (10) days after the end of said fifteen (15) day period. | ||
(e) | Notwithstanding anything in this Employment Agreement to the contrary, if there shall occur a Change in Control and a Triggering Event (as those terms are 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)) under circumstances entitling the Executive to payments and benefits as specified in Article II, Paragraph 1 of 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 the Executive hereunder up to and including the Termination Date (as defined in Paragraph 5(f)). |
3. | Compensation. | |
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. |
(a) | The Company shall pay to the Executive a base salary payable in accordance with the Companys usual pay practices (and in any event no less frequently than monthly) of not less than Three Hundred Fifty-Five Thousand Dollars ($355,000) per annum, subject to such increases as the Board may approve. |
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(b) | In addition to an annual base salary, if the Executive achieves the factors and criteria for bonus payments hereinafter described for any fiscal year of the Company throughout which the Executive is employed by the Company, then the Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of the fiscal year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. The Companys award of bonus compensation to the Executive shall be determined by the factors and criteria, including the financial performance of the Company and the performance by the Executive of his duties hereunder, that may be established from time to time for the calculation of bonus awards by the Executive Compensation Committee (the Committee) of the Board. (Note that in certain circumstances the Executive may be entitled to a pro rata bonus for a partial fiscal year of the Company as provided in Paragraph 4(a) or 5(d).) | ||
(c) | The Company shall provide to the Executive such life, disability, medical, hospitalization and dental insurance for the Executive, his spouse and eligible family members as may be determined by the Board to be consistent with industry standards. | ||
(d) | 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 Employment Agreement shall or shall be deemed to in any way affect the Executives rights and benefits thereunder except as expressly provided herein). | ||
(e) | The Executive shall be entitled to such periods of vacation and sick leave allowance each year as are determined by the Chief Executive Officer or the President of the Company in his reasonable and good faith discretion, which in any event shall be not less than four weeks per year or as otherwise provided under the Companys vacation and sick leave policy for executive officers. | ||
(f) | 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 Executives 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. | ||
(g) | The Company shall reimburse the Executive or provide the Executive 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 Companys business. The Executive shall furnish such documentation with respect to reimbursement to be paid hereunder as the Company shall reasonably request. | ||
(h) | So long as the Executive remains in the employment of the Company, the Company shall pay to the Executive an automobile allowance of $500 per month as may be adjusted from time to time. All expenses related to all automobiles owned by the Executive shall be the sole responsibility of the Executive. |
4. | Payment in the Event of Death or Disability. |
(a) | Except as otherwise provided in Paragraph 4(a)(i), in the event of the Executives death or if the Company terminates the Executives 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 the successors and assigns of the |
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Executive in the event of his death) an amount equal to the sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus (y) a bonus amount prorated up to and including the Termination Date and determined as specified in Paragraph 4(a)(ii) (a Pro Rata Bonus Amount), and shall continue the benefits described in Paragraph 3(c) for the Executive (except in the case of death) and the Executives family for a period of one (1) year. |
(i) | 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 Executives personal representative has timely executed a Release as contemplated by Paragraph 6(c) and has not revoked such Release during any applicable revocation period. | ||
(ii) | The Pro Rata Bonus Amount shall be determined by first calculating a pro forma full year annual bonus amount for the Executive for the entire fiscal year in which the termination occurs in the manner specified in the last sentence of this Paragraph 4(a)(ii) and then multiplying the amount of the pro forma full year annual bonus amount (so calculated) by a fraction, the numerator of which is the number of days in that portion of the fiscal year ending on the Termination Date and the denominator of which is the number of days in the entire fiscal year. The pro forma full year annual bonus amount shall be calculated on the same date and in the same manner as if the Executives employment had continued throughout the end of the fiscal year, using actual results for the entire fiscal year, and, insofar as the Executives individual performance may be a factor, assuming that the Executive had performed throughout the fiscal year at the same level at which the Executive actually performed during the fiscal year up to the Termination Date. |
(b) | The Company will pay the amount equal to one year of salary pursuant to Paragraph 4(a)(x) (i) in the event of the Executives death, as soon as practicable following the Executives death, but in no event later than March 15 of the year after the year in which the Executives death occurs (provided that neither the Executive nor the Executives estate may designate the taxable year of payment), and (ii) in the event of the Companys termination of the Executives employment by reason of the Executives becoming disabled, except as otherwise provided in Section B.2 of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B, during the Seventh Month after the Termination Date (as defined in Section B.1 of the Tax Provision Exhibit). The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 4(a)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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. | ||
(c) | For purposes of this Employment Agreement, the Executive shall become disabled only in the event of a permanent disability. Executives 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, |
Page 4
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 event either the Company or the Executive, after receipt of notice of the Executives disability from the other, dispute that the Executives 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 a written statement to the effect that in the physicians opinion, based on the physicians diagnosis, the Executive is capable of resuming his employment and devoting 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. |
5. | Termination. |
(a) | The employment of the Executive under this Employment Agreement, and the terms hereof, may be terminated by the Company: |
(i) | on the death of the Executive or if the Executive becomes disabled (as previously defined); | ||
(ii) | for cause at any time by action of the Board. For purposes hereof, the term cause shall mean: |
(A) | The Executives 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 Executives 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 | ||
(B) | The Executives material breach of any 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 |
(iii) | without cause pursuant to written notice provided to the Executive not less than ninety (90) days in advance of the Termination Date. |
The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Companys 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. | |||
(b) | 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 |
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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 which the Executive 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 Executives employment for cause. Expenses of the arbitration shall be borne equally by the parties except as otherwise determined by the arbitrator. | |||
(c) | 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 the Executive hereunder up to and including the Termination Date. | ||
(d) | 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(e)), 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 sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (y) a Pro Rata Bonus Amount (determined in the same manner as provided in Paragraph 4(a) in the event of termination due to death or disability), and shall continue the benefits described in Paragraph 3(c) for a period of one (1) year. |
(i) | 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. |
(e) | Except as otherwise provided in Section B.2 of the Tax Provision Exhibit, (i) the Company will pay the amount equal to one year of salary pursuant to Paragraph 5(d)(x) during the Seventh Month after the Termination Date. The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 5(d)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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. | ||
(f) | For all purposes of this Employment Agreement, the term Termination Date means the date on which the Executives employment with the Company terminates. |
6. | Release. This Paragraph 6 will apply only upon termination of the Executives 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) | Presentation of Release by the Company . If this Paragraph 6 applies, the Company may present to the Executive (or in the case of the Executives death or legal incapacity, to the Executives 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 Executives 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 in which the Company advises the Executive (or the Executives personal representative) that the Release is being presented in accordance with this Paragraph 6 and that a failure by the Executive (or the Executives personal representative) to execute and return the Release as contemplated by Paragraph 6(c) would relieve the Company of the obligation to make payments otherwise due to the Executive (or to the Executives personal representative) under one or more portions of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(b) | Effect of Failure by the Company to Present Release . If the Company fails to present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Company will be deemed to have waived the requirement that the Executive (or the Executives personal representative) execute a Release as a condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(c) | Execution of Release by the Executive or the Executives Personal Representative . If the Company does present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Executive (or the Executives personal representative) will have until 50 days after the Termination Date (i.e., at least 29 days after presentation of the Release to the Executive (or the Executives personal representative)) within which to deliver an executed copy of the Release to the Company and thereby satisfy the condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be, provided that the Executive (or the Executives personal representative) does not revoke the execution of the Release during any applicable revocation period. | ||
(d) | Effect of Failure to Execute Release or of Revocation of Release . If the Executive (or the Executives personal representative) fails to deliver an executed copy of the Release to the Company within 50 days after the Termination Date or revokes the execution of the Release during any applicable revocation period, the Executive (or the Executives personal representative) will be deemed to have waived the right to receive all payments under either of Paragraph 4(a) or Paragraph 5(d), as the case may be, that were conditioned on the Release. |
7. | Covenants and Confidential Information. |
(a) | The Executive acknowledges the Companys reliance and expectation of the Executives continued commitment to performance of the Executives duties and responsibilities during the term of this Employment Agreement. In light of such reliance and expectation on the part of the Company, during the term of this Employment Agreement and for a period of one (1) year thereafter (and, as to clause (ii) of this subparagraph (a), at any time |
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during and after the term of this Employment Agreement), the Executive shall not, directly or indirectly do or suffer either of the following: |
(i) | own, manage, control or participate in the ownership, management or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor or otherwise with, any other corporation, partnership, proprietorship, firm, association or other business entity engaged in the business of, or otherwise engage in the business of, acquiring, owning, developing or managing commercial shopping centers; provided, however, that the ownership of not more than one percent (1%) of any class of publicly traded securities of any entity shall not be deemed a violation of this covenant; or | ||
(ii) | disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, the Company, any confidential information relating to the Companys operations, properties or otherwise to its particular business or other trade secrets of the Company, it being acknowledged by the Executive that all such information regarding the business of the Company compiled or obtained by, or furnished to, the Executive while the Executive shall have been employed by or associated with the Company is confidential information and the Companys exclusive property; provided, however, that the foregoing restrictions shall not apply to the extent that such information (A) is clearly obtainable in the public domain, (B) becomes obtainable in the public domain, except by reason of the breach by the Executive of the terms hereof, (C) was not acquired by the Executive in connection with the Executives employment or affiliation with the Company, (D) was not acquired by the Executive from the Company or its representatives or (E) is required to be disclosed by rule of law or by order of a court or governmental body or agency. |
(b) | The Executive will not directly or indirectly during the term of this Employment Agreement and for a period of one (1) year after the expiration of this Employment Agreement or the termination of Executives employment for any reason, solicit or induce or attempt to solicit or induce any employee(s) of the Company and/or any subsidiary, affiliated or related companies to terminate their employment with the Company and/or any subsidiary, affiliated or related companies. | ||
(c) | The Executive agrees and understands that the remedy at law for any breach by the Executive of this Paragraph 7 will be inadequate and that the damages following from such breach are not readily susceptible to being measured in monetary terms. Accordingly, it is acknowledged that, upon adequate proof of the Executives violation of any legally enforceable provision of this Paragraph 7, the Company shall be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach. Nothing in this Paragraph 7 shall be deemed to limit the Companys remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 7 which may be pursued or availed of by the Company. | ||
(d) | The Executive has carefully considered the nature and extent of the restrictions upon him and the rights and remedies conferred upon the Company under this Paragraph 7, and hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to eliminate competition which otherwise would be unfair to the Company, do not stifle the inherent skill and experience of the Executive, would not operate as a bar to the Executives sole means of support, are fully required to protect the legitimate interests |
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of the Company and do not confer a benefit upon the Company disproportionate to the detriment to the Executive. |
8. | Tax Provision Exhibit. | |
All of the terms of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B are hereby incorporated in this Employment Agreement as fully as if those terms were included in the main text of this Employment Agreement. | ||
9. | Miscellaneous. |
(a) | The Executive represents and warrants that the Executive is not a party to any agreement, contract or understanding, whether employment or otherwise, which would restrict or prohibit the Executive from undertaking or performing employment in accordance with the terms and conditions of this Employment Agreement. | ||
(b) | During the term of this Employment Agreement and thereafter, the Executive will provide reasonable assistance to the Company in litigation and regulatory matters that relate to events that occurred during the Executives period of employment with the Company and its predecessors, and will provide reasonable assistance to the Company with matters relating to its corporate history from the period of the Executives employment with it or its predecessors. The Executive will be entitled to reimbursement of reasonable out-of-pocket travel or related costs and expenses relating to any such cooperation or assistance that occurs following the term of employment. | ||
(c) | The provisions of this Employment Agreement are severable and if any one or more provision may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provision and any partially unenforceable provision to the extent enforceable in any jurisdiction nevertheless shall be binding and enforceable. | ||
(d) | The rights and obligations of the Company under this Employment Agreement shall inure to the benefit of, and shall be binding on, the Company and its successors and assigns, and the rights and obligations (other than obligations to perform services) of the Executive under this Employment Agreement shall inure to the benefit of, and shall be binding upon, the Executive and his heirs, personal representatives and assigns. | ||
(e) | Any controversy or claim arising out of or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Rules of the American Arbitration Association then pertaining in the City of Cleveland, Ohio, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. The arbitrator or arbitrators shall be deemed to possess the powers to issue mandatory orders and restraining orders in connection with such arbitration; provided, however, that nothing in this Paragraph 9(e) shall be construed so as to deny the Company the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Executive of any of the covenants contained in Paragraph 7 hereof. | ||
(f) | Any notice to be given under this Employment Agreement shall be personally delivered in writing or shall have been deemed duly given when received after it is posted in the United States mail, postage prepaid, registered or certified, return receipt requested, and if mailed to the Company, shall be addressed to its principal place of business, attention: President, and if mailed to the Executive, shall be addressed to the Executive at his home |
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address last known on the records of the Company, or at such other address or addresses as either the Company or the Executive may hereafter designate in writing to the other. | |||
(g) | The failure of either party to enforce any provision or provisions of this Employment Agreement shall not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party thereafter from enforcing each and every other provision of this Employment Agreement. The rights granted the parties herein are cumulative and the waiver of any single remedy shall not constitute a waiver of such partys right to assert all other legal remedies available to it under the circumstances. | ||
(h) | This Employment Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally. No modification, termination or attempted waiver shall be valid unless in writing and signed by the party against whom the same is sought to be enforced. | ||
(i) | This Employment Agreement shall be governed by and construed according to the laws of the State of Ohio. | ||
(j) | Captions and paragraph headings used herein are for convenience and are not a part of this Employment Agreement and shall not be used in construing it. | ||
(k) | Where necessary or appropriate to the meaning hereof, the singular and plural shall be deemed to include each other, and the masculine, feminine and neuter shall be deemed to include each other. |
DEVELOPERS DIVERSIFIED REALTY CORPORATION | ||||||
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By: |
/s/ Daniel B. Hurwitz
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Chief Operating Officer | |||||
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/s/ Timothy J. Bruce | |||||
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TIMOTHY J. BRUCE |
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Threshold | Target | Maximum | ||
20% | 40% | 80% |
Exhibits Page 1 of 5
A. | Gross-Up of Payments Deemed to be Excess Parachute Payments . |
A.1 | Acknowledgement; Determination by Accounting Firm . The Company and the Executive acknowledge that, following a Change in Ownership or Control, one or more payments or distributions to be made by the Company or an affiliated entity to or for the benefit of the Executive under this Employment Agreement or the Change in Control Agreement (including, without limitation, the issuance of common shares of the Company; the granting or vesting of restricted shares; and the granting, vesting, exercise or termination of options) (a Payment) may be determined to be an excess parachute payment that is not deductible by the Company or its affiliated entity for Federal income tax purposes and with respect to which the Executive will be subject to an excise tax because of Sections 280G and 4999, respectively, of the Internal Revenue Code. If a Change in Ownership or Control occurs, either the Executive or the Company may direct the Accounting Firm, which, subject to any inconsistent position asserted by the Internal Revenue Service, will make all determinations required to be made under this Section A.1, to determine whether any Payment will be an excess parachute payment and to communicate its determination, together with detailed supporting calculations, to the Company and to the Executive within 30 days after its receipt of the direction from the Executive or the Company, as the case may be. The Company and the Executive will cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. | ||
A.2 | Gross-Up Payments . If the Accounting Firm determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax), the Company will make additional cash payments (each, a Gross-Up Payment) to the Executive, from time to time in such amounts as are necessary to put the Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Companys obligation to make Gross-Up Payments under this Section A is not contingent on termination of the Executives employment with the Company. The Company will make each Gross-Up Payment to the Executive within 30 days of the time that the related Payment constituting an excess parachute payment is paid or provided to the Executive. | ||
A.3 | Further Gross-Up Payments as Determined by the IRS . If the Internal Revenue Service determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax) in excess of the amount, if any, previously determined by the Accounting Firm, the Company will make further Goss-Up Payments to the Executive in cash and in such amounts as are necessary to put the Executive in the same position, after payment |
Exhibits Page 2 of 5
of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Company will make any additional Gross-Up Payments required by this Section A.3 not later than the due date of any payment indicated by the Internal Revenue Service with respect to the underlying matters to which the additional Gross-Up relates. | |||
A.4 | Contest of IRS Determination by the Company . If the Company desires to contest any determination by the Internal Revenue Service with respect to the amount of excise tax under Section 4999, the Executive will, upon receipt from the Company of an unconditional written undertaking to indemnify and hold the Executive harmless (on an after tax basis) from any and all adverse consequences that might arise from the contesting of that determination, cooperate with the Company in that contest at the Companys sole expense. Nothing in this Section A will require the Executive to incur any expense other than expenses with respect to which the Company has paid to the Executive sufficient sums so that after the payment of the expense by the Executive and taking into account the payment by the Company with respect to that expense and any and all taxes that may be imposed upon the Executive as a result of the Executives receipt of that payment, the net effect is no cost to the Executive. Nothing in this Section A will require the Executive to extend the statute of limitations with respect to any item or issue in the Executives tax returns other than, exclusively, the excise tax under Section 4999. If, as the result of the contest of any assertion by the Internal Revenue Service with respect to excise tax under Section 4999, the Executive receives a refund of a Section 4999 excise tax previously paid and/or any interest with respect thereto, the Executive will promptly pay to the Company such amount as will leave the Executive, net of the repayment and all tax effects, in the same position, after all taxes and interest, that the Executive would have been in if the refunded excise tax had never been paid. To assure compliance with Section 409A, the Company will make payments to the Executive with respect to expenses as contemplated in this Section A.4 subject to and as provided in Sections B.1 and B.3. | ||
A.5 | Accounting Firm Fees and Expenses . The Company will bear and pay all fees and expenses of the Accounting Firm for services performed pursuant to this Section A (Applicable Fees and Expenses). To assure compliance with Section 409A, the Company will pay any Applicable Fees and Expenses subject to and as provided in Sections B.1 and B.3. |
B. | Compliance with Section 409A . |
B.1 | Six Month Delay on Certain Payments, Benefits, and Reimbursements . If the Executive is a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Employment Agreement that constitutes a deferral of compensation within the meaning of Section 409A, that is to be paid or provided as a result of a separation from service within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a Scheduled Time) that is on or before the date (the Six Month Date) that is exactly six months after the Termination Date (other than |
Exhibits Page 3 of 5
payments, benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Internal Revenue Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the Seventh Month after the Termination Date), except that if the Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of the Executives death and thereafter paid or provided not later than 30 days after the date of death. | |||
B.2 | Earlier Payment if Not a Specified Employee . If the Executive is not a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, any lump sum payment based on base salary that is to be made by the Company to the Executive pursuant to either of Paragraph 4(a) or 5(d) will be made by the Company to the Executive during the 30-day period that begins exactly 60 days after the Termination Date rather than during the Seventh Month after the Termination Date. | ||
B.3 | Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (a) any reimbursement of eligible expenses will be paid within 30 days following the Executives written request for reimbursement; provided that the Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that the Company can make the reimbursement within the time periods required by Section 409A; (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (c) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit. | ||
B.4 | Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Employment Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. The Company and the Executive intend that the payments and benefits provided under this Employment Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Employment Agreement is to be construed, administered, and governed in a manner that effects that intent and the Company will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Employment Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon the Executive. |
Exhibits Page 4 of 5
B.5 | Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase termination of employment and words and phrases of similar import mean a separation from service with the Company within the meaning of Section 409A. The Executive and the Company will take all steps necessary (including taking into account this Section B.5 when considering any further agreement regarding provision of services by the Executive to the Company after the Termination Date) to ensure that (a) any termination of employment under this Employment Agreement constitutes a separation from service within the meaning of Section 409A, and (b) the Termination Date is the date on which the Executive experiences a separation from service within the meaning of Section 409A. |
C. | Definitions . |
C.1 | Accounting Firm . The term Accounting Firm means the independent auditors of the Company for the fiscal year immediately preceding the earlier of (a) the year in which the Termination Date occurred, or (b) the year, if any, in which occurred the first Change of Control occurring after the date of this Employment Agreement, and that firms successor or successors; unless that firm is unable or unwilling to serve and perform in the capacity contemplated by this Employment Agreement, in which case the Company must select another accounting firm that (x) is of recognized regional or national standing and (y) is not then the independent auditors for the Company or any affiliated corporation. | ||
C.2 | Change in Ownership or Control . The term Change in Ownership or Control has the meaning given to that term (without initial caps) in the Treasury Regulations published under Section 280G. | ||
C.3 | Sections 280G, 409A, and 4999 . Each of the terms Section 280G, Section 409A, and Section 4999, respectively, means that numbered section of the Internal Revenue Code. References in this Employment Agreement to any of these sections are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to that specific section by the U.S. Department of Treasury or the Internal Revenue Service. |
Exhibits Page 5 of 5
1. | Employment. |
(a) | The Company hereby employs the Executive, and the Executive hereby accepts such employment, on the terms and subject to the conditions hereinafter set forth. | ||
(b) | 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. |
2. | Term and Positions. |
(a) | 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. | ||
(b) | 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. | ||
(c) | 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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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)). | |||
(d) | 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. |
3. | Compensation. | |
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. |
(a) | The Company shall pay to the Executive a base salary payable in accordance with the Companys usual pay practices (and in any event no less frequently than monthly) of Six Hundred Thousand Dollars ($600,000) per annum. | ||
(b) | 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. | ||
(c) | 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 Executives rights and benefits thereunder except as expressly provided herein). | ||
(d) | 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 Executives 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 Companys 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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(e) | 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 Companys business. The Executive shall furnish such documentation with respect to reimbursement to be paid hereunder as the Company shall reasonably request. | ||
(f) | The Company shall provide to the Executive a new vehicle of the Executives 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. | ||
(g) | 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. |
4. | Payment in the Event of Death or Disability. |
(a) | Except as otherwise provided in Paragraph 4(a)(i), in the event of the Executives death or if the Company terminates the Executives 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 Executives family for a period of one (1) year. |
(i) | 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 Executives personal representative has timely executed a Release as contemplated by Paragraph 6(c) and has not revoked such Release during any applicable revocation period. | ||
(ii) | 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 Executives 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). |
(b) | For purposes of this Employment Agreement, the Executive shall become disabled only in the event of a permanent disability, Executives 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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event either the Company or the Executive, after receipt of notice of the Executives disability from the other, dispute that the Executives 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. |
5. | Termination. |
(a) | The employment of the Executive under this Employment Agreement, and the terms hereof, may be terminated by the Company: |
(i) | on the death of the Executive or if the Executive becomes disabled (as previously defined); | ||
(ii) | for cause at any time by action of the Board. For purposes hereof, the term cause shall mean: |
(A) | The Executives 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 Executives 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 | ||
(B) | The Executives 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 |
(iii) | without cause pursuant to written notice provided to the Executive not less than ninety (90) days in advance of the Termination Date. |
The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Companys 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. | |||
(b) | 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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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 Executives employment for cause. Expenses of the arbitration shall be borne equally by the parties except as otherwise determined by the arbitrator. | |||
(c) | 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. | ||
(d) | 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. |
(i) | 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. | ||
(ii) | 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 Executives 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). |
(e) | 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 Executives 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. | ||
(f) | For all purposes of this Employment Agreement, the term Termination Date means the date on which the Executives employment with the Company terminates. |
6. | Release. This Paragraph 6 will apply only upon termination of the Executives 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) | Presentation of Release by the Company. If this Paragraph 6 applies, the Company may present to the Executive (or in the case of the Executives death or legal incapacity, to the Executives 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 Executives 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 in which the Company advises the Executive (or the Executives personal representative) that the Release is being presented in accordance with this Paragraph 6 and that a failure by the Executive (or the Executives personal representative) to execute and return the Release as contemplated by Paragraph 6(c) would relieve the Company of the obligation to make payments otherwise due to the Executive (or to the Executives personal representative) under one or more portions of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(b) | Effect of Failure by the Company to Present Release . If the Company fails to present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Company will be deemed to have waived the requirement that the Executive (or the Executives personal representative) execute a Release as a condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(c) | Execution of Release by the Executive or the Executives Personal Representative . If the Company does present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Executive (or the Executives personal representative) will have until 50 days after the Termination Date (i.e., at least 29 days after presentation of the Release to the Executive (or the Executives personal representative)) within which to deliver an executed copy of the Release to the Company and thereby satisfy the condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be, provided that the Executive (or the Executives personal representative) does not revoke the execution of the Release during any applicable revocation period. | ||
(d) | Effect of Failure to Execute Release or of Revocation of Release . If the Executive (or the Executives personal representative) fails to deliver an executed copy of the Release to the Company within 50 days after the Termination Date or revokes the execution of the Release during any applicable revocation period, the Executive (or the Executives personal representative) will be deemed to have waived the right to receive all payments under either of Paragraph 4(a) or Paragraph 5(d), as the case may be, that were conditioned on the Release. |
7. | Covenants and Confidential Information. |
(a) | The Executive acknowledges the Companys reliance and expectation of the Executives continued commitment to performance of his duties and responsibilities during the term of this Employment Agreement. In light of such reliance and expectation on the part of the Company, the Executive shall not, directly or indirectly: |
(i) | during the term of this Employment Agreement and for a period of two (2) years after the termination of the Executives employment for any reason, own, |
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manage, control or participate in the ownership, management or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor or otherwise with, any other corporation, partnership, proprietorship, firm, association or other business entity engaged in the business of, or otherwise engage in the business of, acquiring, owning, developing or managing commercial shopping centers; provided, however, that the ownership of not more than one percent (1 %) of any class of publicly traded securities of any entity shall not be deemed a violation of this covenant; or | |||
(ii) | at any time during or after the term of this Employment Agreement, disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, the Company, any confidential information relating to the Companys operations, properties or otherwise to its particular business or other trade secrets of the Company, it being acknowledged by the Executive that all such information regarding the business of the Company compiled or obtained by, or furnished to, the Executive while the Executive shall have been employed by or associated with the Company is confidential information and the Companys exclusive property; provided, however, that the foregoing restrictions shall not apply to the extent that such information (A) is clearly obtainable in the public domain, (B) becomes obtainable in the public domain, except by reason of the breach by the Executive of the terms hereof, (C) was not acquired by the Executive in connection with his employment or affiliation with the Company, (D) was not acquired by the Executive from the Company or its representatives or (E) is required to be disclosed by rule of law or by order of a court or governmental body or agency. |
(b) | The Executive will not directly or indirectly during the term of this Employment Agreement or for a period of two (2) years after the expiration of this Employment Agreement or Executives termination pursuant to this Employment Agreement, solicit or induce or attempt to solicit or induce any employee(s) of the Company and/or any subsidiary, affiliated or related companies to terminate their employment with the Company and/or any subsidiary, affiliated or related companies. | ||
(c) | The Executive agrees and understands that the remedy at law for any breach by him of this Paragraph 7 will be inadequate and that the damages following from such breach are not readily susceptible to being measured in monetary terms. Accordingly, it is acknowledged that, upon adequate proof of the Executives violation of any legally enforceable provision of this Paragraph 7, the Company shall be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach. Nothing in this Paragraph 7 shall be deemed to limit the Companys remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 7 which may be pursued or availed of by the Company. | ||
(d) | The Executive has carefully considered the nature and extent of the restrictions upon him and the rights and remedies conferred upon the Company under this Paragraph 7, and hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to eliminate competition which otherwise would be unfair to the Company, do not stifle the inherent skill and experience of the Executive, would not operate as a bar to the Executives sole means of support, are fully required to protect the legitimate interests of the Company and do not confer a benefit upon the Company disproportionate to the detriment to the Executive. |
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8. | Tax Provision Exhibit . | |
