10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2006

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-11690

DEVELOPERS DIVERSIFIED REALTY CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	34-1723097
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3300 Enterprise Parkway, Beachwood, Ohio 44122

(Address of principal executive offices — zip code)

(216) 755-5500

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ      Accelerated filer o      Non-accelerated filer o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o No þ

     As of November 1, 2006, the registrant had 108,897,597 outstanding common shares, without par value.

PART I
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS — Unaudited

 EX-10.1

 EX-10.2

 EX-10.3

 EX-10.4

 EX-10.5

 EX-10.6

 EX-10.7

 EX-10.8

 EX-10.9

 EX-10.10

 EX-10.11

 EX-10.12

 EX-10.13

 EX-10.14

 EX-10.15

 EX-10.16

 EX-10.17

 EX-10.18

 EX-10.19

 EX-10.20

 EX-10.21

 EX-10.22

 EX-31.1

 EX-31.2

 EX-32.1

 EX-32.2

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DEVELOPERS DIVERSIFIED REALTY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

(Unaudited)

	September 30,			December 31,
	2006			2005
Assets
Real estate rental property:
Land	$	1,769,490		$	1,721,321
Buildings		4,987,320			4,806,373
Fixtures and tenant improvements		191,065			152,958
Construction in progress		447,260			348,685
		7,395,135			7,029,337
Less: Accumulated depreciation		(822,074	)		(692,823	)
Real estate, net		6,573,061			6,336,514
Cash and cash equivalents		48,431			30,655
Investments in and advances to joint ventures		133,643			275,136
Notes receivable		24,250			24,996
Deferred charges, net		25,353			21,157
Real estate held for sale		19,126			—
Other assets		193,644			174,519
	$	7,017,508		$	6,862,977
Liabilities and Shareholders’ Equity
Unsecured indebtedness:
Fixed rate notes	$	2,217,501		$	1,966,268
Variable rate term debt		—			200,000
Revolving credit facilities		125,000			150,000
		2,342,501			2,316,268
Secured indebtedness:
Variable rate term debt		400,000			220,000
Mortgage and other secured indebtedness		1,335,783			1,354,733
		1,735,783			1,574,733
Total indebtedness		4,078,284			3,891,001
Accounts payable and accrued expenses		151,067			111,186
Dividends payable		71,211			65,799
Other liabilities		86,299			93,261
		4,386,861			4,161,247
Minority equity interest		105,432			99,181
Operating partnership minority interests		18,021			32,268
		4,510,314			4,292,696
Commitments and contingencies
Shareholders’ equity:
Class F – 8.60% cumulative redeemable preferred shares, without par value, $250 liquidation value; 750,000 shares authorized; 600,000 shares issued and outstanding at September 30, 2006 and December 31, 2005		150,000			150,000
Class G – 8.0% cumulative redeemable preferred shares, without par value, $250 liquidation value; 750,000 shares authorized; 720,000 shares issued and outstanding at September 30, 2006 and December 31, 2005		180,000			180,000
Class H – 7.375% cumulative redeemable preferred shares, without par value, $500 liquidation value; 410,000 shares authorized; 410,000 shares issued and outstanding at September 30, 2006 and December 31, 2005		205,000			205,000
Class I – 7.5% cumulative redeemable preferred shares, without par value, $500 liquidation value; 340,000 shares authorized; 340,000 shares issued and outstanding at September 30, 2006 and December 31, 2005		170,000			170,000
Common shares, without par value, $.10 stated value; 200,000,000 shares authorized; 109,739,262 and 108,947,748 shares issued at September 30, 2006 and December 31, 2005, respectively		10,974			10,895
Paid-in-capital		1,961,053			1,945,245
Accumulated distributions in excess of net income		(143,510	)		(99,756	)
Deferred obligation		12,386			11,616
Accumulated other comprehensive income		6,204			10,425
Less: Unearned compensation – restricted stock		—			(13,144	)
Common shares in treasury at costs: 845,025 shares at September 30, 2006		(44,913	)		—
		2,507,194			2,570,281
	$	7,017,508		$	6,862,977

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DEVELOPERS DIVERSIFIED REALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30,

(Dollars in thousands, except per share amounts)

(Unaudited)

	2006			2005
Revenues from operations:
Minimum rents	$	143,769		$	125,628
Percentage and overage rents		1,775			1,335
Recoveries from tenants		45,821			39,183
Ancillary income		3,365			2,793
Other property related income		1,470			1,334
Management and other fee income		7,517			4,701
Development fee income		849			745
Other		1,040			3,771
		205,606			179,490
Rental operation expenses:
Operating and maintenance		28,181			22,758
Real estate taxes		25,101			21,560
General and administrative		14,974			14,146
Depreciation and amortization		48,835			39,646
		117,091			98,110
Other income (expense):
Interest income		1,602			2,959
Interest expense		(55,386	)		(46,697	)
Other expense		(203	)		(660	)
		(53,987	)		(44,398	)
Income before equity in net income of joint ventures, minority interests, tax benefit of taxable REIT subsidiaries and franchise taxes, discontinued operations and gain on disposition of real estate		34,528			36,982
Equity in net income of joint ventures		12,868			11,418
Income before minority interests, tax benefit of taxable REIT subsidiaries and franchise taxes, discontinued operations and gain on disposition of real estate		47,396			48,400
Minority interests:
Minority equity interests		(1,749	)		(1,876	)
Operating partnership minority interests		(534	)		(729	)
		(2,283	)		(2,605	)
Tax benefit of taxable REIT subsidiaries and franchise taxes		315			10
Income from continuing operations		45,428			45,805
Discontinued operations:
Income from discontinued operations		253			963
Gain on disposition of real estate, net of tax		3,169			10,978
Income from discontinued operations		3,422			11,941
Income before gain on disposition of real estate		48,850			57,746
Gain on disposition of real estate		13,962			2,531
Net income	$	62,812		$	60,277
Net income applicable to common shareholders	$	49,020		$	46,485
Per share data:
Basic earnings per share data:
Income from continuing operations applicable to common shareholders	$	0.42		$	0.32
Income from discontinued operations		0.03			0.11
Net income applicable to common shareholders	$	0.45		$	0.43
Diluted earnings per share data:
Income continuing operations applicable to common shareholders	$	0.42		$	0.32
Income from discontinued operations		0.03			0.11
Net income applicable to common shareholders	$	0.45		$	0.43

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DEVELOPERS DIVERSIFIED REALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30,

(Dollars in thousands, except per share amounts)

(Unaudited)

	2006			2005
Revenues from operations:
Minimum rents	$	424,153		$	371,959
Percentage and overage rents		5,779			4,823
Recoveries from tenants		131,586			114,306
Ancillary income		9,552			6,585
Other property related income		5,387			3,993
Management and other fee income		19,199			13,976
Development fee income		2,121			1,913
Other		8,565			8,126
		606,342			525,681
Rental operation expenses:
Operating and maintenance		82,481			69,783
Real estate taxes		70,959			61,910
General and administrative		45,805			40,188
Depreciation and amortization		143,309			116,412
		342,554			288,293
Other income (expense):
Interest income		7,586			6,392
Interest expense		(164,812	)		(130,947	)
Other income (expense)		464			(2,526	)
		(156,762	)		(127,081	)
Income before equity in net income of joint ventures, minority interests, tax benefit (expense) of taxable REIT subsidiaries and franchise taxes, discontinued operations and gain on disposition of real estate		107,026			110,307
Equity in net income of joint ventures		22,956			25,984
Income before minority interests, tax benefit (expense) of taxable REIT subsidiaries and franchise taxes, discontinued operations and gain on disposition of real estate		129,982			136,291
Minority interests:
Minority equity interests		(4,903	)		(3,017	)
Operating partnership minority interests		(1,601	)		(2,187	)
		(6,504	)		(5,204	)
Tax benefit (expense) of taxable REIT subsidiaries and franchise taxes		2,646			(555	)
Income from continuing operations		126,124			130,532
Discontinued operations:
Income from discontinued operations		858			3,208
Gain on disposition of real estate, net of tax		3,169			13,977
Income from discontinued operations		4,027			17,185
Income before gain on disposition of real estate		130,151			147,717
Gain on disposition of real estate, net of tax		61,124			86,065
Net income	$	191,275		$	233,782
Net income applicable to common shareholders	$	149,898		$	192,405
Per share data:
Basic earnings per share data:
Income from continuing operations applicable to common shareholders	$	1.33		$	1.62
Income from discontinued operations		0.04			0.16
Net income applicable to common shareholders	$	1.37		$	1.78
Diluted earnings per share data:
Income continuing operations applicable to common shareholders	$	1.33		$	1.60
Income from discontinued operations		0.04			0.16
Net income applicable to common shareholders	$	1.37		$	1.76

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DEVELOPERS DIVERSIFIED REALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30,

(Dollars in thousands)

(Unaudited)

	2006			2005
Net cash flow provided by operating activities	$	285,398		$	275,319
Cash flow from investing activities:
Real estate developed or acquired, net of liabilities assumed		(350,234	)		(800,424	)
Proceeds from sale and refinancing of joint venture interests		22,086			83,334
Equity contributions to joint ventures, net		(31,861	)		(21,251	)
Repayment of notes receivable		746			578
Advances to joint ventures		340			(86,763	)
Proceeds from disposition of real estate		318,794			537,913
Net cash flow used for investing activities		(40,129	)		(286,613	)
Cash flow from financing activities:
(Repayments) Proceeds from revolving credit facilities, net		(230,000	)		380,000
Proceeds of term loans		185,000			70,000
Proceeds from construction loans and mortgages		3,347			80,954
Proceeds from issuance of medium term notes, net of underwriting commissions and $742 of offering expense in 2005		—			395,654
Proceeds from issuance of convertible senior notes, net of underwriting commissions and offering expenses of $550 in 2006		244,450			—
Purchased option arrangement on common shares		(10,337	)		—
Principal payments on rental property debt		(143,495	)		(713,864	)
Payment of deferred finance costs		(3,767	)		(6,668	)
Proceeds from issuance of common shares in conjunction with the exercise of stock options, dividend reinvestment plan and restricted stock plan		7,051			10,220
Distributions to operating partnership minority interests		(1,813	)		(2,172	)
Repurchase of common shares		(48,313	)		—
Dividends paid		(229,616	)		(213,821	)
Net cash flow (used for) provided by financing activities		(227,493	)		303
Increase (decrease) in cash and cash equivalents		17,776			(10,991	)
Cash and cash equivalents, beginning of period		30,655			49,871
Cash and cash equivalents, end of period	$	48,431		$	38,880

     Supplemental disclosure of non-cash investing and financing activities:

     For the nine-months ended September 30, 2006, in connection with the adoption of EITF 04-05, as of January 1, 2006, the Company consolidated real estate assets of $41.4 million and a mortgage payable of $17.1 million. In conjunction with the acquisition of its partners’ interests in four shopping centers, the Company acquired real estate assets of $212.6 million and assumed debt of $104.1 million. For the nine-months ended September 30, 2006, in conjunction with the acquisition of its partners’ interests in 52 assets, the Company acquired real estate assets of $156.3 million, other assets of $25.9 million and assumed debt of $28.8 million. For the nine-months ended September 30, 2006, minority interests with a book value of approximately $14.2 million were converted into approximately 0.4 million common shares of the Company, resulting in an increase of approximately $8.2 million to real estate assets. At September 30, 2006, dividends payable were $71.2 million. Other liabilities include approximately $1.4 million, which represents the fair value of the Company’s interest rate swap. The foregoing transactions did not provide for or require the use of cash for the nine-month period ended September 30, 2006.

     For the nine-months ended September 30, 2005, in conjunction with the acquisition of 15 assets, the Company assumed mortgage debt at a fair value of approximately $673.2 million and other liabilities of approximately $4.4 million. At September 30, 2005, dividends payable were $65.8 million. Included in other assets and debt is approximately $0.6 million, which represents the fair value of the Company’s reverse interest rate swaps at September 30, 2005. In January 2005, in accordance with a performance unit plan, the Company issued 200,000 restricted shares to the Chairman and Chief Executive Officer, of which 30,000 shares vested as of the date of issuance. The remaining 170,000 shares will vest in 2006 through 2009. The foregoing transactions did not provide for or require the use of cash for the nine-month period ended September 30, 2005.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DEVELOPERS DIVERSIFIED REALTY CORPORATION

Notes to Condensed Consolidated Financial Statements

1. NATURE OF BUSINESS AND FINANCIAL STATEMENT PRESENTATION

     Developers Diversified Realty Corporation and its related real estate joint ventures and subsidiaries (collectively, the “Company” or “DDR”) are engaged in the business of acquiring, expanding, owning, developing, redeveloping, leasing, and managing shopping centers.

     Use of Estimates

     The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

     Unaudited Interim Financial Statements

     These financial statements have been prepared by the Company in accordance with generally accepted accounting principles for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results of the periods presented. The results of the operations for the three and nine-months ended September 30, 2006 and 2005 are not necessarily indicative of the results that may be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2005.

     The Company consolidates certain entities in which it owns less than a 100% equity interest if it is deemed to be the primary beneficiary in a variable interest entity (“VIE”), as defined in FASB Interpretation No. 46(R) “Consolidation of Variable Interest Entities” (“FIN 46(R)”). For those entities that are not a VIE as described in FIN 46(R), the Company also consolidates certain entities in which it has effective control. The equity method of accounting is applied to entities in which the Company is not the primary beneficiary as defined by FIN 46(R), or does not have effective control, but can exercise influence over the entity with respect to its operations and major decisions.

New Accounting Standards

Accounting Changes and Error Corrections — SFAS 154

     In May 2005, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 154, “Accounting Changes and Error Corrections” (“SFAS 154”), which replaces APB Opinions No. 20, “Accounting Changes,” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements — An Amendment of APB Opinion No. 28.” SFAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. It establishes retrospective application, on the latest practicable date, as the required method for reporting a change in accounting principle and the reporting of a correction of an error. SFAS 154 was effective for the Company in the

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first quarter of 2006. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows.

Accounting for Uncertainty in Income Taxes — FIN 48

     In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” — an interpretation of FASB Statement No. 109, “Accounting for Income Taxes” (“FIN 48”), regarding accounting for and disclosure of uncertain tax positions. This guidance seeks to reduce the diversity in practice associated with certain aspects of the recognition, disclosure and measurement related to accounting for income taxes. This interpretation is effective for fiscal years beginning after December 15, 2006. Although the Company is assessing the impact of FIN 48, it does not expect the adoption to have a material impact on the Company’s results of operations, cash flows and financial position.

Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements – SAB 108

     In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” in order to address the observed diversity in quantification practices with respect to annual financial statements. This bulletin should be applied for the annual financial statements for the first fiscal year ending after November 15, 2006. The Company does not expect the application of this bulletin to have a material impact on the Company’s results of operations, cash flows and financial position.

Fair Value Measurements — SFAS 157

     In September 2006, the FASB issued SFAS 157, that establishes how companies should measure fair value when they are required to use a fair value measure for recognition or disclosure purposes under GAAP. This Statement addresses the need for increased consistency and comparability in fair value measurements and for expanded disclosures about fair value measurements. The key changes to current practice are: (1) the definition of fair value which focuses on an exit price rather than entry price; (2) the methods used to measure fair value such as emphasis that fair value is a market-based measurement, not an entity-specific measurement, as well as the inclusion of an adjustment for risk, restrictions and credit standing; and (3) the expanded disclosures about fair value measurements.