All of the terms of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit A are hereby incorporated in this Employment Agreement as fully as if those terms were included in the main text of this Employment Agreement. | ||
9. | Miscellaneous. |
(a) | The Executive represents and warrants that he is not a party to any agreement, contract or understanding, whether employment or otherwise, which would restrict or prohibit him from undertaking or performing employment in accordance with the terms and conditions of this Employment Agreement. | ||
(b) | During the term of this Employment Agreement and thereafter, the Executive will provide reasonable assistance to the Company in litigation and regulatory matters that relate to events that occurred during the Executives period of employment with the Company and its predecessors, and will provide reasonable assistance to the Company with matters relating to its corporate history from the period of the Executives employment with it or its predecessors. The Executive will be entitled to reimbursement of reasonable out-of-pocket travel or related costs and expenses relating to any such cooperation or assistance that occurs following the term of employment. | ||
(c) | The provisions of this Employment Agreement are severable and if any one or more provision may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provision and any partially unenforceable provision to the extent enforceable in any jurisdiction nevertheless shall be binding and enforceable. | ||
(d) | The rights and obligations of the Company under this Employment Agreement shall inure to the benefit of, and shall be binding on, the Company and its successors and assigns, and the rights and obligations (other than obligations to perform services) of the Executive under this Employment Agreement shall inure to the benefit of and shall be binding upon, the Executive and his heirs, personal representatives and assigns. | ||
(e) | Any controversy or claim arising out of or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Rules of the American Arbitration Association then pertaining in the City of Cleveland, Ohio, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. The arbitrator or arbitrators shall be deemed to possess the powers to issue mandatory orders and restraining orders in connection with such arbitration; provided, however, that nothing in this Paragraph 9(e) shall be construed so as to deny the Company the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Executive of any of his covenants contained in Paragraph 7 hereof. | ||
(f) | Any notice to be given under this Employment Agreement shall be personally delivered in writing or shall have been deemed duly given when received after it is posted in the United States mail, postage prepaid, registered or certified, return receipt requested, and if mailed to the Company, shall be addressed to its principal place of business, attention: President, and if mailed to the Executive, shall be addressed to him at his home address last known on the records of the Company, or at such other address or addresses as either the Company or the Executive may hereafter designate in writing to the other. |
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(g) | The failure of either party to enforce any provision or provisions of this Employment Agreement shall not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party thereafter from enforcing each and every other provision of this Employment Agreement. The rights granted the parties herein are cumulative and the waiver of any single remedy shall not constitute a waiver of such partys right to assert all other legal remedies available to it under the circumstances. | ||
(h) | As of the date hereof, this Employment Agreement shall supersede all prior agreements and understandings between the parties with respect to the subject matter hereof and may not be modified or terminated orally. No modification, termination or attempted waiver shall be valid unless in writing and signed by the party against whom the same is sought to be enforced. | ||
(i) | This Employment Agreement shall be governed by and construed according to the laws of the State of Ohio. | ||
(j) | Captions and paragraph headings used herein are for convenience and are not a part of this Employment Agreement and shall not be used in construing it. | ||
(k) | Where necessary or appropriate to the meaning hereof, the singular and plural shall be deemed to include each other, and the masculine, feminine and neuter shall be deemed to include each other. |
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DEVELOPERS DIVERSIFIED REALTY CORPORATION | ||||||
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By: |
/s/ Daniel B. Hurwitz
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Chief Operating Officer | |||||
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/s/ David M. Jacobstein | |||||
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DAVID M. JACOBSTEIN |
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A. | Gross-Up of Payments Deemed to be Excess Parachute Payments . |
A.1 | Acknowledgement; Determination by Accounting Firm . The Company and the Executive acknowledge that, following a Change in Ownership or Control, one or more payments or distributions to be made by the Company or an affiliated entity to or for the benefit of the Executive under this Employment Agreement or the Change in Control Agreement (including, without limitation, the issuance of common shares of the Company; the granting or vesting of restricted shares; and the granting, vesting, exercise or termination of options) (a Payment) may be determined to be an excess parachute payment that is not deductible by the Company or its affiliated entity for Federal income tax purposes and with respect to which the Executive will be subject to an excise tax because of Sections 280G and 4999, respectively, of the Internal Revenue Code. If a Change in Ownership or Control occurs, either the Executive or the Company may direct the Accounting Firm, which, subject to any inconsistent position asserted by the Internal Revenue Service, will make all determinations required to be made under this Section A.1, to determine whether any Payment will be an excess parachute payment and to communicate its determination, together with detailed supporting calculations, to the Company and to the Executive within 30 days after its receipt of the direction from the Executive or the Company, as the case may be. The Company and the Executive will cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. | ||
A.2 | Gross-Up Payments . If the Accounting Firm determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax), the Company will make additional cash payments (each, a Gross-Up Payment) to the Executive, from time to time in such amounts as are necessary to put the Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Companys obligation to make Gross-Up Payments under this Section A is not contingent on termination of the Executives employment with the Company. The Company will make each Gross-Up Payment to the Executive within 30 days of the time that the related Payment constituting an excess parachute payment is paid or provided to the Executive. | ||
A.3 | Further Gross-Up Payments as Determined by the IRS . If the Internal Revenue Service determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax) in excess of the amount, if any, previously determined by the |
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Accounting Firm, the Company will make further Goss-Up Payments to the Executive in cash and in such amounts as are necessary to put the Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Company will make any additional Gross-Up Payments required by this Section A.3 not later than the due date of any payment indicated by the Internal Revenue Service with respect to the underlying matters to which the additional Gross-Up relates. | |||
A.4 | Contest of IRS Determination by the Company . If the Company desires to contest any determination by the Internal Revenue Service with respect to the amount of excise tax under Section 4999, the Executive will, upon receipt from the Company of an unconditional written undertaking to indemnify and hold the Executive harmless (on an after tax basis) from any and all adverse consequences that might arise from the contesting of that determination, cooperate with the Company in that contest at the Companys sole expense. Nothing in this Section A will require the Executive to incur any expense other than expenses with respect to which the Company has paid to the Executive sufficient sums so that after the payment of the expense by the Executive and taking into account the payment by the Company with respect to that expense and any and all taxes that may be imposed upon the Executive as a result of the Executives receipt of that payment, the net effect is no cost to the Executive. Nothing in this Section A will require the Executive to extend the statute of limitations with respect to any item or issue in the Executives tax returns other than, exclusively, the excise tax under Section 4999. If, as the result of the contest of any assertion by the Internal Revenue Service with respect to excise tax under Section 4999, the Executive receives a refund of a Section 4999 excise tax previously paid and/or any interest with respect thereto, the Executive will promptly pay to the Company such amount as will leave the Executive, net of the repayment and all tax effects, in the same position, after all taxes and interest, that the Executive would have been in if the refunded excise tax had never been paid. To assure compliance with Section 409A, the Company will make payments to the Executive with respect to expenses as contemplated in this Section A.4 subject to and as provided in Sections B.1 and B.3. | ||
A.5 | Accounting Firm Fees and Expenses . The Company will bear and pay all fees and expenses of the Accounting Firm for services performed pursuant to this Section A (Applicable Fees and Expenses). To assure compliance with Section 409A, the Company will pay any Applicable Fees and Expenses subject to and as provided in Sections B.1 and B.3. |
B. | Compliance with Section 409A . |
B.1 | Six Month Delay on Certain Payments, Benefits, and Reimbursements . If the Executive is a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Employment Agreement that constitutes a deferral of compensation within the meaning of Section 409A, that is to be paid or |
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provided as a result of a separation from service within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a Scheduled Time) that is on or before the date (the Six Month Date) that is exactly six months after the Termination Date (other than payments, benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Internal Revenue Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the Seventh Month after the Termination Date), except that if the Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of the Executives death and thereafter paid or provided not later than 30 days after the date of death. | |||
B.2 | [Reserved]. | ||
B.3 | Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (a) any reimbursement of eligible expenses will be paid within 30 days following the Executives written request for reimbursement; provided that the Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that the Company can make the reimbursement within the time periods required by Section 409A; (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (c) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit. | ||
B.4 | Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Employment Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. The Company and the Executive intend that the payments and benefits provided under this Employment Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Employment Agreement is to be construed, administered, and governed in a manner that effects that intent and the Company will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Employment Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon the Executive. | ||
B.5 | Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase termination of employment and words and phrases of similar import mean a separation from service with the Company within the meaning of Section 409A. The |
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Executive and the Company will take all steps necessary (including taking into account this Section B.5 when considering any further agreement regarding provision of services by the Executive to the Company after the Termination Date) to ensure that (a) any termination of employment under this Employment Agreement constitutes a separation from service within the meaning of Section 409A, and (b) the Termination Date is the date on which the Executive experiences a separation from service within the meaning of Section 409A. |
C. | Definitions . |
C.1 | Accounting Firm . The term Accounting Firm means the independent auditors of the Company for the fiscal year immediately preceding the earlier of (a) the year in which the Termination Date occurred, or (b) the year, if any, in which occurred the first Change of Control occurring after the date of this Employment Agreement, and that firms successor or successors; unless that firm is unable or unwilling to serve and perform in the capacity contemplated by this Employment Agreement, in which case the Company must select another accounting firm that (x) is of recognized regional or national standing and (y) is not then the independent auditors for the Company or any affiliated corporation. | ||
C.2 | Change in Ownership or Control . The term Change in Ownership or Control has the meaning given to that term (without initial caps) in the Treasury Regulations published under Section 280G. | ||
C.3 | Sections 280G, 409A, and 4999 . Each of the terms Section 280G, Section 409A, and Section 4999, respectively, means that numbered section of the Internal Revenue Code. References in this Employment Agreement to any of these sections are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to that specific section by the U.S. Department of Treasury or the Internal Revenue Service. |
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1. | Employment. |
(a) | The Company hereby employs the Executive in his current capacity through December 31, 2008 and, effective January 1, 2009, as its Senior Executive Vice President of Finance and Chief Investment Officer, and the Executive hereby accepts such employment, on the terms and subject to the conditions hereinafter set forth. | ||
(b) | During the term of this Employment Agreement, from and after January 1, 2009, the Executive shall be and have the titles of Senior Executive Vice President of Finance and Chief Investment Officer and shall devote all of his business time and all reasonable efforts to his employment and perform diligently such duties as are customarily performed by Senior Executive Vice Presidents of Finance and Chief Investment Officers of companies similar in size to, and in a similar business as, the Company, together with such other duties as may be reasonably requested from time to time by the President or Chief Executive Officer of the Company or the Board of Directors of the Company (the Board), which duties shall be consistent with his positions previously set forth and as provided in Paragraph 2. |
2. | Term and Positions. |
(a) | The period of employment of the Executive by the Company shall, subject to earlier termination as provided in this Employment Agreement, continue until December 31, 2009, with automatic one year renewals thereafter. 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. | ||
(b) | During the term of this Employment Agreement, from and after January 1, 2009, the Executive shall be entitled to serve as the Senior Executive Vice President of Finance and Chief Investment Officer of the Company. For service as an officer and employee of the |
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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, and any Indemnification Agreement between the Company and the Executive that was in effect as of December 28, 2008 and as the same may be amended from time to time thereafter (the Indemnification Agreement). |
(c) | If: |
(i) | the Company materially changes the Executives duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without his consent; | ||
(ii) | the Executives place of employment or the principal executive offices of the Company are located more than fifty (50) miles from the geographical center of Cleveland, Ohio; or | ||
(iii) | 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; |
then in any 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)). | |||
(d) | The Executive shall be deemed not to have consented to any written proposal calling for a material change in his duties and responsibilities unless the Executive shall give written notice of his consent thereto to the Board within fifteen (15) days after receipt of such written proposal. If the Executive shall not have given such consent, the Company shall have the opportunity to withdraw such proposed material change by written notice to the Executive given within ten (10) days after the end of said fifteen (15) day period. | ||
(e) | Notwithstanding anything in this Employment Agreement to the contrary, if there shall occur a Change in Control and a Triggering Event (as those terms are 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)) under circumstances entitling the Executive to payments and benefits as specified in Article II, Paragraph 1 of 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 the Executive hereunder up to and including the Termination Date (as defined in Paragraph 5(f)). |
3. | Compensation. | |
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) | The Company shall pay to the Executive a base salary payable in accordance with the Companys usual pay practices (and in any event no less frequently than monthly) of not less than Three Hundred Ninety Thousand Dollars ($390,000) per annum (effective January 1, 2009), subject to such increases as the Board may approve. | ||
(b) | In addition to an annual base salary, if the Executive achieves the factors and criteria for bonus payments hereinafter described for any fiscal year of the Company throughout which the Executive is employed by the Company, then the Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of the fiscal year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. The Companys award of bonus compensation to the Executive shall be determined by the factors and criteria, including the financial performance of the Company and the performance by the Executive of his duties hereunder, that may be established from time to time for the calculation of bonus awards by the Executive Compensation Committee (the Committee) of the Board. (Note that in certain circumstances the Executive may be entitled to a pro rata bonus for a partial fiscal year of the Company as provided in Paragraph 4(a) or 5(d).) | ||
(c) | If the Executive achieves the factors and criteria for annual long-term incentive compensation awards hereinafter described for any fiscal year of the Company, then the Company shall pay to the Executive annual long-term compensation for such fiscal year, not later than 75 days following the end of each fiscal year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. The Companys award of annual long-term compensation to the Executive shall be determined by the factors and criteria, including the financial performance of the Company and the performance by the Executive of his duties hereunder, that may be established from time to time for the calculation of annual long-term incentive compensation awards by the Committee and the Chief Executive Officer and the President of the Company. | ||
(d) | The Company shall provide to the Executive such life, disability, medical, hospitalization and dental insurance for the Executive, his spouse and eligible family members as may be determined by the Board to be consistent with industry standards. | ||
(e) | 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 Employment Agreement shall or shall be deemed to in any way affect the Executives rights and benefits thereunder except as expressly provided herein). | ||
(f) | The Executive shall be entitled to such periods of vacation and sick leave allowance each year as are determined by the Chief Executive Officer or the President of the Company in his reasonable and good faith discretion, which in any event shall be not less than four weeks per year or as otherwise provided under the Companys vacation and sick leave policy for executive officers. | ||
(g) | 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, including, without limitation, outperformance award plans. The Executives 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. |
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(h) | The Company shall reimburse the Executive or provide the Executive 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 Companys business. The Executive shall furnish such documentation with respect to reimbursement to be paid hereunder as the Company shall reasonably request. | ||
(i) | The Company shall name the Executive as a social member under the Companys membership at Barrington Country Club during the term of this Employment Agreement, shall bear the cost of regular social membership fees, assessments and dues incurred there during the term of this Employment Agreement and shall reimburse the Executive for the amount of any charge actually and reasonably incurred at Barrington Country Club in the conduct of the Companys business. |
4. | Payment in the Event of Death or Disability. |
(a) | Except as otherwise provided in Paragraph 4(a)(i), in the event of the Executives death or if the Company terminates the Executives 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 the successors and assigns of the Executive in the event of his death) an amount equal to the sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus (y) a bonus amount prorated up to and including the Termination Date and determined as specified in Paragraph 4(a)(ii) (a Pro Rata Bonus Amount), and shall continue the benefits described in Paragraph 3(d) for the Executive (except in the case of death) and the Executives family for a period of one (1) year. |
(i) | 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 Executives personal representative has timely executed a Release as contemplated by Paragraph 6(c) and has not revoked such Release during any applicable revocation period. | ||
(ii) | The Pro Rata Bonus Amount shall be determined by first calculating a pro forma full year annual bonus amount for the Executive for the entire fiscal year in which the termination occurs in the manner specified in the last sentence of this Paragraph 4(a)(ii) and then multiplying the amount of the pro forma full year annual bonus amount (so calculated) by a fraction, the numerator of which is the number of days in that portion of the fiscal year ending on the Termination Date and the denominator of which is the number of days in the entire fiscal year. The pro forma full year annual bonus amount shall be calculated on the same date and in the same manner as if the Executives employment had continued throughout the end of the fiscal year, using actual results for the entire fiscal year, and, insofar as the Executives individual performance may be a factor, assuming that the Executive had performed throughout the fiscal year at the same level at which the Executive actually performed during the fiscal year up to the Termination Date. |
(b) | The Company will pay the amount equal to one year of salary pursuant to Paragraph 4(a)(x) (i) in the event of the Executives death, as soon as practicable following the Executives death, but in no event later than March 15 of the year after the year in which the Executives death occurs (provided that neither the Executive nor the Executives |
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estate may designate the taxable year of payment), and (ii) in the event of the Companys termination of the Executives employment by reason of the Executives becoming disabled, except as otherwise provided in Section B.2 of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B, during the Seventh Month after the Termination Date (as defined in Section B.1 of the Tax Provision Exhibit). The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 4(a)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(d) 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. | |||
(c) | For purposes of this Employment Agreement, the Executive shall become disabled only in the event of a permanent disability. Executives 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 event either the Company or the Executive, after receipt of notice of the Executives disability from the other, dispute that the Executives 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 a written statement to the effect that in the physicians opinion, based on the physicians diagnosis, the Executive is capable of resuming his employment and devoting 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. |
5. | Termination. |
(a) | The employment of the Executive under this Employment Agreement, and the terms hereof, may be terminated by the Company: |
(i) | on the death of the Executive or if the Executive becomes disabled (as previously defined); | ||
(ii) | for cause at any time by action of the Board. For purposes hereof, the term cause shall mean: |
(A) | The Executives 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 Executives 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 | ||
(B) | The Executives material breach of any 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 |
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Executive; or |
(iii) | without cause pursuant to written notice provided to the Executive not less than ninety (90) days in advance of the Termination Date. |
The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Companys 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. | |||
(b) | 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 which the Executive 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 Executives employment for cause. Expenses of the arbitration shall be borne equally by the parties except as otherwise determined by the arbitrator. | ||
(c) | 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(e), 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 the Executive hereunder up to and including the Termination Date. | ||
(d) | 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(e)), 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 sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (y) a Pro Rata Bonus Amount (determined in the same manner as provided in Paragraph 4(a) in the event of termination due to death or disability), and shall continue the benefits described in Paragraph 3(d) for a period of one (1) year. |
(i) | 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. |
(e) | Except as otherwise provided in Section B.2 of the Tax Provision Exhibit, (i) the Company will pay the amount equal to one year of salary pursuant to Paragraph 5(d)(x) |
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during the Seventh Month after the Termination Date. The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 5(d)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(d) 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. | |||
(f) | For all purposes of this Employment Agreement, the term Termination Date means the date on which the Executives employment with the Company terminates. |
6. | Release. This Paragraph 6 will apply only upon termination of the Executives 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)). |
(a) | Presentation of Release by the Company . If this Paragraph 6 applies, the Company may present to the Executive (or in the case of the Executives death or legal incapacity, to the Executives 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 Executives 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 in which the Company advises the Executive (or the Executives personal representative) that the Release is being presented in accordance with this Paragraph 6 and that a failure by the Executive (or the Executives personal representative) to execute and return the Release as contemplated by Paragraph 6(c) would relieve the Company of the obligation to make payments otherwise due to the Executive (or to the Executives personal representative) under one or more portions of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(b) | Effect of Failure by the Company to Present Release . If the Company fails to present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Company will be deemed to have waived the requirement that the Executive (or the Executives personal representative) execute a Release as a condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(c) | Execution of Release by the Executive or the Executives Personal Representative . If the Company does present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Executive (or the Executives personal representative) will have until 50 days after the Termination Date (i.e., at least 29 days after presentation of the Release to the Executive (or the Executives personal representative)) within which to deliver an executed copy of the Release to the Company and thereby satisfy the condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be, provided that the Executive (or the Executives personal representative) does not revoke the execution of the Release during any applicable revocation period. |
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(d) | Effect of Failure to Execute Release or of Revocation of Release . If the Executive (or the Executives personal representative) fails to deliver an executed copy of the Release to the Company within 50 days after the Termination Date or revokes the execution of the Release during any applicable revocation period, the Executive (or the Executives personal representative) will be deemed to have waived the right to receive all payments under either of Paragraph 4(a) or Paragraph 5(d), as the case may be, that were conditioned on the Release. |
7. | Covenants and Confidential Information. |
(a) | The Executive acknowledges the Companys reliance and expectation of the Executives continued commitment to performance of the Executives duties and responsibilities during the term of this Employment Agreement. In light of such reliance and expectation on the part of the Company, during the term of this Employment Agreement and for a period of one (1) year thereafter (and, as to clause (ii) of this subparagraph (a), at any time during and after the term of this Employment Agreement), the Executive shall not, directly or indirectly do or suffer either of the following: |
(i) | own, manage, control or participate in the ownership, management or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor or otherwise with, any other corporation, partnership, proprietorship, firm, association or other business entity engaged in the business of, or otherwise engage in the business of, acquiring, owning, developing or managing commercial shopping centers; provided, however, that the ownership of not more than one percent (1%) of any class of publicly traded securities of any entity shall not be deemed a violation of this covenant; or | ||
(ii) | disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, the Company, any confidential information relating to the Companys operations, properties or otherwise to its particular business or other trade secrets of the Company, it being acknowledged by the Executive that all such information regarding the business of the Company compiled or obtained by, or furnished to, the Executive while the Executive shall have been employed by or associated with the Company is confidential information and the Companys exclusive property; provided, however, that the foregoing restrictions shall not apply to the extent that such information (A) is clearly obtainable in the public domain, (B) becomes obtainable in the public domain, except by reason of the breach by the Executive of the terms hereof, (C) was not acquired by the Executive in connection with the Executives employment or affiliation with the Company, (D) was not acquired by the Executive from the Company or its representatives or (E) is required to be disclosed by rule of law or by order of a court or governmental body or agency. |
(b) | The Executive will not directly or indirectly during the term of this Employment Agreement and for a period of one (1) year after the expiration of this Employment Agreement or the termination of Executives employment for any reason, solicit or induce or attempt to solicit or induce any employee(s) of the Company and/or any subsidiary, affiliated or related companies to terminate their employment with the Company and/or any subsidiary, affiliated or related companies. | ||
(c) | The Executive agrees and understands that the remedy at law for any breach by the Executive of this Paragraph 7 will be inadequate and that the damages following from |
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such breach are not readily susceptible to being measured in monetary terms. Accordingly, it is acknowledged that, upon adequate proof of the Executives violation of any legally enforceable provision of this Paragraph 7, the Company shall be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach. Nothing in this Paragraph 7 shall be deemed to limit the Companys remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 7 which may be pursued or availed of by the Company. | |||
(d) | The Executive has carefully considered the nature and extent of the restrictions upon him and the rights and remedies conferred upon the Company under this Paragraph 7, and hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to eliminate competition which otherwise would be unfair to the Company, do not stifle the inherent skill and experience of the Executive, would not operate as a bar to the Executives sole means of support, are fully required to protect the legitimate interests of the Company and do not confer a benefit upon the Company disproportionate to the detriment to the Executive. |
8. | Tax Provision Exhibit. | |
All of the terms of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B are hereby incorporated in this Employment Agreement as fully as if those terms were included in the main text of this Employment Agreement. |
9. | Miscellaneous. |
(a) | The Executive represents and warrants that the Executive is not a party to any agreement, contract or understanding, whether employment or otherwise, which would restrict or prohibit the Executive from undertaking or performing employment in accordance with the terms and conditions of this Employment Agreement. | ||
(b) | During the term of this Employment Agreement and thereafter, the Executive will provide reasonable assistance to the Company in litigation and regulatory matters that relate to events that occurred during the Executives period of employment with the Company and its predecessors, and will provide reasonable assistance to the Company with matters relating to its corporate history from the period of the Executives employment with it or its predecessors. The Executive will be entitled to reimbursement of reasonable out-of-pocket travel or related costs and expenses relating to any such cooperation or assistance that occurs following the term of employment. | ||
(c) | The provisions of this Employment Agreement are severable and if any one or more provision may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provision and any partially unenforceable provision to the extent enforceable in any jurisdiction nevertheless shall be binding and enforceable. | ||
(d) | The rights and obligations of the Company under this Employment Agreement shall inure to the benefit of, and shall be binding on, the Company and its successors and assigns, and the rights and obligations (other than obligations to perform services) of the Executive under this Employment Agreement shall inure to the benefit of, and shall be binding upon, the Executive and his heirs, personal representatives and assigns. | ||
(e) | Any controversy or claim arising out of or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Rules of the |
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American Arbitration Association then pertaining in the City of Cleveland, Ohio, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. The arbitrator or arbitrators shall be deemed to possess the powers to issue mandatory orders and restraining orders in connection with such arbitration; provided, however, that nothing in this Paragraph 9(e) shall be construed so as to deny the Company the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Executive of any of the covenants contained in Paragraph 7 hereof. | |||
(f) | Any notice to be given under this Employment Agreement shall be personally delivered in writing or shall have been deemed duly given when received after it is posted in the United States mail, postage prepaid, registered or certified, return receipt requested, and if mailed to the Company, shall be addressed to its principal place of business, attention: President, and if mailed to the Executive, shall be addressed to the Executive at his home address last known on the records of the Company, or at such other address or addresses as either the Company or the Executive may hereafter designate in writing to the other. | ||
(g) | The failure of either party to enforce any provision or provisions of this Employment Agreement shall not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party thereafter from enforcing each and every other provision of this Employment Agreement. The rights granted the parties herein are cumulative and the waiver of any single remedy shall not constitute a waiver of such partys right to assert all other legal remedies available to it under the circumstances. | ||
(h) | This Employment Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally. No modification, termination or attempted waiver shall be valid unless in writing and signed by the party against whom the same is sought to be enforced. | ||
(i) | This Employment Agreement shall be governed by and construed according to the laws of the State of Ohio. | ||
(j) | Captions and paragraph headings used herein are for convenience and are not a part of this Employment Agreement and shall not be used in construing it. | ||
(k) | Where necessary or appropriate to the meaning hereof, the singular and plural shall be deemed to include each other, and the masculine, feminine and neuter shall be deemed to include each other. |
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DEVELOPERS DIVERSIFIED REALTY CORPORATION | ||||||
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By: |
/s/ Daniel B. Hurwitz
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Daniel B. Hurwitz, President and | |||||
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Chief Operating Officer | |||||
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/s/ David J. Oakes | |||||
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DAVID J. OAKES |
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Threshold | Target | Maximum | ||
50% | 75% | 125% |
Threshold | Target | Maximum | ||
50% | 75% | 100% |
Exhibits Page 1 of 5
A. | Gross-Up of Payments Deemed to be Excess Parachute Payments . |
A.1 | Acknowledgement; Determination by Accounting Firm . The Company and the Executive acknowledge that, following a Change in Ownership or Control, one or more payments or distributions to be made by the Company or an affiliated entity to or for the benefit of the Executive under this Employment Agreement or the Change in Control Agreement (including, without limitation, the issuance of common shares of the Company; the granting or vesting of restricted shares; and the granting, vesting, exercise or termination of options) (a Payment) may be determined to be an excess parachute payment that is not deductible by the Company or its affiliated entity for Federal income tax purposes and with respect to which the Executive will be subject to an excise tax because of Sections 280G and 4999, respectively, of the Internal Revenue Code. If a Change in Ownership or Control occurs, either the Executive or the Company may direct the Accounting Firm, which, subject to any inconsistent position asserted by the Internal Revenue Service, will make all determinations required to be made under this Section A.1, to determine whether any Payment will be an excess parachute payment and to communicate its determination, together with detailed supporting calculations, to the Company and to the Executive within 30 days after its receipt of the direction from the Executive or the Company, as the case may be. The Company and the Executive will cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. | ||
A.2 | Gross-Up Payments . If the Accounting Firm determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax), the Company will make additional cash payments (each, a Gross-Up Payment) to the Executive, from time to time in such amounts as are necessary to put the Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Companys obligation to make Gross-Up Payments under this Section A is not contingent on termination of the Executives employment with the Company. The Company will make each Gross-Up Payment to the Executive within 30 days of the time that the related Payment constituting an excess parachute payment is paid or provided to the Executive. | ||
A.3 | Further Gross-Up Payments as Determined by the IRS . If the Internal Revenue Service determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax) in excess of the amount, if any, previously determined by the Accounting Firm, the Company will make further Goss-Up Payments to the Executive in cash and in such amounts as are necessary to put the Executive in the same position, after payment |
Exhibits Page 2 of 5
of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Company will make any additional Gross-Up Payments required by this Section A.3 not later than the due date of any payment indicated by the Internal Revenue Service with respect to the underlying matters to which the additional Gross-Up relates. | |||
A.4 | Contest of IRS Determination by the Company . If the Company desires to contest any determination by the Internal Revenue Service with respect to the amount of excise tax under Section 4999, the Executive will, upon receipt from the Company of an unconditional written undertaking to indemnify and hold the Executive harmless (on an after tax basis) from any and all adverse consequences that might arise from the contesting of that determination, cooperate with the Company in that contest at the Companys sole expense. Nothing in this Section A will require the Executive to incur any expense other than expenses with respect to which the Company has paid to the Executive sufficient sums so that after the payment of the expense by the Executive and taking into account the payment by the Company with respect to that expense and any and all taxes that may be imposed upon the Executive as a result of the Executives receipt of that payment, the net effect is no cost to the Executive. Nothing in this Section A will require the Executive to extend the statute of limitations with respect to any item or issue in the Executives tax returns other than, exclusively, the excise tax under Section 4999. If, as the result of the contest of any assertion by the Internal Revenue Service with respect to excise tax under Section 4999, the Executive receives a refund of a Section 4999 excise tax previously paid and/or any interest with respect thereto, the Executive will promptly pay to the Company such amount as will leave the Executive, net of the repayment and all tax effects, in the same position, after all taxes and interest, that the Executive would have been in if the refunded excise tax had never been paid. To assure compliance with Section 409A, the Company will make payments to the Executive with respect to expenses as contemplated in this Section A.4 subject to and as provided in Sections B.1 and B.3. | ||
A.5 | Accounting Firm Fees and Expenses . The Company will bear and pay all fees and expenses of the Accounting Firm for services performed pursuant to this Section A (Applicable Fees and Expenses). To assure compliance with Section 409A, the Company will pay any Applicable Fees and Expenses subject to and as provided in Sections B.1 and B.3. |
B. | Compliance with Section 409A . |
B.1 | Six Month Delay on Certain Payments, Benefits, and Reimbursements . If the Executive is a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Employment Agreement that constitutes a deferral of compensation within the meaning of Section 409A, that is to be paid or provided as a result of a separation from service within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a Scheduled Time) that is on or before the date (the Six Month Date) that is exactly six months after the Termination Date (other than |
Exhibits Page 3 of 5
payments, benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Internal Revenue Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the Seventh Month after the Termination Date), except that if the Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of the Executives death and thereafter paid or provided not later than 30 days after the date of death. | |||
B.2 | Earlier Payment if Not a Specified Employee . If the Executive is not a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, any lump sum payment based on base salary that is to be made by the Company to the Executive pursuant to either of Paragraph 4(a) or 5(d) will be made by the Company to the Executive during the 30-day period that begins exactly 60 days after the Termination Date rather than during the Seventh Month after the Termination Date. | ||
B.3 | Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits described in Paragraph 3(d) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits described in Paragraph 3(d) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (a) any reimbursement of eligible expenses will be paid within 30 days following the Executives written request for reimbursement; provided that the Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that the Company can make the reimbursement within the time periods required by Section 409A; (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (c) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit. | ||
B.4 | Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Employment Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. The Company and the Executive intend that the payments and benefits provided under this Employment Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Employment Agreement is to be construed, administered, and governed in a manner that effects that intent and the Company will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Employment Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon the Executive. |
Exhibits Page 4 of 5
B.5 | Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase termination of employment and words and phrases of similar import mean a separation from service with the Company within the meaning of Section 409A. The Executive and the Company will take all steps necessary (including taking into account this Section B.5 when considering any further agreement regarding provision of services by the Executive to the Company after the Termination Date) to ensure that (a) any termination of employment under this Employment Agreement constitutes a separation from service within the meaning of Section 409A, and (b) the Termination Date is the date on which the Executive experiences a separation from service within the meaning of Section 409A. |
C. | Definitions . |
C.1 | Accounting Firm . The term Accounting Firm means the independent auditors of the Company for the fiscal year immediately preceding the earlier of (a) the year in which the Termination Date occurred, or (b) the year, if any, in which occurred the first Change of Control occurring after the date of this Employment Agreement, and that firms successor or successors; unless that firm is unable or unwilling to serve and perform in the capacity contemplated by this Employment Agreement, in which case the Company must select another accounting firm that (x) is of recognized regional or national standing and (y) is not then the independent auditors for the Company or any affiliated corporation. | ||
C.2 | Change in Ownership or Control . The term Change in Ownership or Control has the meaning given to that term (without initial caps) in the Treasury Regulations published under Section 280G. | ||
C.3 | Sections 280G, 409A, and 4999 . Each of the terms Section 280G, Section 409A, and Section 4999, respectively, means that numbered section of the Internal Revenue Code. References in this Employment Agreement to any of these sections are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to that specific section by the U.S. Department of Treasury or the Internal Revenue Service. |
Exhibits Page 5 of 5
1. | Employment. |
(a) | The Company hereby employs the Executive as its Executive Vice President and Chief Financial Officer, and the Executive hereby accepts such employment, on the terms and subject to the conditions hereinafter set forth. | ||
(b) | During the term of this Employment Agreement, the Executive shall be and have the titles of Executive Vice President and Chief Financial Officer and shall devote all of his business time and all reasonable efforts to his employment and perform diligently such duties as are customarily performed by Executive Vice Presidents and Chief Financial Officers of companies similar in size to, and in a similar business as, the Company, together with such other duties as may be reasonably requested from time to time by the President or Chief Executive Officer of the Company or the Board of Directors of the Company (the Board), which duties shall be consistent with his positions previously set forth and as provided in Paragraph 2. |
2. | Term and Positions. |
(a) | The period of employment of the Executive by the Company shall, subject to earlier termination as provided in this Employment Agreement, continue until December 31, 2009, with automatic one year renewals thereafter. 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. | ||
(b) | During the term of this Employment Agreement, the Executive shall be entitled to serve as the Executive Vice President and Chief Financial Officer of the Company. For service as an officer and 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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and any Indemnification Agreement between the Company and the Executive that was in effect as of December 28, 2008 and as the same may be amended from time to time thereafter (the Indemnification Agreement). |
(c) | If: |
(i) | the Company materially changes the Executives duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without his consent; | ||
(ii) | the Executives place of employment or the principal executive offices of the Company are located more than fifty (50) miles from the geographical center of Cleveland, Ohio; or | ||
(iii) | 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; |
then in any 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)). | |||
(d) | The Executive shall be deemed not to have consented to any written proposal calling for a material change in his duties and responsibilities unless the Executive shall give written notice of his consent thereto to the Board within fifteen (15) days after receipt of such written proposal. If the Executive shall not have given such consent, the Company shall have the opportunity to withdraw such proposed material change by written notice to the Executive given within ten (10) days after the end of said fifteen (15) day period. | ||
(e) | Notwithstanding anything in this Employment Agreement to the contrary, if there shall occur a Change in Control and a Triggering Event (as those terms are 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)) under circumstances entitling the Executive to payments and benefits as specified in Article II, Paragraph 1 of 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 the Executive hereunder up to and including the Termination Date (as defined in Paragraph 5(f)). |
3. | Compensation. | |
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. |
(a) | The Company shall pay to the Executive a base salary payable in accordance with the Companys usual pay practices (and in any event no less frequently than monthly) of not less than Three Hundred Five Thousand Dollars ($305,000) per annum, subject to such increases as the Board may approve. |
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(b) | In addition to an annual base salary, if the Executive achieves the factors and criteria for bonus payments hereinafter described for any fiscal year of the Company throughout which the Executive is employed by the Company, then the Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of the fiscal year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. The Companys award of bonus compensation to the Executive shall be determined by the factors and criteria, including the financial performance of the Company and the performance by the Executive of his duties hereunder, that may be established from time to time for the calculation of bonus awards by the Executive Compensation Committee (the Committee) of the Board. (Note that in certain circumstances the Executive may be entitled to a pro rata bonus for a partial fiscal year of the Company as provided in Paragraph 4(a) or 5(d).) | ||
(c) | The Company shall provide to the Executive such life, disability, medical, hospitalization and dental insurance for the Executive, his spouse and eligible family members as may be determined by the Board to be consistent with industry standards. | ||
(d) | 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 Employment Agreement shall or shall be deemed to in any way affect the Executives rights and benefits thereunder except as expressly provided herein). | ||
(e) | The Executive shall be entitled to such periods of vacation and sick leave allowance each year as are determined by the Chief Executive Officer or the President of the Company in his reasonable and good faith discretion, which in any event shall be not less than four weeks per year or as otherwise provided under the Companys vacation and sick leave policy for executive officers. | ||
(f) | 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 Executives 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. | ||
(g) | The Company shall reimburse the Executive or provide the Executive 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 Companys business. The Executive shall furnish such documentation with respect to reimbursement to be paid hereunder as the Company shall reasonably request. | ||
(h) | So long as the Executive remains in the employment of the Company, the Company shall pay to the Executive an automobile allowance of $500 per month as may be adjusted from time to time. All expenses related to all automobiles owned by the Executive shall be the sole responsibility of the Executive. | ||
(i) | The Company shall name the Executive as a corporate member under the Companys membership at Barrington Country Club during the term of this Employment Agreement, shall bear the cost of regular membership fees, assessments and dues incurred there during the term of this Employment Agreement and shall reimburse the Executive for the amount of any charge actually and reasonably incurred at Barrington Country Club in the conduct of the Companys business. |
Page 3
4. | Payment in the Event of Death or Disability. |
(a) | Except as otherwise provided in Paragraph 4(a)(i), in the event of the Executives death or if the Company terminates the Executives 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 the successors and assigns of the Executive in the event of his death) an amount equal to the sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus (y) a bonus amount prorated up to and including the Termination Date and determined as specified in Paragraph 4(a)(ii) (a Pro Rata Bonus Amount), and shall continue the benefits described in Paragraph 3(c) for the Executive (except in the case of death) and the Executives family for a period of one (1) year. |
(i) | 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 Executives personal representative has timely executed a Release as contemplated by Paragraph 6(c) and has not revoked such Release during any applicable revocation period. | ||
(ii) | The Pro Rata Bonus Amount shall be determined by first calculating a pro forma full year annual bonus amount for the Executive for the entire fiscal year in which the termination occurs in the manner specified in the last sentence of this Paragraph 4(a)(ii) and then multiplying the amount of the pro forma full year annual bonus amount (so calculated) by a fraction, the numerator of which is the number of days in that portion of the fiscal year ending on the Termination Date and the denominator of which is the number of days in the entire fiscal year. The pro forma full year annual bonus amount shall be calculated on the same date and in the same manner as if the Executives employment had continued throughout the end of the fiscal year, using actual results for the entire fiscal year, and, insofar as the Executives individual performance may be a factor, assuming that the Executive had performed throughout the fiscal year at the same level at which the Executive actually performed during the fiscal year up to the Termination Date. |
(b) | The Company will pay the amount equal to one year of salary pursuant to Paragraph 4(a)(x) (i) in the event of the Executives death, as soon as practicable following the Executives death, but in no event later than March 15 of the year after the year in which the Executives death occurs (provided that neither the Executive nor the Executives estate may designate the taxable year of payment), and (ii) in the event of the Companys termination of the Executives employment by reason of the Executives becoming disabled, except as otherwise provided in Section B.2 of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B, during the Seventh Month after the Termination Date (as defined in Section B.1 of the Tax Provision Exhibit). The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 4(a)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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. |
Page 4
(c) | For purposes of this Employment Agreement, the Executive shall become disabled only in the event of a permanent disability. Executives 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 event either the Company or the Executive, after receipt of notice of the Executives disability from the other, dispute that the Executives 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 a written statement to the effect that in the physicians opinion, based on the physicians diagnosis, the Executive is capable of resuming his employment and devoting 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. |
5. | Termination. |
(a) | The employment of the Executive under this Employment Agreement, and the terms hereof, may be terminated by the Company: |
(i) | on the death of the Executive or if the Executive becomes disabled (as previously defined); | ||
(ii) | for cause at any time by action of the Board. For purposes hereof, the term cause shall mean: |
(A) | The Executives 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 Executives 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 | ||
(B) | The Executives material breach of any 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 |
(iii) | without cause pursuant to written notice provided to the Executive not less than ninety (90) days in advance of the Termination Date. |
The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Companys 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. | |||
(b) | 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, |
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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 which the Executive 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 Executives employment for cause. Expenses of the arbitration shall be borne equally by the parties except as otherwise determined by the arbitrator. | |||
(c) | 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 the Executive hereunder up to and including the Termination Date. | ||
(d) | 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(e)), 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 sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (y) a Pro Rata Bonus Amount (determined in the same manner as provided in Paragraph 4(a) in the event of termination due to death or disability), and shall continue the benefits described in Paragraph 3(c) for a period of one (1) year. |
(i) | 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. |
(e) | Except as otherwise provided in Section B.2 of the Tax Provision Exhibit, (i) the Company will pay the amount equal to one year of salary pursuant to Paragraph 5(d)(x) during the Seventh Month after the Termination Date. The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 5(d)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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. | ||
(f) | For all purposes of this Employment Agreement, the term Termination Date means the date on which the Executives employment with the Company terminates. |
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6. | Release. This Paragraph 6 will apply only upon termination of the Executives 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)). |
(a) | Presentation of Release by the Company . If this Paragraph 6 applies, the Company may present to the Executive (or in the case of the Executives death or legal incapacity, to the Executives 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 Executives 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 in which the Company advises the Executive (or the Executives personal representative) that the Release is being presented in accordance with this Paragraph 6 and that a failure by the Executive (or the Executives personal representative) to execute and return the Release as contemplated by Paragraph 6(c) would relieve the Company of the obligation to make payments otherwise due to the Executive (or to the Executives personal representative) under one or more portions of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(b) | Effect of Failure by the Company to Present Release . If the Company fails to present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Company will be deemed to have waived the requirement that the Executive (or the Executives personal representative) execute a Release as a condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(c) | Execution of Release by the Executive or the Executives Personal Representative . If the Company does present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Executive (or the Executives personal representative) will have until 50 days after the Termination Date (i.e., at least 29 days after presentation of the Release to the Executive (or the Executives personal representative)) within which to deliver an executed copy of the Release to the Company and thereby satisfy the condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be, provided that the Executive (or the Executives personal representative) does not revoke the execution of the Release during any applicable revocation period. | ||
(d) | Effect of Failure to Execute Release or of Revocation of Release . If the Executive (or the Executives personal representative) fails to deliver an executed copy of the Release to the Company within 50 days after the Termination Date or revokes the execution of the Release during any applicable revocation period, the Executive (or the Executives personal representative) will be deemed to have waived the right to receive all payments under either of Paragraph 4(a) or Paragraph 5(d), as the case may be, that were conditioned on the Release. |
7. | Covenants and Confidential Information. |
(a) | The Executive acknowledges the Companys reliance and expectation of the Executives continued commitment to performance of the Executives duties and responsibilities |
Page 7
during the term of this Employment Agreement. In light of such reliance and expectation on the part of the Company, during the term of this Employment Agreement and for a period of one (1) year thereafter (and, as to clause (ii) of this subparagraph (a), at any time during and after the term of this Employment Agreement), the Executive shall not, directly or indirectly do or suffer either of the following: |
(i) | own, manage, control or participate in the ownership, management or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor or otherwise with, any other corporation, partnership, proprietorship, firm, association or other business entity engaged in the business of, or otherwise engage in the business of, acquiring, owning, developing or managing commercial shopping centers; provided, however, that the ownership of not more than one percent (1%) of any class of publicly traded securities of any entity shall not be deemed a violation of this covenant; or | ||
(ii) | disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, the Company, any confidential information relating to the Companys operations, properties or otherwise to its particular business or other trade secrets of the Company, it being acknowledged by the Executive that all such information regarding the business of the Company compiled or obtained by, or furnished to, the Executive while the Executive shall have been employed by or associated with the Company is confidential information and the Companys exclusive property; provided, however, that the foregoing restrictions shall not apply to the extent that such information (A) is clearly obtainable in the public domain, (B) becomes obtainable in the public domain, except by reason of the breach by the Executive of the terms hereof, (C) was not acquired by the Executive in connection with the Executives employment or affiliation with the Company, (D) was not acquired by the Executive from the Company or its representatives or (E) is required to be disclosed by rule of law or by order of a court or governmental body or agency. |
(b) | The Executive will not directly or indirectly during the term of this Employment Agreement and for a period of one (1) year after the expiration of this Employment Agreement or the termination of Executives employment for any reason, solicit or induce or attempt to solicit or induce any employee(s) of the Company and/or any subsidiary, affiliated or related companies to terminate their employment with the Company and/or any subsidiary, affiliated or related companies. | ||
(c) | The Executive agrees and understands that the remedy at law for any breach by the Executive of this Paragraph 7 will be inadequate and that the damages following from such breach are not readily susceptible to being measured in monetary terms. Accordingly, it is acknowledged that, upon adequate proof of the Executives violation of any legally enforceable provision of this Paragraph 7, the Company shall be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach. Nothing in this Paragraph 7 shall be deemed to limit the Companys remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 7 which may be pursued or availed of by the Company. | ||
(d) | The Executive has carefully considered the nature and extent of the restrictions upon him and the rights and remedies conferred upon the Company under this Paragraph 7, and hereby acknowledges and agrees that the same are reasonable in time and territory, are |
Page 8
designed to eliminate competition which otherwise would be unfair to the Company, do not stifle the inherent skill and experience of the Executive, would not operate as a bar to the Executives sole means of support, are fully required to protect the legitimate interests of the Company and do not confer a benefit upon the Company disproportionate to the detriment to the Executive. |
8. | Tax Provision Exhibit. | |
All of the terms of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B are hereby incorporated in this Employment Agreement as fully as if those terms were included in the main text of this Employment Agreement. |
9. | Miscellaneous. |
(a) | The Executive represents and warrants that the Executive is not a party to any agreement, contract or understanding, whether employment or otherwise, which would restrict or prohibit the Executive from undertaking or performing employment in accordance with the terms and conditions of this Employment Agreement. | ||
(b) | During the term of this Employment Agreement and thereafter, the Executive will provide reasonable assistance to the Company in litigation and regulatory matters that relate to events that occurred during the Executives period of employment with the Company and its predecessors, and will provide reasonable assistance to the Company with matters relating to its corporate history from the period of the Executives employment with it or its predecessors. The Executive will be entitled to reimbursement of reasonable out-of-pocket travel or related costs and expenses relating to any such cooperation or assistance that occurs following the term of employment. | ||
(c) | The provisions of this Employment Agreement are severable and if any one or more provision may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provision and any partially unenforceable provision to the extent enforceable in any jurisdiction nevertheless shall be binding and enforceable. | ||
(d) | The rights and obligations of the Company under this Employment Agreement shall inure to the benefit of, and shall be binding on, the Company and its successors and assigns, and the rights and obligations (other than obligations to perform services) of the Executive under this Employment Agreement shall inure to the benefit of, and shall be binding upon, the Executive and his heirs, personal representatives and assigns. | ||
(e) | Any controversy or claim arising out of or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Rules of the American Arbitration Association then pertaining in the City of Cleveland, Ohio, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. The arbitrator or arbitrators shall be deemed to possess the powers to issue mandatory orders and restraining orders in connection with such arbitration; provided, however, that nothing in this Paragraph 9(e) shall be construed so as to deny the Company the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Executive of any of the covenants contained in Paragraph 7 hereof. | ||
(f) | Any notice to be given under this Employment Agreement shall be personally delivered in writing or shall have been deemed duly given when received after it is posted in the |
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United States mail, postage prepaid, registered or certified, return receipt requested, and if mailed to the Company, shall be addressed to its principal place of business, attention: President, and if mailed to the Executive, shall be addressed to the Executive at his home address last known on the records of the Company, or at such other address or addresses as either the Company or the Executive may hereafter designate in writing to the other. | |||
(g) | The failure of either party to enforce any provision or provisions of this Employment Agreement shall not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party thereafter from enforcing each and every other provision of this Employment Agreement. The rights granted the parties herein are cumulative and the waiver of any single remedy shall not constitute a waiver of such partys right to assert all other legal remedies available to it under the circumstances. | ||
(h) | This Employment Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally. No modification, termination or attempted waiver shall be valid unless in writing and signed by the party against whom the same is sought to be enforced. | ||
(i) | This Employment Agreement shall be governed by and construed according to the laws of the State of Ohio. | ||
(j) | Captions and paragraph headings used herein are for convenience and are not a part of this Employment Agreement and shall not be used in construing it. | ||
(k) | Where necessary or appropriate to the meaning hereof, the singular and plural shall be deemed to include each other, and the masculine, feminine and neuter shall be deemed to include each other. |
DEVELOPERS DIVERSIFIED REALTY CORPORATION | ||||||
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By: |
/s/ Daniel B. Hurwitz
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Daniel B. Hurwitz, President and | |||||
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Chief Operating Officer | |||||
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/s/ William H. Schafer | |||||
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WILLIAM H. SCHAFER |
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Threshold | Target | Maximum | ||
20% | 40% | 80% |
Exhibits Page 1 of 5
A. | Gross-Up of Payments Deemed to be Excess Parachute Payments . |
A.1 | Acknowledgement; Determination by Accounting Firm . The Company and the Executive acknowledge that, following a Change in Ownership or Control, one or more payments or distributions to be made by the Company or an affiliated entity to or for the benefit of the Executive under this Employment Agreement or the Change in Control Agreement (including, without limitation, the issuance of common shares of the Company; the granting or vesting of restricted shares; and the granting, vesting, exercise or termination of options) (a Payment) may be determined to be an excess parachute payment that is not deductible by the Company or its affiliated entity for Federal income tax purposes and with respect to which the Executive will be subject to an excise tax because of Sections 280G and 4999, respectively, of the Internal Revenue Code. If a Change in Ownership or Control occurs, either the Executive or the Company may direct the Accounting Firm, which, subject to any inconsistent position asserted by the Internal Revenue Service, will make all determinations required to be made under this Section A.1, to determine whether any Payment will be an excess parachute payment and to communicate its determination, together with detailed supporting calculations, to the Company and to the Executive within 30 days after its receipt of the direction from the Executive or the Company, as the case may be. The Company and the Executive will cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. | ||
A.2 | Gross-Up Payments . If the Accounting Firm determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax), the Company will make additional cash payments (each, a Gross-Up Payment) to the Executive, from time to time in such amounts as are necessary to put the Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Companys obligation to make Gross-Up Payments under this Section A is not contingent on termination of the Executives employment with the Company. The Company will make each Gross-Up Payment to the Executive within 30 days of the time that the related Payment constituting an excess parachute payment is paid or provided to the Executive. | ||
A.3 | Further Gross-Up Payments as Determined by the IRS . If the Internal Revenue Service determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax) in excess of the amount, if any, previously determined by the Accounting Firm, the Company will make further Goss-Up Payments to the Executive in cash and in such amounts as are necessary to put the Executive in the same position, after payment |
Exhibits Page 2 of 5
of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Company will make any additional Gross-Up Payments required by this Section A.3 not later than the due date of any payment indicated by the Internal Revenue Service with respect to the underlying matters to which the additional Gross-Up relates. | |||
A.4 | Contest of IRS Determination by the Company . If the Company desires to contest any determination by the Internal Revenue Service with respect to the amount of excise tax under Section 4999, the Executive will, upon receipt from the Company of an unconditional written undertaking to indemnify and hold the Executive harmless (on an after tax basis) from any and all adverse consequences that might arise from the contesting of that determination, cooperate with the Company in that contest at the Companys sole expense. Nothing in this Section A will require the Executive to incur any expense other than expenses with respect to which the Company has paid to the Executive sufficient sums so that after the payment of the expense by the Executive and taking into account the payment by the Company with respect to that expense and any and all taxes that may be imposed upon the Executive as a result of the Executives receipt of that payment, the net effect is no cost to the Executive. Nothing in this Section A will require the Executive to extend the statute of limitations with respect to any item or issue in the Executives tax returns other than, exclusively, the excise tax under Section 4999. If, as the result of the contest of any assertion by the Internal Revenue Service with respect to excise tax under Section 4999, the Executive receives a refund of a Section 4999 excise tax previously paid and/or any interest with respect thereto, the Executive will promptly pay to the Company such amount as will leave the Executive, net of the repayment and all tax effects, in the same position, after all taxes and interest, that the Executive would have been in if the refunded excise tax had never been paid. To assure compliance with Section 409A, the Company will make payments to the Executive with respect to expenses as contemplated in this Section A.4 subject to and as provided in Sections B.1 and B.3. | ||
A.5 | Accounting Firm Fees and Expenses . The Company will bear and pay all fees and expenses of the Accounting Firm for services performed pursuant to this Section A (Applicable Fees and Expenses). To assure compliance with Section 409A, the Company will pay any Applicable Fees and Expenses subject to and as provided in Sections B.1 and B.3. |
B. | Compliance with Section 409A . |
B.1 | Six Month Delay on Certain Payments, Benefits, and Reimbursements . If the Executive is a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Employment Agreement that constitutes a deferral of compensation within the meaning of Section 409A, that is to be paid or provided as a result of a separation from service within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a Scheduled Time) that is on or before the date (the Six Month Date) that is exactly six months after the Termination Date (other than |
Exhibits Page 3 of 5
payments, benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Internal Revenue Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the Seventh Month after the Termination Date), except that if the Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of the Executives death and thereafter paid or provided not later than 30 days after the date of death. | |||
B.2 | Earlier Payment if Not a Specified Employee . If the Executive is not a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, any lump sum payment based on base salary that is to be made by the Company to the Executive pursuant to either of Paragraph 4(a) or 5(d) will be made by the Company to the Executive during the 30-day period that begins exactly 60 days after the Termination Date rather than during the Seventh Month after the Termination Date. | ||
B.3 | Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (a) any reimbursement of eligible expenses will be paid within 30 days following the Executives written request for reimbursement; provided that the Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that the Company can make the reimbursement within the time periods required by Section 409A; (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (c) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit. | ||
B.4 | Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Employment Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. The Company and the Executive intend that the payments and benefits provided under this Employment Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Employment Agreement is to be construed, administered, and governed in a manner that effects that intent and the Company will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Employment Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon the Executive. |
Exhibits Page 4 of 5
B.5 | Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase termination of employment and words and phrases of similar import mean a separation from service with the Company within the meaning of Section 409A. The Executive and the Company will take all steps necessary (including taking into account this Section B.5 when considering any further agreement regarding provision of services by the Executive to the Company after the Termination Date) to ensure that (a) any termination of employment under this Employment Agreement constitutes a separation from service within the meaning of Section 409A, and (b) the Termination Date is the date on which the Executive experiences a separation from service within the meaning of Section 409A. |
C. | Definitions . |
C.1 | Accounting Firm . The term Accounting Firm means the independent auditors of the Company for the fiscal year immediately preceding the earlier of (a) the year in which the Termination Date occurred, or (b) the year, if any, in which occurred the first Change of Control occurring after the date of this Employment Agreement, and that firms successor or successors; unless that firm is unable or unwilling to serve and perform in the capacity contemplated by this Employment Agreement, in which case the Company must select another accounting firm that (x) is of recognized regional or national standing and (y) is not then the independent auditors for the Company or any affiliated corporation. | ||
C.2 | Change in Ownership or Control . The term Change in Ownership or Control has the meaning given to that term (without initial caps) in the Treasury Regulations published under Section 280G. | ||
C.3 | Sections 280G, 409A, and 4999 . Each of the terms Section 280G, Section 409A, and Section 4999, respectively, means that numbered section of the Internal Revenue Code. References in this Employment Agreement to any of these sections are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to that specific section by the U.S. Department of Treasury or the Internal Revenue Service. |
Exhibits Page 5 of 5
1. | Employment. |
(a) | The Company hereby employs the Executive as its Executive Vice President of Leasing, and the Executive hereby accepts such employment, on the terms and subject to the conditions hereinafter set forth. | ||
(b) | During the term of this Employment Agreement, the Executive shall be and have the title of Executive Vice President of Leasing and shall devote all of her business time and all reasonable efforts to her employment and perform diligently such duties as are customarily performed by Executive Vice Presidents of Leasing of companies similar in size to, and in a similar business as, the Company, together with such other duties as may be reasonably requested from time to time by the Senior Executive Vice President, President or Chief Executive Officer of the Company or the Board of Directors of the Company (the Board), which duties shall be consistent with her positions previously set forth and as provided in Paragraph 2. |