     This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those years. The Company is currently evaluating the impact of this Statement on its financial statements.

Comprehensive Income

     Comprehensive income (in thousands) for the three-month periods ended September 30, 2006 and 2005 was $57,145 and $69,991, respectively. Comprehensive income (in thousands) for the nine-month periods ended September 30, 2006 and 2005 was $187,054 and $244,334, respectively (Note 8).

2. EQUITY INVESTMENTS IN JOINT VENTURES

     At September 30, 2006 and December 31, 2005, the Company had ownership interests in various unconsolidated joint ventures, which owned 108 and 112 shopping center properties,

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respectively, and 51 and 55 shopping center sites, respectively, formerly owned by Service Merchandise Company, Inc.

     Combined condensed financial information of the Company’s unconsolidated joint venture investments is as follows (in thousands):

	September 30,			December 31,
	2006			2005
Combined Balance Sheets:
Land	$	1,031,065		$	894,477
Buildings		2,619,275			2,480,025
Fixtures and tenant improvements		44,866			58,060
Construction in progress		46,389			37,550
		3,741,595			3,470,112
Less: Accumulated depreciation		(214,561	)		(195,708	)
Real estate, net		3,527,034			3,274,404
Receivables, net		73,703			76,744
Leasehold interests		16,880			23,297
Other assets		120,193			109,490
	$	3,737,810		$	3,483,935
Mortgage debt	$	2,526,608		$	2,173,401
Amounts payable to DDR		8,370			108,020
Other liabilities		90,182			78,406
		2,625,160			2,359,827
Accumulated equity		1,112,650			1,124,108
	$	3,737,810		$	3,483,935
Company’s share of accumulated equity (1)	$	158,363		$	178,908

(1) The difference between the Company’s share of accumulated equity and the advances to and investments in joint ventures recorded on the Company’s condensed consolidated balance sheets primarily result from the basis differentials, as described below, deferred development fees, net of the portion relating to the Company’s interest, notes and amounts receivable from the joint venture investments.

	Three-Month Periods					Nine-Month Periods
	Ended September 30,					Ended September 30,
	2006		2005			2006		2005
Combined Statements of Operations:
Revenues from operations	$	105,308	$	105,773		$	309,947	$	310,076
Expenses:
Rental operation		35,536		36,567			102,417		107,917
Depreciation and amortization		19,752		21,557			59,669		61,833
Interest		36,384		28,607			95,123		84,098
Total expense		91,672		86,731			257,209		253,848
Income before gain on sale of real estate and discontinued operations		13,636		19,042			52,738		56,228
Gain on sale of real estate		193		38			237		797
Income from continuing operations		13,829		19,080			52,975		57,025
Discontinued operations:
Income (loss) from discontinued operations		116		(222	)		943		57
Gain on sale of real estate		21,460		26,773			19,910		35,495
Net income	$	35,405	$	45,631		$	73,828	$	92,577
Company’s share of equity in net income of joint ventures (2)	$	12,583	$	14,086		$	22,360	$	28,083

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     Advances to and investments in joint ventures include the following items, which represent the difference between the Company’s investment and its proportionate share of the joint ventures underlying net assets (in millions):

	September 30, 2006			December 31, 2005
Company’s proportionate share of accumulated equity	$	158.4		$	178.9
Basis differentials		26.9			46.3
Deferred development fees, net of portion relating to the Company’s interest		(2.7	)		(3.0	)
Basis differential upon transfer of assets		(76.5	)		(74.9	)
Notes receivable from investments		19.1			19.8
Amounts payable to DDR		8.4			108.0
Advances to and investments in joint ventures	$	133.6		$	275.1

(2) For the three-month periods ended September 30, 2006 and 2005, the difference between the $12.6 million and $14.1 million, respectively, of the Company’s share of equity in net income of joint ventures reflected above and the $12.9 million and $11.4 million, respectively, of equity in net income of joint ventures reflected in the Company’s condensed consolidated statements of operations is primarily attributable to amortization associated with basis differentials and differences in gain on sale of certain assets due to the basis differentials. The Company’s share of joint venture net income has been adjusted by approximately $0.2 million and $2.6 million, respectively, for the three-month periods ended September 30, 2006 and 2005, respectively, to reflect basis differentials associated with amortization and adjustments to gain on sales. For the nine-month periods ended September 30, 2006 and 2005, the difference between the $22.4 million and $28.1 million, respectively, of the Company’s share of equity in net income of joint ventures reflected above and the $23.0 million and $26.0 million, respectively, of equity in net income of joint ventures reflected in the Company’s condensed consolidated statements of operations is attributable to depreciation associated with basis differentials and differences in gain on sale of certain assets due to the basis differentials. The Company’s share of joint venture net income has been adjusted by approximately $0.5 million and $2.1 million, respectively, for the nine-month periods ended September 30, 2006 and 2005, respectively, to reflect basis differentials associated with amortization and adjustments to gain on sales. Basis differentials occur primarily when the Company has purchased interests in existing joint ventures at fair market values, which differ from their share of the historical cost of the net assets of the joint venture. Basis differentials also occur when the Company contributes assets to joint ventures.

     The Company’s proportionate share of service fees earned through the management, acquisition and financing, leasing and development activities performed related to the Company’s joint ventures are as follows (in millions):

	Three-Month Periods				Nine-Month Periods
	Ended September 30,				Ended September 30,
	2006		2005		2006		2005
Management and other fees	$	6.7	$	4.1	$	16.8	$	12.3
Development fees and leasing commissions		1.3		1.3		4.1		3.3
Interest income		0.7		2.1		5.0		4.5
Acquisition and financing fees		0.1		0.1		0.6		2.4

MDT Preferred Joint Venture

     During the second quarter of 2006, the Company sold six properties, aggregating 0.8 million owned square feet, to the MDT Preferred Joint Venture, a newly formed joint venture with Macquarie DDR Trust, for approximately $122.7 million and recognized gains totaling approximately $38.5 million of which $32.5 million represented merchant building gains from recently developed shopping centers.

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     Under the terms of the new MDT Preferred Joint Venture, MDT receives a 9% preferred return on its preferred equity investment of approximately $12.2 million and then receives a 10% return on its common equity investment of approximately $20.8 million before DDR receives a 10% return on an agreed upon common equity investment of $3.5 million, which has not been recognized in the condensed consolidated balance sheet due to the terms of its subordination. DDR is then entitled to a 20% promoted interest in any cash flow achieved above a 10% leveraged internal rate of return on all common equity. The Company recognizes its proportionate share of equity in earnings of the MDT Preferred Joint Venture at an amount equal to increases in its common equity investment based upon an assumed liquidation including consideration of cash received, of the joint venture at its depreciated book value as of the end of each reporting period. The Company has not recorded any equity in earnings from the MDT Preferred Joint Venture as of September 30, 2006.

     The Company has been engaged to perform all day-to-day operations of the properties and earns and/or may be entitled to receive ongoing fees for property management, leasing and construction management, in addition to a promoted interest, along with other periodic fees such as financing fees.

MDT Joint Venture

     In July 2006, the Company sold two additional expansion areas in McDonough, Georgia and Coon Rapids, Minnesota to the MDT Joint Venture for approximately $10.1 million. These expansion areas are adjacent to shopping centers currently owned by the MDT Joint Venture. The Company recognized an aggregate merchant build gain of $3.1 million, and deferred gains of approximately $0.5 million relating to the Company’s effective 14.5% ownership interest in the venture.

     In March 2006, the Company sold newly developed expansion areas located in Birmingham, Alabama and Monaca, Pennsylvania, aggregating 0.1 million square feet, to the MDT Joint Venture for approximately $14.6 million. The Company recognized an aggregate gain of $5.5 million and deferred gains of approximately $1.0 million relating to the Company’s effective 14.5% ownership interest in the venture. These expansion areas are adjacent to shopping centers owned by the MDT Joint Venture.

Mervyns Joint Venture

     In September 2005, the Company formed the Mervyns Joint Venture, a consolidated joint venture with MDT, which acquired the underlying real estate of certain operating Mervyns stores. The Mervyns Joint Venture is effectively owned 50% by the Company and 50% by MDT. The Mervyns Joint Venture purchased one additional site in 2006 for approximately $11.0 million.

Coventry II Joint Ventures

     As further discussed below, the Coventry II Joint Venture acquired 51 assets formerly occupied by Service Merchandise from the Company in September 2006.

     In September 2006, the Coventry II Joint Venture acquired an 88 acre site located in Bloomfield Hills, Michigan at a cost of approximately $68.4 million. The Company anticipates commencing construction of a 600,000 square foot lifestyle center.

     In May 2006, the Coventry II Joint Venture acquired three assets located in Cincinnati, Ohio; Benton Harbor, Michigan and Allen, Texas at an aggregate cost of approximately $225 million.

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     The Company is generally responsible for day-to-day operations of the properties and receives its share of ongoing fees for property management, certain leasing, construction management, and construction oversight, in addition to a promoted interest in the properties acquired.

Service Merchandise Joint Venture

     In August 2006, the Company purchased its then partners’ approximate 75% interest in the remaining 52 assets formerly occupied by Service Merchandise owned by the KLA/SM Joint Venture at a gross purchase price of approximately $138 million relating to the partners’ approximate 75% ownership interest, based on a total valuation of approximately $185 million for all remaining assets, including outstanding indebtedness.

     In September 2006, the Company sold 51 of the assets formerly occupied by Service Merchandise to the Coventry II Joint Venture at a gross purchase price of approximately $185 million and assumed debt of approximately $29 million. The Company has a 20% interest in the joint venture. The Company recorded a gain of approximately $6.4 million.

Other Joint Ventures

     In September 2006, one of the Company’s Retail Value Investment Program (“RVIP”) joint ventures, in which the Company has an effective 25.5% ownership interest, sold a 41,000 square foot shopping center in Everett, Washington for approximately $8.1 million. The joint venture recorded an aggregate gain of $3.7 million of which approximately $1.2 million represents the Company’s share of the gain.

     In August 2006, the joint venture shopping center in Kildeer, Illinois, of which the Company owned a 10% interest, was sold for approximately $47.3 million. The joint venture recorded a gain of approximately $17.7 million. The Company recorded a gain of approximately $7.3 million which includes promoted income from the sale of the asset of approximately $5.5 million.

     In August 2006, the Company acquired its partner’s 20% ownership interest in a development in Apex, North Carolina for approximately $3.5 million.

     In May 2006, one of the Company’s RVIP joint ventures, in which the Company has an effective 25.5% ownership, sold four shopping centers in Kansas City, Kansas and Kansas City, Missouri aggregating 0.4 million square feet for approximately $20.0 million. The joint venture recognized a loss of approximately $1.8 million, of which the Company’s proportionate share was approximately $0.5 million.

     In April 2006, the Company acquired its partner’s 50% ownership interest in Deer Valley Towne Center located in Phoenix, Arizona for approximately $15.6 million in addition to assuming the partner’s proportionate share of the $17.3 million of existing mortgage debt (or $8.65 million). The total shopping center, excluding the mortgage debt, was valued at approximately $48.2 million.

     In March 2006, the Company acquired its partner’s 50% ownership interest in a shopping center located in Salisbury, Maryland, which is adjacent to one of the Company’s properties, for $1.5 million in addition to assuming the partner’s proportionate share of the $1.8 million of existing mortgage debt (or $0.9 million) which was repaid following the acquisition. The total shopping center, excluding the mortgage debt, was valued at approximately $4.7 million.

     In January 2006, the Company acquired its partner’s 75% ownership interest in a shopping center located in Pasadena, California for $55.9 million in addition to assuming the partner’s

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proportionate share of the $85 million of existing mortgage debt (or $63.75 million), which was repaid following the acquisition. The total shopping center, excluding mortgage debt, was valued at approximately $175 million.

     Following the date of acquisition these previously unconsolidated joint ventures have been consolidated into the Company’s consolidated financial statements.

     As a result of the adoption of EITF 04-5, the Company consolidated one limited partnership with total assets and liabilities of $24.4 million and $17.7 million, respectively, which were consolidated into the Company’s financial statements at January 1, 2006.

3. ACQUISITIONS AND PRO FORMA FINANCIAL INFORMATION

     In January 2005, the Company completed the acquisition of 15 retail real estate assets in Puerto Rico from Caribbean Property Group, LLC and related entities (“CPG”), for approximately $1.2 billion (“CPG Properties”). The financing for the transaction was provided by the assumption of approximately $660 million of existing debt, line of credit borrowings on the Company’s unsecured credit facility and the application of a $30 million deposit funded in 2004. Included in the assets acquired are the land, building and tenant improvements associated with the underlying real estate. The other assets allocation of $12.6 million relates primarily to in-place leases, leasing commissions, tenant relationships and tenant improvements of the properties (Note 4). There was a separate allocation in the purchase price of $2.3 million for above-market leases and $9.1 million for below-market leases. The Company entered into this transaction to obtain a shopping center portfolio in Puerto Rico, a market where the Company previously did not own or manage any assets.

     The following supplemental pro forma operating data is presented for the nine-month period ended September 30, 2005 as if the acquisition of properties from CPG was completed on January 1, 2005. Pro forma operating data is not presented for the three and nine-month periods ended September 30, 2006, and the three-month period ended September 30, 2005 as the Company’s acquisitions for these periods are not considered material. The supplemental pro forma operating data is not necessarily indicative of what the actual results of operations of the Company would have been assuming the transactions had been completed as set forth above, nor do they purport to represent the Company’s results of operations for future periods. In addition, the following supplemental pro forma operating data does not present the sale of assets through September 30, 2006. The Company accounted for the acquisition of assets utilizing the purchase method of accounting.

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	Nine-Month
	Period Ended
	September 30,
	2005
	(in thousands,
	except per share amounts)
Pro forma revenues	$	533,626
Pro forma income from continuing operations	$	132,083
Pro forma income from discontinued operations	$	17,185
Pro forma net income applicable to common shareholders	$	193,956
Per share data:
Basic earnings per share data:
Income from continuing operations applicable to common shareholders	$	1.63
Income from discontinued operations		0.16
Net income applicable to common shareholders	$	1.79
Diluted earnings per share data:
Income from continuing operations applicable to common shareholders	$	1.60
Income from discontinued operations		0.16
Net income applicable to common shareholders	$	1.76

4. OTHER ASSETS

Other assets consist of the following (in thousands):

	September 30,		December 31,
	2006		2005
Intangible assets:
In-place leases (including lease origination costs), net	$	2,035	$	2,568
Tenant relations, net		13,592		14,538
Total intangible assets (1)		15,627		17,106
Other assets:
Accounts receivable, net (2)		115,035		112,464
Cash flow and fair value hedges		—		292
Prepaids, deposits and other assets		62,982		44,657
Total other assets	$	193,644	$	174,519

(1)

The Company recorded amortization expense of $1.3 million and $1.2 million for the three-months ended September 30, 2006 and 2005, respectively, and $4.3 million and $3.8 million for the nine-months ended September 30, 2006 and 2005, respectively, related to these intangible assets. The amortization period of the in-place leases and tenant relations is approximately two to 31 years and 10 years, respectively.

(2)

Includes net, straight-line rent receivables of $51.0 million and $38.5 million at September 30, 2006 and December 31, 2005, respectively.