2. | Term and Positions. |
(a) | The period of employment of the Executive by the Company shall, subject to earlier termination as provided in this Employment Agreement, continue until December 31, 2009, with automatic one year renewals thereafter. 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. | ||
(b) | During the term of this Employment Agreement, the Executive shall be entitled to serve as the Executive Vice President of Leasing of the Company. For service as an officer and 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, and any |
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Indemnification Agreement between the Company and the Executive that was in effect as of December 28, 2008 and as the same may be amended from time to time thereafter (the Indemnification Agreement). |
(c) | If: |
(i) | the Company materially changes the Executives duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without her consent; | ||
(ii) | the Executives place of employment or the principal executive offices of the Company are located more than fifty (50) miles from the geographical center of Cleveland, Ohio; or | ||
(iii) | 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; |
then in any such event the Executive shall have the right to terminate her 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)). |
(d) | The Executive shall be deemed not to have consented to any written proposal calling for a material change in her duties and responsibilities unless the Executive shall give written notice of her consent thereto to the Board within fifteen (15) days after receipt of such written proposal. If the Executive shall not have given such consent, the Company shall have the opportunity to withdraw such proposed material change by written notice to the Executive given within ten (10) days after the end of said fifteen (15) day period. | ||
(e) | Notwithstanding anything in this Employment Agreement to the contrary, if there shall occur a Change in Control and a Triggering Event (as those terms are 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)) under circumstances entitling the Executive to payments and benefits as specified in Article II, Paragraph 1 of 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 the Executive hereunder up to and including the Termination Date (as defined in Paragraph 5(f)). |
3. | Compensation. |
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. |
(a) | The Company shall pay to the Executive a base salary payable in accordance with the Companys usual pay practices (and in any event no less frequently than monthly) of not less than Two Hundred Ninety Thousand Dollars ($290,000) per annum, subject to such increases as the Board may approve. |
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(b) | In addition to an annual base salary, if the Executive achieves the factors and criteria for bonus payments hereinafter described for any fiscal year of the Company throughout which the Executive is employed by the Company, then the Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of the fiscal year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. The Companys award of bonus compensation to the Executive shall be determined by the factors and criteria, including the financial performance of the Company and the performance by the Executive of her duties hereunder, that may be established from time to time for the calculation of bonus awards by the Executive Compensation Committee (the Committee) of the Board. (Note that in certain circumstances the Executive may be entitled to a pro rata bonus for a partial fiscal year of the Company as provided in Paragraph 4(a) or 5(d).) | ||
(c) | The Company shall provide to the Executive such life, disability, medical, hospitalization and dental insurance for the Executive, her spouse and eligible family members as may be determined by the Board to be consistent with industry standards. | ||
(d) | 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 Employment Agreement shall or shall be deemed to in any way affect the Executives rights and benefits thereunder except as expressly provided herein). | ||
(e) | The Executive shall be entitled to such periods of vacation and sick leave allowance each year as are determined by the Chief Executive Officer or the President of the Company in his reasonable and good faith discretion, which in any event shall be not less than four weeks per year or as otherwise provided under the Companys vacation and sick leave policy for executive officers. | ||
(f) | 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 Executives 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. | ||
(g) | The Company shall reimburse the Executive or provide the Executive 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 Companys business. The Executive shall furnish such documentation with respect to reimbursement to be paid hereunder as the Company shall reasonably request. |
4. | Payment in the Event of Death or Disability. |
(a) | Except as otherwise provided in Paragraph 4(a)(i), in the event of the Executives death or if the Company terminates the Executives 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 the successors and assigns of the Executive in the event of her death) an amount equal to the sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus (y) a bonus amount prorated up to and including the Termination Date and determined as specified in Paragraph 4(a)(ii) (a Pro Rata Bonus Amount), and shall continue the |
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benefits described in Paragraph 3(c) for the Executive (except in the case of death) and the Executives family for a period of one (1) year. |
(i) | 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 Executives personal representative has timely executed a Release as contemplated by Paragraph 6(c) and has not revoked such Release during any applicable revocation period. | ||
(ii) | The Pro Rata Bonus Amount shall be determined by first calculating a pro forma full year annual bonus amount for the Executive for the entire fiscal year in which the termination occurs in the manner specified in the last sentence of this Paragraph 4(a)(ii) and then multiplying the amount of the pro forma full year annual bonus amount (so calculated) by a fraction, the numerator of which is the number of days in that portion of the fiscal year ending on the Termination Date and the denominator of which is the number of days in the entire fiscal year. The pro forma full year annual bonus amount shall be calculated on the same date and in the same manner as if the Executives employment had continued throughout the end of the fiscal year, using actual results for the entire fiscal year, and, insofar as the Executives individual performance may be a factor, assuming that the Executive had performed throughout the fiscal year at the same level at which the Executive actually performed during the fiscal year up to the Termination Date. |
(b) | The Company will pay the amount equal to one year of salary pursuant to Paragraph 4(a)(x) (i) in the event of the Executives death, as soon as practicable following the Executives death, but in no event later than March 15 of the year after the year in which the Executives death occurs (provided that neither the Executive nor the Executives estate may designate the taxable year of payment), and (ii) in the event of the Companys termination of the Executives employment by reason of the Executives becoming disabled, except as otherwise provided in Section B.2 of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B, during the Seventh Month after the Termination Date (as defined in Section B.1 of the Tax Provision Exhibit). The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 4(a)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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. | ||
(c) | For purposes of this Employment Agreement, the Executive shall become disabled only in the event of a permanent disability. Executives 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 her physical or mental disability or illness, shall have been unable to discharge her 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 event either the Company or the Executive, after receipt of notice of the Executives disability |
Page 4
from the other, dispute that the Executives 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 a written statement to the effect that in the physicians opinion, based on the physicians diagnosis, the Executive is capable of resuming her employment and devoting full time and energy to discharging her duties within thirty (30) days after the date of such statement, such permanent disability shall be deemed to have occurred. |
5. | Termination. |
(a) | The employment of the Executive under this Employment Agreement, and the terms hereof, may be terminated by the Company: |
(i) | on the death of the Executive or if the Executive becomes disabled (as previously defined); | ||
(ii) | for cause at any time by action of the Board. For purposes hereof, the term cause shall mean: |
(A) | The Executives 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 Executives willful and repeated failure to perform her 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 | ||
(B) | The Executives material breach of any 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 |
(iii) | without cause pursuant to written notice provided to the Executive not less than ninety (90) days in advance of the Termination Date. |
The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Companys 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. |
(b) | 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 which the Executive is entitled hereunder, and if at any time during the pendency of such |
Page 5
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 Executives employment for cause. Expenses of the arbitration shall be borne equally by the parties except as otherwise determined by the arbitrator. |
(c) | 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 the Executive hereunder up to and including the Termination Date. | ||
(d) | 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(e)), 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 sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (y) a Pro Rata Bonus Amount (determined in the same manner as provided in Paragraph 4(a) in the event of termination due to death or disability), and shall continue the benefits described in Paragraph 3(c) for a period of one (1) year. |
(i) | 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. |
(e) | Except as otherwise provided in Section B.2 of the Tax Provision Exhibit, (i) the Company will pay the amount equal to one year of salary pursuant to Paragraph 5(d)(x) during the Seventh Month after the Termination Date. The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 5(d)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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. | ||
(f) | For all purposes of this Employment Agreement, the term Termination Date means the date on which the Executives employment with the Company terminates. |
6. | Release. This Paragraph 6 will apply only upon termination of the Executives 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)). |
(a) | Presentation of Release by the Company . If this Paragraph 6 applies, the Company may present to the Executive (or in the case of the Executives death or legal incapacity, to the Executives 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 |
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Executives 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 in which the Company advises the Executive (or the Executives personal representative) that the Release is being presented in accordance with this Paragraph 6 and that a failure by the Executive (or the Executives personal representative) to execute and return the Release as contemplated by Paragraph 6(c) would relieve the Company of the obligation to make payments otherwise due to the Executive (or to the Executives personal representative) under one or more portions of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | |||
(b) | Effect of Failure by the Company to Present Release . If the Company fails to present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Company will be deemed to have waived the requirement that the Executive (or the Executives personal representative) execute a Release as a condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(c) | Execution of Release by the Executive or the Executives Personal Representative . If the Company does present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Executive (or the Executives personal representative) will have until 50 days after the Termination Date (i.e., at least 29 days after presentation of the Release to the Executive (or the Executives personal representative)) within which to deliver an executed copy of the Release to the Company and thereby satisfy the condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be, provided that the Executive (or the Executives personal representative) does not revoke the execution of the Release during any applicable revocation period. | ||
(d) | Effect of Failure to Execute Release or of Revocation of Release . If the Executive (or the Executives personal representative) fails to deliver an executed copy of the Release to the Company within 50 days after the Termination Date or revokes the execution of the Release during any applicable revocation period, the Executive (or the Executives personal representative) will be deemed to have waived the right to receive all payments under either of Paragraph 4(a) or Paragraph 5(d), as the case may be, that were conditioned on the Release. |
7. | Covenants and Confidential Information. |
(a) | The Executive acknowledges the Companys reliance and expectation of the Executives continued commitment to performance of the Executives duties and responsibilities during the term of this Employment Agreement. In light of such reliance and expectation on the part of the Company, during the term of this Employment Agreement and for a period of one (1) year thereafter (and, as to clause (ii) of this subparagraph (a), at any time during and after the term of this Employment Agreement), the Executive shall not, directly or indirectly do or suffer either of the following: |
(i) | own, manage, control or participate in the ownership, management or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor or otherwise with, any other corporation, partnership, proprietorship, firm, association or other business entity engaged in |
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the business of, or otherwise engage in the business of, acquiring, owning, developing or managing commercial shopping centers; provided, however, that the ownership of not more than one percent (1%) of any class of publicly traded securities of any entity shall not be deemed a violation of this covenant; or | |||
(ii) | disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, the Company, any confidential information relating to the Companys operations, properties or otherwise to its particular business or other trade secrets of the Company, it being acknowledged by the Executive that all such information regarding the business of the Company compiled or obtained by, or furnished to, the Executive while the Executive shall have been employed by or associated with the Company is confidential information and the Companys exclusive property; provided, however, that the foregoing restrictions shall not apply to the extent that such information (A) is clearly obtainable in the public domain, (B) becomes obtainable in the public domain, except by reason of the breach by the Executive of the terms hereof, (C) was not acquired by the Executive in connection with the Executives employment or affiliation with the Company, (D) was not acquired by the Executive from the Company or its representatives or (E) is required to be disclosed by rule of law or by order of a court or governmental body or agency. |
(b) | The Executive will not directly or indirectly during the term of this Employment Agreement and for a period of one (1) year after the expiration of this Employment Agreement or the termination of Executives employment for any reason, solicit or induce or attempt to solicit or induce any employee(s) of the Company and/or any subsidiary, affiliated or related companies to terminate their employment with the Company and/or any subsidiary, affiliated or related companies. | ||
(c) | The Executive agrees and understands that the remedy at law for any breach by the Executive of this Paragraph 7 will be inadequate and that the damages following from such breach are not readily susceptible to being measured in monetary terms. Accordingly, it is acknowledged that, upon adequate proof of the Executives violation of any legally enforceable provision of this Paragraph 7, the Company shall be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach. Nothing in this Paragraph 7 shall be deemed to limit the Companys remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 7 which may be pursued or availed of by the Company. | ||
(d) | The Executive has carefully considered the nature and extent of the restrictions upon her and the rights and remedies conferred upon the Company under this Paragraph 7, and hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to eliminate competition which otherwise would be unfair to the Company, do not stifle the inherent skill and experience of the Executive, would not operate as a bar to the Executives sole means of support, are fully required to protect the legitimate interests of the Company and do not confer a benefit upon the Company disproportionate to the detriment to the Executive. |
8. | Tax Provision Exhibit. | |
All of the terms of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B are hereby incorporated in this Employment Agreement as fully as if those terms were included in the main text of this Employment Agreement. |
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9. | Miscellaneous. |
(a) | The Executive represents and warrants that the Executive is not a party to any agreement, contract or understanding, whether employment or otherwise, which would restrict or prohibit the Executive from undertaking or performing employment in accordance with the terms and conditions of this Employment Agreement. | ||
(b) | During the term of this Employment Agreement and thereafter, the Executive will provide reasonable assistance to the Company in litigation and regulatory matters that relate to events that occurred during the Executives period of employment with the Company and its predecessors, and will provide reasonable assistance to the Company with matters relating to its corporate history from the period of the Executives employment with it or its predecessors. The Executive will be entitled to reimbursement of reasonable out-of-pocket travel or related costs and expenses relating to any such cooperation or assistance that occurs following the term of employment. | ||
(c) | The provisions of this Employment Agreement are severable and if any one or more provision may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provision and any partially unenforceable provision to the extent enforceable in any jurisdiction nevertheless shall be binding and enforceable. | ||
(d) | The rights and obligations of the Company under this Employment Agreement shall inure to the benefit of, and shall be binding on, the Company and its successors and assigns, and the rights and obligations (other than obligations to perform services) of the Executive under this Employment Agreement shall inure to the benefit of, and shall be binding upon, the Executive and her heirs, personal representatives and assigns. | ||
(e) | Any controversy or claim arising out of or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Rules of the American Arbitration Association then pertaining in the City of Cleveland, Ohio, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. The arbitrator or arbitrators shall be deemed to possess the powers to issue mandatory orders and restraining orders in connection with such arbitration; provided, however, that nothing in this Paragraph 9(e) shall be construed so as to deny the Company the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Executive of any of the covenants contained in Paragraph 7 hereof. | ||
(f) | Any notice to be given under this Employment Agreement shall be personally delivered in writing or shall have been deemed duly given when received after it is posted in the United States mail, postage prepaid, registered or certified, return receipt requested, and if mailed to the Company, shall be addressed to its principal place of business, attention: President, and if mailed to the Executive, shall be addressed to the Executive at her home address last known on the records of the Company, or at such other address or addresses as either the Company or the Executive may hereafter designate in writing to the other. | ||
(g) | The failure of either party to enforce any provision or provisions of this Employment Agreement shall not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party thereafter from enforcing each and every other provision of this Employment Agreement. The rights granted the parties herein are cumulative and the waiver of any single remedy shall not |
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constitute a waiver of such partys right to assert all other legal remedies available to it under the circumstances. | |||
(h) | This Employment Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally. No modification, termination or attempted waiver shall be valid unless in writing and signed by the party against whom the same is sought to be enforced. | ||
(i) | This Employment Agreement shall be governed by and construed according to the laws of the State of Ohio. | ||
(j) | Captions and paragraph headings used herein are for convenience and are not a part of this Employment Agreement and shall not be used in construing it. | ||
(k) | Where necessary or appropriate to the meaning hereof, the singular and plural shall be deemed to include each other, and the masculine, feminine and neuter shall be deemed to include each other. |
DEVELOPERS DIVERSIFIED REALTY CORPORATION
|
||||
By: | /s/ Daniel B. Hurwitz | |||
Daniel B. Hurwitz, President and | ||||
Chief Operating Officer | ||||
/s/ Robin R. Walker-Gibbons | ||||
ROBIN R. WALKER-GIBBONS | ||||
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Threshold | Target | Maximum | ||
20% | 40% | 80% |
Exhibits Page 1 of 5
A. | Gross-Up of Payments Deemed to be Excess Parachute Payments . |
A.1 | Acknowledgement; Determination by Accounting Firm . The Company and the Executive acknowledge that, following a Change in Ownership or Control, one or more payments or distributions to be made by the Company or an affiliated entity to or for the benefit of the Executive under this Employment Agreement or the Change in Control Agreement (including, without limitation, the issuance of common shares of the Company; the granting or vesting of restricted shares; and the granting, vesting, exercise or termination of options) (a Payment) may be determined to be an excess parachute payment that is not deductible by the Company or its affiliated entity for Federal income tax purposes and with respect to which the Executive will be subject to an excise tax because of Sections 280G and 4999, respectively, of the Internal Revenue Code. If a Change in Ownership or Control occurs, either the Executive or the Company may direct the Accounting Firm, which, subject to any inconsistent position asserted by the Internal Revenue Service, will make all determinations required to be made under this Section A.1, to determine whether any Payment will be an excess parachute payment and to communicate its determination, together with detailed supporting calculations, to the Company and to the Executive within 30 days after its receipt of the direction from the Executive or the Company, as the case may be. The Company and the Executive will cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. | ||
A.2 | Gross-Up Payments . If the Accounting Firm determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax), the Company will make additional cash payments (each, a Gross-Up Payment) to the Executive, from time to time in such amounts as are necessary to put the Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Companys obligation to make Gross-Up Payments under this Section A is not contingent on termination of the Executives employment with the Company. The Company will make each Gross-Up Payment to the Executive within 30 days of the time that the related Payment constituting an excess parachute payment is paid or provided to the Executive. | ||
A.3 | Further Gross-Up Payments as Determined by the IRS . If the Internal Revenue Service determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax) in excess of the amount, if any, previously determined by the Accounting Firm, the Company will make further Goss-Up Payments to the Executive in cash and in such amounts as are necessary to put the Executive in the same position, after payment |
Exhibits Page 2 of 5
of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Company will make any additional Gross-Up Payments required by this Section A.3 not later than the due date of any payment indicated by the Internal Revenue Service with respect to the underlying matters to which the additional Gross-Up relates. |
A.4 | Contest of IRS Determination by the Company . If the Company desires to contest any determination by the Internal Revenue Service with respect to the amount of excise tax under Section 4999, the Executive will, upon receipt from the Company of an unconditional written undertaking to indemnify and hold the Executive harmless (on an after tax basis) from any and all adverse consequences that might arise from the contesting of that determination, cooperate with the Company in that contest at the Companys sole expense. Nothing in this Section A will require the Executive to incur any expense other than expenses with respect to which the Company has paid to the Executive sufficient sums so that after the payment of the expense by the Executive and taking into account the payment by the Company with respect to that expense and any and all taxes that may be imposed upon the Executive as a result of the Executives receipt of that payment, the net effect is no cost to the Executive. Nothing in this Section A will require the Executive to extend the statute of limitations with respect to any item or issue in the Executives tax returns other than, exclusively, the excise tax under Section 4999. If, as the result of the contest of any assertion by the Internal Revenue Service with respect to excise tax under Section 4999, the Executive receives a refund of a Section 4999 excise tax previously paid and/or any interest with respect thereto, the Executive will promptly pay to the Company such amount as will leave the Executive, net of the repayment and all tax effects, in the same position, after all taxes and interest, that the Executive would have been in if the refunded excise tax had never been paid. To assure compliance with Section 409A, the Company will make payments to the Executive with respect to expenses as contemplated in this Section A.4 subject to and as provided in Sections B.1 and B.3. | ||
A.5 | Accounting Firm Fees and Expenses . The Company will bear and pay all fees and expenses of the Accounting Firm for services performed pursuant to this Section A (Applicable Fees and Expenses). To assure compliance with Section 409A, the Company will pay any Applicable Fees and Expenses subject to and as provided in Sections B.1 and B.3. |
B. | Compliance with Section 409A . |
B.1 | Six Month Delay on Certain Payments, Benefits, and Reimbursements . If the Executive is a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Employment Agreement that constitutes a deferral of compensation within the meaning of Section 409A, that is to be paid or provided as a result of a separation from service within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a Scheduled Time) that is on or before the date (the Six Month Date) that is exactly six months after the Termination Date (other than |
Exhibits Page 3 of 5
payments, benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Internal Revenue Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the Seventh Month after the Termination Date), except that if the Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of the Executives death and thereafter paid or provided not later than 30 days after the date of death. |
B.2 | Earlier Payment if Not a Specified Employee . If the Executive is not a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, any lump sum payment based on base salary that is to be made by the Company to the Executive pursuant to either of Paragraph 4(a) or 5(d) will be made by the Company to the Executive during the 30-day period that begins exactly 60 days after the Termination Date rather than during the Seventh Month after the Termination Date. | ||
B.3 | Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (a) any reimbursement of eligible expenses will be paid within 30 days following the Executives written request for reimbursement; provided that the Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that the Company can make the reimbursement within the time periods required by Section 409A; (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (c) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit. | ||
B.4 | Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Employment Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. The Company and the Executive intend that the payments and benefits provided under this Employment Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Employment Agreement is to be construed, administered, and governed in a manner that effects that intent and the Company will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Employment Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon the Executive. |
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B.5 | Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase termination of employment and words and phrases of similar import mean a separation from service with the Company within the meaning of Section 409A. The Executive and the Company will take all steps necessary (including taking into account this Section B.5 when considering any further agreement regarding provision of services by the Executive to the Company after the Termination Date) to ensure that (a) any termination of employment under this Employment Agreement constitutes a separation from service within the meaning of Section 409A, and (b) the Termination Date is the date on which the Executive experiences a separation from service within the meaning of Section 409A. |
C. | Definitions . |
C.1 | Accounting Firm . The term Accounting Firm means the independent auditors of the Company for the fiscal year immediately preceding the earlier of (a) the year in which the Termination Date occurred, or (b) the year, if any, in which occurred the first Change of Control occurring after the date of this Employment Agreement, and that firms successor or successors; unless that firm is unable or unwilling to serve and perform in the capacity contemplated by this Employment Agreement, in which case the Company must select another accounting firm that (x) is of recognized regional or national standing and (y) is not then the independent auditors for the Company or any affiliated corporation. | ||
C.2 | Change in Ownership or Control . The term Change in Ownership or Control has the meaning given to that term (without initial caps) in the Treasury Regulations published under Section 280G. | ||
C.3 | Sections 280G, 409A, and 4999 . Each of the terms Section 280G, Section 409A, and Section 4999, respectively, means that numbered section of the Internal Revenue Code. References in this Employment Agreement to any of these sections are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to that specific section by the U.S. Department of Treasury or the Internal Revenue Service. |
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1. | Employment. |
(a) | The Company hereby employs the Executive as its Executive Vice President of Property Management, and the Executive hereby accepts such employment, on the terms and subject to the conditions hereinafter set forth. | ||
(b) | During the term of this Employment Agreement, the Executive shall be and have the title of Executive Vice President of Property Management and shall devote all of his business time and all reasonable efforts to his employment and perform diligently such duties as are customarily performed by Executive Vice Presidents of Property Management of companies similar in size to, and in a similar business as, the Company, together with such other duties as may be reasonably requested from time to time by the President or Chief Executive Officer of the Company or the Board of Directors of the Company (the Board), which duties shall be consistent with his positions previously set forth and as provided in Paragraph 2. |
2. | Term and Positions. |
(a) | The period of employment of the Executive by the Company shall, subject to earlier termination as provided in this Employment Agreement, continue until December 31, 2009, with automatic one year renewals thereafter. 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. | ||
(b) | During the term of this Employment Agreement, the Executive shall be entitled to serve as the Executive Vice President of Property Management of the Company. For service as an officer and 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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and any Indemnification Agreement between the Company and the Executive that was in effect as of December 28, 2008 and as the same may be amended from time to time thereafter (the Indemnification Agreement). |
(c) | If: |
(i) | the Company materially changes the Executives duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without his consent; | ||
(ii) | the Executives place of employment or the principal executive offices of the Company are located more than fifty (50) miles from the geographical center of Cleveland, Ohio; or | ||
(iii) | 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; |
then in any 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)). |
(d) | The Executive shall be deemed not to have consented to any written proposal calling for a material change in his duties and responsibilities unless the Executive shall give written notice of his consent thereto to the Board within fifteen (15) days after receipt of such written proposal. If the Executive shall not have given such consent, the Company shall have the opportunity to withdraw such proposed material change by written notice to the Executive given within ten (10) days after the end of said fifteen (15) day period. | ||
(e) | Notwithstanding anything in this Employment Agreement to the contrary, if there shall occur a Change in Control and a Triggering Event (as those terms are 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)) under circumstances entitling the Executive to payments and benefits as specified in Article II, Paragraph 1 of 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 the Executive hereunder up to and including the Termination Date (as defined in Paragraph 5(f)). |
3. | Compensation. | |
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. |
(a) | The Company shall pay to the Executive a base salary payable in accordance with the Companys usual pay practices (and in any event no less frequently than monthly) of not less than Two Hundred Forty Thousand Dollars ($240,000) per annum, subject to such increases as the Board may approve. |
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(b) | In addition to an annual base salary, if the Executive achieves the factors and criteria for bonus payments hereinafter described for any fiscal year of the Company throughout which the Executive is employed by the Company, then the Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of the fiscal year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. The Companys award of bonus compensation to the Executive shall be determined by the factors and criteria, including the financial performance of the Company and the performance by the Executive of his duties hereunder, that may be established from time to time for the calculation of bonus awards by the Executive Compensation Committee (the Committee) of the Board. (Note that in certain circumstances the Executive may be entitled to a pro rata bonus for a partial fiscal year of the Company as provided in Paragraph 4(a) or 5(d).) | ||
(c) | The Company shall provide to the Executive such life, disability, medical, hospitalization and dental insurance for the Executive, his spouse and eligible family members as may be determined by the Board to be consistent with industry standards. | ||
(d) | 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 Employment Agreement shall or shall be deemed to in any way affect the Executives rights and benefits thereunder except as expressly provided herein). | ||
(e) | The Executive shall be entitled to such periods of vacation and sick leave allowance each year as are determined by the Chief Executive Officer or the President of the Company in his reasonable and good faith discretion, which in any event shall be not less than four weeks per year or as otherwise provided under the Companys vacation and sick leave policy for executive officers. | ||
(f) | 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, including, without limitation, outperformance award plans. The Executives 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. | ||
(g) | The Company shall reimburse the Executive or provide the Executive 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 Companys business. The Executive shall furnish such documentation with respect to reimbursement to be paid hereunder as the Company shall reasonably request. | ||
(h) | The Company shall name the Executive as a social member under the Companys membership at Barrington Country Club during the term of this Employment Agreement, shall bear the cost of regular social membership fees, assessments and dues incurred there during the term of this Employment Agreement and shall reimburse the Executive for the amount of any charge actually and reasonably incurred at Barrington Country Club in the conduct of the Companys business. |
4. | Payment in the Event of Death or Disability. |
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(a) | Except as otherwise provided in Paragraph 4(a)(i), in the event of the Executives death or if the Company terminates the Executives 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 the successors and assigns of the Executive in the event of his death) an amount equal to the sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus (y) a bonus amount prorated up to and including the Termination Date and determined as specified in Paragraph 4(a)(ii) (a Pro Rata Bonus Amount), and shall continue the benefits described in Paragraph 3(c) for the Executive (except in the case of death) and the Executives family for a period of one (1) year. |
(i) | 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 Executives personal representative has timely executed a Release as contemplated by Paragraph 6(c) and has not revoked such Release during any applicable revocation period. | ||
(ii) | The Pro Rata Bonus Amount shall be determined by first calculating a pro forma full year annual bonus amount for the Executive for the entire fiscal year in which the termination occurs in the manner specified in the last sentence of this Paragraph 4(a)(ii) and then multiplying the amount of the pro forma full year annual bonus amount (so calculated) by a fraction, the numerator of which is the number of days in that portion of the fiscal year ending on the Termination Date and the denominator of which is the number of days in the entire fiscal year. The pro forma full year annual bonus amount shall be calculated on the same date and in the same manner as if the Executives employment had continued throughout the end of the fiscal year, using actual results for the entire fiscal year, and, insofar as the Executives individual performance may be a factor, assuming that the Executive had performed throughout the fiscal year at the same level at which the Executive actually performed during the fiscal year up to the Termination Date. |
(b) | The Company will pay the amount equal to one year of salary pursuant to Paragraph 4(a)(x) (i) in the event of the Executives death, as soon as practicable following the Executives death, but in no event later than March 15 of the year after the year in which the Executives death occurs (provided that neither the Executive nor the Executives estate may designate the taxable year of payment), and (ii) in the event of the Companys termination of the Executives employment by reason of the Executives becoming disabled, except as otherwise provided in Section B.2 of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B, during the Seventh Month after the Termination Date (as defined in Section B.1 of the Tax Provision Exhibit). The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 4(a)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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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(c) | For purposes of this Employment Agreement, the Executive shall become disabled only in the event of a permanent disability. Executives 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 event either the Company or the Executive, after receipt of notice of the Executives disability from the other, dispute that the Executives 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 a written statement to the effect that in the physicians opinion, based on the physicians diagnosis, the Executive is capable of resuming his employment and devoting 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. |