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5. REVOLVING CREDIT FACILITIES

     The Company maintains its primary unsecured revolving credit facility with a syndicate of financial institutions, for which JP Morgan serves as the administrative agent (the “Unsecured Credit Facility”). The facility was amended in June 2006. As a result of the amendment, the facility was increased from $1.0 billion to $1.2 billion, provided for an accordion feature of a future expansion to $1.4 billion, extended the maturity date to June 2010, with a one-year extension option and amended the pricing. The facility includes a competitive bid option for up to 50% of the facility. The Company’s borrowings under this facility bear interest at variable rates at the Company’s election, based on the prime rate, as defined in the facility, or LIBOR, plus a specified spread (0.60% at September 30, 2006). The specified spread over LIBOR varies depending on the Company’s long-term senior unsecured debt rating from Standard and Poor’s and Moody’s Investors Service. The Company is required to comply with certain covenants relating to total outstanding indebtedness, secured indebtedness, maintenance of unencumbered real estate assets and fixed charge coverage. The Company was in compliance with these covenants at September 30, 2006. The facility also provides for a facility fee of 0.15% on the entire facility. At September 30, 2006, total borrowings under this facility aggregated $120.0 million with a weighted average interest rate of 5.3%.

     The Company also maintains a $60 million unsecured revolving credit facility with National City Bank. This facility was amended in June 2006 to extend the maturity date to June 2010 and to reflect terms consistent with those contained in the Unsecured Credit Facility. Borrowings under the facility bear interest at variable rates based on the prime rate, as defined in the facility, or LIBOR plus a specified spread (0.60% at September 30, 2006). The specified spread over LIBOR is dependent on the Company’s long-term senior unsecured debt rating from Standard and Poor’s and Moody’s Investors Service. The Company is required to comply with certain covenants relating to total outstanding indebtedness, secured indebtedness, maintenance of unencumbered real estate assets and fixed charge coverage. The Company was in compliance with these covenants at September 30, 2006. At September 30, 2006, total borrowings under this facility aggregated $5.0 million with a weighted average interest rate of 6.0%.

6. TERM LOANS

     In July 2006, the Company repaid its $200.0 million variable rate term loan with funds drawn on the Unsecured Credit Facility. This facility was terminated upon repayment.

     The Company also maintains its primary secured term loan agreement with a syndicate of financial institutions, for which KeyBank Capital Markets serves as the administrative agent. This term loan was amended in March and June 2006. The facility was amended to add an accordion feature to increase the loan, at the Company’s option, up to $500 million and covenant modifications. At September 30, 2006, total borrowings under this facility aggregated $400.0 million with a weighted average interest rate of 6.1%.

7. FIXED RATE NOTES

     In August 2006, the Company issued $250 million of Senior Convertible Notes due 2011 (the “Senior Convertible Notes”). The Senior Convertible Notes were issued at par and pay interest in cash semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2007. The Senior Convertible Notes are unsecured unsubordinated obligations and rank equally with all other unsecured and unsubordinated indebtedness. The Senior Convertible Notes have an initial conversion price of $65.11 per share. The Senior Convertible Notes may only be converted prior to maturity: (i) during any calendar quarter beginning after September 30, 2006 if the closing price of the

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Company’s common stock reaches 125% of the conversion price for 20 trading days during a specified period, or (ii) if specified distributions to holders of the Company’s common stock are made or specified corporate transactions occur, or (iii) if the trading price of the Senior Convertible Notes was less than 98% of the product of the closing sale price of our common shares multiplied by the applicable conversion rate; or (iv) during the last month prior to maturity of the applicable notes. Upon conversion, a holder would receive: (i) cash equal to the lesser of the principal amount of the note or the conversion value and (ii) to the extent the conversion value exceeds the principal amount of the note, shares of the Company’s common stock. In addition, upon a change in control, as defined, the holders may require the Company to purchase for cash all or a portion of their notes for 100% of the principal amount of the notes plus accrued and unpaid interest, if any, plus a number of additional make-whole shares of the Company’s common stock, as set forth in the applicable indenture. The indentures under which the Senior Convertible Notes were issued contain customary covenants. A total of $48.3 million of the net proceeds from Senior Convertible Notes were used to repurchase common stock.

     Concurrent with the issuance of the Senior Convertible Notes, the Company purchased an option on its common stock in a private transaction. This option allow the Company to receive shares of the Company’s common stock, up to a maximum of approximately 480,000 shares, from counterparties equal to the amounts of common stock and/or cash related to the excess conversion value that it would pay to the holders of the Senior Convertible Notes upon conversion. The option will terminate upon the earlier of the maturity dates of the related Senior Convertible Notes or the first day all of the related Senior Convertible Notes are no longer outstanding due to conversion or otherwise. The option, which cost $10.3 million, was recorded as a reduction of shareholders’ equity.

8. DERIVATIVE FINANCIAL INSTRUMENTS

Cash Flow Hedges

     In September 2006, the Company entered into two interest rate swaps each with a notional amount of $100 million for a three-year and four-year terms. These swaps were executed to hedge a portion of our interest rate risk associated with variable rate borrowing. The four-year swap was effective at September 30, 2006 and converts certain floating rate debt into a fixed rate of approximately 5.3%. In March 2006, the Company entered into an interest rate swap with a notional amount of $200 million for a four-year term, effectively converting certain floating rate debt into a fixed rate of approximately 6.0% through June 2010. As of September 30, 2006, the aggregate fair value of the Company’s interest rate swaps was a liability of $1.4 million, which is included in other liabilities in the condensed consolidated balance sheets. For the nine-month period ended September 30, 2006, the amount of hedge ineffectiveness was not material.

     All components of the interest rate swaps were included in the assessment of hedge effectiveness. The Company expects that within the next 12 months it will reflect as an increase to earnings $0.4 million of the amount recorded in accumulated other comprehensive income. The fair value of the interest rate swaps is based upon the estimated amounts the Company would receive or pay to terminate the contracts at the reporting date and is determined using interest rate market pricing models.

9. CONTINGENCIES

     The Company and its subsidiaries are subject to various legal proceedings which, taken together, are not expected to have a material adverse effect on the Company. The Company is also

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subject to a variety of legal actions for personal injury or property damage arising in the ordinary course of its business, most of which are covered by insurance. While the resolution of all matters cannot be predicted with certainty, management believes that the final outcome of such legal proceedings and claims will not have a material adverse effect on the Company’s liquidity, financial position or results of operations.

10. SHAREHOLDERS’ EQUITY AND OPERATING PARTNERSHIP UNITS

     The following table summarizes the changes in shareholders’ equity since December 31, 2005 (in thousands):

			Common
			Shares					Accumulated					Accumulated			Unearned
			($.10					Distributions					Other			Compensation -			Treasury
	Preferred		Stated		Paid-in			In Excess of			Deferred		Comprehensive			Restricted			Stock
	Shares		Value)		Capital			Net Income			Obligation		Income			Stock			at Cost			Total
Balance December 31, 2005	$	705,000	$	10,895	$	1,945,245		$	(99,756	)	$	11,616	$	10,425		$	(13,144	)	$	—		$	2,570,281
Issuance of common shares related to exercise of stock options, dividend reinvestment plan and director compensation				28		586														5,136			5,750
Repurchase of common shares																				(48,313	)		(48,313	)
Redemption of operating partnership units in exchange for common shares				45		22,371																	22,416
Issuance of restricted stock				6		653														(151	)		508
Vesting of restricted stock						1,628						770								(1,585	)		813
Change in fair value of interest rate swaps														(3,130	)								(3,130	)
Amortization of interest rate contracts														(1,091	)								(1,091	)
Purchased option arrangement on common shares						(10,337	)																(10,337	)
Adoption of FAS 123(R)						(1,558	)										13,144						11,586
Stock based compensation						2,465																	2,465
Net income									191,275														191,275
Dividends declared common shares									(193,652	)													(193,652	)
Dividends declared preferred shares		—		—		—			(41,377	)		—		—			—			—			(41,377	)
Balance September 30, 2006	$	705,000	$	10,974	$	1,961,053		$	(143,510	)	$	12,386	$	6,204		$	—		$	(44,913	)	$	2,507,194

     Common share dividends declared, per share, were $0.59 and $0.54 for the three-month periods ended September 30, 2006 and 2005, respectively, and were $1.77 and $1.62 for the nine-month periods ended September 30, 2006 and 2005, respectively.

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     In August 2006, the Company’s Board of Directors authorized the Company to repurchase 909,000 common shares of the Company at a cost of $53.15 per share in connection with the convertible debt financing (Note 7).

     In 2006, the vesting of restricted stock grants to certain officers and directors of the Company, approximating 23,000 shares of common stock of the Company, was deferred through the Company’s non-qualified deferred compensation plans and, accordingly, the Company recorded $0.8 million in deferred obligations.

     In February 2006, the Company issued approximately 0.4 million common shares in exchange for operating partnership units (“OP Units”) issued in conjunction with the assets acquired from Benderson Development Company. The conversion of OP Units into the Company’s common shares was recorded in the Company’s condensed consolidated financial statements as a purchase of minority interest.

11. OTHER INCOME

     Other income for the three and nine-month periods ended September 30, 2006 and 2005 was comprised of the following (in millions):

	Three-Month Periods				Nine-Month Periods
	Ended September 30,				Ended September 30,
	2006		2005		2006		2005
Lease termination fees	$	0.9	$	3.6	$	7.7	$	5.1
Financing fees		—		—		0.4		2.3
Other miscellaneous		0.1		0.2		0.5		0.7
	$	1.0	$	3.8	$	8.6	$	8.1

12. DISCONTINUED OPERATIONS

     Included in discontinued operations for the three and nine-month periods ended September 30, 2006 and 2005, is one property sold in 2006, aggregating 0.2 million square feet, three properties classified as held for sale at September 30, 2006, aggregating 0.5 million square feet, and ten shopping centers and 25 business centers sold in 2005, aggregating 3.8 million square feet. The balance sheet relating to the assets held for sale and the operating results relating to assets sold and held for sale are as follows (in thousands):

	September 30, 2006
Land	$	5,806
Building		19,851
Other real estate assets		449
		26,106
Less accumulated depreciation		(7,060	)
		19,046
Other assets		80
Total assets held for sale	$	19,126

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	Three-Month Periods				Nine-Month Periods
	Ended September 30,				Ended September 30,
	2006		2005		2006		2005
Revenues	$	900	$	7,927	$	2,812	$	24,194
Expenses:
Operating		236		3,453		703		9,509
Impairment Charge		—		—		—		642
Interest		192		1,416		595		4,361
Depreciation		219		2,092		656		6,410
Minority interests		—		3		—		64
Total expense		647		6,964		1,954		20,986
Income before gain on disposition of real estate		253		963		858		3,208
Gain on disposition of real estate		3,169		10,978		3,169		13,977
Net income	$	3,422	$	11,941	$	4,027	$	17,185

     In 2006, the Company sold six shopping center properties and four newly developed expansion areas to the MDT Preferred Joint Venture and the MDT Joint Venture, respectively, that are not reflected in discontinued operations due to the Company’s continuing involvement. In addition, the Company’s sale of the Service Merchandise portfolio to the Coventry II Joint Venture is not reflected in discontinued operations due to the Company’s continuing involvement.

13. RELATED PARTY TRANSACTIONS

     As discussed in Note 2, in August 2006, the Company purchased its partners’ approximate 75% interest in the Service Merchandise Joint Venture which was managed by Lubert-Adler Real Estate Funds, which is owned in part by a Director of the Company.

     In September 2005, the Company entered into the Mervyns Joint Venture, which acquired the underlying real estate of 36 operating Mervyns stores (Note 2). In 2006, the Mervyns Joint Venture purchased an additional site for approximately $11.0 million. Additionally, the Company purchased an additional site for approximately $12.4 million in 2006. The assets were acquired from several funds, one of which was managed by Lubert-Adler Real Estate Funds, which is owned in part by a Director of the Company.

14. STOCK-BASED COMPENSATION

     Prior to January 1, 2006, the Company followed APB 25, “Accounting for Stock Issued to Employees.” Accordingly, the Company did not recognize compensation cost for stock options when the option exercise price equaled or exceeded the market value on the date of the grant. No stock-based employee compensation cost for stock options was reflected in net income, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The Company recorded compensation expense related to its restricted stock plan and its performance unit awards.

     In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment” (“SFAS 123(R)”). SFAS 123(R) is an amendment of SFAS 123 and requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements on the grant date using an option pricing model. The value of the portion of the restricted stock and performance awards issued prior to the adoption of SFAS 123(R) that is ultimately expected to vest is recognized as expense

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on a straight-line attribution basis over the requisite service periods in the Company’s condensed consolidated financial statements. SFAS 123(R) requires forfeitures to be estimated at the time of grant in order to estimate the amount of share-based awards that will ultimately vest. The forfeiture rate is based on historical rates.

     The Company adopted SFAS 123(R) as required on January 1, 2006, using the modified prospective method. The Company’s condensed consolidated financial statements as of and for the three and nine-months ended September 30, 2006, reflect the impact of SFAS 123(R). In accordance with the modified prospective method, the Company’s condensed consolidated financial statements for prior periods have not been restated to reflect the impact of SFAS 123(R). Share-based compensation expense recognized in the Company’s condensed consolidated financial statements for the three and nine-months ended September 30, 2006, includes (i) compensation expense for share-based payment awards granted prior to, but not yet vested as of December 31, 2005, based on the grant-date fair value and (ii) compensation expense for the share-based payment awards granted subsequent to December 31, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R).

     On January 1, 2006, the Company adopted SFAS 123(R), the effect of which changed the balance sheet and resulted in decreasing other liabilities by $11.6 million, eliminating unearned compensation- restricted stock (included in shareholder’s equity) of $13.1 million, resulting in an increase to shareholder’s equity of $11.6 million. These balance sheet changes relate to deferred compensation under the performance unit plans and unvested restricted stock awards. Under SFAS 123(R), deferred compensation is no longer recorded at the time unvested shares are issued. Share-based compensation is now recorded over the requisite service period on a straight-line attribution basis with an offsetting credit to equity (generally paid-in-capital).

     The compensation cost recognized under SFAS 123(R) was approximately $2.7 million and $7.0 million for the three and nine-months ended September 30, 2006, respectively. There were no significant capitalized stock-based compensation costs at September 30, 2006. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS 148 “Accounting for Stock-Based Compensation — Transition and Disclosure an amendment of SFAS No. 123,” for the three and nine-months ended September 30, 2005 (in thousands, except per share amounts):

	Three-Month			Nine-Month
	Period Ended			Period Ended
	September 30,			September 30,
	2005			2005
Net income, as reported	$	60,277		$	233,782
Add: Stock-based employee compensation included in reported net income		1,511			4,088
Deduct: Stock-based employee compensation expense determined under fair value based method for all awards		(1,316	)		(3,895	)
	$	60,472		$	233,975
Earnings per share:
Basic — as reported	$	0.43		$	1.78
Basic — pro forma	$	0.43		$	1.78
Diluted — as reported	$	0.43		$	1.76
Diluted — pro forma	$	0.43		$	1.76

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Stock Options

     The Company’s stock option and equity-based award plans provide for grants to employees of the Company of: Incentive and non-qualified stock options to purchase common shares of the Company, rights to receive the appreciation in value of common shares, awards of common shares subject to restrictions on transfer, awards of common shares issuable in the future upon satisfaction of certain conditions and rights to purchase common shares and other awards based on common shares. Under the terms of the award plans, awards available for grant approximated 2.2 million shares at September 30, 2006. Options may be granted at per share prices not less than fair market value at the date of grant, and in the case of incentive options, must be exercisable within the maximum contractual term of 10 years thereof (or, with respect to incentive options granted to certain shareholders, within five years thereof). Options granted under the plans generally vest one year after the date of grant as to one-third of the optioned shares, with the remaining options vesting over the following two-year period.