5. | Termination. |
(a) | The employment of the Executive under this Employment Agreement, and the terms hereof, may be terminated by the Company: |
(i) | on the death of the Executive or if the Executive becomes disabled (as previously defined); | ||
(ii) | for cause at any time by action of the Board. For purposes hereof, the term cause shall mean: |
(A) | The Executives 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 Executives 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 | ||
(B) | The Executives material breach of any 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 |
(iii) | without cause pursuant to written notice provided to the Executive not less than ninety (90) days in advance of the Termination Date. |
The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Companys 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. |
(b) | 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, |
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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 which the Executive 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 Executives employment for cause. Expenses of the arbitration shall be borne equally by the parties except as otherwise determined by the arbitrator. |
(c) | 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 the Executive hereunder up to and including the Termination Date. | ||
(d) | 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(e)), 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 sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (y) a Pro Rata Bonus Amount (determined in the same manner as provided in Paragraph 4(a) in the event of termination due to death or disability), and shall continue the benefits described in Paragraph 3(c) for a period of one (1) year. |
(i) | 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. |
(e) | Except as otherwise provided in Section B.2 of the Tax Provision Exhibit, (i) the Company will pay the amount equal to one year of salary pursuant to Paragraph 5(d)(x) during the Seventh Month after the Termination Date. The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 5(d)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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. | ||
(f) | For all purposes of this Employment Agreement, the term Termination Date means the date on which the Executives employment with the Company terminates. |
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6. | Release. This Paragraph 6 will apply only upon termination of the Executives 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)). |
(a) | Presentation of Release by the Company . If this Paragraph 6 applies, the Company may present to the Executive (or in the case of the Executives death or legal incapacity, to the Executives 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 Executives 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 in which the Company advises the Executive (or the Executives personal representative) that the Release is being presented in accordance with this Paragraph 6 and that a failure by the Executive (or the Executives personal representative) to execute and return the Release as contemplated by Paragraph 6(c) would relieve the Company of the obligation to make payments otherwise due to the Executive (or to the Executives personal representative) under one or more portions of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(b) | Effect of Failure by the Company to Present Release . If the Company fails to present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Company will be deemed to have waived the requirement that the Executive (or the Executives personal representative) execute a Release as a condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(c) | Execution of Release by the Executive or the Executives Personal Representative . If the Company does present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Executive (or the Executives personal representative) will have until 50 days after the Termination Date (i.e., at least 29 days after presentation of the Release to the Executive (or the Executives personal representative)) within which to deliver an executed copy of the Release to the Company and thereby satisfy the condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be, provided that the Executive (or the Executives personal representative) does not revoke the execution of the Release during any applicable revocation period. | ||
(d) | Effect of Failure to Execute Release or of Revocation of Release . If the Executive (or the Executives personal representative) fails to deliver an executed copy of the Release to the Company within 50 days after the Termination Date or revokes the execution of the Release during any applicable revocation period, the Executive (or the Executives personal representative) will be deemed to have waived the right to receive all payments under either of Paragraph 4(a) or Paragraph 5(d), as the case may be, that were conditioned on the Release. |
7. | Covenants and Confidential Information. |
(a) | The Executive acknowledges the Companys reliance and expectation of the Executives continued commitment to performance of the Executives duties and responsibilities |
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during the term of this Employment Agreement. In light of such reliance and expectation on the part of the Company, during the term of this Employment Agreement and for a period of one (1) year thereafter (and, as to clause (ii) of this subparagraph (a), at any time during and after the term of this Employment Agreement), the Executive shall not, directly or indirectly do or suffer either of the following: |
(i) | own, manage, control or participate in the ownership, management or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor or otherwise with, any other corporation, partnership, proprietorship, firm, association or other business entity engaged in the business of, or otherwise engage in the business of, acquiring, owning, developing or managing commercial shopping centers; provided, however, that the ownership of not more than one percent (1%) of any class of publicly traded securities of any entity shall not be deemed a violation of this covenant; or | ||
(ii) | disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, the Company, any confidential information relating to the Companys operations, properties or otherwise to its particular business or other trade secrets of the Company, it being acknowledged by the Executive that all such information regarding the business of the Company compiled or obtained by, or furnished to, the Executive while the Executive shall have been employed by or associated with the Company is confidential information and the Companys exclusive property; provided, however, that the foregoing restrictions shall not apply to the extent that such information (A) is clearly obtainable in the public domain, (B) becomes obtainable in the public domain, except by reason of the breach by the Executive of the terms hereof, (C) was not acquired by the Executive in connection with the Executives employment or affiliation with the Company, (D) was not acquired by the Executive from the Company or its representatives or (E) is required to be disclosed by rule of law or by order of a court or governmental body or agency. |
(b) | The Executive will not directly or indirectly during the term of this Employment Agreement and for a period of one (1) year after the expiration of this Employment Agreement or the termination of Executives employment for any reason, solicit or induce or attempt to solicit or induce any employee(s) of the Company and/or any subsidiary, affiliated or related companies to terminate their employment with the Company and/or any subsidiary, affiliated or related companies. | ||
(c) | The Executive agrees and understands that the remedy at law for any breach by the Executive of this Paragraph 7 will be inadequate and that the damages following from such breach are not readily susceptible to being measured in monetary terms. Accordingly, it is acknowledged that, upon adequate proof of the Executives violation of any legally enforceable provision of this Paragraph 7, the Company shall be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach. Nothing in this Paragraph 7 shall be deemed to limit the Companys remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 7 which may be pursued or availed of by the Company. | ||
(d) | The Executive has carefully considered the nature and extent of the restrictions upon him and the rights and remedies conferred upon the Company under this Paragraph 7, and hereby acknowledges and agrees that the same are reasonable in time and territory, are |
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designed to eliminate competition which otherwise would be unfair to the Company, do not stifle the inherent skill and experience of the Executive, would not operate as a bar to the Executives sole means of support, are fully required to protect the legitimate interests of the Company and do not confer a benefit upon the Company disproportionate to the detriment to the Executive. |
8. | Tax Provision Exhibit. |
All of the terms of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B are hereby incorporated in this Employment Agreement as fully as if those terms were included in the main text of this Employment Agreement. | ||
9. | Miscellaneous. |
(a) | The Executive represents and warrants that the Executive is not a party to any agreement, contract or understanding, whether employment or otherwise, which would restrict or prohibit the Executive from undertaking or performing employment in accordance with the terms and conditions of this Employment Agreement. | ||
(b) | During the term of this Employment Agreement and thereafter, the Executive will provide reasonable assistance to the Company in litigation and regulatory matters that relate to events that occurred during the Executives period of employment with the Company and its predecessors, and will provide reasonable assistance to the Company with matters relating to its corporate history from the period of the Executives employment with it or its predecessors. The Executive will be entitled to reimbursement of reasonable out-of-pocket travel or related costs and expenses relating to any such cooperation or assistance that occurs following the term of employment. | ||
(c) | The provisions of this Employment Agreement are severable and if any one or more provision may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provision and any partially unenforceable provision to the extent enforceable in any jurisdiction nevertheless shall be binding and enforceable. | ||
(d) | The rights and obligations of the Company under this Employment Agreement shall inure to the benefit of, and shall be binding on, the Company and its successors and assigns, and the rights and obligations (other than obligations to perform services) of the Executive under this Employment Agreement shall inure to the benefit of, and shall be binding upon, the Executive and his heirs, personal representatives and assigns. | ||
(e) | Any controversy or claim arising out of or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Rules of the American Arbitration Association then pertaining in the City of Cleveland, Ohio, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. The arbitrator or arbitrators shall be deemed to possess the powers to issue mandatory orders and restraining orders in connection with such arbitration; provided, however, that nothing in this Paragraph 9(e) shall be construed so as to deny the Company the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Executive of any of the covenants contained in Paragraph 7 hereof. | ||
(f) | Any notice to be given under this Employment Agreement shall be personally delivered in writing or shall have been deemed duly given when received after it is posted in the |
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United States mail, postage prepaid, registered or certified, return receipt requested, and if mailed to the Company, shall be addressed to its principal place of business, attention: President, and if mailed to the Executive, shall be addressed to the Executive at his home address last known on the records of the Company, or at such other address or addresses as either the Company or the Executive may hereafter designate in writing to the other. |
(g) | The failure of either party to enforce any provision or provisions of this Employment Agreement shall not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party thereafter from enforcing each and every other provision of this Employment Agreement. The rights granted the parties herein are cumulative and the waiver of any single remedy shall not constitute a waiver of such partys right to assert all other legal remedies available to it under the circumstances. | ||
(h) | This Employment Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally. No modification, termination or attempted waiver shall be valid unless in writing and signed by the party against whom the same is sought to be enforced. | ||
(i) | This Employment Agreement shall be governed by and construed according to the laws of the State of Ohio. | ||
(j) | Captions and paragraph headings used herein are for convenience and are not a part of this Employment Agreement and shall not be used in construing it. | ||
(k) | Where necessary or appropriate to the meaning hereof, the singular and plural shall be deemed to include each other, and the masculine, feminine and neuter shall be deemed to include each other. |
DEVELOPERS DIVERSIFIED REALTY CORPORATION
|
||||
By: | /s/ Daniel B. Hurwitz | |||
Daniel B. Hurwitz, President and | ||||
Chief Operating Officer | ||||
/s/ John S. Kokinchak | ||||
JOHN S. KOKINCHAK | ||||
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Threshold | Target | Maximum | ||
20% | 40% | 80% |
Threshold | Target | Maximum | ||
12.5% | 25% | 50% |
Exhibits Page 1 of 5
A. | Gross-Up of Payments Deemed to be Excess Parachute Payments . |
A.1 | Acknowledgement; Determination by Accounting Firm . The Company and the Executive acknowledge that, following a Change in Ownership or Control, one or more payments or distributions to be made by the Company or an affiliated entity to or for the benefit of the Executive under this Employment Agreement or the Change in Control Agreement (including, without limitation, the issuance of common shares of the Company; the granting or vesting of restricted shares; and the granting, vesting, exercise or termination of options) (a Payment) may be determined to be an excess parachute payment that is not deductible by the Company or its affiliated entity for Federal income tax purposes and with respect to which the Executive will be subject to an excise tax because of Sections 280G and 4999, respectively, of the Internal Revenue Code. If a Change in Ownership or Control occurs, either the Executive or the Company may direct the Accounting Firm, which, subject to any inconsistent position asserted by the Internal Revenue Service, will make all determinations required to be made under this Section A.1, to determine whether any Payment will be an excess parachute payment and to communicate its determination, together with detailed supporting calculations, to the Company and to the Executive within 30 days after its receipt of the direction from the Executive or the Company, as the case may be. The Company and the Executive will cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. | ||
A.2 | Gross-Up Payments . If the Accounting Firm determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax), the Company will make additional cash payments (each, a Gross-Up Payment) to the Executive, from time to time in such amounts as are necessary to put the Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Companys obligation to make Gross-Up Payments under this Section A is not contingent on termination of the Executives employment with the Company. The Company will make each Gross-Up Payment to the Executive within 30 days of the time that the related Payment constituting an excess parachute payment is paid or provided to the Executive. | ||
A.3 | Further Gross-Up Payments as Determined by the IRS . If the Internal Revenue Service determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax) in excess of the amount, if any, previously determined by the Accounting Firm, the Company will make further Goss-Up Payments to the Executive in cash and in such amounts as are necessary to put the Executive in the same position, after payment |
Exhibits Page 2 of 5
of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Company will make any additional Gross-Up Payments required by this Section A.3 not later than the due date of any payment indicated by the Internal Revenue Service with respect to the underlying matters to which the additional Gross-Up relates. | |||
A.4 | Contest of IRS Determination by the Company . If the Company desires to contest any determination by the Internal Revenue Service with respect to the amount of excise tax under Section 4999, the Executive will, upon receipt from the Company of an unconditional written undertaking to indemnify and hold the Executive harmless (on an after tax basis) from any and all adverse consequences that might arise from the contesting of that determination, cooperate with the Company in that contest at the Companys sole expense. Nothing in this Section A will require the Executive to incur any expense other than expenses with respect to which the Company has paid to the Executive sufficient sums so that after the payment of the expense by the Executive and taking into account the payment by the Company with respect to that expense and any and all taxes that may be imposed upon the Executive as a result of the Executives receipt of that payment, the net effect is no cost to the Executive. Nothing in this Section A will require the Executive to extend the statute of limitations with respect to any item or issue in the Executives tax returns other than, exclusively, the excise tax under Section 4999. If, as the result of the contest of any assertion by the Internal Revenue Service with respect to excise tax under Section 4999, the Executive receives a refund of a Section 4999 excise tax previously paid and/or any interest with respect thereto, the Executive will promptly pay to the Company such amount as will leave the Executive, net of the repayment and all tax effects, in the same position, after all taxes and interest, that the Executive would have been in if the refunded excise tax had never been paid. To assure compliance with Section 409A, the Company will make payments to the Executive with respect to expenses as contemplated in this Section A.4 subject to and as provided in Sections B.1 and B.3. | ||
A.5 | Accounting Firm Fees and Expenses . The Company will bear and pay all fees and expenses of the Accounting Firm for services performed pursuant to this Section A (Applicable Fees and Expenses). To assure compliance with Section 409A, the Company will pay any Applicable Fees and Expenses subject to and as provided in Sections B.1 and B.3. |
B. | Compliance with Section 409A . |
B.1 | Six Month Delay on Certain Payments, Benefits, and Reimbursements . If the Executive is a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Employment Agreement that constitutes a deferral of compensation within the meaning of Section 409A, that is to be paid or provided as a result of a separation from service within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a Scheduled Time) that is on or before the date (the Six Month Date) that is exactly six months after the Termination Date (other than |
Exhibits Page 3 of 5
payments, benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Internal Revenue Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the Seventh Month after the Termination Date), except that if the Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of the Executives death and thereafter paid or provided not later than 30 days after the date of death. | |||
B.2 | Earlier Payment if Not a Specified Employee . If the Executive is not a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, any lump sum payment based on base salary that is to be made by the Company to the Executive pursuant to either of Paragraph 4(a) or 5(d) will be made by the Company to the Executive during the 30-day period that begins exactly 60 days after the Termination Date rather than during the Seventh Month after the Termination Date. | ||
B.3 | Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (a) any reimbursement of eligible expenses will be paid within 30 days following the Executives written request for reimbursement; provided that the Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that the Company can make the reimbursement within the time periods required by Section 409A; (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (c) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit. | ||
B.4 | Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Employment Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. The Company and the Executive intend that the payments and benefits provided under this Employment Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Employment Agreement is to be construed, administered, and governed in a manner that effects that intent and the Company will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Employment Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon the Executive. |
Exhibits Page 4 of 5
B.5 | Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase termination of employment and words and phrases of similar import mean a separation from service with the Company within the meaning of Section 409A. The Executive and the Company will take all steps necessary (including taking into account this Section B.5 when considering any further agreement regarding provision of services by the Executive to the Company after the Termination Date) to ensure that (a) any termination of employment under this Employment Agreement constitutes a separation from service within the meaning of Section 409A, and (b) the Termination Date is the date on which the Executive experiences a separation from service within the meaning of Section 409A. |
C. | Definitions . |
C.1 | Accounting Firm . The term Accounting Firm means the independent auditors of the Company for the fiscal year immediately preceding the earlier of (a) the year in which the Termination Date occurred, or (b) the year, if any, in which occurred the first Change of Control occurring after the date of this Employment Agreement, and that firms successor or successors; unless that firm is unable or unwilling to serve and perform in the capacity contemplated by this Employment Agreement, in which case the Company must select another accounting firm that (x) is of recognized regional or national standing and (y) is not then the independent auditors for the Company or any affiliated corporation. | ||
C.2 | Change in Ownership or Control . The term Change in Ownership or Control has the meaning given to that term (without initial caps) in the Treasury Regulations published under Section 280G. | ||
C.3 | Sections 280G, 409A, and 4999 . Each of the terms Section 280G, Section 409A, and Section 4999, respectively, means that numbered section of the Internal Revenue Code. References in this Employment Agreement to any of these sections are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to that specific section by the U.S. Department of Treasury or the Internal Revenue Service. |
Exhibits Page 5 of 5
1. | Employment. |
(a) | The Company hereby employs the Executive in his current capacity through December 31, 2008 and, effective January 1, 2009, as its Senior Executive Vice President of Development and Leasing, and the Executive hereby accepts such employment, on the terms and subject to the conditions hereinafter set forth. | ||
(b) | During the term of this Employment Agreement, from and after January 1, 2009, the Executive shall be and have the title of Senior Executive Vice President of Development and Leasing and shall devote all of his business time and all reasonable efforts to his employment and perform diligently such duties as are customarily performed by Senior Executive Vice Presidents of Development and Leasing of companies similar in size to, and in a similar business as, the Company, together with such other duties as may be reasonably requested from time to time by the President or Chief Executive Officer of the Company or the Board of Directors of the Company (the Board), which duties shall be consistent with his positions previously set forth and as provided in Paragraph 2. |
2. | Term and Positions. |
(a) | The period of employment of the Executive by the Company shall, subject to earlier termination as provided in this Employment Agreement, continue until December 31, 2009, with automatic one year renewals thereafter. 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. | ||
(b) | During the term of this Employment Agreement, from and after January 1, 2009, the Executive shall be entitled to serve as the Senior Executive Vice President of Development and Leasing of the Company. For service as an officer and 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, and any Indemnification Agreement between the Company and the Executive that was in effect as of |
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December 28, 2008 and as the same may be amended from time to time thereafter (the Indemnification Agreement). |
(c) | If: |
(i) | the Company materially changes the Executives duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without his consent; | ||
(ii) | the Executives place of employment or the principal executive offices of the Company are located more than fifty (50) miles from the geographical center of Cleveland, Ohio; or | ||
(iii) | 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; |
then in any 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)). |
(d) | The Executive shall be deemed not to have consented to any written proposal calling for a material change in his duties and responsibilities unless the Executive shall give written notice of his consent thereto to the Board within fifteen (15) days after receipt of such written proposal. If the Executive shall not have given such consent, the Company shall have the opportunity to withdraw such proposed material change by written notice to the Executive given within ten (10) days after the end of said fifteen (15) day period. | ||
(e) | Notwithstanding anything in this Employment Agreement to the contrary, if there shall occur a Change in Control and a Triggering Event (as those terms are 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)) under circumstances entitling the Executive to payments and benefits as specified in Article II, Paragraph 1 of 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 the Executive hereunder up to and including the Termination Date (as defined in Paragraph 5(f)). |
3. | Compensation. |
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. |
(a) | The Company shall pay to the Executive a base salary payable in accordance with the Companys usual pay practices (and in any event no less frequently than monthly) of not less than Three Hundred Eighty Thousand Dollars ($380,000) per annum (effective January 1, 2009), subject to such increases as the Board may approve. |
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(b) | In addition to an annual base salary, if the Executive achieves the factors and criteria for bonus payments hereinafter described for any fiscal year of the Company throughout which the Executive is employed by the Company, then the Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of the fiscal year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. The Companys award of bonus compensation to the Executive shall be determined by the factors and criteria, including the financial performance of the Company and the performance by the Executive of his duties hereunder, that may be established from time to time for the calculation of bonus awards by the Executive Compensation Committee (the Committee) of the Board. (Note that in certain circumstances the Executive may be entitled to a pro rata bonus for a partial fiscal year of the Company as provided in Paragraph 4(a) or 5(d).) | ||
(c) | The Company shall provide to the Executive such life, disability, medical, hospitalization and dental insurance for the Executive, his spouse and eligible family members as may be determined by the Board to be consistent with industry standards. | ||
(d) | 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 Employment Agreement shall or shall be deemed to in any way affect the Executives rights and benefits thereunder except as expressly provided herein). | ||
(e) | The Executive shall be entitled to such periods of vacation and sick leave allowance each year as are determined by the Chief Executive Officer or the President of the Company in his reasonable and good faith discretion, which in any event shall be not less than four weeks per year or as otherwise provided under the Companys vacation and sick leave policy for executive officers. | ||
(f) | 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 Executives 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. | ||
(g) | The Company shall reimburse the Executive or provide the Executive 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 Companys business. The Executive shall furnish such documentation with respect to reimbursement to be paid hereunder as the Company shall reasonably request. |
4. | Payment in the Event of Death or Disability. |
(a) | Except as otherwise provided in Paragraph 4(a)(i), in the event of the Executives death or if the Company terminates the Executives 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 the successors and assigns of the Executive in the event of his death) an amount equal to the sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus (y) a bonus amount prorated up to and including the Termination Date and determined as specified in Paragraph 4(a)(ii) (a Pro Rata Bonus Amount), and shall continue the |
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benefits described in Paragraph 3(c) for the Executive (except in the case of death) and the Executives family for a period of one (1) year. |
(i) | 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 Executives personal representative has timely executed a Release as contemplated by Paragraph 6(c) and has not revoked such Release during any applicable revocation period. |
(ii) | The Pro Rata Bonus Amount shall be determined by first calculating a pro forma full year annual bonus amount for the Executive for the entire fiscal year in which the termination occurs in the manner specified in the last sentence of this Paragraph 4(a)(ii) and then multiplying the amount of the pro forma full year annual bonus amount (so calculated) by a fraction, the numerator of which is the number of days in that portion of the fiscal year ending on the Termination Date and the denominator of which is the number of days in the entire fiscal year. The pro forma full year annual bonus amount shall be calculated on the same date and in the same manner as if the Executives employment had continued throughout the end of the fiscal year, using actual results for the entire fiscal year, and, insofar as the Executives individual performance may be a factor, assuming that the Executive had performed throughout the fiscal year at the same level at which the Executive actually performed during the fiscal year up to the Termination Date. |
(b) | The Company will pay the amount equal to one year of salary pursuant to Paragraph 4(a)(x) (i) in the event of the Executives death, as soon as practicable following the Executives death, but in no event later than March 15 of the year after the year in which the Executives death occurs (provided that neither the Executive nor the Executives estate may designate the taxable year of payment), and (ii) in the event of the Companys termination of the Executives employment by reason of the Executives becoming disabled, except as otherwise provided in Section B.2 of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B, during the Seventh Month after the Termination Date (as defined in Section B.1 of the Tax Provision Exhibit). The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 4(a)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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. |
(c) | For purposes of this Employment Agreement, the Executive shall become disabled only in the event of a permanent disability. Executives 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 event either the Company or the Executive, after receipt of notice of the Executives disability |
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from the other, dispute that the Executives 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 a written statement to the effect that in the physicians opinion, based on the physicians diagnosis, the Executive is capable of resuming his employment and devoting 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. |
5. | Termination. |
(a) | The employment of the Executive under this Employment Agreement, and the terms hereof, may be terminated by the Company: |
(i) | on the death of the Executive or if the Executive becomes disabled (as previously defined); |
(ii) | for cause at any time by action of the Board. For purposes hereof, the term cause shall mean: |
(A) | The Executives 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 Executives 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 |
(B) | The Executives material breach of any 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 |
(iii) | without cause pursuant to written notice provided to the Executive not less than ninety (90) days in advance of the Termination Date. |
The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Companys 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. |
(b) | 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 which the Executive is entitled hereunder, and if at any time during the pendency of such |
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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 Executives employment for cause. Expenses of the arbitration shall be borne equally by the parties except as otherwise determined by the arbitrator. |
(c) | 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 the Executive hereunder up to and including the Termination Date. | ||
(d) | 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(e)), 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 sum of (x) the Executives then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (y) a Pro Rata Bonus Amount (determined in the same manner as provided in Paragraph 4(a) in the event of termination due to death or disability), and shall continue the benefits described in Paragraph 3(c) for a period of one (1) year. |
(i) | 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. |
(e) | Except as otherwise provided in Section B.2 of the Tax Provision Exhibit, (i) the Company will pay the amount equal to one year of salary pursuant to Paragraph 5(d)(x) during the Seventh Month after the Termination Date. The Company will pay the Pro Rata Bonus Amount pursuant to Paragraph 5(d)(y) on the date on which the Company generally pays bonuses for the fiscal year during which the termination of employment occurred (but not later than March 15 of the immediately following year). To assure compliance with Section 409A of the Internal Revenue Code, the timing of the provision of the benefits described in Paragraph 3(c) 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. |
(f) | For all purposes of this Employment Agreement, the term Termination Date means the date on which the Executives employment with the Company terminates. |
6. | Release. This Paragraph 6 will apply only upon termination of the Executives 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)). |
(a) | Presentation of Release by the Company . If this Paragraph 6 applies, the Company may present to the Executive (or in the case of the Executives death or legal incapacity, to the Executives 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 |
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Executives 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 in which the Company advises the Executive (or the Executives personal representative) that the Release is being presented in accordance with this Paragraph 6 and that a failure by the Executive (or the Executives personal representative) to execute and return the Release as contemplated by Paragraph 6(c) would relieve the Company of the obligation to make payments otherwise due to the Executive (or to the Executives personal representative) under one or more portions of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. |
(b) | Effect of Failure by the Company to Present Release . If the Company fails to present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Company will be deemed to have waived the requirement that the Executive (or the Executives personal representative) execute a Release as a condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be. | ||
(c) | Execution of Release by the Executive or the Executives Personal Representative . If the Company does present a Release and covering message to the Executive (or the Executives personal representative) as contemplated by Paragraph 6(a) within 21 days of the Termination Date, the Executive (or the Executives personal representative) will have until 50 days after the Termination Date (i.e., at least 29 days after presentation of the Release to the Executive (or the Executives personal representative)) within which to deliver an executed copy of the Release to the Company and thereby satisfy the condition to receiving payments under any portion of either of Paragraph 4(a) or Paragraph 5(d), as the case may be, provided that the Executive (or the Executives personal representative) does not revoke the execution of the Release during any applicable revocation period. | ||
(d) | Effect of Failure to Execute Release or of Revocation of Release . If the Executive (or the Executives personal representative) fails to deliver an executed copy of the Release to the Company within 50 days after the Termination Date or revokes the execution of the Release during any applicable revocation period, the Executive (or the Executives personal representative) will be deemed to have waived the right to receive all payments under either of Paragraph 4(a) or Paragraph 5(d), as the case may be, that were conditioned on the Release. |
7. | Covenants and Confidential Information. |
(a) | The Executive acknowledges the Companys reliance and expectation of the Executives continued commitment to performance of the Executives duties and responsibilities during the term of this Employment Agreement. In light of such reliance and expectation on the part of the Company, during the term of this Employment Agreement and for a period of one (1) year thereafter (and, as to clause (ii) of this subparagraph (a), at any time during and after the term of this Employment Agreement), the Executive shall not, directly or indirectly do or suffer either of the following: |
(i) | own, manage, control or participate in the ownership, management or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor or otherwise with, any other corporation, partnership, proprietorship, firm, association or other business entity engaged in |
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the business of, or otherwise engage in the business of, acquiring, owning, developing or managing commercial shopping centers; provided, however, that the ownership of not more than one percent (1%) of any class of publicly traded securities of any entity shall not be deemed a violation of this covenant; or |
(ii) | disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, the Company, any confidential information relating to the Companys operations, properties or otherwise to its particular business or other trade secrets of the Company, it being acknowledged by the Executive that all such information regarding the business of the Company compiled or obtained by, or furnished to, the Executive while the Executive shall have been employed by or associated with the Company is confidential information and the Companys exclusive property; provided, however, that the foregoing restrictions shall not apply to the extent that such information (A) is clearly obtainable in the public domain, (B) becomes obtainable in the public domain, except by reason of the breach by the Executive of the terms hereof, (C) was not acquired by the Executive in connection with the Executives employment or affiliation with the Company, (D) was not acquired by the Executive from the Company or its representatives or (E) is required to be disclosed by rule of law or by order of a court or governmental body or agency. |
(b) | The Executive will not directly or indirectly during the term of this Employment Agreement and for a period of one (1) year after the expiration of this Employment Agreement or the termination of Executives employment for any reason, solicit or induce or attempt to solicit or induce any employee(s) of the Company and/or any subsidiary, affiliated or related companies to terminate their employment with the Company and/or any subsidiary, affiliated or related companies. | ||