     The following table reflects the stock option activity and summarizes the characteristics of the options outstanding at September 30, 2006, as described above (in thousands):

									Weighted
							Weighted		Average
							Average		Remaining		Aggregate
	Number of Options						Exercise		Contractual		Intrinsic
	Employees			Directors			Price		Term		Value
Balance December 31, 2005		1,903			62		$	32.46
Granted		285			—			50.94
Exercised		(582	)		(20	)		29.39
Forfeited		(41	)		—			42.85
Balance September 30, 2006		1,565			42		$	36.60		7.5	$	30,810
Exercisable at September 30, 2006		696			42		$	28.54		6.4	$	20,098

     The fair value of each option grant was estimated using the Black-Scholes option pricing model. Expected volatilities are based on historical volatility of the Company’s stock. The expected term of the options granted was derived from historical exercises of options. The risk-free rate is based upon a U.S. Treasury Strip with a maturity date that approximates the expected term of the option.

     The following table represents the factors that existed on the date of grant and weighted average fair values during the nine-month period ended September 30, 2006:

	For the Nine-
	Months Ended
	September 30, 2006
Weighted average fair value of grants	$	6.47
Risk-free interest rate (range)		4.4 % - 5.1	%
Dividend yield (range)		4.3 % - 5.0	%
Expected life (range)	3-4 years
Expected volatility (range)		19.8% - 20.3	%

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     The following table reflects the activity for unvested stock option awards for the nine-month period ended September 30, 2006 (in thousands):

				Weighted
				Average
				Grant Date
	Options			Fair Value
Unvested at December 31, 2005		1,268		$	4.27
Granted		285			6.47
Vested		(643	)		3.27
Forfeited		(41	)		4.64
Unvested at September 30, 2006		869		$	5.37

     As of September 30, 2006, there was $3.1 million of total unrecognized compensation cost related to unvested share-based compensation arrangements related to stock options granted under the plans. The cost is expected to be recognized over a weighted-average period of approximately 1.1 years.

  Exercises of Employee Stock Options

     The total intrinsic value of options exercised for the nine-months ended September 30, 2006 was approximately $14.3 million. The total cash received from employees as a result of employee stock option exercises for the nine-months ended September 30, 2006 was approximately $7.9 million. The Company settles employee stock options exercises primarily with newly issued common shares and, occasionally, with treasury shares.

  Performance Units

     In 2000, the Board of Directors approved a grant of 30,000 Performance Units to the Company’s Chief Executive Officer. Pursuant to the provisions of the Plan, the 30,000 Performance Units were converted on December 31, 2004 to common share equivalents of 200,000 common shares based on the annualized total shareholders’ return for the five-year period ended December 31, 2004. These shares will vest over the following five-year period. In 2002, the Board of Directors approved grants aggregating 70,000 Performance Units to the Company’s Chief Executive Officer, President and Senior Executive Vice President. The 70,000 Performance Units granted in 2002 will be converted to common share equivalents ranging from 70,000 to 466,666 common shares based on the annualized total shareholders’ return, as defined by the Plan, for the five-year period ending December 31, 2006.

     The fair value of each performance unit grant was estimated on the date of grant using a simulation approach model using the following assumptions:

	Range
Risk-free interest rate		4.4%-6.4	%
Dividend yield		7.8%-10.9	%
Expected life	10 years
Expected volatility		20%-23	%

      As of September 30, 2006, there was $0.2 million and $1.4 million of total unrecognized compensation cost related to the 2000 and 2002 Performance Units, respectively, granted and expected to be recognized over a 3.25 and 5.25 year term, respectively.

Outperformance Awards

     In December 2005 and August 2006, the Board of Directors approved a grant of outperformance long-term incentive plan agreements with certain executive officers. The outperformance agreements provide for awards of the Company’s common shares or an equivalent amount in cash, at the Company’s option to certain officers of the Company if stated performance metrics are achieved.

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     With respect to the award plans granted to the Company’s Chief Executive Officer and Senior Executive Vice President (the “Senior Executive Officers”), the performance metrics are as follows; (a) a specified level of growth in the Company’s funds from operations (the “FFO Target”), (b) an increase in the market price of the Company’s common shares (the “Share Price Target”), (c) an increase in the market price of the Company’s common shares relative to the increase in the market prices of the relative common stock of companies included in a specified peer group (the “Comparative Share Price Target”, together with the Share Price Target, the “Share Price Metrics”), and (d) non-financial performance criteria established by the Compensation Committee of the Board of Directors of the Company (the “Discretionary Metrics”, and, together with the FFO Target and the Share Price Metrics, the “Senior Executive Officer Targets”). The beginning of the measurement period for the Senior Executive Officer Targets is January 1, 2005 because the prior performance award measurement period of the Chief Executive Officer ended December 31, 2004. The current measurement period ends the earlier of December 31, 2007 or the date of a change in control.

     If the FFO Target is achieved, the Company will issue to the Senior Executive Officers a number of common shares equal to (a) the dollar value assigned to the FFO Target set forth in such officer’s outperformance agreement, divided by (b) the greater of (i) the average closing price for the common shares over the twenty trading days ending on the applicable valuation date or (ii) the closing price per common share on the last trading date before the senior officer valuation date (as defined in the outperformance agreements), or the equivalent amount of cash, at the Company’s option, as soon as practicable following the applicable vesting date, March 1, 2008.

     If one or both of the Share Price Metrics are achieved, the Company will issue to the officer a number of shares set forth in the agreement, depending on whether one or both of the Share Price Metrics have been achieved, or the equivalent amount of cash, at the Company’s option, as soon as practicable following the applicable vesting date, March 1, 2008. The value of the number of common shares or equivalent amount paid in cash with respect to the Share Price Metrics that may be paid is capped at the amount specified in each Senior Executive Officer’s outperformance agreement.

     If in the discretion of the Compensation Committee, the Discretionary Metrics have been achieved, the Company will issue to the officer a number of common shares equal to (a) the dollar value assigned to the Discretionary Metrics set forth in such Senior Executive Officer’s outperformance agreement, divided by (b) the greater of (i) the average closing price for the common shares over the twenty trading days ending on the Valuation Date (as defined in the outperformance agreements) or (ii) the closing price per common share on the last trading date before the senior officer valuation date (as defined in the outperformance agreements), or the equivalent amount of cash, at the Company’s option, as soon as practicable following the applicable vesting date, March 1, 2008.

     With respect to nine additional executive officers (the “Officers”), the performance metrics are as follows: (a) the FFO Target, (b) a total return to the Company’s shareholders target (the “TRS Target”), and (c) a total return to the Company’s shareholders target relative to that of the total return to shareholders of companies included in a specified peer group (the “Comparative TRS Target”, together with the TRS Target, the “TRS Metrics” and, together with the FFO Target and the TRS Target, the “Officer Targets”). The measurement period for the Officer Targets is January 1, 2005 through the earlier of December 31, 2009 or the date of a change in control.

     If the FFO Target is achieved, the Company will issue to the Officer a number of common shares equal to (a) the dollar value assigned to the FFO Target set forth in such officer’s outperformance agreement, and (b) divided by the greater of (i) the average closing price for the common shares over the twenty trading days ending on the valuation date (as defined in the outperformance agreements) or (ii) the closing price per common share on the last trading date before the officer valuation date (as defined in the outperformance agreements), or the equivalent amount of

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cash, at the Company’s option, as soon as practicable following the applicable vesting date, March 1, 2010.

     If one or both of the TRS Metrics are achieved, the Company will issue to the Officer a number of shares set forth in the agreement, depending on whether one or both of the TRS Metrics have been achieved, or the equivalent amount of cash, at the Company’s option, as soon as practicable following the applicable vesting date. The value of the number of common shares or equivalent amount paid in cash with respect to the TRS Metrics that may be paid is capped at the amount specified in each Officer’s outperformance agreement.

     The fair value of each outperformance unit grant for the Share Price Metrics was estimated on the date of grant using a monte carlo approach model using the following assumptions:

	Range
Risk-free interest rate		4.4%-5.0	%
Dividend yield		4.4%-4.5	%
Expected life	3-5 years
Expected volatility		19%-21	%

      As of September 30, 2006, there was $1.4 million and $1.2 million of total unrecognized compensation cost related to the Senior Executive Officers and the Officers outperformance plans, respectively, granted and expected to be recognized over a 1.4 and 3.4 year term, respectively.

  Restricted Stock Awards

     For the nine-month period ended September 30, 2006, the Board of Directors approved a grant of 64,940 restricted shares of common stock to several executives of the Company which vest in equal annual amounts over a five-year period. Restricted stock awards have the same cash dividend and voting rights as other common stock and are considered to be currently issued and outstanding. This grant has a weighted average fair value at the date of grant of $50.81 per share, which was equal to the market value of the Company’s stock at the date of grant.

     The following table reflects the activity for unvested restricted stock awards for the nine-month period ended September 30, 2006 (in thousands):

				Weighted
				Average
				Grant Date
	Awards			Fair Value
Unvested at December 31, 2005		191		$	33.46
Granted		65			50.81
Vested		(94	)		32.37
Unvested at September 30, 2006		162		$	41.04

     As of September 30, 2006, there was $6.6 million of total unrecognized compensation cost related to unvested restricted stock award arrangements granted under the plans. The cost is expected to be recognized over a weighted-average period of approximately 1.3 years.

15. EARNINGS PER SHARE

     Earnings Per Share (EPS) have been computed pursuant to the provisions of SFAS No. 128, “Earnings per Share.” The following table provides a reconciliation of net income and the number of common shares used in the computations of “basic” EPS, which utilizes the weighted average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares.

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	Three-Month Period						Nine-Month Period
	Ended September 30,						Ended September 30,
	(in thousands, except per share amounts)
	2006			2005			2006			2005
Income from continuing operations	$	45,428		$	45,805		$	126,124		$	130,532
Add: Gain on disposition of real estate		13,962			2,531			61,124			86,065
Less: Preferred stock dividends		(13,792	)		(13,792	)		(41,377	)		(41,377	)
Basic – Income from continuing operations applicable to common shareholders		45,598			34,544			145,871			175,220
Add: Operating partnership minority interests		—			—			—			2,187
Diluted – Income from continuing operations applicable to common shareholders	$	45,598		$	34,544		$	145,871		$	177,407
Number of Shares:
Basic – average shares outstanding		109,120			108,431			109,124			108,239
Effect of dilutive securities:
Stock options		488			698			535			710
Operating partnership minority interests		—			—			—			1,350
Restricted stock		62			82			55			154
Diluted – average shares outstanding		109,670			109,211			109,714			110,453
Per share data:
Basic earnings per share data:
Income from continuing operations applicable to common shareholders	$	0.42		$	0.32		$	1.33		$	1.62
Income from discontinued operations		0.03			0.11			0.04			0.16
Net income applicable to common shareholders	$	0.45		$	0.43		$	1.37		$	1.78
Diluted earnings per share data:
Income from continuing operations applicable to common shareholders	$	0.42		$	0.32		$	1.33		$	1.60
Income from discontinued operations		0.03			0.11			0.04			0.16
Net income applicable to common shareholders	$	0.45		$	0.43		$	1.37		$	1.76

     The exchange into common stock of the minority interest associated with OP Units was not included in the computation of diluted EPS for the three-months ended September 30, 2005 and 2006 and the nine-months ended September 30, 2006 because the effect of assuming conversion was anti-dilutive.

     The Senior Convertible Notes, issued in August 2006, which are convertible into common shares of the Company at a price of $65.11, were not included in the computation of diluted EPS for the three and nine-months ended September 30, 2006 as the Company’s stock price did not exceed the strike price of the conversion feature in the Senior Convertible Notes

16. SEGMENT INFORMATION

     The Company had two reportable business segments, shopping centers and business centers, determined in accordance with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information.” The Company sold the majority of its business center assets in September 2005. Each shopping center is considered a separate operating segment; however, each shopping center on a stand-alone basis is less than 10% of the revenues, profit or loss, and assets of the combined reported operating segment and meets the majority of the aggregation criteria under SFAS 131.

     At September 30, 2006, the shopping center segment consisted of 460 shopping centers (including 159 owned through joint ventures and 39 of which are consolidated by the Company), in 44 states, plus Puerto Rico. At September 30, 2006, the Company owned seven business centers in five states.

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     The table below presents information about the Company’s reportable segments for the three and nine-month periods ended September 30, 2006 and 2005.

	Three-Months ended September 30, 2006
	(in thousands)
	Business			Shopping
	Centers			Centers			Other			Total
Total revenues	$	1,144		$	204,462					$	205,606
Operating expenses		(587	)		(52,695	)					(53,282	)
Net operating income		557			151,767						152,324
Unallocated expenses (1)							$	(117,481	)		(117,481	)
Equity in net income of joint ventures					12,868						12,868
Minority interests								(2,283	)		(2,283	)
Income from continuing operations										$	45,428

	Three-Months ended September 30, 2005
	(in thousands)
	Business			Shopping
	Centers			Centers			Other			Total
Total revenues	$	2,166		$	177,324					$	179,490
Operating expenses		(364	)		(43,954	)					(44,318	)
Net operating income		1,802			133,370						135,172
Unallocated expenses (1)							$	(98,180	)		(98,180	)
Equity in net income of joint ventures					11,418						11,418
Minority interests								(2,605	)		(2,605	)
Income from continuing operations										$	45,805

	Nine-Months ended September 30, 2006
	(in thousands)
	Business			Shopping
	Centers			Centers			Other			Total
Total revenues	$	3,255		$	603,087					$	606,342
Operating expenses		(1,525	)		(151,914	)					(153,439	)
Net operating income		1,730		$	451,173						452,903
Unallocated expenses (1)							$	(343,231	)		(343,231	)
Equity in net income of joint ventures					22,956						22,956
Minority interests								(6,504	)		(6,504	)
Income from continuing operations										$	126,124
Total real estate assets	$	88,844		$	7,332,397					$	7,421,241

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	Nine-Months ended September 30, 2005
	(in thousands)
	Business			Shopping
	Centers			Centers			Other			Total
Total revenues	$	6,067		$	519,614					$	525,681
Operating expenses		(1,252	)		(130,441	)					(131,693	)
Net operating income		4,815			389,173						393,988
Unallocated expenses (1)							$	(284,236	)		(284,236	)
Equity in net income of joint ventures					25,984						25,984
Minority interests								(5,204	)		(5,204	)
Income from continuing operations										$	130,532
Total real estate assets	$	83,950		$	6,839,949					$	6,923,899

(1) Unallocated expenses consist of general and administrative, interest income, interest expense, tax benefit/expense, other income/expense and depreciation and amortization as listed in the condensed consolidated statements of operations.

17. SUBSEQUENT EVENTS

     In October 2006, DDR and Inland Retail Real Estate Trust, Inc. (“IRRETI”) announced that they entered into a definitive merger agreement. Under the terms of the agreement, DDR will acquire all of the outstanding shares of IRRETI for a total merger consideration of $14.00 per share in cash. DDR, at its option, may elect to issue up to $4.00 per share of the total merger consideration in the form of DDR common stock to be based upon the ten day average closing price of DDR’s shares determined two trading days prior to the IRRETI stockholders’ meeting to approve the transaction. The election to issue DDR common stock may be made up to 15 calendar days prior to the IRRETI stockholders’ meeting and may be revoked by DDR at any time if the revocation would not delay the stockholders’ meeting for more than ten business days.

     The transaction has a total enterprise value of approximately $6.2 billion. This amount includes approximately $2.3 billion of existing debt, a significant portion of which is expected to be prepaid at closing. IRRETI’s real estate portfolio aggregates 307 community shopping centers, neighborhood shopping centers and single tenant/net leased retail properties, comprising approximately 43.6 million square feet of total GLA.

     In November 2006, the Company announced the formation of a joint venture with TIAA-CREF to purchase a portfolio of 67 community retail centers from the IRRETI portfolio of assets for approximately $3.0 billion of total asset value. An affiliate of TIAA expects to contribute 85% of the equity in the joint venture, and an affiliate of DDR expects to contribute 15% of the equity in the joint venture. In addition to its earnings from the joint venture, DDR will be entitled to certain fees for asset management, leasing, property management, development/tenant coordination and acquisitions. DDR will also earn a promoted interest equal to 20% of the cash flow of the joint venture after the partners have received an internal rate of return equal to 10% on their equity investment. The joint venture agreement is subject to certain closing conditions in accordance with the joint venture agreement.

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     In October 2006, the Company announced the acquisition of a 50% joint venture interest in Sonae Sierra Brazil, a fully integrated retail real estate company based in Sao Paulo, Brazil. Sonae Sierra Brazil is a subsidiary of Sonae Sierra, an international owner, developer and manager of shopping centers based in Portugal. Sonae Sierra Brazil is the managing partner of a partnership that owns direct and indirect interests in nine retail assets aggregating 3.4 million square feet and a property management company in Sao Paulo, Brazil that oversees the leasing and management operations of the portfolio. Sonae Sierra Brazil owns approximately 93% of the joint venture and Enplanta Engenharia owns approximately 7%. The aggregate market value of Sonae Sierra Brazil is approximately $300 million (U.S.). The Company’s aggregate proportionate share investment is approximately $150 million (U.S.).

     In November 2006, the Company acquired its partner 50% ownership interest in a development project in San Antonio, TX for approximately $23.3 million.

     In connection with the joint venture with TIAA-CREF, the Company purchased two interest rate swaption agreements, which limit future interest rates on $500 million of forecasted five year borrowings and $750 million of forecasted ten year borrowings.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following discussion should be read in conjunction with the condensed consolidated financial statements, the notes thereto and the comparative summary of selected financial data appearing elsewhere in this report. Historical results and percentage relationships set forth in the condensed consolidated financial statements, including trends that might appear, should not be taken as indicative of future operations. The Company considers portions of this information to be “forward-looking statements” within the meaning of Section 27A of the Securities Exchange Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectations for future periods. For this purpose, any statements contained herein that are not statements of historical fact should be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, without limitation, statements related to acquisitions (including any related pro forma financial information) and other business development activities, future capital expenditures, financing sources and availability and the effects of environmental and other regulations. Although the Company believes that the expectations reflected in those forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Readers should exercise caution in interpreting and relying on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control and could materially affect the Company’s actual results, performance or achievements.

     Factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following:

• 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;

• 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 of changes in consumer buying practices, including sales over the Internet and the resulting retailing practices and space needs of its tenants on its properties;

• 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 certain of its major tenants, and could be adversely affected by the bankruptcy of those tenants;

• The Company may not realize the intended benefits of an acquisition transaction. The 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

- 29 -

	properties or portfolios of properties. In addition, the Company may be limited in its acquisition opportunities due to competition and other factors;
•	The Company may fail to dispose of properties on favorable terms. In addition, real estate investments can be illiquid and limit the Company’s 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 or if it is unable to obtain all necessary zoning and other required governmental permits and authorizations;
•	The Company may not complete projects on schedule as a result of various factors, many of which are beyond the Company’s control, such as weather, labor conditions and material shortages, resulting in increased debt service expense and construction costs and decreases in revenue;
•	The Company’s financial condition may be affected by required payments of debt or related interest, the risk of default and the 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;
•	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;
•	The Company is subject to complex regulations related to its status as a real estate investment trust (“REIT”) and would be adversely affected if it failed to qualify as a REIT;
•	The Company must make distributions to shareholders to continue to qualify as a REIT, and if the Company borrows funds to make distributions, those borrowings may not be available on favorable terms;
•	Partnership or joint venture investments may involve risks not otherwise present for investments made solely by the Company, including the possibility that the Company’s partner or co-venturer might become bankrupt, that the Company’s partner or co-venturer might at any time have different interests or goals than does the Company and that the Company’s partner or co-venturer may take action contrary to the Company’s instructions, requests, policies or objectives, including the Company’s policy with respect to maintaining its qualification as a REIT;
•	The Company may not realize anticipated returns from its real estate assets outside of the United States. The Company expects to continue to pursue international expansion opportunities that may subject us to different or greater risk from those associated with our domestic operations.
•	The Company holds an interest in a joint venture in Brazil and assets in Puerto Rico. The Company also expects to pursue additional expansion opportunities outside the United States. International development and ownership activities carry risks that are different from those the Company faces with the Company’s domestic properties and operations. These risks include:

• Adverse effects of changes in exchange rates for foreign currencies;

• Changes in foreign political environments, regionally, nationally, and locally;

• Challenges of complying with a wide variety of foreign laws including corporate governance, operations, taxes and litigation;

• Differing lending practices;

• Differences in cultures;

• 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 Company’s international activities currently are a relatively small portion of the Company’s business to the extent that the Company expands the Company’s international activities, these risks could increase in significance and adversely affect the Company’s 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;
•	The Company could incur additional expenses in order to comply with or respond to claims under the Americans with Disabilities Act or could otherwise be adversely affected by changes in government regulations, including changes in environmental, zoning, tax and other regulations and

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• Changes in interest rates could adversely affect the market price for the Company’s common shares, as well as its performance and cash flow.

Executive Summary

     Leasing activity in the operating and development portfolio continues to be strong, reflecting the underlying strength of the retail industry and the Company’s tenants. Occupancy gains, leasing spreads, and same store NOI growth also reflect the quality of the portfolio. These positive leasing results also reflect the ongoing strength of the retail industry. The Company believes that the demand for new store locations show no signs of weakening. In addition, the Company strengthened its balance sheet in the third quarter through strategic and innovative capital markets activity which included decreasing the amount of variable rate debt outstanding through the execution of $250 million of fixed rate notes and $300 million of interest rate swap arrangements. In addition, the Company formed a new joint venture which owns the assets formerly occupied by Service Merchandise and decreased its ownership percentage in the assets and received repayment of amounts due from the former joint venture of approximately $90 million.

     In October 2006, the Company completed its first international investment by acquiring a 50% ownership interest in Sonae Sierra Brazil, the second largest owner and manager or retail real estate in the country of Brazil. The joint venture represents a fully integrated operating company and is well positioned to execute further opportunities for development, acquisition and third party property management.

     The Company recently announced its pending merger with Inland Retail Real Estate Trust, Inc. (“IRRETI”). This transaction represents an acquisition of a quality portfolio in growth markets in the southeastern United States. The transaction represents strategic benefits unique to the Company’s core competencies and further strengthens key tenant relationships.

     The Company believes that there are embedded value-added opportunities in the IRRETI portfolio from increasing occupancy, increasing rents, growing ancillary income, and re-tenanting underperforming tenants. As part of this acquisition, the Company intends to examine the existing portfolio and consider selling non-strategic assets and/or provides opportunities to form additional joint ventures.

     The Company has a proven track record of integrating large, new portfolios, and then increasing value of the portfolio through asset management, not just on a property level in terms of leasing, management expertise, and accounting, but at the corporate finance level as well. The Company has demonstrated its ability to manage its balance sheet after several significant transactions. Theses significant transactions allow the Company to reevaluate its debt portfolio, draw on banking relationships and establish new financing vehicles that efficiently enable the Company to maintain a strong balance sheet. Additionally, the Company has used these significant transactions as an opportunity to access multiple capital sources with multiple joint ventures and enable the Company to deliver enhanced returns and promoted income along with additional fee income through these joint venture partnerships.

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Results of Operations

  Revenues from Operations

	Three-Months Ended
	September 30,
	2006		2005		$ Change			% Change
			(in thousands)
Base and percentage rental revenues	$	145,544	$	126,963	$	18,581			14.6	%
Recoveries from tenants		45,821		39,183		6,638			16.9
Ancillary income		3,365		2,793		572			20.5
Other property related income		1,470		1,334		136			10.2
Management and other fee income		7,517		4,701		2,816			59.9
Development fee income		849		745		104			14.0
Other		1,040		3,771		(2,731	)		(72.4	)
Total revenues	$	205,606	$	179,490	$	26,116			14.6	%

	Nine-Months Ended
	September 30,
	2006		2005		$ Change		% Change
			(in thousands)
Base and percentage rental revenues	$	429,932	$	376,782	$	53,150		14.1	%
Recoveries from tenants		131,586		114,306		17,280		15.1
Ancillary income		9,552		6,585		2,967		45.1
Other property related income		5,387		3,993		1,394		34.9
Management and other fee income		19,199		13,976		5,223		37.4
Development fee income		2,121		1,913		208		10.9
Other		8,565		8,126		439		5.4
Total revenues	$	606,342	$	525,681	$	80,661		15.3	%

     Base and percentage rental revenues relating to new leasing, re-tenanting and expansion of the Core Portfolio Properties (shopping center properties owned as of January 1, 2005, including the assets located in Puerto Rico for a comparable eight months of ownership, but excluding properties under development and those classified as discontinued operations) (“Core Portfolio Properties”) increased approximately $10.4 million, or 3.0%, for the nine-months ended September 30, 2006, as compared to the same period in 2005. The increase in base and percentage rental revenues is due to the following (in millions):

	Increase
	(decrease)
Core Portfolio Properties	$	10.4
Acquisition of real estate assets		39.6
Development and redevelopment of 12 shopping center properties		2.5
Consolidation of a joint venture asset (EITF 04-05)		3.2
Transfer of 18 properties to unconsolidated joint ventures		(7.0	)
Business center property under redevelopment		(1.4	)
Service Merchandise assets		2.7
Straight-line rents		3.2
	$	53.2

     At September 30, 2006, the aggregate occupancy of the Company’s shopping center portfolio was 95.3%, as compared to 95.0% at September 30, 2005. The Company owned 460 shopping centers at September 30, 2006. The average annualized base rent per occupied square foot was $11.19 at September 30, 2006, as compared to $10.69 at September 30, 2005.

     At September 30, 2006, the aggregate occupancy of the Company’s wholly-owned shopping centers was 94.0%, as compared to 94.4% at September 30, 2005. The Company owned 261 wholly-

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owned shopping centers at September 30, 2006. The average annualized base rent per leased square foot was $10.72 at September 30, 2006, as compared to $10.37 at September 30, 2005.

     At September 30, 2006, the aggregate occupancy of the Company’s joint venture shopping centers was 97.4% as compared to 96.2% at September 30, 2005. The Company’s joint ventures owned 159 shopping centers including 39 consolidated centers primarily owned through the Mervyns Joint Venture at September 30, 2006. The average annualized base rent per leased square foot was $11.98 at September 30, 2006, as compared to $12.00 at September 30, 2005. The slight decrease is due to a change in tenant composition at the joint venture properties as a result of asset acquisitions and dispositions.

     At September 30, 2006, the aggregate occupancy of the Company’s business centers was 41.6%, as compared to 42.5% at September 30, 2005. The business centers consist of seven assets in five states.

     Recoveries from tenants increased $17.3 million or 15.1% for the nine-month period ended September 30, 2006 as compared to the same period in 2005. This increase is primarily due to an increase in operating expenses and real estate taxes which aggregated $21.7 million primarily due to acquisitions and developments coming on line as discussed below. Recoveries were approximately 85.8% and 86.8% of operating expenses and real estate taxes for the nine-months ended September 30, 2006 and 2005, respectively.

     The increase in recoveries from tenants was primarily related to the following (in millions):

	Increase
	(Decrease)
Acquisition and development/redevelopment of shopping center properties in 2005 and 2006	$	13.6
Transfer of properties to joint ventures in 2006 and 2005		(2.5	)
Consolidation of a joint venture asset (EITF 04-05)		0.9
Service Merchandise assets		0.7
Net increase in operating expenses at the remaining shopping center and business center properties		4.6
	$	17.3

     Ancillary income increased primarily due to income earned from the acquisition of properties from the CPG and Benderson portfolios. The Company anticipates that this ancillary income will grow with additional opportunities in these portfolios. The Company’s ancillary income program continues to be an industry leader among “open-air” shopping centers. Continued growth is anticipated in the area of ancillary or non-traditional revenue, as additional revenue opportunities are pursued and as currently established revenue opportunities proliferate throughout the Company’s core, acquired and development portfolios. Ancillary revenue opportunities have in the past included short-term and seasonal leasing programs, outdoor advertising programs, wireless tower development programs, energy management programs, sponsorship programs and various other programs.

     The increase in management and other fee income, which aggregated $5.2 million, is primarily due to unconsolidated joint venture interests formed in 2005 and the continued growth of the MDT Joint Venture aggregating $0.8 million. This increase was offset by the sale of several of the Company’s joint venture properties, which contributed approximately $1.2 million in management fee income. The remaining increase of $5.6 million is due to an increase in other fee income. Management fee income is expected to continue to increase as the MDT Joint Venture and other joint ventures acquire additional properties and as unconsolidated joint venture assets under development become operational.

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     Development fee income was primarily earned through the redevelopment of assets through the Coventry II Joint Venture. The Company expects to continue to pursue additional development joint ventures as opportunities present themselves.

     Other income is comprised of the following (in millions):

	Three-Months ended				Nine-months ended
	September 30,				September 30,
	2006		2005		2006		2005
Lease termination fees (1)	$	0.9	$	3.6	$	7.7	$	5.1
Financing fees (2)		—		—		0.4		2.3
Other miscellaneous		0.1		0.2		0.5		0.7
	$	1.0	$	3.8	$	8.6	$	8.1

(1)	For the nine-month period ended September 30, 2006, the Company executed lease terminations on four vacant Wal-Mart spaces in the Company’s wholly-owned portfolio.
(2)	Financing fees received in connection with the MDT Joint Venture, excluding the Company’s retained ownership of approximately 14.5%. The Company’s fees are earned in conjunction with the timing and amount of the transaction by the joint venture.