(c) | The Executive agrees and understands that the remedy at law for any breach by the Executive of this Paragraph 7 will be inadequate and that the damages following from such breach are not readily susceptible to being measured in monetary terms. Accordingly, it is acknowledged that, upon adequate proof of the Executives violation of any legally enforceable provision of this Paragraph 7, the Company shall be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach. Nothing in this Paragraph 7 shall be deemed to limit the Companys remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 7 which may be pursued or availed of by the Company. | ||
(d) | The Executive has carefully considered the nature and extent of the restrictions upon him and the rights and remedies conferred upon the Company under this Paragraph 7, and hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to eliminate competition which otherwise would be unfair to the Company, do not stifle the inherent skill and experience of the Executive, would not operate as a bar to the Executives sole means of support, are fully required to protect the legitimate interests of the Company and do not confer a benefit upon the Company disproportionate to the detriment to the Executive. |
8. | Tax Provision Exhibit. |
All of the terms of the Tax Provision Exhibit attached to this Employment Agreement as Exhibit B are hereby incorporated in this Employment Agreement as fully as if those terms were included in the main text of this Employment Agreement. |
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9. | Miscellaneous. |
(a) | The Executive represents and warrants that the Executive is not a party to any agreement, contract or understanding, whether employment or otherwise, which would restrict or prohibit the Executive from undertaking or performing employment in accordance with the terms and conditions of this Employment Agreement. | ||
(b) | During the term of this Employment Agreement and thereafter, the Executive will provide reasonable assistance to the Company in litigation and regulatory matters that relate to events that occurred during the Executives period of employment with the Company and its predecessors, and will provide reasonable assistance to the Company with matters relating to its corporate history from the period of the Executives employment with it or its predecessors. The Executive will be entitled to reimbursement of reasonable out-of-pocket travel or related costs and expenses relating to any such cooperation or assistance that occurs following the term of employment. | ||
(c) | The provisions of this Employment Agreement are severable and if any one or more provision may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provision and any partially unenforceable provision to the extent enforceable in any jurisdiction nevertheless shall be binding and enforceable. | ||
(d) | The rights and obligations of the Company under this Employment Agreement shall inure to the benefit of, and shall be binding on, the Company and its successors and assigns, and the rights and obligations (other than obligations to perform services) of the Executive under this Employment Agreement shall inure to the benefit of, and shall be binding upon, the Executive and his heirs, personal representatives and assigns. | ||
(e) | Any controversy or claim arising out of or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Rules of the American Arbitration Association then pertaining in the City of Cleveland, Ohio, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. The arbitrator or arbitrators shall be deemed to possess the powers to issue mandatory orders and restraining orders in connection with such arbitration; provided, however, that nothing in this Paragraph 9(e) shall be construed so as to deny the Company the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Executive of any of the covenants contained in Paragraph 7 hereof. | ||
(f) | Any notice to be given under this Employment Agreement shall be personally delivered in writing or shall have been deemed duly given when received after it is posted in the United States mail, postage prepaid, registered or certified, return receipt requested, and if mailed to the Company, shall be addressed to its principal place of business, attention: President, and if mailed to the Executive, shall be addressed to the Executive at his home address last known on the records of the Company, or at such other address or addresses as either the Company or the Executive may hereafter designate in writing to the other. | ||
(g) | The failure of either party to enforce any provision or provisions of this Employment Agreement shall not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party thereafter from enforcing each and every other provision of this Employment Agreement. The rights granted the parties herein are cumulative and the waiver of any single remedy shall not |
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constitute a waiver of such partys right to assert all other legal remedies available to it under the circumstances. | |||
(h) | This Employment Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally. No modification, termination or attempted waiver shall be valid unless in writing and signed by the party against whom the same is sought to be enforced. | ||
(i) | This Employment Agreement shall be governed by and construed according to the laws of the State of Ohio. | ||
(j) | Captions and paragraph headings used herein are for convenience and are not a part of this Employment Agreement and shall not be used in construing it. | ||
(k) | Where necessary or appropriate to the meaning hereof, the singular and plural shall be deemed to include each other, and the masculine, feminine and neuter shall be deemed to include each other. |
DEVELOPERS DIVERSIFIED REALTY CORPORATION
|
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By: | /s/ Daniel B. Hurwitz | |||
Daniel B. Hurwitz, President and | ||||
Chief Operating Officer | ||||
/s/ Paul Freddo | ||||
PAUL FREDDO | ||||
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Threshold | Target | Maximum | ||
25% | 50% | 100% |
Exhibits Page 1 of 5
A. | Gross-Up of Payments Deemed to be Excess Parachute Payments . |
A.1 | Acknowledgement; Determination by Accounting Firm . The Company and the Executive acknowledge that, following a Change in Ownership or Control, one or more payments or distributions to be made by the Company or an affiliated entity to or for the benefit of the Executive under this Employment Agreement or the Change in Control Agreement (including, without limitation, the issuance of common shares of the Company; the granting or vesting of restricted shares; and the granting, vesting, exercise or termination of options) (a Payment) may be determined to be an excess parachute payment that is not deductible by the Company or its affiliated entity for Federal income tax purposes and with respect to which the Executive will be subject to an excise tax because of Sections 280G and 4999, respectively, of the Internal Revenue Code. If a Change in Ownership or Control occurs, either the Executive or the Company may direct the Accounting Firm, which, subject to any inconsistent position asserted by the Internal Revenue Service, will make all determinations required to be made under this Section A.1, to determine whether any Payment will be an excess parachute payment and to communicate its determination, together with detailed supporting calculations, to the Company and to the Executive within 30 days after its receipt of the direction from the Executive or the Company, as the case may be. The Company and the Executive will cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. | ||
A.2 | Gross-Up Payments . If the Accounting Firm determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax), the Company will make additional cash payments (each, a Gross-Up Payment) to the Executive, from time to time in such amounts as are necessary to put the Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Companys obligation to make Gross-Up Payments under this Section A is not contingent on termination of the Executives employment with the Company. The Company will make each Gross-Up Payment to the Executive within 30 days of the time that the related Payment constituting an excess parachute payment is paid or provided to the Executive. | ||
A.3 | Further Gross-Up Payments as Determined by the IRS . If the Internal Revenue Service determines that any Payment gives rise, directly or indirectly, to liability on the part of the Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax) in excess of the amount, if any, previously determined by the Accounting Firm, the Company will make further Goss-Up Payments to the Executive in cash and in such amounts as are necessary to put the Executive in the same position, after payment |
Exhibits Page 2 of 5
of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as the Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of the Company) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. The Company will make any additional Gross-Up Payments required by this Section A.3 not later than the due date of any payment indicated by the Internal Revenue Service with respect to the underlying matters to which the additional Gross-Up relates. | |||
A.4 | Contest of IRS Determination by the Company . If the Company desires to contest any determination by the Internal Revenue Service with respect to the amount of excise tax under Section 4999, the Executive will, upon receipt from the Company of an unconditional written undertaking to indemnify and hold the Executive harmless (on an after tax basis) from any and all adverse consequences that might arise from the contesting of that determination, cooperate with the Company in that contest at the Companys sole expense. Nothing in this Section A will require the Executive to incur any expense other than expenses with respect to which the Company has paid to the Executive sufficient sums so that after the payment of the expense by the Executive and taking into account the payment by the Company with respect to that expense and any and all taxes that may be imposed upon the Executive as a result of the Executives receipt of that payment, the net effect is no cost to the Executive. Nothing in this Section A will require the Executive to extend the statute of limitations with respect to any item or issue in the Executives tax returns other than, exclusively, the excise tax under Section 4999. If, as the result of the contest of any assertion by the Internal Revenue Service with respect to excise tax under Section 4999, the Executive receives a refund of a Section 4999 excise tax previously paid and/or any interest with respect thereto, the Executive will promptly pay to the Company such amount as will leave the Executive, net of the repayment and all tax effects, in the same position, after all taxes and interest, that the Executive would have been in if the refunded excise tax had never been paid. To assure compliance with Section 409A, the Company will make payments to the Executive with respect to expenses as contemplated in this Section A.4 subject to and as provided in Sections B.1 and B.3. | ||
A.5 | Accounting Firm Fees and Expenses . The Company will bear and pay all fees and expenses of the Accounting Firm for services performed pursuant to this Section A (Applicable Fees and Expenses). To assure compliance with Section 409A, the Company will pay any Applicable Fees and Expenses subject to and as provided in Sections B.1 and B.3. |
B. | Compliance with Section 409A . |
B.1 | Six Month Delay on Certain Payments, Benefits, and Reimbursements . If the Executive is a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Employment Agreement that constitutes a deferral of compensation within the meaning of Section 409A, that is to be paid or provided as a result of a separation from service within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a Scheduled Time) that is on or before the date (the Six Month Date) that is exactly six months after the Termination Date (other than |
Exhibits Page 3 of 5
payments, benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Internal Revenue Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the Seventh Month after the Termination Date), except that if the Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of the Executives death and thereafter paid or provided not later than 30 days after the date of death. | |||
B.2 | Earlier Payment if Not a Specified Employee . If the Executive is not a specified employee for purposes of Section 409A, as determined under the Companys policy for determining specified employees on the Termination Date, any lump sum payment based on base salary that is to be made by the Company to the Executive pursuant to either of Paragraph 4(a) or 5(d) will be made by the Company to the Executive during the 30-day period that begins exactly 60 days after the Termination Date rather than during the Seventh Month after the Termination Date. | ||
B.3 | Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits described in Paragraph 3(c) pursuant to either of Paragraph 4(a) or 5(d) or pursuant to any other section of this Employment Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (a) any reimbursement of eligible expenses will be paid within 30 days following the Executives written request for reimbursement; provided that the Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that the Company can make the reimbursement within the time periods required by Section 409A; (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (c) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit. | ||
B.4 | Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Employment Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. The Company and the Executive intend that the payments and benefits provided under this Employment Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Employment Agreement is to be construed, administered, and governed in a manner that effects that intent and the Company will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Employment Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon the Executive. |
Exhibits Page 4 of 5
B.5 | Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase termination of employment and words and phrases of similar import mean a separation from service with the Company within the meaning of Section 409A. The Executive and the Company will take all steps necessary (including taking into account this Section B.5 when considering any further agreement regarding provision of services by the Executive to the Company after the Termination Date) to ensure that (a) any termination of employment under this Employment Agreement constitutes a separation from service within the meaning of Section 409A, and (b) the Termination Date is the date on which the Executive experiences a separation from service within the meaning of Section 409A. |
C. | Definitions . |
C.1 | Accounting Firm . The term Accounting Firm means the independent auditors of the Company for the fiscal year immediately preceding the earlier of (a) the year in which the Termination Date occurred, or (b) the year, if any, in which occurred the first Change of Control occurring after the date of this Employment Agreement, and that firms successor or successors; unless that firm is unable or unwilling to serve and perform in the capacity contemplated by this Employment Agreement, in which case the Company must select another accounting firm that (x) is of recognized regional or national standing and (y) is not then the independent auditors for the Company or any affiliated corporation. | ||
C.2 | Change in Ownership or Control . The term Change in Ownership or Control has the meaning given to that term (without initial caps) in the Treasury Regulations published under Section 280G. | ||
C.3 | Sections 280G, 409A, and 4999 . Each of the terms Section 280G, Section 409A, and Section 4999, respectively, means that numbered section of the Internal Revenue Code. References in this Employment Agreement to any of these sections are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to that specific section by the U.S. Department of Treasury or the Internal Revenue Service. |
Exhibits Page 5 of 5
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 Employers outstanding securities; |
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(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. |
1. | Upon the occurrence of a Change in Control on or after the date of this Agreement, 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 total amount of base salary payable during the term remaining after the date of the Change in Control, if any, of the Amended and Restated Employment Agreement of even date herewith between Employer and Employee. In addition, Employer shall, at its expense, provide Executive, and his family, with life, health, hospitalization, vision, dental, disability and accidental death and dismemberment insurance in an amount not less than that provided at the time of the Change in Control, until the earlier of (i) in the event that Executive shall become employed by another employer after a Change in Control, 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 Change in Control. | |
2. | Employer will pay the lump sum amount pursuant to Article II, Paragraph 1 to Executive in immediately available funds within the seven-day period following the occurrence of the Change in Control. 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 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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DEVELOPERS DIVERSIFIED REALTY CORPORATION
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By: | /s/ Daniel B. Hurwitz | |||
Daniel B. Hurwitz, President and | ||||
Chief Operating Officer | ||||
/s/ David M. Jacobstein | ||||
DAVID M. JACOBSTEIN | ||||
Page 5
A. | Gross-Up of Payments Deemed to be Excess Parachute Payments . |
A.1 | Acknowledgement; Determination by Accounting Firm . Employer and Executive acknowledge that, following a Change in Ownership or Control, one or more payments or distributions to be made by Employer or an affiliated entity to or for the benefit of Executive under this Agreement or Executives Amended and Restated Employment Agreement (including, without limitation, the issuance of common shares of Employer; the granting or vesting of restricted shares; and the granting, vesting, exercise or termination of options) (a Payment) may be determined to be an excess parachute payment that is not deductible by Employer or its affiliated entity for Federal income tax purposes and with respect to which Executive will be subject to an excise tax because of Sections 280G and 4999, respectively, of the Code. If a Change in Ownership or Control occurs, either Executive or Employer may direct the Accounting Firm, which, subject to any inconsistent position asserted by the Internal Revenue Service, will make all determinations required to be made under this Section A.1, to determine whether any Payment will be an excess parachute payment and to communicate its determination, together with detailed supporting calculations, to Employer and to Executive within 30 days after its receipt of the direction from Executive or Employer, as the case may be. Employer and Executive will cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. | ||
A.2 | Gross-Up Payments . If the Accounting Firm determines that any Payment gives rise, directly or indirectly, to liability on the part of Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax), Employer will make additional cash payments (each, a Gross-Up Payment) to Executive, from time to time in such amounts as are necessary to put Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between Executive and Employer, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of Employer) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. Employers obligation to make Gross-Up Payments under this Section A is not contingent on termination of Executives employment with Employer. Employer will make each Gross-Up Payment to Executive within 30 days of the time that the related Payment constituting an excess parachute payment is paid or provided to Executive. | ||
A.3 | Further Gross-Up Payments as Determined by the IRS . If the Internal Revenue Service determines that any Payment gives rise, directly or indirectly, to liability on the part of Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax) in excess of the amount, if any, previously determined by the Accounting Firm, Employer will make further Goss-Up Payments to Executive in cash and in |
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such amounts as are necessary to put Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between Executive and Employer, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of Employer) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. Employer will make any additional Gross-Up Payments required by this Section A.3 not later than the due date of any payment indicated by the Internal Revenue Service with respect to the underlying matters to which the additional Gross-Up relates. | |||
A.4 | Contest of IRS Determination by Employer . If Employer desires to contest any determination by the Internal Revenue Service with respect to the amount of excise tax under Section 4999, Executive will, upon receipt from Employer of an unconditional written undertaking to indemnify and hold Executive harmless (on an after tax basis) from any and all adverse consequences that might arise from the contesting of that determination, cooperate with Employer in that contest at Employers sole expense. Nothing in this Section A will require Executive to incur any expense other than expenses with respect to which Employer has paid to Executive sufficient sums so that after the payment of the expense by Executive and taking into account the payment by Employer with respect to that expense and any and all taxes that may be imposed upon Executive as a result of Executives receipt of that payment, the net effect is no cost to Executive. Nothing in this Section A will require Executive to extend the statute of limitations with respect to any item or issue in Executives tax returns other than, exclusively, the excise tax under Section 4999. If, as the result of the contest of any assertion by the Internal Revenue Service with respect to excise tax under Section 4999, Executive receives a refund of a Section 4999 excise tax previously paid and/or any interest with respect thereto, Executive will promptly pay to Employer such amount as will leave Executive, net of the repayment and all tax effects, in the same position, after all taxes and interest, that Executive would have been in if the refunded excise tax had never been paid. To assure compliance with Section 409A, Employer will make payments to Executive with respect to expenses as contemplated in this Section A.4 subject to and as provided in Sections B.1 and B.3. | ||
A.5 | Accounting Firm Fees and Expenses . Employer will bear and pay all fees and expenses of the Accounting Firm for services performed pursuant to this Section A (Applicable Fees and Expenses). To assure compliance with Section 409A, Employer will pay any Applicable Fees and Expenses subject to and as provided in Sections B.1 and B.3. |
B. | Compliance with Section 409A . |
B.1 | Six Month Delay on Certain Payments, Benefits, and Reimbursements . If Executive is a specified employee for purposes of Section 409A, as determined under Employers policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Agreement that constitutes a deferral of compensation within the meaning of Section 409A, that is to be paid or provided as a result of a separation from service within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a Scheduled Time) that is on or before the date (the Six Month Date) that is exactly six months after the Termination Date (other than payments, |
Page 7
benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the Seventh Month after the Termination Date), except that if Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of Executives death and thereafter paid or provided not later than 30 days after the date of death. |
B.2 | [Reserved]. | ||
B.3 | Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits pursuant to any of Article II, Paragraph 1; Article II, Paragraph 2; Article V; or any other section of this Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A of the Code) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits provided pursuant to any of Article II, Paragraph 1; Article II, Paragraph 2; Article V; or any other section of this Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (a) any reimbursement of eligible expenses will be paid within 30 days following Executives written request for reimbursement; provided that Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that Employer can make the reimbursement within the time periods required by Section 409A; (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (c) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit. | ||
B.4 | Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. Employer and Executive intend that the payments and benefits provided under this Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Agreement is to be construed, administered, and governed in a manner that effects that intent and Employer will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon Executive. | ||
B.5 | Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase termination of employment and words and phrases of similar import mean a separation from service with Employer within the meaning of Section 409A. Executive and Employer will take all steps necessary (including taking into account this Section B.5 when considering any further agreement regarding provision of services by Executive to Employer after the Termination Date) to ensure that (a) any termination of employment under this Agreement constitutes a separation from service within the meaning of Section 409A, |
Page 8
and (b) the Termination Date is the date on which Executive experiences a separation from service within the meaning of Section 409A. |
C. | Definitions . |
C.1 | Accounting Firm . The term Accounting Firm means the independent auditors of Employer for the fiscal year immediately preceding the earlier of (a) the year in which the Termination Date occurred, or (b) the year, if any, in which occurred the first Change of Control occurring after the date of this Agreement, and that firms successor or successors; unless that firm is unable or unwilling to serve and perform in the capacity contemplated by this Agreement, in which case Employer must select another accounting firm that (x) is of recognized regional or national standing and (y) is not then the independent auditors for Employer or any affiliated corporation. | ||
C.2 | Change in Ownership or Control . The term Change in Ownership or Control has the meaning given to that term (without initial caps) in the Treasury Regulations published under Section 280G. | ||
C.3 | Sections 280G, 409A, and 4999 . Each of the terms Section 280G, Section 409A, and Section 4999, respectively, means that numbered section of the Internal Revenue Code. References in this Agreement to any of these sections are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to that specific section by the U.S. Department of Treasury or the Internal Revenue Service. |
Page 9
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 Employers outstanding securities; |
Page 1
(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 Executives title, responsibilities, power or authority in comparison with Executives title, responsibilities, power or authority at the time of the Change in Control and Executive thereafter terminates Executives employment with Employer within such two year period; | ||
(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 and Executive thereafter terminates Executives employment with Employer within such two year period; | ||
(d) | Within two years from the date on which the Change in Control occurred, Employer (i) reduces Executives 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 Executives family), [his/her] pension, retirement or profit-sharing benefits or any benefits provided by any of Employers 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 |
Page 2
bonus, or (iv) excludes Executive from any plan, program or arrangement in which similar executive officers of Employer are included and Executive thereafter terminates Executives employment with Employer within such two year period; or | |||
(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 [or whichever remote office location has been approved for the Executive at the time of the Change in Control] and Executive thereafter terminates Executives employment with Employer within such two year period. |
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. | Executives Annual Bonus means Executives 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. | Executives Annual Salary means Executives annual base salary at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher. | |
9. | Termination Date means the date on which Executives employment with Employer terminates. |
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 in an amount equal to the sum of (i) two times Executives Annual Bonus plus (ii) two times Executives Annual Salary. In addition, Employer shall, at its expense, provide Executive, and Executives 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 Executives family received from Employer or (y) the second anniversary of the date of the Triggering Event. |
(a) | 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 |
Page 3
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. |
2. | Employer shall provide Executive, at Employers 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. |
Page 4
Page 5
DEVELOPERS DIVERSIFIED REALTY CORPORATION | ||||||
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|
By: | |||||
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|
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[EXECUTIVES NAME] |
Page 6
A. | Gross-Up of Payments Deemed to be Excess Parachute Payments . |
A.1 | Acknowledgement; Determination by Accounting Firm . Employer and Executive acknowledge that, following a Change in Ownership or Control, one or more payments or distributions to be made by Employer or an affiliated entity to or for the benefit of Executive under this Agreement or Executives [[Amended and Restated] Employment Agreement/employment] (including, without limitation, the issuance of common shares of Employer; the granting or vesting of restricted shares; and the granting, vesting, exercise or termination of options) (a Payment) may be determined to be an excess parachute payment that is not deductible by Employer or its affiliated entity for Federal income tax purposes and with respect to which Executive will be subject to an excise tax because of Sections 280G and 4999, respectively, of the Code. If a Change in Ownership or Control occurs, either Executive or Employer may direct the Accounting Firm, which, subject to any inconsistent position asserted by the Internal Revenue Service, will make all determinations required to be made under this Section A.1, to determine whether any Payment will be an excess parachute payment and to communicate its determination, together with detailed supporting calculations, to Employer and to Executive within 30 days after its receipt of the direction from Executive or Employer, as the case may be. Employer and Executive will cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. | ||
A.2 | Gross-Up Payments . If the Accounting Firm determines that any Payment gives rise, directly or indirectly, to liability on the part of Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax), Employer will make additional cash payments (each, a Gross-Up Payment) to Executive, from time to time in such amounts as are necessary to put Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between Executive and Employer, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of Employer) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. Employers obligation to make Gross-Up Payments under this Section A is not contingent on termination of Executives employment with Employer. Employer will make each Gross-Up Payment to Executive within 30 days of the time that the related Payment constituting an excess parachute payment is paid or provided to Executive. | ||
A.3 | Further Gross-Up Payments as Determined by the IRS . If the Internal Revenue Service determines that any Payment gives rise, directly or indirectly, to liability on the part of Executive for excise tax under Section 4999 (and/or any penalties and/or interest with respect to any such excise tax) in excess of the amount, if any, previously determined by the Accounting Firm, Employer will make further Goss-Up Payments to Executive in cash and in |
such amounts as are necessary to put Executive in the same position, after payment of all federal, state, and local taxes (whether income taxes, excise taxes under Section 4999 or otherwise, or other taxes) and any and all penalties and interest with respect to any such excise tax, as Executive would have been in after payment of all federal, state, and local income taxes if the Payments (other than in respect of or regarding any units or awards granted or vested pursuant to any Performance Unit Agreement between Executive and Employer, or any equity awards granted or issued pursuant to any outperformance award plans (including the Outperformance Long-Term Incentive Plan) or supplemental equity award plans (including the 2007 Supplemental Equity Plan) of Employer) had not given rise to an excise tax under Section 4999 and no such penalties or interest had been imposed. Employer will make any additional Gross-Up Payments required by this Section A.3 not later than the due date of any payment indicated by the Internal Revenue Service with respect to the underlying matters to which the additional Gross-Up relates. | |||
A.4 | Contest of IRS Determination by Employer . If Employer desires to contest any determination by the Internal Revenue Service with respect to the amount of excise tax under Section 4999, Executive will, upon receipt from Employer of an unconditional written undertaking to indemnify and hold Executive harmless (on an after tax basis) from any and all adverse consequences that might arise from the contesting of that determination, cooperate with Employer in that contest at Employers sole expense. Nothing in this Section A will require Executive to incur any expense other than expenses with respect to which Employer has paid to Executive sufficient sums so that after the payment of the expense by Executive and taking into account the payment by Employer with respect to that expense and any and all taxes that may be imposed upon Executive as a result of Executives receipt of that payment, the net effect is no cost to Executive. Nothing in this Section A will require Executive to extend the statute of limitations with respect to any item or issue in Executives tax returns other than, exclusively, the excise tax under Section 4999. If, as the result of the contest of any assertion by the Internal Revenue Service with respect to excise tax under Section 4999, Executive receives a refund of a Section 4999 excise tax previously paid and/or any interest with respect thereto, Executive will promptly pay to Employer such amount as will leave Executive, net of the repayment and all tax effects, in the same position, after all taxes and interest, that Executive would have been in if the refunded excise tax had never been paid. To assure compliance with Section 409A, Employer will make payments to Executive with respect to expenses as contemplated in this Section A.4 subject to and as provided in Sections B.1 and B.3. | ||
A.5 | Accounting Firm Fees and Expenses . Employer will bear and pay all fees and expenses of the Accounting Firm for services performed pursuant to this Section A (Applicable Fees and Expenses). To assure compliance with Section 409A, Employer will pay any Applicable Fees and Expenses subject to and as provided in Sections B.1 and B.3. |
B. | Compliance with Section 409A . |
B.1 | Six Month Delay on Certain Payments, Benefits, and Reimbursements . If Executive is a specified employee for purposes of Section 409A, as determined under Employers policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Agreement that constitutes a deferral of compensation within the meaning of Section 409A, that is to be paid or provided as a result of a separation from service within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a Scheduled Time) that is on or before the date (the Six Month Date) that is exactly six months after the Termination Date (other than payments, |
benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the Seventh Month after the Termination Date), except that if Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of Executives death and thereafter paid or provided not later than 30 days after the date of death. | |||
B.2 | Earlier Payment if Not a Specified Employee . If Executive is not a specified employee for purposes of Section 409A, as determined under Employers policy for determining specified employees on the Termination Date, any lump sum severance benefit payable pursuant to Article II, Paragraph 1 will be made by Employer to Executive during the 30-day period that begins exactly 60 days after the Termination Date rather than during the Seventh Month after the Termination Date. | ||
B.3 | Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits pursuant to any of Article II, Paragraph 1; Article II, Paragraph 2; Article V; or any other section of this Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A of the Code) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits provided pursuant to any of Article II, Paragraph 1; Article II, Paragraph 2; Article V; or any other section of this Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (a) any reimbursement of eligible expenses will be paid within 30 days following Executives written request for reimbursement; provided that Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that Employer can make the reimbursement within the time periods required by Section 409A; (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (c) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit. | ||
B.4 | Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. Employer and Executive intend that the payments and benefits provided under this Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Agreement is to be construed, administered, and governed in a manner that effects that intent and Employer will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon Executive. | ||
B.5 | Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase termination of employment and words and phrases of similar import mean a separation from service with Employer within the meaning of Section 409A. Executive and |
Employer will take all steps necessary (including taking into account this Section B.5 when considering any further agreement regarding provision of services by Executive to Employer after the Termination Date) to ensure that (a) any termination of employment under this Agreement constitutes a separation from service within the meaning of Section 409A, and (b) the Termination Date is the date on which Executive experiences a separation from service within the meaning of Section 409A. |
C. | Definitions . |
C.1 | Accounting Firm . The term Accounting Firm means the independent auditors of Employer for the fiscal year immediately preceding the earlier of (a) the year in which the Termination Date occurred, or (b) the year, if any, in which occurred the first Change of Control occurring after the date of this Agreement, and that firms successor or successors; unless that firm is unable or unwilling to serve and perform in the capacity contemplated by this Agreement, in which case Employer must select another accounting firm that (x) is of recognized regional or national standing and (y) is not then the independent auditors for Employer or any affiliated corporation. | ||
C.2 | Change in Ownership or Control . The term Change in Ownership or Control has the meaning given to that term (without initial caps) in the Treasury Regulations published under Section 280G. | ||
C.3 | Sections 280G, 409A, and 4999 . Each of the terms Section 280G, Section 409A, and Section 4999, respectively, means that numbered section of the Internal Revenue Code. References in this Agreement to any of these sections are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to that specific section by the U.S. Department of Treasury or the Internal Revenue Service. |
1. | I have reviewed this annual report on Form 10-K of Developers Diversified Realty Corporation (DDR); | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of DDR as of, and for, the periods presented in this report; | |
4. | DDRs other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for DDR and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to DDR, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of DDRs disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | disclosed in this report any change in DDRs internal control over financial reporting that occurred during DDRs most recent fiscal quarter (DDRs fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, DDRs internal control over financial reporting; and |
5. | DDRs other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to DDRs auditors and the audit committee of DDRs board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect DDRs ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in DDRs internal control over financial reporting. |
1. | I have reviewed this annual report on Form 10-K of Developers Diversified Realty Corporation (DDR); | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of DDR as of, and for, the periods presented in this report; | |