     Expenses from Operations

	Three-Months Ended
	September 30,
	2006		2005		$ Change		% Change
			(in thousands)
Operating and maintenance	$	28,181	$	22,758	$	5,423		23.8	%
Real estate taxes		25,101		21,560		3,541		16.4
General and administrative		14,974		14,146		828		5.9
Depreciation and amortization		48,835		39,646		9,189		23.2
	$	117,091	$	98,110	$	18,981		19.3	%

	Nine-Months Ended
	September 30,
	2006		2005		$ Change		% Change
			(in thousands)
Operating and maintenance	$	82,481	$	69,783	$	12,698		18.2	%
Real estate taxes		70,959		61,910		9,049		14.6
General and administrative		45,805		40,188		5,617		14.0
Depreciation and amortization		143,309		116,412		26,897		23.1
	$	342,554	$	288,293	$	54,261		18.8	%

     Operating and maintenance expenses include the Company’s provision for bad debt expense, which approximated 0.8% and 1.0% of total revenues for the nine-months ended September 30, 2006 and 2005, respectively (See Economic Conditions).

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     The increase in rental operation expenses, excluding general and administrative, is due to the following (in millions):

	Operating			Real
	and			Estate
	Maintenance			Taxes			Depreciation
Core Portfolio Properties	$	3.9		$	4.0		$	4.5
Acquisition and development/redevelopment of shopping center properties		8.8			5.5			20.7
Consolidation of a joint venture asset (EITF 04-05)		0.4			0.6			0.7
Transfer of 18 properties to unconsolidated joint ventures		(1.3	)		(1.5	)		(1.7	)
Business center properties		0.1			(0.1	)		0.3
Service Merchandise assets		1.2			0.5			1.3
Provision for bad debt expense		(0.4	)		—			—
Personal property		—			—			1.1
	$	12.7		$	9.0		$	26.9

     In the third quarter of 2006, DDR formed two wholly-owned captive insurance companies. The Captives will insure the Company’s self-insured retentions for the first $100,000 of general liability insurance and the first $100,000 of property damage insurance on a per occurrence basis. The Company believes the wholly-owned captive insurance companies, licensed and regulated by the state of Vermont, are adequately funded to cover the per occurrence retentions for liability coverage and property damage subject to certain aggregate limits as defined in the respective policies. While the Company believes that the self-insurance reserves are adequate, the Company cannot assure that the self-insurance reserves will be adequate to cover the incurred losses.

     The increase in general and administrative expenses is primarily attributable to certain executive outperformance incentive compensation plans as noted below in the adoption of SFAS 123(R). Total general and administrative expenses were approximately 5.0% and 4.6%, respectively, of total revenues, including total revenues of joint ventures, for the nine-months ended September 30, 2006 and 2005, respectively.

     The Company continues to expense internal leasing salaries, legal salaries and related expenses associated with certain leasing and re-leasing of existing space. In addition, the Company capitalized certain direct construction administration costs consisting of direct wages and benefits, travel expenses and office overhead costs of $6.8 million and $4.7 million for the nine-month periods ending September 30, 2006 and 2005, respectively.

     The Company adopted SFAS 123(R), “Share-Based Payment,” as required on January 1, 2006 using the modified prospective method. The Company’s condensed consolidated financial statements as of and for the three and nine-months ended September 30, 2006 reflects the impact of SFAS 123(R). In accordance with the modified prospective method, the Company’s condensed consolidated financial statements for prior periods have not been restated to reflect the impact of SFAS 123(R). The compensation cost recognized under SFAS 123(R) was approximately $2.7 million and $7.0 million for the three and nine-months ended September 30, 2006, respectively. There were no significant capitalized stock-based compensation costs at September 30, 2006. For the three and nine-months ended September 30, 2005, the Company recorded compensation expense related to its restricted stock plan and its performance unit awards of approximately $1.3 million and $3.9 million, respectively.

     SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair value. The fair value is estimated at the date of grant using a Black-Scholes option pricing model with weighted average assumptions for the activity under stock plans. Option pricing model input assumptions such as expected volatility, expected term and risk–free interest rate, impact the fair value estimate. Further,

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the forfeiture rate impacts the amount of aggregate compensation. These assumptions are subjective and generally require significant analysis and judgment to develop. When estimating fair value, some of the assumptions will be based on or determined from external data and other assumptions may be derived from historical experience with share-based payment arrangements. The appropriate weight to place on historical experience is a matter of judgment, based on relevant facts and circumstances.

     Volatility is estimated by considering the implied volatility derived from the Company’s historical stock volatility. Forfeitures are estimated using a historical forfeiture rate. Forfeitures are expected to be adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from this estimate. The expected term is estimated based on the historical data and the period of time that the options granted are expected to be outstanding for similar grants. The risk-free interest rate is the implied yield currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term used as the input to the Black-Scholes model.

  Other Income and Expenses

	Three-Months Ended
	September 30,
	2006			2005			$ Change			% Change
				(in thousands)
Interest income	$	1,602		$	2,959		$	(1,357	)		(45.9	)%
Interest expense		(55,386	)		(46,697	)		(8,689	)		18.6
Other income (expense)		(203	)		(660	)		457			(69.2	)
	$	(53,987	)	$	(44,398	)	$	(9,589	)		21.6	%

	Nine-Months Ended
	September 30,
	2006			2005			$ Change			% Change
				(in thousands)
Interest income	$	7,586		$	6,392		$	1,194			18.7	%
Interest expense		(164,812	)		(130,947	)		(33,865	)		25.9
Other income (expense)		464			(2,526	)		2,990			(118.4	)
	$	(156,762	)	$	(127,081	)	$	(29,681	)		23.4	%

     Interest income for the nine-months ended September 30, 2006 increased primarily as a result of advances to the Service Merchandise joint venture beginning in July 2005. This advance was repaid as the Company acquired its partners’ interest in the KLA/SM Joint Venture in August 2006. The 51 KLA/SM Joint Venture assets were sold to a newly formed Coventry II Joint Venture and the Company did not advance funds to this partnership to fund the acquisition.

     Interest expense increased primarily due to the acquisition of assets and associated borrowings combined with other development assets becoming operational and the increase in short-term interest rates. The weighted average debt outstanding and related weighted average interest rate during the nine-month period ended September 30, 2006, was $4.1 billion and 5.9%, respectively, compared to $3.5 billion and 5.4%, respectively, for the same period in 2005. At September 30, 2006, the Company’s weighted average interest rate was 5.9% compared to 5.5% at September 30, 2005. Interest costs capitalized, in conjunction with development and expansion projects and development joint venture interests, were $5.5 million and $14.7 million for the three and nine-month periods ended September 30, 2006, respectively, as compared to $3.5 million and $8.4 million for the same period in 2005.

     Other income/expense is comprised of litigation settlements or costs and abandoned acquisition and development project costs.

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Other

	Three-Months Ended
	September 30,
	2006			2005			$ Change		% Change
				(in thousands)
Equity in net income of joint ventures	$	12,868		$	11,418		$	1,450		12.7	%
Minority interests		(2,283	)		(2,605	)		322		(12.4	)
Income tax benefit of taxable REIT subsidiaries and franchise taxes		315			10			305		3050.0

	Nine-Months Ended
	September 30,
	2006			2005			$ Change			% Change
				(in thousands)
Equity in net income of joint ventures	$	22,956		$	25,984		$	(3,028	)		(11.7	)%
Minority interests		(6,504	)		(5,204	)		(1,300	)		25.0
Income tax benefit (expense) of taxable REIT subsidiaries and franchise taxes		2,646			(555	)		3,201			(576.8	)

     A summary of the decrease in equity in net income of joint ventures for the nine months ended September 30, 2006 is comprised of the following (in millions):

	Increase
	(Decrease)
Reduction in gains from sale transactions as compared to 2005	$	(2.3	)
Sale of joint venture interests to DDR		1.6
Adoption of EITF 04-05		(0.6	)
Acquisition of assets by unconsolidated joint ventures		1.0
Debt refinancing and increased interest rates at various joint ventures		(2.7	)
	$	(3.0	)

     The decrease in equity in net income of joint ventures is due to several factors, including increased interest costs resulting from an increase in interest rates on variable rate borrowings and refinancings at higher debt proceeds levels at certain joint ventures. These decreases were partially offset by an increase in joint venture income from newly formed joint ventures in 2005, including assets acquired by the Company’s MDT Joint Venture. The Company’s unconsolidated joint ventures sold the following assets in the nine-month periods ended September 30, 2006 and 2005, which excludes the Company’s acquisitions during the nine-month period ended September 30, 2006 of its partners’ 50% interest in shopping centers in Salisbury, Maryland and Phoenix, Arizona, its partner’s 75% interest in a shopping center in Pasadena, California and its partner’s 80% interest in a development in Apex, North Carolina.

2006 Sales
Four 25.5% effectively owned shopping centers
One 20.75% effectively owned shopping center
One 10% owned shopping center
One site formerly occupied by Service Merchandise

2005 Sales
One 24.75% owned shopping center
One 20% owned shopping center
Two sites formerly occupied by Service Merchandise

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Minority equity interest expense increased for the nine months ended September 30, 2006 primarily due to the following:

	(Increase)
	Decrease
Formation of the Mervyns Joint Venture consolidated investment in September 2005, which is owned approximately 50% by the Company	$	(4.0	)
Conversion of 0.4 million operating partnership units into common shares of the Company in 2006		0.7
Consolidation of a joint venture asset (EITF 04-05)		(0.5	)
Net decrease in net income from consolidated joint venture investments		2.5
	$	(1.3	)

     The 2006 income tax benefit is primarily attributable to the Company’s ability to deduct intercompany interest costs due to the increased gain on sales. The allowance of intercompany interest expense within the Company’s taxable REIT subsidiaries is subject to certain intercompany limitations based upon taxable income as required under Internal Revenue Code Section 163(j).

Discontinued Operations

	Three-Months Ended
	September 30,
	2006		2005		$ Change			% Change
	(in thousands)
Income from operations	$	253	$	963	$	(710	)		(73.7	)%
Gain on disposition of real estate, net		3,169		10,978		(7,809	)		(71.1	)

	Nine-Months Ended
	September 30,
	2006		2005		$ Change			% Change
	(in thousands)
Income from operations	$	858	$	3,208	$	(2,350	)		(73.3	)%
Gain on disposition of real estate, net		3,169		13,977		(10,808	)		(77.3	)

     Included in discontinued operations for the three and nine-month periods ended September 30, 2006 and 2005, is one property sold in 2006, aggregating 0.2 million square feet, three properties classified as held for sale at September 30, 2006, aggregating 0.5 million square feet, and ten shopping centers and 25 business centers sold in 2005, aggregating 3.8 million square feet.

Gain on Disposition of Assets

	Three-Months Ended
	September 30,
	2006		2005		$ Change		% Change
	(in thousands)
Gain on disposition of assets	$	13,962	$	2,531	$	11,431		451.6	%

	Nine-Months Ended
	September 30,
	2006		2005		$ Change			% Change
	(in thousands)
Gain on disposition of assets	$	61,124	$	86,065	$	(24,941	)		(29.0	)%

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     The Company recorded gains on disposition of real estate and real estate investments for the nine-months ended September 30, 2006 and 2005, as follows (in millions):

	Nine-Months
	Ended
	September 30,
	2006			2005
Transfer of assets to the Coventry II Service Merchandise Joint Venture (1)	$	6.4		$	—
Transfer of assets to the DPG Realty Holdings Joint Venture (2)		0.7			—
Transfer of assets to the MDT Joint Venture (3)		9.1			79.7
Transfer of assets to the MDT Preferred Joint Venture (4)		38.6			—
Land sales (5)		6.8			5.9
Previously deferred gains (6)		0.4			0.5
Other loss on sales		(0.9	)		—
	$	61.1		$	86.1

(1)	For the nine-month period ended September 30, 2006, the Company transferred 51 retail sites previously occupied by Service Merchandise. This disposition is not classified as discontinued operations due to the Company’s continuing involvement through its retained ownership interest and management agreements.
(2)	For the nine-month period ended September 30, 2006, the Company transferred a newly developed expansion area adjacent to a shopping center owned by the joint venture. This disposition is not classified as discontinued operations due to the Company’s continuing involvement through its retained ownership interest and management agreements.
(3)	For the nine-month period ended September 30, 2006, the Company transferred newly developed expansion areas adjacent to four shopping centers owned by the joint venture. For the nine-month period ended September 30, 2005, the Company transferred 12 assets. These dispositions are not classified as discontinued operations due to the Company’s continuing involvement through its retained ownership interest and management agreements.
(4)	For the nine-month period ended September 30, 2006, the Company transferred six assets. These dispositions are not classified as discontinued operations due to the Company’s continuing involvement through its retained ownership interest and management agreements.
(5)	These sales did not meet the discontinued operations disclosure requirement.
(6)	Primarily attributable to the recognition of additional gains associated with the leasing of units associated with master lease and other obligations on disposed properties.

  Net Income

	Three-Months Ended
	September 30,
	2006		2005		$ Change		% Change
	(in thousands)
Net Income	$	62,812	$	60,277	$	2,535		4.2	%

	Nine-Months Ended
	September 30,
	2006		2005		$ Change			% Change
	(in thousands)
Net Income	$	191,275	$	233,782	$	(42,507	)		(18.2	)%

     Net income decreased primarily due to a reduction in gain on sales of assets and increased interest costs offset by the acquisition of assets. A summary of the changes from 2005 is as follows (in millions):

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	Three - Months			Nine -Months
	ended			ended
	September 30			September 30
Increase in net operating revenues total revenues in excess of operating and maintenance expenses and real estate taxes	$	17.2		$	58.9
Increase in general and administrative expenses		(0.8	)		(5.6	)
Increase in depreciation expense		(9.2	)		(26.9	)
(Decrease) increase in interest income		(1.4	)		1.2
Increase in interest expense		(8.7	)		(33.9	)
Change in other income/expense		0.5			3.0
Increase (decrease) in equity in net income of joint ventures		1.5			(3.0	)
Decrease (increase) in minority interest expense		0.3			(1.3	)
Change in income tax benefit/expense		0.3			3.2
Decrease in income from discontinued operations		(0.8	)		(2.4	)
Decrease in gain on disposition of real estate of discontinued operations properties		(7.8	)		(10.8	)
Increase (decrease) in gain on disposition of real estate		11.4			(24.9	)
Increase (decrease) in net income	$	2.5		$	(42.5	)

Funds From Operations

     The Company 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 real estate investment trusts (“REITs”). 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 is intended to exclude GAAP historical cost depreciation and amortization of real estate and real estate investments, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions, and many companies utilize different depreciable lives and methods. Because FFO excludes depreciation and amortization unique to real estate, gains from depreciable property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities and interest costs. This provides a perspective of the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP.

     FFO is generally defined and calculated by the Company as net income, adjusted to exclude: (i) preferred dividends, (ii) gains from sales of depreciable real estate property, except for those sold through the Company’s merchant building program, (iii) sales of securities, (iv) extraordinary items, (v) cumulative effect of adoption of new accounting standards and (vi) certain non-cash items. These non-cash items principally include real property depreciation, equity income from joint ventures and equity income from minority equity investments and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and minority equity investments, determined on a consistent basis.

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     For the reasons described above, management believes that FFO provides the Company and investors with an important indicator of the Company’s operating performance. This measure of performance is used by the Company for several business purposes and by other REITs. FFO provides a recognized measure of performance other than GAAP net income, which may include non-cash items (often large). Other real estate companies may calculate FFO in a different manner.

     The Company uses FFO (i) in executive employment agreements to determine incentives based on the Company’s performance, (ii) as a measure of a real estate asset’s performance, (iii) to shape acquisition, disposition and capital investment strategies and (iv) to compare the Company’s performance to that of other publicly traded shopping center REITs.