4. | DDRs other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for DDR and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to DDR, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of DDRs disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | disclosed in this report any change in DDRs internal control over financial reporting that occurred during DDRs most recent fiscal quarter (DDRs fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, DDRs internal control over financial reporting; and |
5. | DDRs other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to DDRs auditors and the audit committee of DDRs board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect DDRs ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in DDRs internal control over financial reporting. |
Consolidated Financial Statements
Table of Contents
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by Auditors Report)
1
2
3
4
5-6
7-23
- 2 -
- 3 -
- 4 -
- 5 -
- 6 -
- 7 -
- 8 -
- 9 -
- 10 -
- 11 -
- 12 -
- 13 -
- 14 -
- 15 -
- 16 -
- 17 -
- 18 -
- 19 -
- 20 -
- 21 -
- 22 -
- 23 -
December 31,
2008
2007
$
839,245,648
$
838,979,858
2,077,161,732
2,077,768,858
34,316,152
27,005,515
85,515
53,074
2,950,809,047
2,943,807,305
(128,822,296
)
(58,311,132
)
2,821,986,751
2,885,496,173
3,633,563
2,336,561
2,825,620,314
2,887,832,734
26,439,480
16,332,800
37,856,872
19,816,731
514,264
539,026
3,579,600
4,755,958
3,524,026
1,158,095
74,286,767
88,566,376
5,944,306
5,662,931
2,051,987
1,842,504
$
2,979,817,616
$
3,026,507,155
$
1,578,123,391
$
1,580,648,927
197,300,000
197,300,000
7,537,099
8,132,897
8,638,670
5,329,202
8,079,317
6,041,294
15,404,875
13,450,572
2,328,649
2,202,401
1,817,412,001
1,813,105,293
1,162,405,615
1,213,401,862
$
2,979,817,616
$
3,026,507,155
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report)
For the Period from
February 27, 2007
Year Ended
(date of inception) to
December 31, 2008
December 31, 2007
$
194,082,003
$
165,913,304
1,348,450
693,114
54,560,523
43,707,932
541,975
299,223
1,618,233
902,889
252,151,184
211,516,462
82,183,876
65,665,624
32,248,540
26,455,859
33,311,393
23,899,637
7,285,295
7,788,189
3,067,296
2,574,520
1,866,425
1,608,078
159,962,825
127,991,907
92,188,359
83,524,555
623,910
1,276,288
(94,898,719
)
(84,908,269
)
(2,932,500
)
(94,274,809
)
(86,564,481
)
$
(2,086,450
)
$
(3,039,926
)
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report)
DDR TC
TREA
Total
$
183,705,868
$
1,040,999,920
$
1,224,705,788
(1,239,600
)
(7,024,400
)
(8,264,000
)
(455,989
)
(2,583,937
)
(3,039,926
)
$
182,010,279
$
1,031,391,583
$
1,213,401,862
(7,911,340
)
(40,998,457
)
(48,909,797
)
(312,967
)
(1,773,483
)
(2,086,450
)
$
173,785,972
$
988,619,643
$
1,162,405,615
Consolidated Statements of Cash Flows
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report)
For the Period from
February 27, 2007
Year Ended
(date of inception)to
December 31, 2008
December 31, 2007
$
(2,086,450
)
$
(3,039,926
)
82,183,876
65,665,624
1,170,924
998,967
1,952,100
1,056,320
(410,876
)
(351,332
)
2,932,500
(16,078,734
)
(19,774,705
)
24,762
18,832
(281,375
)
(623,074
)
(209,483
)
103,050
(595,798
)
8,132,897
3,309,468
5,329,202
2,038,023
6,041,294
2,273,400
(1,642,767
)
126,248
26,906
75,502,535
67,913,714
73,416,085
64,873,788
(2,742,593,565
)
(9,484,275
)
(2,806,107
)
(1,227,508
)
(12,290,382
)
(2,743,821,073
)
1,291,592,370
197,300,000
(2,932,500
)
5,434
(5,754,925
)
(2,114,660
)
(1,366,648
)
1,224,705,788
(48,909,797
)
(8,264,000
)
(51,019,023
)
2,695,280,085
10,106,680
16,332,800
16,332,800
$
26,439,480
$
16,332,800
Consolidated Statements of Cash Flows
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report)
For the Period from
Year Ended
February 27, 2007 to
December 31, 2008
December 31, 2007
$
(4,852
)
$
(18,293
)
(816,623
)
265,790
(1,413,613
)
(394,400
)
292,491,949
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
$
2,940,460,071
115,112,014
3,055,572,085
(8,585,071
)
(290,774,537
)
(19,302,707
)
$
2,736,909,770
31.5 years
Useful lives, which approximate
lease terms, where applicable
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
$
8,216,121
8,216,121
8,216,121
8,216,121
8,216,121
$
41,080,605
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
$
27,583
30,471
33,862
37,187
41,081
344,080
$
514,264
2008
2007
$
1,472,393
$
1,639,079
23,554
16,778
125,920
430,120
186,647
$
2,051,987
$
1,842,504
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
Interest
Maturity
Balance at December 31,
Property Name
rate
date
2008
2007
7.0900
%
03/11/12
14,209,786
14,414,079
**
5.4475
%
03/01/17
28,116,029
28,116,029
5.4800
%
03/01/12
44,693,280
44,693,280
5.4475
%
03/01/17
9,887,151
9,887,151
5.4800
%
03/01/12
23,850,206
23,850,206
4.3720
%
05/01/09
3,700,000
3,700,000
5.0000
%
04/11/12
16,000,000
16,000,000
5.4475
%
03/01/17
14,649,463
14,649,463
5.4475
%
03/01/17
20,708,571
20,708,571
5.4475
%
03/01/17
27,854,444
27,854,444
5.4475
%
03/01/17
23,172,886
23,172,886
5.4475
%
03/01/17
40,425,230
40,425,230
5.4475
%
03/01/17
23,297,527
23,297,527
5.4475
%
03/01/17
29,006,478
29,006,478
5.4475
%
03/01/17
70,373,016
70,373,016
4.4600
%
07/01/09
21,500,000
21,500,000
5.4800
%
03/01/12
34,810,605
34,810,605
5.4475
%
03/01/17
34,515,625
34,515,625
5.4800
%
03/01/12
27,846,060
27,846,060
5.6200
%
07/01/10
53,250,000
53,250,000
5.4475
%
03/01/17
50,712,288
50,712,288
5.4800
%
03/01/12
20,802,589
20,802,589
5.4475
%
03/01/17
57,307,446
57,307,446
5.4475
%
03/01/17
25,818,322
25,818,322
5.4475
%
03/01/17
30,458,783
30,458,783
5.4800
%
03/01/12
11,278,498
11,278,498
5.4475
%
03/01/17
17,417,561
17,417,561
5.4475
%
03/01/17
37,609,248
37,609,248
5.4800
%
03/01/12
75,631,929
75,631,929
5.4800
%
03/01/12
16,431,075
16,431,075
4.2720
%
06/01/09
8,200,000
8,200,000
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
Interest
Maturity
Balance at December 31,
Property Name
rate
date
2008
2007
5.4475
%
03/01/17
37,680,787
37,680,787
5.4475
%
03/01/17
48,381,600
48,381,600
5.4475
%
03/01/17
10,098,326
10,098,326
5.4800
%
03/01/12
6,354,156
6,354,156
6.9800
%
07/01/18
14,056,647
14,480,310
**
5.4800
%
03/01/12
31,969,446
31,969,446
5.4475
%
03/01/17
47,065,383
47,065,383
4.1300
%
06/01/10
16,939,303
16,939,303
4.3720
%
05/01/09
7,350,000
7,350,000
5.4475
%
03/01/17
13,653,259
13,653,259
5.2400
%
11/01/10
2,475,000
2,475,000
4.0400
%
06/11/10
25,900,000
25,900,000
5.4475
%
03/01/17
15,296,764
15,296,764
5.4800
%
03/01/12
9,378,785
9,378,785
5.4800
%
03/01/12
55,775,471
55,775,471
5.4800
%
03/01/12
36,181,010
36,181,010
5.4800
%
03/01/12
11,221,206
11,221,206
5.4800
%
03/01/12
21,168,215
21,168,215
6.3700
%
08/11/32
25,777,065
26,188,210
**
5.4475
%
03/01/17
12,903,920
12,903,919
5.4800
%
03/01/12
6,559,842
6,559,842
4.3020
%
06/01/09
5,590,000
5,590,000
5.4475
%
03/01/17
10,148,501
10,148,501
5.4800
%
03/01/12
121,081,389
121,081,389
6.3500
%
08/01/12
28,989,561
29,453,673
**
6.3500
%
08/01/12
38,192,597
38,804,045
**
$
1,573,722,329
$
1,575,836,989
**
Mortgage notes payables, identified above, require principal and interest payments. The
remaining mortgage notes payable require interest only payments. Principal payments on applicable
mortgage debt are as follows:
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
Principal Paid
2008
2007
$
204,293
$
165,115
423,661
411,145
332,283
464,112
375,087
611,449
494,163
$
2,114,660
$
1,366,648
$
49,233,656
101,657,880
3,307,339
649,843,002
1,984,635
767,695,817
$
1,573,722,329
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
$
184,495,342
172,241,984
155,663,460
125,061,306
98,074,633
400,303,854
$
1,135,840,579
$
625,000
625,000
625,000
625,000
625,000
55,979,167
$
59,104,167
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 and For the Period from February 27, 2007
(date of inception) to December 31, 2007 (Not Covered by
Auditors Report) (continued)
2008
2007
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
$
197,300,000
$
190,714,130
$
197,300,000
$
197,300,000
1,578,123,391
1,433,982,753
1,580,648,927
1,691,043,734
$
1,775,423,391
1,624,696,883
$
1,777,948,927
1,888,343,734
Income Statement
|
2 | |||
|
||||
Balance Sheet
|
3 | |||
|
||||
Statement of Changes in Equity
|
4 | |||
|
||||
Cash Flow Statement
|
5 | |||
|
||||
Notes to the financial statements
|
6 | |||
|
||||
1. Summary of significant accounting policies
|
6 | |||
2. Trust formation
|
13 | |||
3. Management fee
|
13 | |||
4. Net gain from derivative financial instruments
|
14 | |||
5. Other expenses
|
14 | |||
6. Remuneration of auditor
|
14 | |||
7. Earnings per unit
|
15 | |||
8. Distributions paid and payable
|
16 | |||
9. Receivables
|
16 | |||
10. Derivative financial instruments
|
17 | |||
11. Investments in joint venture entities
|
18 | |||
12. Payables
|
20 | |||
13. Provisions
|
20 | |||
14. Interest bearing liabilities
|
21 | |||
15. Tax liabilities
|
21 | |||
16. Contributed equity
|
21 | |||
17. Reserves
|
22 | |||
18. Undistributed income
|
23 | |||
19. Cash and cash equivalents
|
24 | |||
20. Cash flow information
|
24 | |||
21. Net tangible assets
|
25 | |||
22. Related party disclosures
|
25 | |||
23. Segment information
|
28 | |||
24. Capital and financial risk management
|
29 | |||
25. Commitments and contingent liabilities
|
33 | |||
26. Significant contract terms and conditions
|
33 | |||
27. Events occurring after reporting date
|
34 | |||
|
||||
Report of
Independent Auditors
|
35 |
(Not Covered by | (Not Covered by | |||||||||||||||
Auditor's Report) | Auditor's Report) | |||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||
Note | A$000 | A$000 | A$000 | |||||||||||||
|
||||||||||||||||
Income
|
||||||||||||||||
Share of net profits from investments in joint venture entities:
|
||||||||||||||||
Net property income
|
11(ii) | 159,592 | 183,940 | 173,058 | ||||||||||||
Management fees
|
3 | (11,491 | ) | (12,201 | ) | (11,765 | ) | |||||||||
Finance costs
|
11(ii) | (68,558 | ) | (76,892 | ) | (64,696 | ) | |||||||||
Other income and expenses
|
11(ii) | (6,319 | ) | (4,748 | ) | 3,374 | ||||||||||
Share of net
profit from investments in joint venture entities before property valuation (losses)/ gains
|
11(ii) | 73,224 | 90,099 | 99,971 | ||||||||||||
|
||||||||||||||||
Property valuation (losses)/gains
|
11(ii) | (140,696 | ) | 146,442 | 92,151 | |||||||||||
Share of net (loss)/profit from investments in joint venture entities
|
11(ii) | (67,472 | ) | 236,541 | 192,122 | |||||||||||
Interest income
|
310 | 427 | 332 | |||||||||||||
Net gain from derivative financial instruments
|
4 | 3,369 | 11,315 | 14,704 | ||||||||||||
Unrealised foreign exchange gains
|
25,539 | 21,217 | | |||||||||||||
Realised foreign exchange gains
|
4,164 | 418 | | |||||||||||||
Total income
|
(34,090 | ) | 269,918 | 207,158 | ||||||||||||
|
||||||||||||||||
Expenses
|
||||||||||||||||
Finance costs
|
349 | 506 | 80 | |||||||||||||
Interest expense
|
1,594 | 5,588 | 3,749 | |||||||||||||
Unrealised foreign exchange losses
|
| | 2,578 | |||||||||||||
Realised foreign exchange losses
|
| | 954 | |||||||||||||
Other expenses
|
5 | 1,362 | 1,319 | 1,275 | ||||||||||||
Total expenses
|
3,305 | 7,413 | 8,636 | |||||||||||||
(Loss)/profit before tax
|
(37,395 | ) | 262,505 | 198,522 | ||||||||||||
|
||||||||||||||||
US withholding tax expense
|
(4,691 | ) | (5,366 | ) | (5,858 | ) | ||||||||||
US capital gains tax benefit/(expense)
|
33,887 | (71,884 | ) | (52,956 | ) | |||||||||||
Total tax benefit/(expense)
|
29,196 | (77,250 | ) | (58,814 | ) | |||||||||||
(Loss)/profit before finance costs attributable to unitholders
|
(8,199 | ) | 185,255 | 139,708 | ||||||||||||
Finance costs attributable to unitholders
|
1 | (r) | | | (30,890 | ) | ||||||||||
(Loss)/Profit
|
(8,199 | ) | 185,255 | 108,818 | ||||||||||||
|
||||||||||||||||
Basic earnings per unit (cents)
|
7 | (0.88 | ) | 19.96 | 12.40 | |||||||||||
Diluted earnings per unit (cents)
|
7 | (0.88 | ) | 19.96 | 12.40 | |||||||||||
|
||||||||||||||||
Total distributions in respect of the year ended 30 June
|
8 | 85,976 | 92,948 | 88,423 | ||||||||||||
Distribution per unit in respect of the year ended 30 June (cents)
|
8 | 9.25 | 10.00 | 10.00 |
2
(Not Covered by | ||||||||||||
Auditors Report) | ||||||||||||
2008 | 2007 | |||||||||||
Note | A$000 | A$000 | ||||||||||
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
19 | 533 | 2,566 | |||||||||
Receivables
|
9 | 242 | 1,823 | |||||||||
Derivative financial instruments
|
10 | 45,916 | 27,122 | |||||||||
Other
|
14 | 22 | ||||||||||
Total current assets
|
46,705 | 31,533 | ||||||||||
|
||||||||||||
Non-current assets
|
||||||||||||
Investments in joint venture entities:
|
||||||||||||
Investment properties
|
2,235,707 | 2,617,449 | ||||||||||
Less: Share of borrowings
|
(1,286,351 | ) | (1,296,272 | ) | ||||||||
Add: Share of other net assets
|
3,321 | 24,376 | ||||||||||
Total investments in joint venture entities
|
11(iii) | 952,677 | 1,345,553 | |||||||||
Derivative financial instruments
|
10 | 34,264 | 33,882 | |||||||||
Total non-current assets
|
986,941 | 1,379,435 | ||||||||||
Total assets
|
1,033,646 | 1,410,968 | ||||||||||
|
||||||||||||
Current liabilities
|
||||||||||||
Payables
|
12 | 6,006 | 5,073 | |||||||||
Derivative financial instruments
|
10 | 13,682 | 25 | |||||||||
Provisions
|
13 | | | |||||||||
Total current liabilities
|
19,688 | 5,098 | ||||||||||
|
||||||||||||
Non-current liabilities
|
||||||||||||
Interest bearing liabilities
|
14 | 569 | 86,738 | |||||||||
Tax liabilities
|
15 | 147,780 | 205,078 | |||||||||
Total non-current liabilities
|
148,349 | 291,816 | ||||||||||
Total liabilities
|
168,037 | 296,914 | ||||||||||
Net assets
|
865,609 | 1,114,054 | ||||||||||
|
||||||||||||
Equity
|
||||||||||||
Contributed equity
|
16 | 939,657 | 939,657 | |||||||||
Reserves
|
17 | (288,507 | ) | (137,723 | ) | |||||||
Undistributed income
|
18 | 214,459 | 312,120 | |||||||||
Total equity
|
865,609 | 1,114,054 | ||||||||||
3
(Not Covered by | (Not Covered by | |||||||||||||||
Auditor's Report) | Auditor's Report) | |||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||
Note | A$000 | A$000 | A$000 | |||||||||||||
|
||||||||||||||||
Total equity at the beginning of the year
|
1,114,054 | 1,125,018 | 938,668 | |||||||||||||
Adjustment on adoption of IAS 32/39
|
||||||||||||||||
- Fair value of derivative financial instruments on adoption of
IAS 32/39
|
| | 23,635 | |||||||||||||
- Joint venture entity derivative financial instruments booked on
adoption of IAS 32/39
|
| | (4,321 | ) | ||||||||||||
Restated total equity at the beginning of the year
|
1,114,054 | 1,125,018 | 957,982 | |||||||||||||
|
||||||||||||||||
(Loss)/profit
|
(8,199 | ) | 185,255 | 108,818 | ||||||||||||
|
||||||||||||||||
Net income recognised directly in equity
|
||||||||||||||||
- Movement in fair value of effective net investment hedges
|
17 | 20,188 | 40,489 | (7,924 | ) | |||||||||||
- Movement in effective cash flow hedges held by joint venture
entities
|
17 | (27,842 | ) | 4,964 | 3,734 | |||||||||||
- Foreign currency translation differences
|
17 | (143,130 | ) | (159,081 | ) | 23,248 | ||||||||||
|
(150,784 | ) | (113,628 | ) | 19,058 | |||||||||||
|
||||||||||||||||
Total recognised income and expense for the year
|
(158,983 | ) | 71,627 | 127,876 | ||||||||||||
|
||||||||||||||||
Units on issue classified as liabilities for part of the year
|
||||||||||||||||
- Classification of units on issue as liabilities on adoption of IAS
32/39
|
| | (938,668 | ) | ||||||||||||
- Reclassification to equity on 10 October 2005
|
| | 938,668 | |||||||||||||
- Reclassification of finance costs attributable to unitholders
|
| | 30,890 | |||||||||||||
|
| | 30,890 | |||||||||||||
|
||||||||||||||||
Transactions with unitholders in their capacity as unitholders
|
||||||||||||||||
- Contributions of equity, net of issue costs
|
16 | | 10,124 | 93,983 | ||||||||||||
- Distributions paid or payable
|
13 | (89,462 | ) | (92,715 | ) | (85,713 | ) | |||||||||
|
(89,462 | ) | (82,591 | ) | 8,270 | |||||||||||
|
||||||||||||||||
Total equity at the end of the year
|
865,609 | 1,114,054 | 1,125,018 | |||||||||||||
4
(Not Covered by | (Not Covered by | |||||||||||||||
Auditor's Report) | Auditor's Report) | |||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||
A$000 | A$000 | A$000 | ||||||||||||||
Inflows/ | Inflows/ | Inflows/ | ||||||||||||||
Note | (outflows) | (outflows) | (outflows) | |||||||||||||
|
||||||||||||||||
Cash flows from operating activities
|
||||||||||||||||
Distributions received from investments in joint venture entities
|
154,464 | 76,287 | 88,175 | |||||||||||||
Interest income received
|
310 | 427 | 332 | |||||||||||||
Realised gains on derivative financial instruments
|
25,037 | 13,861 | 7,498 | |||||||||||||
Other operating expenses paid
|
(1,413 | ) | (1,291 | ) | (1,924 | ) | ||||||||||
US withholding tax paid
|
(5,377 | ) | (2,447 | ) | (3,769 | ) | ||||||||||
Net cash flows from operating activities
|
20 | 173,021 | 86,837 | 90,312 | ||||||||||||
|
||||||||||||||||
Cash flows from investing activities
|
||||||||||||||||
Payments for investments in joint venture entities
|
(135 | ) | (65 | ) | (159,453 | ) | ||||||||||
Net cash flows from investing activities
|
(135 | ) | (65 | ) | (159,453 | ) | ||||||||||
|
||||||||||||||||
Cash flows from financing activities
|
||||||||||||||||
Proceeds from borrowings
|
| 12,283 | 141,641 | |||||||||||||
Repayment of borrowings
|
(82,064 | ) | (12,587 | ) | (45,417 | ) | ||||||||||
Proceeds from issue of unit
|
| | 18,215 | |||||||||||||
Equity issue costs paid
|
| (17 | ) | (147 | ) | |||||||||||
Interest paid
|
(3,284 | ) | (5,462 | ) | (4,104 | ) | ||||||||||
Distributions paid to unitholders
|
(89,462 | ) | (82,574 | ) | (37,540 | ) | ||||||||||
Net cash flows from financing activities
|
(174,810 | ) | (88,357 | ) | 72,648 | |||||||||||
Net decrease in cash and cash equivalents
|
(1,924 | ) | (1,585 | ) | 3,507 | |||||||||||
Cash and cash equivalents at the beginning of the year
|
2,566 | 4,480 | 1,226 | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
(109 | ) | (329 | ) | (253 | ) | ||||||||||
Cash and cash equivalents at the end of the year
|
19 | 533 | 2,566 | 4,480 | ||||||||||||
5
1. | Summary of significant accounting policies |
(a) | Basis of preparation | |
This general purpose financial report has been prepared in accordance with the requirements of the Trust Constitution. | ||
For the year ended 30 June 2008, due to Developers Diversified Realtys (DDR) ownership of the Trusts units as described in Note 22(c), the Trust qualified as a significant subsidiary to DDR and, as a result, audited financial statements are presented for that period. As of 30 June 2007 and for the years ended 30 June 2007 and 30 June 2006, the Trust does not meet the criteria of a significant subsidiary to DDR, and as a result, the financial statements for those periods are audited using Australian Auditing Standards but the reports are not presented herein. | ||
Compliance with IFRS as issued by IAS
This financial report complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IAS). |
||
Historical cost convention
The financial report has been prepared under the historical cost convention, as modified by the revaluation of investment properties and derivative financial instruments held at fair value. |
||
Critical accounting estimates
The preparation of the financial report in conformity with IFRS may require the use of certain critical accounting estimates and management to exercise its judgment in the process of applying the Trusts accounting policies. Other than the estimation of fair values described in notes 1(e) and 1(s) and assumptions relating to deferred tax liabilities, no key assumptions concerning the future, or other estimation of uncertainty at the reporting date, have a significant risk of causing material adjustments to the financial report in the next annual reporting period. |
||
(b) | Going concern | |
A detailed review was undertaken as in the opinion of the directors of Macquarie DDR Management Limited (Manager), the rapid and unanticipated dislocation on the global credit markets has significantly impacted the operations, financial position and outlook of the Trust. Substantial doubt now exists as to the Trusts ability to continue as a going concern and the Trust is now undertaking a Strategic Review to address these concerns. | ||
On 10 December 2008, the Trust announced that it would undertake a Strategic Review with the objective of maximising unit holder value and subsequently, the Trust has appointed advisers for the strategic review. The process to be followed will include soliciting bids for corporate or entity acquisition transactions or for the acquisition of properties or portfolios of properties. It is possible that this could result in a proposal to acquire 100% of MDT units. Alternatively, it could result in the disposal of a large number or even the majority or all of MDTs properties. The Board will, with the assistance of its advisers, assess the bids which are received to determine the strategy which is in the best interest of unitholders. In addition, the Strategic review will focus on the restructuring of the Trusts debt by renegotiating or refinancing its loan facilities. | ||
There should be minimal disruption to the business and operations of MDT, during the process and management will continue its focus on strengthening MDTs balance sheet through refinancing upcoming debt maturities and selling properties where this will not unduly affect the review process. | ||
The Trust paid no distribution at 31 December 2008 in order to retain operating capital and assist with the refinancing of debt facilities. |
6
1. | Summary of significant accounting policies (continued) | |
(b) | Going concern (continued) | |
Ongoing risks
Ongoing risks to the Trusts future performance include: |
(i) | Fair value risk on property investments | ||
The Trust measures investment properties at fair value. Given the Trusts short term debt obligations and the potential difficulty in refinancing these obligations, it is likely that the Trust may need to sell a significant portion of its property portfolio over the next 12 months. Upon sale the Trust may not realise the values recognised in the financial statements. Further details on the approach used to value investment properties are disclosed in Note 1(e). | |||
(ii) | Ability to refinance debt facilities as they fall due and maintain debt covenants | ||
As disclosed in Note 14 of the financial statements, the Trust has A$208.9 million (US$147.8 million) due to be repaid in June 2009 and a further A$815 million (US$576.6 million) to be refinanced within the next 2 years. Management are negotiating with a number of lenders to arrange re-financing of these facilities. However, there is no certainty that the Trust will be able to arrange re-financing. | |||
The Trust reviews its compliance with its debt and financial instrument covenants on a regular basis. At 31 December 2008 the Trust is in compliance with its debt and financial instruments covenants. If fair value of investments properties continue to fall and the Trust is unable to generate sufficient asset sales to repay debt or is unable to renegotiate debt covenants, or both, there is a high likelihood that debt covenants could be breached in 2009. | |||
Breaching covenants would introduce the ability of the relevant lender to perform actions which could jeopardise the ability of the Trust to continue as a going concern. |
The directors expect that the Trust will undertake the following as part of its strategic review: |
| Extend existing loan facilities and/or renegotiate existing loan covenants; | ||
| Refinance existing facilities with new lenders; | ||
| Sell investment properties; or | ||
| Generate operating cash flows significantly in excess of interest obligations. |
No adjustments have been made to the financial report relating to the recoverability and classification of the asset carrying amounts and classification of liabilities that might be necessary should the Trust not continue as a going concern. | ||
(c) | Receivables | |
Receivables are carried at the amounts due to the Trust and are generally received within 30 days of becoming due and receivable. | ||
The collectability of debts is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off in the period in which they are identified. A provision for doubtful debts is raised where there is objective evidence that the Trust will not collect all amounts due. The amount of the provision is the difference between the carrying amount and estimated future cash flows. Cash flows relating to current receivables are not discounted. | ||
The amount of any impairment loss is recognised in the Income Statement in other expenses if the receivable is held by the Trust or in net property income if the receivable is held in the joint venture entities. When a trade receivable for which a provision has been recognised becomes uncollectable in a subsequent period, it is written off against the provision. Subsequent recoveries of amounts previously written off are credited against other expenses in the Income Statement or net property income for those trade receivables relating to joint venture entities. |
7
1. | Summary of significant accounting policies (continued) | |
(d) | Investments in joint venture entities | |
The Trusts property investments are held through joint venture entities. The Trust exercises joint control over its joint venture entities but neither the Trust nor its joint venture partner has control in their own right, irrespective of their ownership interest. | ||
Accordingly, investments in joint venture entities are accounted for using the equity method of accounting, after initially being recognised at cost. Under this method, the Trusts share of the profits or losses of each joint venture entity is recognised as income in the Income Statement, and its share of movements in reserves is recognised in the Balance Sheet. | ||
(e) | Investment properties | |
Investment properties comprise investment interests in land and buildings (including integral plant and equipment) held for the purpose of letting to produce rental income. | ||
Initially, investment properties are measured at cost including transaction costs. Subsequent to initial recognition, the investment properties are then stated at fair value. Gains and losses arising from changes in the fair values of investment properties are included in the Income Statement in the period in which they arise. | ||
At each reporting date, the fair values of the investment properties are assessed by the Manager by reference to independent valuation reports or through appropriate valuation techniques adopted by the Manager. Fair value is determined assuming a long term investment period. Specific circumstances of the owner are not taken into account. | ||
The factors taken into account in assessing internal valuations may include: |
| Assuming a willing buyer and a willing seller, without duress and an appropriate time to market the property to maximise price; | ||
| Information obtained from valuers, sales and leasing agents, market research reports, vendors and potential purchasers; | ||
| Capitalisation rates used to value the asset, market rental levels and lease expiries; | ||
| Changes in interest rates; | ||
| Asset replacement values; | ||
| Discounted cash flow models; | ||
| Available sales evidence; and | ||
| Comparisons to valuation professionals performing valuation assignments across the market. |
The approach adopted for valuing the investment property portfolio was consistent with that adopted at previous reporting periods and was as follows: |
| If the most recent independent valuation was more than 3 years old, a new external valuation was obtained; and | ||
| Internal valuations were performed by Macquarie Asset Services Limited on all other properties primarily using net operating income and a capitalisation rate as assessed by using market research reports and the valuations that were undertaken by the external valuers where appropriate. If this internal valuation significantly differed from the current book value of the property, an external valuation was also obtained for this property. |
Due to the volatility in the real estate markets, application of the policy has resulted in all investment properties being independently valued no earlier than December 2007 with 32% independently valued at 30 June 2008. | ||
The global market for many types of real estate has been severely affected by the recent volatility in global financial markets. The lower levels of liquidity and volatility in the banking sector have translated into a general weakening of market sentiment towards real estate and the number of real estate transactions has significantly reduced. | ||
Fair value of investment property is the price at which the property could be exchanged between knowledgeable, willing parties in an arms length transaction. A willing seller is neither a forced seller nor one prepared to sell at a price not considered reasonable in the current market. The best evidence of fair value is given by current prices in an active market for similar property in the same location and condition. The current lack of comparable market evidence relating to pricing assumptions and market drivers means that there is less certainty in regards to valuations and the assumptions applied to valuation inputs. The period of time needed to negotiate a sale in this environment may also be significantly prolonged. |
8
(e) | Investment properties (continued) | |
The fair value of investment property has been adjusted to reflect market conditions at the end of the reporting period. While this represents the best estimates of fair value as at the balance sheet date, the current market uncertainty means that if investment property is sold in future the price achieved may be higher or lower than the most recent valuation, or higher or lower than the fair value recorded in the financial statements. | ||
The carrying amount of investment properties recorded in the Balance Sheet includes components relating to lease incentives and assets relating to fixed increases in operating lease rentals in future periods. | ||
As the fair value method has been adopted for investment properties, the buildings and any component thereof (including plant and equipment) are not depreciated. Taxation allowances for the depreciation of buildings and plant and equipment are claimed by the Trust and contribute to the tax deferred component of distributions. | ||
(f) | Derivatives | |
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance date. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Trust may designate certain derivatives as either hedges of net investments in foreign operations (net investment hedges) or hedges of exposures to variability in cash flows associated with future interest payments on variable rate debt (cash flow hedges). | ||
The Trust documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Trust also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items. |
(i) |
Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting is recognised immediately in the Income Statement. |
||
(ii) |
Net investment hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as net investment hedges is recognised in the foreign currency translation reserve. This amount will be reclassified into the Income Statement on disposal of the foreign operations. The gain or loss relating to the ineffective portion is recognised immediately in the Income Statement. |
||
Gains and losses accumulated in equity are included in the Income Statement when the foreign operation is partially disposed of or sold. | |||
(iii) |
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in the cash flow hedge reserve. The gain or loss relating to the ineffective portion is recognised immediately in the Income Statement. |
||
Amounts accumulated in equity are recycled in the Income Statement in the period when the hedged item impacts the Income Statement. | |||
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the Income Statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the Income Statement. |
Notwithstanding the accounting outcome, the Manager considers that these derivative contracts are appropriate and effective in hedging the economic foreign exchange and interest rate exposures of the Trust. |
9
1. | Summary of significant accounting policies (continued) | |
(g) | Payables | |
Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the Trust. The amounts are unsecured and are usually paid within 30 or 60 days of recognition. | ||
(h) | Interest bearing liabilities | |
Borrowings are initially recognised at fair value, net of transaction costs incurred and are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Income Statement over the period of the borrowing using the effective interest rate method. Fees paid on the establishment of loan facilities, which are not an incremental cost relating to the actual drawdown of the facility, are recognised as prepayments and amortised on a straight line basis over the term of the facility. | ||
(i) | Interest income | |
Revenue is recognised as interest accrues using the effective interest method. | ||
(j) | Finance costs | |
Finance costs, excluding interest expense, are expensed in the Income Statement when incurred. | ||
(k) | Income tax | |
Under current Australian income tax legislation, the Trust is not liable to pay income tax provided its taxable income (including assessable realised capital gains) is fully distributed to unitholders, by way of cash or reinvestment. | ||
Macquarie DDR US Trust Inc. and Macquarie DDR US Trust II Inc. (US REITs), joint venture entities of the Trust, have been elected to be taxed as Real Estate Investment Trusts (REITs) under US federal taxation law, and on this basis, will generally not be subject to US income taxes on that portion of the US REITs taxable income or capital gains which are distributable to the US REITs shareholders, provided that the US REITs comply with the requirements of the US Internal Revenue Code of 1986 and maintain their REIT status. | ||
The US REITs may ultimately realise a capital gain or loss on disposal which may attract a US income tax liability if the proceeds from disposal are not reinvested in a qualifying asset. If the capital gain is realised, it may give rise to a foreign tax credit which would be available to unitholders. A deferred tax liability is recognised based on the temporary difference between the carrying amount of the assets in the Balance Sheet and their associated tax cost bases. | ||
(l) | Goods and services tax (GST) | |
Income, expenses, assets and liabilities are recognised net of the amount of GST recoverable from the Australian Taxation Office (ATO). The non-recoverable GST is recognised as part of the income, expense, asset or liability. Receivables and payables are exclusive of GST. The net amount of GST recoverable from or payable to the ATO is included in receivables or payables in the Balance Sheet. Cash flows relating to GST are included in the Cash Flow Statement on a gross basis. | ||
(m) | Equity transaction costs | |
Transaction costs arising on the issue of equity are recognised directly in equity as a reduction in the proceeds of units to which the costs relate. | ||
(n) | Reserves | |
In accordance with the Trust Constitution, amounts may be transferred from reserves to fund distributions. |
10
1. | Summary of significant accounting policies (continued) | |
(o) | Foreign currency translation |
(i) | Functional and presentation currencies | ||
Items included in the financial statements of the Trust are measured using the currency of the primary economic environment in which the Trust operates (the functional currency). The financial statements are presented in Australian dollars, which is the Trusts functional and presentation currency. | |||
(ii) |
Transactions and balances
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges. |
||
(iii) |
Foreign operations
Transactions of foreign equity accounted joint venture entities are measured using the currency of the primary economic environment in which those entities operate. Assets and liabilities of foreign equity accounted joint venture entities are translated at exchange rates ruling at balance date while income and expenses are translated at average exchange rates for the period. Exchange differences arising on translation of the interests in foreign equity accounted joint venture entities are taken directly to the foreign currency translation reserve. At 30 June 2008, the spot rate used was A$1.00 = US$0.9582 (2007: A$1.00 = US$0.8479, 2006: A$1.00 = US$0.7432). The average spot rate during the year ended 30 June 2008 was A$1.00 = US$0.9044 (2007: A$1.00 = US$0.7922, 2006: A$1.00 = US$0.7472). |
(p) | Segment information | |
Segment income, expenditure, assets and liabilities are those that are directly attributable to a segment and the relevant portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and consist primarily of cash, receivables (net of any related provisions) and investments. Any assets used jointly by segments are allocated based on reasonable estimates of usage. | ||
(q) | Earnings per unit | |
Basic earnings per unit are determined by dividing profit by the weighted average number of ordinary units on issue during the financial period. | ||
Diluted earnings per unit are determined by dividing the profit by the weighted average number of ordinary units and dilutive potential ordinary units on issue during the financial period. | ||
(r) | Classification of units | |
Under Australian Generally Accepted Accounting Principles (AGAAP), units issued by the Trust were classified as equity on the Balance Sheet. To meet the IFRS equity classification requirements of IAS 32, on 10 October 2005, amendments were made to the Trust Constitution to remove the 80 year life of the Trust. | ||
Due to the classification of the Trusts units on issue as financial liabilities for the period from 1 July 2005 to 10 October 2005, A$30.9 million of the Trusts result (including revaluation gains) for the financial year ended 30 June 2006, has been disclosed as a finance cost in the Income Statement. Since 10 October 2005, the units on issue are classified as equity, therefore finance costs attributable to unitholders will not be recorded in future periods. | ||
(s) | Fair value estimation | |
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. | ||
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Trust is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price. |
11
1. | Summary of significant accounting policies (continued) | |
(s) | Fair value estimation (continued) | |
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques as allowed by IFRS. The Trust uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward exchange contracts is determined using forward exchange market rates at the balance sheet date. | ||
The nominal value less estimated credit adjustments of trade receivables and payables approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Trust for similar financial instruments. | ||
(t) | New standards and Urgent Issues Group Interpretations | |
Certain new standards, interpretations and amendments to existing standards have been published that are mandatory for the Trust for accounting periods beginning on or after 1 July 2008 or later periods, which the Trust has not yet adopted. These include: |
(i) |
IAS 8 Operating Segments (effective from 1 July 2009)
This standard will require the entity to adopt the management approach to disclosing information about its reportable segments. Generally, the financial information will be reported on the same basis as it is used internally by the chief decision maker for evaluating operating segment performance and deciding how to allocate resources to operating segments. Such information may be prepared using different measures from that used in preparing the Income Statement and Balance Sheet, in which case reconciliations of certain items will be required. |
||
(ii) |
IAS 1 Presentation of Financial Statements (effective from 1 January 2009)
This standard introduces the notion of a complete set of financial statements, and changes the presentation of financial statements so owner changes in equity are disclosed separately from non-owner changes in equity. All non-owner changes in equity (comprehensive income) will be presented either in one statement of comprehensive income or in two statements (an income statement and a statement of comprehensive income), instead of being presented in the statement of changes in equity. Additional disclosure will be made of the income tax relating to each component of other comprehensive income, and the titles of the financial statements will change although their use will not be mandatory (balance sheet becomes statement of financial position; income statement becomes part of the statement of comprehensive income, unless a separate income statement is provided; cash flow statement becomes statement of cash flows). |
||
(iii) |
IAS 3 Business Combinations and IAS 27 Consolidated and Separate Financial
Statements (effective from 1 July 2009)
These standards amend the accounting for certain aspects of business combinations and changes in ownership interests in subsidiaries. Changes include: |
| transaction costs are recognised as an expense at the acquisition date, unless the cost relates to issuing debt or equity securities; | ||
| contingent consideration is measured at fair value at the acquisition date (allowing for a 12-month period post-acquisition to affirm fair values) without regard to the probability of having to make a future payment, and all subsequent changes in fair value are recognised in profit; | ||
| changes in control are considered significant economic events, thereby requiring: |
| previous ownership interests to be remeasured to their fair value (and the gain/loss recognised in profit) when control is gained (i.e. becomes a subsidiary); and | ||
| retained ownership interests to be remeasured to their fair value (and the gain/loss recognised in profit) when control is lost (i.e. divestment of a subsidiary); |
| changes in a parents ownership interest in a subsidiary that do not result in a loss of control (e.g. dilutionary gains) are recognised directly in equity. |
(iv) |
IAS 23 Borrowing Costs (effective from 1 January 2009).