     Management recognizes FFO’s limitations when compared to GAAP’s income from continuing operations. FFO does not represent amounts available for needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. Management does not use FFO as an indicator of the Company’s cash obligations and funding requirement for future commitments, acquisitions or development activities. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs, including the payment of dividends. FFO should not be considered an alternative to net income (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. FFO is simply used as an additional indicator of the Company’s operating performance.

     For the three-month period ended September 30, 2006, FFO available to common shareholders increased $9.9 million to $91.7 million, as compared to $81.8 million for the same period in 2005. For the nine-month period ended September 30, 2006, FFO available to common shareholders increased $14.3 million to $287.7 million as compared to $273.4 million for the same period in 2005.

     The Company’s calculation of FFO is as follows (in thousands):

	Three-Month Periods						Nine-Month Periods
	Ended September 30,						Ended September 30,
	2006			2005			2006			2005
Net income applicable to common shareholders (1)	$	49,020		$	46,485		$	149,898		$	192,405
Depreciation and amortization of real estate investments		47,235			42,172			138,072			122,506
Equity in net income of joint ventures		(12,868	)		(11,418	)		(22,956	)		(25,984	)
Joint ventures’ FFO (2)		13,682			15,358			32,963			37,438
Minority equity interests (OP Units)		534			729			1,601			2,187
Gain on disposition of depreciable real estate, net (3)		(5,870	)		(11,543	)		(11,869	)		(55,162	)
FFO applicable to common shareholders		91,733			81,783			287,709			273,390
Preferred dividends		13,792			13,792			41,377			41,377
Total FFO	$	105,525		$	95,575		$	329,086		$	314,767

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(1)	Includes straight line rental revenues of approximately $4.4 million and $3.2 million for the three-month periods ended September 30, 2006 and 2005, respectively, and $12.1 million and $9.0 million for the nine-month periods ended September 30, 2006 and 2005, respectively.
(2)	Joint ventures’ FFO is summarized as follows:

	Three-Month Periods						Nine-Month Periods
	Ended September 30,						Ended September 30,
	2006			2005			2006			2005
Net income (a)	$	35,405		$	45,631		$	73,828		$	92,577
Gain on disposition of real estate, net (b)		(21,418	)		(4,954	)		(21,437	)		(12,727	)
Depreciation of real estate investments		19,795			22,554			60,510			65,478
	$	33,782		$	63,231		$	112,901		$	145,328
DDR ownership interest (c)	$	13,682		$	15,358		$	32,963		$	37,438

(a)	Revenue for the three-month periods ended September 30, 2006 and 2005 included approximately $1.4 million and $2.0 million, respectively, resulting from the recognition of straight line rents of which the Company’s proportionate share is $0.2 million and $0.4 million, respectively. Revenue for the nine-month periods ended September 30, 2006 and 2005 included approximately $3.9 million and $5.6 million, respectively, resulting from the recognition of straight line rents of which the Company’s proportionate share is $0.7 million and $1.0 million, respectively.
(b)	The gain on disposition of recently developed shopping centers is not reflected as an adjustment from net income to arrive at FFO, as the Company considers these properties as part of the merchant building program. These properties were either developed through the Retail Value Investment Program with Prudential Real Estate Investors, or are assets sold in conjunction with the formation of the joint venture that acquired the Service Merchandise properties.
(c)	The Company’s share of joint venture net income has been increased by $0.2 million and decreased by $2.6 million for the three-month periods ended September 30, 2006 and 2005, respectively. The Company’s share of joint venture net income has been increased by $0.5 million and decreased by $2.1 million for the nine-month periods ended September 30, 2006 and 2005, respectively. The above amounts are related to basis differences in depreciation and adjustments to gain on sales. At September 30, 2006 and 2005, the Company owned joint venture interests in 108 and 112 operating shopping center properties, respectively. In addition, at September 30, 2006, the Company owned 51 shopping center sites formerly owned by Service Merchandise through its 20% owned joint venture. At September 30, 2005, the Company owned 59 of these sites through its approximately 25% owned joint venture. The Company also owned an approximate 25% interest in the Prudential Retail Value Fund and a 50% joint venture equity interest in a real estate management/development company.
(3)	The amount reflected as gain on disposition of real estate and real estate investments from continuing operations in the condensed consolidated statement of operations includes residual land sales, which management considers a sale of non-depreciated real

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property, and the sale of newly developed shopping centers as the company considers these properties as part of the merchant building program. These sales are included in the Company’s FFO and therefore are not reflected as an adjustment in FFO. For the three-month periods ended September 30, 2006 and 2005, net gains resulting from residual land sales aggregated $4.5 million and $1.3 million, respectively. For the nine-month periods ended September 30, 2006 and 2005, net gains resulting from residual land sales aggregated $6.8 million and $5.9 million, respectively. For the three-month periods ended September 30, 2006 and 2005, merchant building gains aggregated $6.8 million and $0.6 million, respectively. For the nine-month periods ended September 30, 2006 and 2005, merchant building gains aggregated $45.6 million and $38.8 million, respectively. In 2005, these gains included a portion of the net gain recognized of approximately $6.6 million from the sale of a shopping center located in Plainville, Connecticut through the Company’s taxable REIT subsidiary, associated with its merchant building program. The remaining $14.3 million of the gain recognized on the sale of the shopping center located in Plainville, Connecticut was not included in the computation of FFO as the Company believes such amount was derived primarily from the acquisition of its partner’s approximately 75% interest in the shopping center following substantial completion of development. During 2005, the Company’s gain on sales of real estate was reduced by $1.9 million relating to debt prepayment costs incurred as a result of the sales transaction. This debt prepayment has been accounted for as a cost of sale and neither the gross gain on sale nor the related costs of the sale have been included in FFO.

Liquidity and Capital Resources

The Company’s cash flow activities are summarized as follows (in thousands):

	Nine-Month Periods
	Ended September 30,
	2006			2005
Cash flow from operating activities	$	285,398		$	275,319
Cash flow used for investing activities		(40,129	)		(286,613	)
Cash flow (used for) provided by financing activities		(227,493	)		303

     The Company anticipates that cash flow from operating activities will continue to provide adequate capital for all interest and monthly principal payments on outstanding indebtedness, recurring tenant improvements and dividend payments in accordance with REIT requirements. Although the Company is evaluating its financing alternatives with its expected acquisitions, Company anticipates that cash on hand, borrowings available under its existing revolving credit facilities, as well as other debt and equity alternatives, including the issuance of common and preferred shares, OP Units, joint venture capital and asset sales, will provide the necessary capital to achieve continued growth. The proceeds from the sale of assets classified as discontinued operations and other asset sales are utilized to acquire and develop assets. The Company intends that its acquisition and developments completed in 2006, new leasing, expansion and re-tenanting of the Core Portfolio Properties continue to add to the Company’s operating cash flow. Changes in cash flow from investing activities in 2006 as compared to 2005 primarily due to a decrease in real estate acquired with cash and a decrease in proceeds from the disposition of real estate. Changes in cash flow from financing activities in 2006 as compared to 2005 primarily relate to a decrease in acquisition activity in 2006 as compared to 2005 and, accordingly, a decrease in the proceeds from revolving credit facilities, term debt, and the issuance of senior notes.

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     In February 2006, the Company declared an increase in the 2006 quarterly dividend per common share to $0.59 from $0.54 in 2005. The Company anticipates that the increased dividend level will continue to result in a conservative payout ratio. The payout ratio is determined based on common and preferred dividends declared as compared to the Company’s FFO. The Company’s common share dividend payout ratio for the first nine-months of 2006 was approximately 67.9% of reported FFO, as compared to 65.2% for the same period in 2005. See “Off Balance Sheet Arrangements” and “Contractual Obligations and Other Commitments” sections for discussion of additional disclosure of capital resources.

Acquisitions, Developments and Expansions

     During the nine-month period ended September 30, 2006, the Company and its joint ventures invested $0.7 billion, net, to acquire, develop, expand, improve and re-tenant various properties, with the majority of this amount relating to the Company’s wholly-owned properties. The Company’s expansion, acquisition and development activity is summarized below.

Strategic Real Estate Transactions

Inland Retail Real Estate Trust

     In October 2006, the Company and Inland Retail Real Estate Trust, Inc. (“IRRETI”) announced that they entered into a definitive merger agreement. Under the terms of the agreement, DDR will acquire all of the outstanding shares of IRRETI for a total merger consideration of $14.00 per share in cash. DDR, at its option, may elect to issue up to $4.00 per share of the total merger consideration in the form of DDR common stock to be based upon the ten day average closing price of DDR’s shares determined two trading days prior to the IRRETI stockholders’ meeting to approve the transaction. The election to issue DDR common stock may be made up to 15 calendar days prior to the IRRETI stockholders’ meeting and may be revoked by DDR at any time if the revocation would not delay the stockholders’ meeting for more than ten business days.

     The transaction has a total enterprise value of approximately $6.2 billion. This amount includes approximately $2.3 billion of existing debt, a significant portion of which is expected to be prepaid at closing. IRRETI’s real estate portfolio aggregates 307 community shopping centers, neighborhood shopping centers and single tenant/net leased retail properties, comprising approximately 43.6 million square feet of total GLA.

     In November 2006, the Company announced the formation of a joint venture with TIAA-CREF to purchase a portfolio of 67 community retail centers from the IRRETI portfolio of assets for approximately $3.0 billion of total asset value. An affiliate of TIAA expects to contribute 85% of the equity in the joint venture, and an affiliate of DDR expects to contribute 15% of the equity in the joint venture. In addition to its earnings from the joint venture, DDR will be entitled to certain fees for asset management, leasing, property management, development/tenant coordination and acquisitions. DDR will also earn a promoted interest equal to 20% of the cash flow of the joint venture after the partners have received an internal rate of return equal to 10% on their equity investment. The joint venture agreement is subject to certain closing conditions in accordance with the joint venture agreement.

     In addition to the portfolio of operating properties, DDR will acquire a development pipeline of five projects and numerous potential expansion and redevelopment projects. DDR plans to generate additional value by implementing its proactive leasing, development, redevelopment and property management systems. In addition, DDR intends, immediately upon closing, to incorporate the IRRETI

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assets into its ancillary income program, which DDR anticipates will result in additional value creation.

     The completion of the transaction, which is expected to occur in the first quarter of 2007, is subject to approval of the merger agreement by IRRETI shareholders and other customary closing conditions described in the merger agreement. The merger was unanimously approved by DDR’s Board of Directors. The merger was unanimously approved by IRRETI’s Board of Directors, with two related party directors recusing themselves.

Sonae Sierra Brazil

     In October 2006, the Company announced the acquisition of a 50% joint venture interest in Sonae Sierra Brazil, a fully integrated retail real estate company based in Sao Paulo, Brazil. Sonae Sierra Brazil is a subsidiary of Sonae Sierra, an international owner, developer and manager of shopping centers based in Portugal. Sonae Sierra Brazil is the managing partner of a partnership that owns direct and indirect interests in nine retail assets aggregating 3.4 million square feet and a property management company in Sao Paulo, Brazil that oversees the leasing and management operations of the portfolio. Sonae Sierra Brazil owns approximately 93% of the joint venture and Enplanta Engenharia owns approximately 7%. The aggregate market value of Sonae Sierra Brazil is approximately $300 million (U.S.). The Company’s aggregate proportionate share investment is approximately $150 million (U.S.).

MDT Preferred Joint Venture

     During the second quarter of 2006, the Company sold six properties, aggregating 0.8 million owned square feet, to the MDT Preferred Joint Venture, a newly formed joint venture with Macquarie DDR Trust, for approximately $122.7 million and recognized gains totaling approximately $38.5 million of which $32.5 million represented merchant building gains from recently developed shopping centers.

     Under the terms of the new MDT Preferred Joint Venture, MDT receives a 9% preferred return on its preferred equity investment of approximately $12.2 million and then receives a 10% return on its common equity investment of approximately $20.8 million before DDR receives a 10% return on an agreed upon common equity investment of $3.5 million, which has not been recognized in the condensed consolidated balance sheet due to the terms of its subordination. DDR is then entitled to a 20% promoted interest in any cash flow achieved above a 10% leveraged internal rate of return on all common equity. The Company recognizes its proportionate share of equity in earnings of the MDT Preferred Joint Venture at an amount equal to increases in our common equity investment based upon an assumed liquidation including consideration of cash received of the joint venture at its depreciated book value as of the end of each reporting period. The Company has not recorded any equity in earnings from the MDT Preferred Joint Venture as of September 30, 2006.

     The Company has been engaged to perform all day-to-day operations of the properties and earns and/or may be entitled to receive ongoing fees for property management, leasing and construction management, in addition to a promoted interest, along with other periodic fees such as financing fees.

MDT Joint Venture

     In July 2006, the Company sold two additional expansion areas in McDonough, Georgia and Coon Rapids, Minnesota to the MDT Joint Venture for approximately $10.1 million. These expansion areas are adjacent to shopping centers currently owned by the MDT Joint Venture. The Company

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recognized an aggregate merchant build gain of $3.1 million, and deferred gains of approximately $0.5 million relating to the Company’s effective 14.5% ownership interest in the venture.

     In March 2006, the Company sold newly developed expansion areas located in Birmingham, Alabama and Monaca, Pennsylvania, aggregating 0.1 million square feet, to the MDT Joint Venture for approximately $14.6 million. The Company recognized an aggregate merchant build gain of $5.5 million, and deferred gains of approximately $1.0 million relating to the Company’s effective 14.5% ownership interest in the venture. These expansion areas are adjacent to shopping centers owned by the MDT Joint Venture.

Mervyns Joint Venture

     In September 2005, the Company formed the Mervyns Joint Venture, a consolidated joint venture with MDT, which acquired the underlying real estate of certain operating Mervyns stores. The Mervyns Joint Venture is effectively owned 50% by the Company and 50% by MDT. The Mervyns Joint Venture purchased one additional site in 2006 for approximately $11.0 million.

Coventry II Joint Ventures

     As further discussed below, the Coventry II Joint Venture acquired 51 assets formerly occupied by Service Merchandise from the Company in September 2006. The Company remains generally responsible for day-to-day operations of the properties and receives its share of ongoing fees for property management, certain leasing, construction management and construction oversight, in addition to a promoted interest.

     As of September 30, 2006, the Coventry II Joint Ventures acquired the following assets, not including those purchased from the Company or its joint ventures:

	DDR’s					Coventry II Acquisition
	Effective			Square Feet		Purchase Price
Location	Interest			(thousands)		(millions)
Tri-County Mall; Cincinnati, Ohio (1)		18.0	%		1,336	$	185.4
Fairplain Plaza; Benton Harbor, Michigan (2)		20.0	%		223		26.9
Watters Creek at Montgomery Farm; Allen, Texas		10.0	%	Under Development			10.9
Bloomfield Hills, Michigan		20.0	%	Under Development			68.4

(1)	Approximately 160,000 sq. ft. under redevelopment
(2)	Approximately 100,000 sq. ft. under redevelopment

Service Merchandise Joint Venture

     In August 2006, the Company purchased its then partners’ approximate 75% interest in the remaining 52 assets formerly occupied by Service merchandise owned by the KLA/SM Joint Venture at a gross purchase price of approximately $138 million relating to the partners’ approximate ownership 75% ownership interest, based on a total valuation of approximately $185 million for all remaining assets, including outstanding indebtedness.