This standard removes the option to expense all borrowing costs and will require the capitalisation of all borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset. There will be no impact on the Trust as the Trust already capitalises borrowing costs in relation to qualifying assets. |
12
1. | Summary of significant accounting policies (continued) | |
(u) | Rounding | |
The Trust is a registered scheme of a kind referred to in Class Order 98/0100 issued by the Australian Securities & Investments Commission relating to the rounding off of amounts in the financial report. Amounts in the financial report have been rounded to the nearest thousand dollars in accordance with that Class Order, unless otherwise indicated. |
2. | Trust formation |
3. | Management fee |
(a) | Base fee |
(b) | Performance fee |
(i) | 5% of the total Increased Unitholder Value from outperformance; plus | ||
(ii) | 15% of the Increased Unitholder Value above 2% nominal outperformance per annum (1% per half year). |
13
3. | Management fees (continued) | |
(c) | Management fee calculation | |
The Managers total fee for the financial year is detailed as follows: |
2008 | 2007 | 2006 | ||||||||||
A$000 | A$000 | A$000 | ||||||||||
|
||||||||||||
Base fee
|
11,491 | 12,201 | 11,765 | |||||||||
Performance fee
|
| | | |||||||||
|
11,491 | 12,201 | 11,765 | |||||||||
4. | Net gain from derivative financial instruments |
(Loss)/gain on derivative financial instruments unrealised
|
(17,130 | ) | (2,881 | ) | 7,018 | |||||||
Gain on capital hedging derivative financial instruments realised
|
4,661 | 1,406 | 187 | |||||||||
Gain on income hedging derivative financial instruments realised
|
22,462 | 11,245 | 7,376 | |||||||||
(Loss)/gain on other derivative financial instruments realised
|
(6,624 | ) | 1,545 | 123 | ||||||||
|
3,369 | 11,315 | 14,704 | |||||||||
5. | Other expenses |
Accounting fees
|
165 | 165 | 165 | |||||||||
Audit committee fees independent directors
|
28 | 21 | 21 | |||||||||
Audit fees
|
224 | 198 | 219 | |||||||||
Bank fees
|
10 | 10 | 3 | |||||||||
Compliance fees independent directors
|
90 | 60 | 60 | |||||||||
Custodian fees
|
56 | 61 | 150 | |||||||||
Insurance
|
56 | 64 | 68 | |||||||||
Legal fees
|
82 | 70 | 65 | |||||||||
Postage and printing costs
|
71 | 63 | 47 | |||||||||
Registry fees
|
134 | 139 | 138 | |||||||||
Stock exchange costs
|
65 | 64 | | |||||||||
Taxation fees
|
13 | 24 | 15 | |||||||||
Travel
|
78 | 126 | 134 | |||||||||
Unitholder communications costs
|
104 | 174 | 150 | |||||||||
Other
|
186 | 80 | 40 | |||||||||
|
1,362 | 1,319 | 1,275 | |||||||||
6. | Remuneration of auditor |
Audit services
|
224 | 198 | 219 | |||||||||
Taxation services
|
13 | 24 | 15 | |||||||||
|
237 | 222 | 234 | |||||||||
14
6. | Remuneration of auditor (continued) |
7. | Earnings per unit |
2008 | 2007 | 2006 | ||||||||||
Basic earnings per unit (cents)
|
(0.88 | ) | 19.96 | 12.40 | ||||||||
Diluted earnings per unit (cents)
|
(0.88 | ) | 19.96 | 12.40 | ||||||||
|
||||||||||||
Distributable earnings per unit (cents)
|
9.81 | 10.03 | 10.05 | |||||||||
|
||||||||||||
Earnings used in the calculation of basic and diluted
earnings per unit ($000)
|
(8,199 | ) | 185,255 | 108,818 | ||||||||
Earnings used in the calculation of distributable earnings
per unit (refer to calculation in table below) ($000)
|
91,155 | 93,111 | 88,145 | |||||||||
|
||||||||||||
Weighted average number of units used in the calculation
of basic, diluted and distributable earnings per unit (000)*
|
929,461 | 928,110 | 877,254 | |||||||||
2008 | 2007 | 2006 | ||||||||||||||
Note | A$000 | A$000 | A$000 | |||||||||||||
|
||||||||||||||||
(Loss)/profit per Income Statement
|
(8,199 | ) | 185,255 | 108,818 | ||||||||||||
Unrealised items:
|
||||||||||||||||
Property valuation gains
|
18(iii) | 140,696 | (146,442 | ) | (92,151 | ) | ||||||||||
Unrealised loss/(gain) on derivative financial instruments
|
18(iv) | 19,325 | 4,802 | (11,969 | ) | |||||||||||
Unrealised foreign exchange (gains)/losses
|
18 | (v) | (25,539 | ) | (21,217 | ) | 2,578 | |||||||||
US capital gains tax expense
|
18 | (v) | (33,887 | ) | 71,884 | 52,956 | ||||||||||
Finance costs attributable to unitholders
|
| | 30,890 | |||||||||||||
Non-cash items:
|
||||||||||||||||
Amortisation of borrowing costs**
|
18 | (v) | 1,628 | 3,434 | 2,494 | |||||||||||
Straight lining of fixed rent increases
|
18 | (v) | (2,869 | ) | (4,914 | ) | (5,642 | ) | ||||||||
Reserve transfers:
|
||||||||||||||||
Valuation fees
|
18(iii) | | 309 | 171 | ||||||||||||
Distributable earnings
|
91,155 | 93,111 | 88,145 | |||||||||||||
15
7. | Earnings per unit (continued) |
8. | Distributions paid and payable |
9. | Receivables |
2008 | 2007 | |||||||
A$000 | A$000 | |||||||
|
||||||||
GST receivable
|
| 14 | ||||||
Withholding tax receivable
|
131 | 1,809 | ||||||
Sundry debtors
|
111 | | ||||||
|
242 | 1,823 | ||||||
16
10. | Derivative financial instruments |
2008 | 2007 | |||||||
A$000 | A$000 | |||||||
Assets
|
||||||||
Current
|
||||||||
Forward foreign exchange contracts
|
11,650 | 12,472 | ||||||
Cross currency swaps
|
34,266 | 14,650 | ||||||
Interest rate swaps
|
| - | ||||||
|
45,916 | 27,122 | ||||||
|
||||||||
Non-current
|
||||||||
Forward foreign exchange contracts
|
34,264 | 33,882 | ||||||
|
34,264 | 33,882 | ||||||
|
||||||||
Liabilities
|
||||||||
Current
|
||||||||
Interest rate swaps
|
13,682 | 25 | ||||||
|
13,682 | 25 | ||||||
2008 | 2007 | |||||||
A$000 | A$000 | |||||||
|
||||||||
Less than 1 year
|
27,222 | | ||||||
1 - 2 years
|
27,222 | 27,222 | ||||||
2 - 3 years
|
27,222 | 27,222 | ||||||
3 - 4 years
|
27,222 | 27,222 | ||||||
4 - 5 years
|
27,222 | 27,222 | ||||||
More than 5 years
|
139,554 | 27,222 | ||||||
|
275,664 | 136,110 | ||||||
17
10. | Derivative financial instruments (continued) |
2008 | 2007 | |||||||
A$000 | A$000 | |||||||
|
||||||||
Less than 1 year
|
208,731 | 206,399 | ||||||
1 - 2 years
|
| | ||||||
2 - 3 years
|
| | ||||||
3 - 4 years
|
| | ||||||
4 - 5 years
|
| | ||||||
More than 5 years
|
| | ||||||
|
208,731 | 206,399 | ||||||
11. | Investments in joint venture entities |
Ownership interest | ||||||||||||||||
Country of | 2008 | 2007 | ||||||||||||||
Joint venture entities | incorporation | Principal activity | % | % | ||||||||||||
|
||||||||||||||||
Macquarie DDR US Trust Inc. (US REIT I)
|
United States | Property investment | 97.32 | 97.32 | ||||||||||||
DDR Macquarie Fund LLC (US LLC)
|
United States | Property investment | 85.48 | * | 85.48 | * | ||||||||||
Macquarie DDR US Trust II Inc. (US REIT II)
|
United States | Property investment | 99.89 | 99.89 | ||||||||||||
DDR MDT MV LLC (MV LLC)
|
United States | Property investment | 49.94 | * | 49.94 | * | ||||||||||
DDR MDT PS LLC (PS LLC)
|
United States | Property investment | 90.24 | * | 90.23 | * | ||||||||||
(i) | Carrying amount of investments in joint venture entities |
2008 | 2007 | 2006 | ||||||||||||||
Note | A$000 | A$000 | A$000 | |||||||||||||
|
||||||||||||||||
Carrying amount at the beginning of the year
|
1,345,553 | 1,350,769 | 1,009,213 | |||||||||||||
Additions during the year
|
135 | 163 | 187,195 | |||||||||||||
Share of profit before property valuation gains
|
11(ii) | 73,224 | 90,099 | 99,971 | ||||||||||||
Share of property valuation (losses)/gains
|
11(ii) | (140,696 | ) | 146,442 | 92,151 | |||||||||||
Fair value
of derivative financial instruments on adoption of IAS 32/39
|
| | (4,321 | ) | ||||||||||||
Movement in share of cash flow hedge reserve
|
(27,842 | ) | 4,964 | 3,734 | ||||||||||||
Distributions paid and payable for the year
|
(71,344 | ) | (76,097 | ) | (63,669 | ) | ||||||||||
Return of capital
|
(83,120 | ) | | | ||||||||||||
Exchange rate differences on translation
|
(143,233 | ) | (170,787 | ) | 26,495 | |||||||||||
Carrying amount at the end of the year
|
952,677 | 1,345,553 | 1,350,769 | |||||||||||||
18
11. | Investments in joint venture entities (continued) | |
(ii) | Results attributable to joint venture entities (Trusts share) |
2008 | 2007 | 2006 | ||||||||||
A$000 | A$000 | A$000 | ||||||||||
|
||||||||||||
Property income
|
||||||||||||
Property income
|
226,156 | 256,509 | 241,497 | |||||||||
Property expenses
|
(66,564 | ) | (72,569 | ) | (68,439 | ) | ||||||
Net property income
|
159,592 | 183,940 | 173,058 | |||||||||
|
||||||||||||
Management fees
|
||||||||||||
Management base fee
|
(11,491 | ) | (12,201 | ) | (11,765 | ) | ||||||
Management performance fee
|
| | | |||||||||
|
(11,491 | ) | (12,201 | ) | (11,765 | ) | ||||||
|
||||||||||||
Finance costs
|
||||||||||||
Interest expense
|
(65,411 | ) | (72,919 | ) | (62,072 | ) | ||||||
Borrowing establishment costs
|
(3,147 | ) | (3,973 | ) | (2,624 | ) | ||||||
|
(68,558 | ) | (76,892 | ) | (64,696 | ) | ||||||
Other income and expenses
|
||||||||||||
Interest income
|
485 | 586 | 580 | |||||||||
Derivative financial instrument loss
|
(2,195 | ) | (1,921 | ) | 4,951 | |||||||
Other operating expenses
|
(4,609 | ) | (3,413 | ) | (2,157 | ) | ||||||
Total other income and expenses
|
(6,319 | ) | (4,748 | ) | 3,374 | |||||||
|
||||||||||||
Share of net profit from investments
in joint venture entities before
property valuation gains
|
73,224 | 90,099 | 99,971 | |||||||||
|
||||||||||||
Property valuation gains
|
||||||||||||
Revaluation of investment properties
|
25,209 | 147,890 | 97,793 | |||||||||
Devaluation of investment properties
|
(163,036 | ) | (3,466 | ) | | |||||||
Revaluation
of investment properties adjustment for straight lining of
fixed rent increases
|
(2,869 | ) | (4,914 | ) | (5,642 | ) | ||||||
Total property valuation (losses)/gains
|
(140,696 | ) | 146,442 | 92,151 | ||||||||
|
||||||||||||
Share of net (loss)/profit from
investments in joint venture entities
|
(67,472 | ) | 236,541 | 192,122 | ||||||||
19
11. | Investments in joint venture entities (continued) | |
(iii) | Share of joint venture entities assets and liabilities |
2008 | 2007 | |||||||
A$000 | A$000 | |||||||
|
||||||||
Current assets
|
44,788 | 41,373 | ||||||
Property held for sale
|
132,048 | | ||||||
Derivative financial instruments
|
| 8,338 | ||||||
Investment properties
|
2,103,659 | 2,617,449 | ||||||
Total assets
|
2,280,495 | 2,667,160 | ||||||
|
||||||||
Current liabilities
|
21,976 | 25,335 | ||||||
Derivative financial instruments
|
19,491 | | ||||||
Current interest bearing liabilities*
|
454,385 | | ||||||
Non-current interest bearing liabilities
|
831,966 | 1,296,272 | ||||||
Total liabilities
|
1,327,818 | 1,321,607 | ||||||
|
||||||||
Net assets
|
952,677 | 1,345,553 | ||||||
12. | Payables |
|
||||||||
Custodian fees
|
14 | 15 | ||||||
Withholding tax payable
|
1,053 | 3,372 | ||||||
Amounts payable to settle derivative closed before year end
|
4,489 | | ||||||
Sundry creditors and accruals
|
450 | 1,686 | ||||||
|
6,006 | 5,073 | ||||||
13. | Provisions |
|
||||||||
Distribution
|
||||||||
Opening balance
|
| | ||||||
Distributions declared
|
89,462 | 92,715 | ||||||
Paid during the year
|
(89,462 | ) | (82,574 | ) | ||||
Distributions reinvested
|
| (10,141 | ) | |||||
Closing balance
|
| - | ||||||
20
14. | Interest bearing liabilities |
2008 | 2007 | |||||||
A$000 | A$000 | |||||||
|
||||||||
Non-current
|
||||||||
Bank loan
|
808 | 87,039 | ||||||
Less: Unamortised transaction costs
|
(239 | ) | (301 | ) | ||||
|
569 | 86,738 | ||||||
15. | Tax liabilities |
US capital gains deferred tax liability
|
147,780 | 205,078 | ||||||
|
147,780 | 205,078 | ||||||
16. | Contributed equity |
|
||||||||||||||||||
No. of units |
Details
|
Date of income entitlement | ||||||||||||||||
838,580,202 |
Units on issue
|
30 Jun 2005 | 835,550 | |||||||||||||||
9,843,026 |
DRP issue
|
1 Jul 2005 | 11,644 | |||||||||||||||
11,154,491 |
DRP issue
|
1 Sep 2005 | 12,538 | |||||||||||||||
7,715,154 |
Underwritten DRP
|
1 Sep 2005 | 8,672 | |||||||||||||||
9,859,770 |
DRP issue
|
1 Jan 2006 | 11,008 | |||||||||||||||
23,915,309 |
Conversion of REIT
shares*
|
20 Jan 2006 | 27,742 | |||||||||||||||
8,087,631 |
Underwritten DRP
|
19 Apr 2006 | 9,543 | |||||||||||||||
11,003,429 |
DRP issue
|
1 Apr 2006 | 12,983 | |||||||||||||||
Equity issue costs
|
(147 | ) | ||||||||||||||||
920,159,012 |
Units on issue
|
30 Jun 2006 | 929,533 | 929,533 | ||||||||||||||
9,301,843 |
DRP issue**
|
1 Jul 2006 | 10,141 | |||||||||||||||
Equity issue costs
|
(17 | ) | ||||||||||||||||
929,460,855 |
Units on issue***
|
30 Jun 2007 | 939,657 | 939,657 | ||||||||||||||
|
||||||||||||||||||
929,460,855 |
Units on issue
|
30 Jun 2008 | 939,657 | 939,657 | ||||||||||||||
21
16. | Contributed equity (continued) |
17. | Reserves |
2008 | 2007 | |||||||||||
Note | A$000 | A$000 | ||||||||||
|
||||||||||||
Foreign currency translation reserve
|
||||||||||||
Opening balance
|
(143,209 | ) | (24,617 | ) | ||||||||
Translation of foreign operations*
|
(143,130 | ) | (159,081 | ) | ||||||||
Fair value of derivative financial instruments on adoption of IAS 32/39
|
| | ||||||||||
Movement in fair value of effective net investment hedges
|
20,188 | 40,489 | ||||||||||
Closing balance
|
(266,151 | ) | (143,209 | ) | ||||||||
|
||||||||||||
Capital reserve
|
||||||||||||
Opening balance
|
(3,212 | ) | (3,212 | ) | ||||||||
Closing balance
|
(3,212 | ) | (3,212 | ) | ||||||||
|
||||||||||||
Cash flow hedge reserve
|
||||||||||||
Opening balance
|
8,698 | 3,734 | ||||||||||
Movement in effective cash flow hedges held by joint venture entities
|
(27,842 | ) | 4,964 | |||||||||
Closing balance
|
(19,144 | ) | 8,698 | |||||||||
Total reserves
|
(288,507 | ) | (137,723 | ) | ||||||||
22
18. | Undistributed income |
2008 | 2007 | 2006 | ||||||||||||||
Note | A$000 | A$000 | A$000 | |||||||||||||
|
||||||||||||||||
(i) Summary of undistributed income
|
||||||||||||||||
Undistributed income realised items
|
18(ii) | 29,421 | 27,728 | 27,332 | ||||||||||||
Undistributed income investment property revaluations
|
18(iii) | 323,390 | 464,086 | 317,953 | ||||||||||||
Undistributed income unrealised derivative revaluations
|
18(iv) | 3,483 | 22,808 | 27,610 | ||||||||||||
Undistributed income other unrealised items
|
18 | (v) | (141,835 | ) | (202,502 | ) | (153,315 | ) | ||||||||
Total undistributed income
|
214,459 | 312,120 | 219,580 | |||||||||||||
|
||||||||||||||||
(ii) Undistributed income realised items
|
||||||||||||||||
Opening balance
|
27,728 | 27,332 | 24,900 | |||||||||||||
Distributable earnings
|
7 | 91,155 | 93,111 | 88,145 | ||||||||||||
Available for distribution
|
118,883 | 120,443 | 113,045 | |||||||||||||
Distributions paid and payable
|
13 | (89,462 | ) | (92,715 | ) | (85,713 | ) | |||||||||
Closing balance
|
29,421 | 27,728 | 27,332 | |||||||||||||
23
19. | Cash and cash equivalents |
2008 | 2007 | |||||||||||
Note | A$000 | A$000 | ||||||||||
|
||||||||||||
Australian dollar operating account
|
315 | 430 | ||||||||||
US dollar operating account
|
218 | 2,136 | ||||||||||
|
533 | 2,566 | ||||||||||
20. | Cash flow information |
|
||||||||||||
(a) Reconciliation of profit to net cash flows from
operating activities
|
||||||||||||
|
||||||||||||
Profit
|
(8,199 | ) | 185,255 | 108,818 | ||||||||
|
||||||||||||
Non-cash items
|
||||||||||||
Share of joint venture entities net profits less
distributions
|
81,240 | (14,011 | ) | (11,793 | ) | |||||||
Finance costs attributable to unitholders
|
| | 30,890 | |||||||||
Property valuation gains
|
140,696 | (146,442 | ) | (92,151 | ) | |||||||
Realised gain on transfer of loan without cash received
|
(4,000 | ) | | | ||||||||
Exchange rate differences on translation
|
109 | 329 | 253 | |||||||||
|
||||||||||||
Classified as financing activities
|
||||||||||||
Interest paid
|
3,284 | 5,462 | 4,124 | |||||||||
|
||||||||||||
Changes in assets and liabilities
|
||||||||||||
Decrease/(increase) in assets
|
||||||||||||
Receivables
|
1,581 | 3,025 | 2,021 | |||||||||
Derivative financial instruments not recognised
in the foreign currency
translation reserve
|
14,667 | 2,425 | (7,225 | ) | ||||||||
Other
|
8 | 36 | (40 | ) | ||||||||
Increase in liabilities
|
||||||||||||
Payables
|
933 | 364 | 295 | |||||||||
Deferred tax liability
|
(57,298 | ) | 50,394 | 55,120 | ||||||||
Net cash flows from operating activities
|
173,021 | 86,837 | 90,312 | |||||||||
|
||||||||||||
(b) Non-cash financing and investing activities
|
||||||||||||
|
||||||||||||
The following items are not reflected in the Cash Flow Statement:
|
||||||||||||
|
||||||||||||
Distributions by the Trust satisfied during the financial year
by the issue of units under DRP
|
| 10,141 | 48,173 | |||||||||
Acquisition of shares in US REIT 1 satisfied by the issue of
units in the Trust in line with the exchange agreement
|
| | 27,742 | |||||||||
24
21. | Net tangible assets |
2008 | 2007 | |||||||
A$000 | A$000 | |||||||
|
||||||||
Total assets
|
1,033,646 | 1,410,968 | ||||||
Less: Total liabilities
|
(168,037 | ) | (296,914 | ) | ||||
Net tangible assets
|
865,609 | 1,114,054 | ||||||
|
||||||||
Total number of units on issue
|
929,460,855 | 929,460,855 | ||||||
Net tangible asset backing per unit
|
$ | 0.93 | $ | 1.20 | ||||
Net tangible asset backing per unit after distribution
|
$ | 0.91 | $ | 1.17 | ||||
Net tangible asset backing per unit after
distribution and excluding deferred tax liability
|
$ | 1.07 | $ | 1.39 |
22. | Related party disclosures | |
(a) | Directors |
W Richard Sheppard
Steven Guttman Robert Joss David Spruell Scott Wolstein David Jacobstein (resigned 10 December 2007) David Oakes (appointed 10 December 2007) Daniel Hurwitz Mark Baillie Stephen Girdis Joan Allgood (alternate for Daniel Hurwitz, David Jacobstein and Scott Wolstein ceased to act as alternate director for David Jacobstein 10 December 2007) John Wright (alternate for W Richard Sheppard, Mark Baillie and Stephen Girdis). |
(b) | Parent entity |
(c) | Transactions with related parties |
25
22. | Related party disclosures (continued) | |
(c) | Transactions with related parties (continued) |
(d) | Key management personnel and remuneration |
26
22. | Related party disclosures (continued) | |
(e) | Directors interest in Trust units |
Units held | Units held | Units held | ||||||||||
2008 | 2007 | 2006 | ||||||||||
|
||||||||||||
W Richard Sheppard
|
1,012,000 | 512,000 | 512,000 | |||||||||
Mark Baillie
|
450,000 | 150,000 | 150,000 | |||||||||
Stephen Girdis
|
239,662 | 164,662 | 164,662 | |||||||||
Steven Guttman
|
60,000 | | | |||||||||
Daniel Hurwitz
|
| | | |||||||||
David Jacobstein
|
| | | |||||||||
David Oakes
|
| | | |||||||||
Robert Joss
|
250,000 | 50,000 | 50,000 | |||||||||
David Spruell
|
230,561 | 80,561 | 78,755 | |||||||||
Scott Wolstein
|
100,000 | | | |||||||||
Joan Allgood (alternate)
|
| | | |||||||||
John Wright (alternate)
|
20,000 | 20,000 | 20,000 | |||||||||
Units | Units | Units | ||||||||||
2008 | 2007 | 2006 | ||||||||||
|
||||||||||||
Acquisitions
|
||||||||||||
W Richard Sheppard
|
500,000 | | 200,000 | |||||||||
Mark Baillie
|
300,000 | | | |||||||||
Stephen Girdis
|
75,000 | | | |||||||||
Steven Guttman
|
60,000 | | | |||||||||
Robert Joss
|
200,000 | | 50,000 | |||||||||
David Spruell
|
150,000 | 1,806 | 43,171 | |||||||||
Scott Wolstein
|
100,000 | | | |||||||||
John Wright (alternate)
|
19,291 | |||||||||||
|
||||||||||||
Disposals
|
| | | |||||||||
27
23. | Segment information |
United | Unallocated | |||||||||||||||
States | Australia | Finance costs | Total | |||||||||||||
2008 | 2008 | 2008 | 2008 | |||||||||||||
30 June 2008 | A$000 | A$000 | A$000 | A$000 | ||||||||||||
|
||||||||||||||||
Share of net
(losses)/profits from
investments in joint
venture entities
|
(67,472 | ) | | | (67,472 | ) | ||||||||||
Total income
|
(67,472 | ) | 33,382 | | (34,090 | ) | ||||||||||
Total tax benefit/(expense)
|
29,196 | | | 29,196 | ||||||||||||
Profit
|
(38,276 | ) | 30,077 | | (8,199 | ) | ||||||||||
|
||||||||||||||||
Total assets
|
952,919 | 80,727 | | 1,033,646 | ||||||||||||
Total liabilities
|
148,833 | 19,204 | | 168,037 | ||||||||||||
Asset acquisitions
|
58,105 | | | 58,105 | ||||||||||||
United | Unallocated | |||||||||||||||
States | Australia | Finance costs | Total | |||||||||||||
2007 | 2007 | 2007 | 2007 | |||||||||||||
30 June 2007 | A$000 | A$000 | A$000 | A$000 | ||||||||||||
Share of net
(losses)/profits from
investments in joint
venture entities
|
236,541 | | | 236,541 | ||||||||||||
Total income
|
236,541 | 33,377 | | 269,918 | ||||||||||||
Total tax benefit/(expense)
|
(77,250 | ) | | | (77,250 | ) | ||||||||||
Profit
|
159,291 | 25,964 | | 185,255 | ||||||||||||
|
||||||||||||||||
Total assets
|
1,347,362 | 63,606 | | 1,410,968 | ||||||||||||
Total liabilities
|
208,450 | 88,464 | | 296,914 | ||||||||||||
Asset acquisitions
|
19,017 | | | 19,017 | ||||||||||||
United | Unallocated | |||||||||||||||
States | Australia | Finance costs | Total | |||||||||||||
2006 | 2006 | 2006 | 2006 | |||||||||||||
30 June 2006 | A$000 | A$000 | A$000 | A$000 | ||||||||||||
Share of net
(losses)/profits from
investments in joint
venture entities
|
192,122 | | | 192,122 | ||||||||||||
Total income
|
192,122 | 15,036 | | 207,158 | ||||||||||||
Total tax benefit/(expense)
|
(52,956 | ) | | | (52,956 | ) | ||||||||||
Profit
|
133,308 | 6,400 | (30,890 | ) | 108,818 | |||||||||||
|
||||||||||||||||
Total assets
|
1,356,027 | 27,563 | | 1,383,590 | ||||||||||||
Total liabilities
|
158,213 | 100,359 | | 258,572 | ||||||||||||
Asset acquisitions
|
512,603 | | | 512,603 | ||||||||||||
28
24. | Capital and financial risk management | |
(a) | Capital risk management |
(b) | Financial risk management |
(c) | Financial risk |
29
24. | Capital and financial risk management (continued) | |
(c) | Financial risk (continued) |
Australian dollar exposure | US dollar exposure | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
$'000s | $'000s | $'000s | $'000s | |||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
314 | 430 | 219 | 2,136 | ||||||||||||
Derivative financial instruments
|
80,180 | 61,004 | | | ||||||||||||
Receivables and other assets
|
14 | 36 | 242 | 1,809 | ||||||||||||
Investment in joint venture entities
|
| | 952,678 | 1,345,553 | ||||||||||||
|
80,508 | 61,470 | 953,139 | 1,349,498 | ||||||||||||
|
||||||||||||||||
Liabilities
|
||||||||||||||||
Payables
|
463 | 300 | 5,543 | 4,773 | ||||||||||||
Derivative financial instruments
|
| | 13,682 | 25 | ||||||||||||
Interest bearing liabilities
|
| | 569 | 86,738 | ||||||||||||
Deferred tax liabilities
|
| | 147,780 | 205,078 | ||||||||||||
|
463 | 300 | 167,574 | 296,614 | ||||||||||||
|
||||||||||||||||
Net assets
|
80,045 | 61,170 | 785,565 | 1,052,884 | ||||||||||||
|
||||||||||||||||
Notional value of derivatives to hedge
foreign exchange exposure
|
| | (420,887 | ) | (405,173 | ) | ||||||||||
Net exposure to foreign exchange movements
|
80,045 | 61,170 | 364,678 | 647,711 | ||||||||||||
Profit | Distributable earnings | Total equity movement | ||||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
A$'000s | A$'000s | A$'000s | A$'000s | A$'000s | A$'000s | |||||||||||||||||||
AUD:USD AUD increase 10%
|
34,208 | 31,127 | | | (33,153 | ) | (58,883 | ) | ||||||||||||||||
AUD:USD AUD decrease 10%
|
(37,629 | ) | (34,239 | ) | | | 40,520 | 71,968 | ||||||||||||||||
30
24. | Capital and financial risk management (continued) | |
(c) | Financial risk (continued) |
Australian interest rates | US interest rates | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
A$'000s | A$'000s | A$'000s | A$'000s | |||||||||||||
Fixed rate
|
||||||||||||||||
Interest bearing liabilities
|
| | (886,303 | ) | (1,002,015 | ) | ||||||||||
Cross currency swaps
|
275,664 | 136,110 | (225,429 | ) | (117,943 | ) | ||||||||||
|
275,664 | 136,110 | (1,111,732 | ) | (1,119,958 | ) | ||||||||||
|
||||||||||||||||
Floating rates
|
||||||||||||||||
Cash and cash equivalents
|
315 | 430 | 219 | 2,136 | ||||||||||||
Interest bearing liabilities
|
| | (400,618 | ) | (380,996 | ) | ||||||||||
|
315 | 430 | (400,399 | ) | (378,860 | ) | ||||||||||
|
||||||||||||||||
Interest rate swaps
|
| | 234,692 | 235,739 | ||||||||||||
|
||||||||||||||||
Net interest rate exposure
|
315 | 430 | (165,707 | ) | (143,121 | ) | ||||||||||
Profit | Distributable earnings | Total equity movement | ||||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
A$'000s | A$'000s | A$'000s | A$'000s | A$'000s | A$'000s | |||||||||||||||||||
0.5% p.a increase in AUD rates
|
(7,046 | ) | (5,277 | ) | 2 | 2 | (7,047 | ) | (5,279 | ) | ||||||||||||||
0.5% p.a decrease in AUD rates
|
7,046 | 5,277 | (2 | ) | (2 | ) | 7,047 | 5,279 | ||||||||||||||||
0.5% p.a increase in USD rates
|
14,477 | 11,421 | (829 | ) | (716 | ) | 27,129 | 24,141 | ||||||||||||||||
0.5% p.a decrease in USD rates
|
(14,477 | ) | (11,421 | ) | 829 | 716 | (27,129 | ) | (24,141 | ) | ||||||||||||||
31
24. | Capital and financial risk management (continued) | |
(d) | Liquidity risk |
Less than | ||||||||||||||||||||
Book value | 1 year | 1 to 2 years | 2 to 3 years | Total | ||||||||||||||||
2008 | 2008 | 2008 | 2008 | 2008 | ||||||||||||||||
30 June 2008 | A$000 | A$000 | A$000 | A$000 | A$000 | |||||||||||||||
Financial liabilities
|
||||||||||||||||||||
Payables
|
6,006 | 6,006 | | | 6,006 | |||||||||||||||
Interest bearing liabilities
|
569 | 31 | 831 | | 862 | |||||||||||||||
Derivative financial instruments*
|
13,682 | 13,682 | | | 13,682 | |||||||||||||||
Total undiscounted financial liabilities
|
20,257 | 19,719 | 831 | | 20,550 | |||||||||||||||
Less than | ||||||||||||||||||||
Book value | 1 year | 1 to 2 years | 2 to 3 years | Total | ||||||||||||||||
2007 | 2007 | 2007 | 2007 | 2007 | ||||||||||||||||
30 June 2007 | A$000 | A$000 | A$000 | A$000 | A$000 | |||||||||||||||
Financial liabilities
|
||||||||||||||||||||
Payables
|
5,073 | 5,073 | | | 5,073 | |||||||||||||||
Interest bearing liabilities
|
86,738 | 5,536 | 5,536 | 91,175 | 102,247 | |||||||||||||||
Derivative financial instruments*
|
25 | 25 | | | 25 | |||||||||||||||
Total undiscounted financial liabilities
|
91,836 | 10,634 | 5,536 | 91,175 | 107,345 | |||||||||||||||
2008 | 2007 | |||||||
A$000 | A$000 | |||||||
Less than 1 year*
|
458,045 | | ||||||
1 to 2 years
|
500,594 | 517,634 | ||||||
2 to 3 years
|
134,720 | 288,805 | ||||||
3 to 4 years
|
75,834 | 357,421 | ||||||
4 to 5 years
|
6,746 | 85,699 | ||||||
more than 5 years
|
114,880 | 140,292 | ||||||
|
1,290,819 | 1,389,851 | ||||||
Borrowing costs to be amortised
|
(3,899 | ) | (6,841 | ) | ||||
|
1,286,920 | 1,383,010 | ||||||
32
24. | Capital and financial risk management (continued) | |
(e) | Credit risk |
2008 | 2007 | |||||||
A$000 | A$000 | |||||||
Cash and cash equivalents with Australian entities
|
533 | 2,566 | ||||||
Derivative financial instruments with Australian entities
|
80,180 | 61,004 | ||||||
Receivables with US entities
|
131 | 1,809 | ||||||
Receivables with Australian entities
|
111 | 14 | ||||||
|
80,955 | 65,393 | ||||||
25. | Commitments and contingent liabilities |
26. | Significant contract terms and conditions |
33
27. | Events occurring after reporting date |
| The Trust has refinanced US$291 million of debt held in US LLC (Trusts share) due to expire in December 2008. The new facility is US$316.7 million (Trusts share) of which US$229 million matures in 2015 and US$87.7 million matures in 2011; | ||
| The Trust has agreed terms to increase the gearing covenant on the Trusts loan from 60% to 65% and net worth to US$650 million on the condition that the facility is reduced to US$50 million. At 30 June 2008 it was drawn to US$76.8 million and it has subsequently reduced to below US$50 million; | ||
| In the period to 31 December 2008, Mervyns entered into chapter 11 and in January 2009 vacated 37 properties in the Trusts portfolio. The Trust has sold five of its Mervyns portfolio to Kohls Department Store and re-leased one of its Mervyns properties in California to Forever 21; | ||
| The Trust has sold one property in Kansas City, Missouri, for a price of US$62 million (Trusts share US$53 million); | ||
| The Trust has entered into sale contracts for one of its properties in Nashville, Tennessee, for US$16 million (Trusts share US$13.7 million); | ||
| The Trust has revised its hedging policy from 90-100% of net assets to 60-100% of gross assets. The policy change has resulted in the realisation of US$216 million of cross currency swaps resulting in a A$15 million profit; and | ||
| The Trust has relaxed its policy of hedging long term future US dollar income generated by the Trusts assets. Accordingly, the Trust has entered into offsetting foreign exchange forward agreements for 96% of its currency income hedge exposures at an average spot rate of approximately US$0.71; |
34
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