     In September 2006, the Company sold 51 of the assets formerly occupied by Service merchandise to the Coventry II Joint Venture. The Company retained a 20% interest in the joint venture. The Company recorded a gain of approximately $6.4 million of which $3.6 million is included in FFO.

Acquisitions

     In April 2006, the Company acquired its partner’s 50% ownership interest in Deer Valley Towne Center located in Phoenix, Arizona for approximately $15.6 million in addition to assuming the

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partner’s proportionate share of the $17.3 million of existing mortgage debt (or $8.65 million). The total shopping center, excluding the mortgage debt, was valued at approximately $48.2 million.

     In January 2006, the Company acquired its partner’s 75% ownership interest in a shopping center located in Pasadena, California for $55.9 million in addition to assuming the partner’s proportionate share of the $85 million of existing mortgage debt (or $63.75 million), which was repaid following the acquisition. The total shopping center, excluding mortgage debt, was valued at approximately $175 million.

     Following the date of acquisition these previously unconsolidated joint ventures have been consolidated into the Company’s condensed consolidated financial statements.

Dispositions

     In September 2006, one of the Company’s Retail Value Investment Program (“RVIP”) joint ventures, in which the Company has an effective 25.5% ownership interest, sold a 41,000 square foot shopping center in Everett, Washington for approximately $8.1 million. The joint venture recorded an aggregate gain of $3.7 million of which approximately $1.2 million represents the Company’s share of the gain.

     In August 2006, the joint venture shopping center in Kildeer, Illinois, of which the Company owned a 10% interest, was sold for approximately $47.3 million. The joint venture recorded a gain of approximately $17.7 million. The Company recorded a gain of approximately $7.3 million which includes promoted income from the sale of the asset of approximately $5.5 million. The promoted income of $5.5 million realized in connection with the sale is included in FFO.

     In May 2006, one of the Company’s RVIP joint ventures, in which the Company has an effective 25.5% ownership, sold four shopping centers in Kansas City, Kansas and Kansas City, Missouri aggregating 0.4 million square feet for approximately $20.0 million. The joint venture recognized a loss of approximately $1.8 million, of which the Company’s proportionate share was approximately $0.5 million.

Development (Wholly-Owned and Consolidated Joint Ventures)

     As of September 30, 2006, the Company has substantially completed the construction of the Freehold, New Jersey and Pittsburgh, Pennsylvania shopping centers, at an aggregate cost of $46.2 million.

     The Company currently has eight shopping center projects under construction. These projects are located in Miami, Florida; Nampa, Idaho; McHenry, Illinois; Seabrook, New Hampshire; Horseheads, New York; two projects in Apex, North Carolina (Beaver Creek Crossings – Phases I and II), and San Antonio, Texas, (which is being developed through a joint venture with David Berndt Interests). These projects are scheduled for completion during 2006 through 2007 at a projected aggregate cost of approximately $581.1 million and will create an additional 4.4 million square feet of gross leasable retail space.

     The Company anticipates commencing construction in 2006 on two additional shopping centers located in Ukiah, California and Homestead, Florida. These projects have an estimated aggregate cost of $140.3 million and will create an additional 1.1 million square feet of gross leasable retail space.

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     At September 30, 2006, approximately $340.4 million of costs were incurred in relation to the above projects under construction and projects that will be commencing construction.

     The wholly-owned and consolidated development estimated funding schedule as of September 30, 2006, is as follows (in millions):

Funded as of September 30, 2006	$	382.7
Projected net funding during 2006		58.6
Projected net funding thereafter		326.3
Total	$	767.6

     In addition to the above developments, the Company has identified several additional development sites in its potential development pipeline, for future development at a projected aggregate estimated cost of over $700 million. While there are no assurances that any of these potential projects will be developed, it does provide a source of future potential development projects over the next several years.

Development (Joint Ventures)

     In addition to the Bloomfield Hills, Michigan project previously disclosed, three of the Company’s joint ventures currently have shopping center projects under construction. These projects are located in Merriam, Kansas; Allen, Texas and San Antonio, Texas. These three projects are being developed through the Coventry II program. A significant portion of the project located in San Antonio, Texas was substantially completed during 2005. The remaining two projects are scheduled for completion during 2007 and 2008. These projects have an aggregate projected cost of approximately $337.4 million. At September 30, 2006, approximately $130.4 million of costs was incurred in relation to these development projects.

     The joint venture development estimated funding schedule as of September 30, 2006 is as follows (in millions):

					Anticipated
					Proceeds
	DDR’s		JV Partners’		from
	Proportionate		Proportionate		Construction
	Share		Share		Loans		Total
Funded as of September 30, 2006	$	3.4	$	14.6	$	112.4	$	130.4
Projected net funding during 2006		1.2		4.9		8.9		15.0
Projected net funding thereafter		11.0		43.6		137.4		192.0
Total	$	15.6	$	63.1	$	258.7	$	337.4

Expansions

     During the nine month period ended September 30, 2006, the Company completed five expansions and redevelopment projects located in Lakeland, Florida; Ocala, Florida; Stockbridge, Georgia; Rome, New York and Mooresville, North Carolina at an aggregate gross cost of $25.3 million. The Company is currently expanding/redeveloping eleven shopping centers located in Birmingham, Alabama; Gadsden, Alabama; Ottumwa, Iowa; Chesterfield, Michigan; Gaylord, Michigan; Hamilton, New Jersey; Olean, New York; Stow, Ohio; Bayamon, Puerto Rico (Rio Hondo); Ft. Union, Utah and Brookfield, Wisconsin at a projected aggregate gross cost of approximately $92.1 million. At September 30, 2006, approximately $41.4 million of costs was incurred in relation to these projects. The Company anticipates commencing construction on nine additional expansion and redevelopment projects at shopping centers located in Crystal River, Florida; Louisville, Kentucky; Gulfport,

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Mississippi; Huber Heights, Ohio; Amherst, New York; Bayamon, Puerto Rico (Plaza Del Sol), Hatillo, Puerto Rico, and San Juan, Puerto Rico and McKinney, Texas.

     Five of the Company’s joint ventures are currently expanding/redeveloping their shopping centers located in Phoenix, Arizona; Lancaster, California; Benton Harbor, Michigan; Kansas City, Missouri and Cincinnati, Ohio at a projected gross cost of approximately $466.8 million (which includes the initial acquisition costs for the Coventry II redevelopment projects located in Phoenix, Arizona; Benton Harbor, Michigan; Kansas City, Missouri and Cincinnati, Ohio). At September 30, 2006, approximately $349.3 million of costs was incurred in relation to these projects. Three of the Company’s joint ventures anticipate commencing expansion/redevelopment projects at their shopping centers located in Buena Park, California; Deer Park, Illinois and Kirkland, Washington.

Off Balance Sheet Arrangements

     The Company has a number of off balance sheet joint ventures and other unconsolidated entities with varying economic structures. Through these interests, the Company has investments in operating properties, development properties and a management and development company. Such arrangements are generally with institutional investors and various developers located throughout the United States.

     In connection with the development of shopping centers owned by certain of these affiliates, the Company and/or its equity affiliates have agreed to fund the required capital associated with approved development projects aggregating approximately $4.9 million at September 30, 2006. These obligations, comprised principally of construction contracts, are generally due in 12 to 18 months as the related construction costs are incurred and are expected to be financed through new or existing construction loans.

     The Company has provided loans and advances to certain unconsolidated entities and/or related partners in the amount of $3.1 million at September 30, 2006, for which the Company’s joint venture partners have not funded their proportionate share. These entities are current on all debt service owed to DDR. The Company guaranteed base rental income from one to three years at certain centers held through the Coventry II Service Merchandise joint venture, aggregating $2.8 million at September 30, 2006. The Company has not recorded a liability for the guarantee, as the subtenants of the joint venture affiliates are paying rent when due. The Company has recourse against the other parties in the partnership in the event of default.

     The Company is involved with overseeing the development activities for several of its joint ventures that are constructing, redeveloping or expanding shopping centers. The Company earns a fee for its services commensurate with the level of oversight provided. The Company generally provides a completion guarantee to the third-party lending institution(s) providing construction financing.

     The Company’s joint ventures have aggregate outstanding indebtedness to third parties of approximately $2.5 billion and $2.2 billion at September 30, 2006 and 2005, respectively. Such mortgages and construction loans are generally non-recourse to the Company and its partners, although certain mortgages may have recourse to its partners in certain limited situations such as misuse of funds and material misrepresentations. In connection with certain of the Company’s joint ventures, the Company agreed to fund any amounts due the joint venture’s lender if such amounts are not paid by the joint venture based on the Company’s pro rata share of such amount aggregating $48.3 million at September 30, 2006. The Company and its joint venture partner provided a $33.0 million payment and performance guaranty on behalf of the Mervyns Joint Venture to the joint venture’s lender in certain events, such as the bankruptcy of Mervyns. The Company’s maximum obligation is equal to its effective 50% ownership percentage, or $16.5 million.

     In October 2006, the Company entered into a joint venture which owns real estate assets in Brazil. At this time, the Company has chosen not to mitigate any of the foreign currency risk through the use of hedging instruments. The Company will continue to monitor and evaluate this risk and may enter into hedging agreements at a later date.

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Financing Activities

     In August 2006, the Company issued $250 million, 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 represent a 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 shares of the Company’s common stock, with an investment bank that had the economic impact of effectively increasing the 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 Company’s condensed consolidated balance sheet.

     In addition, in late September and early October 2006 the Company entered into an aggregate $300 million of interest rate swaps which converted floating rate debt to a weighted average fixed LIBOR rate of approximately 4.94%. As a result, the percentage of floating rate debt (including the impact of fixing interest costs through interest rate swaps) to total debt, was 6.6% at September 30, 2006 as compared to 20.9% at December 31, 2005.

     In June 2006, the Company amended and restated its senior unsecured credit facility to expand the facility from $1.0 billion to $1.2 billion and added an accordion feature to increase the facility, at the Company’s option, up to $1.4 billion. The Company also reduced interest rate pricing to LIBOR plus 60 basis points, based on the Company’s current corporate credit ratings and extended the maturity to June 2010.

     The Company also amended its $60 million unsecured credit facility with National City Bank to reflect terms, pricing and maturity consistent with those contributions the $1.2 billion senior unsecured credit facility, described above.

     In March and June 2006, the Company’s $400 million secured term loan, for which Key Bank Capital Markets serves as administrative agent, was amended to add an accordion feature to increase the loan, at the Company’s option, up to $500 million and make similar covenant modifications. This facility is a beneficial vehicle as it is secured by the equity interests in assets already encumbered by low-leverage first mortgage debt at a favorable interest rate. This structure provides low cost capital and eliminates the need to mortgage additional assets, thereby enabling the Company to maintain a greater unencumbered asset pool.

Capitalization

     At September 30, 2006, the Company’s capitalization consisted of $4.1 billion of debt, $705 million of preferred shares and $6.1 billion of market equity (market equity is defined as common shares and OP Units outstanding multiplied by the closing price of the common shares on the New York Stock Exchange at September 30, 2006, of $55.76), resulting in a debt to total market capitalization ratio of 0.37 to 1.0. At September 30, 2006, the Company’s total debt consisted of $3.6 billion of fixed rate debt and $0.5 billion of variable rate debt, including $60 million of fixed rate debt

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that was effectively swapped to a variable rate and $300 million of variable rate debt that was effectively swapped to a fixed rate. At September 30, 2005, the Company’s total debt consisted of $2.7 billion of fixed rate debt and $1.1 billion of variable rate debt, including $60 million of fixed rate debt which was effectively swapped to a variable rate.

     It is management’s intent to have access to the capital resources necessary to expand and develop its business. Accordingly, the Company may seek to obtain funds through additional equity offerings, debt financings or joint venture capital in a manner consistent with its intention to operate with a conservative debt capitalization policy and maintain its investment grade ratings with Moody’s Investors Service and Standard and Poor’s. The security rating is not a recommendation to buy, sell or hold securities, as it may be subject to revision or withdrawal at any time by the rating organization. Each rating should be evaluated independently of any other rating.

     As of September 30, 2006, the Company had $1.1 billion available under its $1.3 billion revolving credit facilities and cash of $48.4 million. As of September 30, 2006, the Company also had 212 unencumbered operating properties generating $331.1 million, or 54.7%, of the total revenue of the Company for the nine-months ended September 30, 2006 thereby providing a potential collateral base for future borrowings, subject to consideration of the financial covenants on unsecured borrowings.

     In connection with the joint venture with TIAA-CREF, the Company purchased two interest rate swaption agreements, which limit future interest rates on $500 million of forecasted five year borrowings and $750 million of forecasted ten year borrowings.

Contractual Obligations and Other Commitments

     The Company does not have any scheduled debt maturities through December 31, 2006.

     At September 30, 2006, the Company had letters of credit outstanding of approximately $20.7 million. The Company has not recorded any obligation associated with these letters of credit. The majority of the letters of credit are collateral for existing indebtedness and other obligations accrued on the Company’s accounts.

     In conjunction with the development of shopping centers, the Company has entered into commitments aggregating approximately $71.5 million with general contractors for its wholly-owned properties at September 30, 2006. These obligations, comprised principally of construction contracts, are generally due in 12 to 18 months as the related construction costs are incurred and are expected to be financed through operating cash flow and/or new or existing construction loans or revolving credit facilities.

     The Company entered into master lease agreements during 2003 through 2006 with the transfer of properties to certain joint ventures, which are recorded as a liability and reduction of its gain. The Company is responsible for the monthly base rent, all operating and maintenance expenses and certain tenant improvements and leasing commissions for units not yet leased at closing for a three-year period. At September 30, 2006, the Company’s material master lease obligations, included in accounts payable and other expenses, were incurred with the properties transferred to the following joint ventures (in millions):

MDT Joint Venture	$	3.1
MDT Preferred Joint Venture		3.8
DDR Markaz II		1.3
	$	8.2

     The Company enters into cancelable contracts for the maintenance of its properties. At September 30, 2006, the Company had purchase order obligations payable, typically payable within

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one year, aggregating approximately $11.8 million related to the maintenance of its properties and general and administrative expenses.

     The Company continually monitors its obligations and commitments. There have been no other material items entered into by the Company since December 31, 2003, through September 30, 2006, other than as described above. See discussion of commitments relating to the Company’s joint ventures and other unconsolidated arrangements in “Off Balance Sheet Arrangements.”

Inflation

     Substantially all of the Company’s long-term leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions include clauses enabling the Company to receive additional rental income from escalation clauses, which generally increase rental rates during the terms of the leases and/or percentage rentals based on tenants’ gross sales. Such escalations are determined by negotiation, increases in the consumer price index or similar inflation indices. In addition, many of the Company’s leases are for terms of less than 10 years, permitting the Company to seek increased rents at market rates upon renewal. Most of the Company’s leases require tenants to pay their share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing the Company’s exposure to increases in costs and operating expenses resulting from inflation.

Economic Conditions

     Historically, real estate has been subject to a wide range of cyclical economic conditions that affect various real estate markets and geographic regions with differing intensities and at different times. Different regions of the United States have been experiencing varying degrees of economic growth. Adverse changes in general or local economic conditions could result in the inability of some tenants of the Company to meet their lease obligations and could otherwise adversely affect the Company’s ability to attract or retain tenants. The Company’s shopping centers are typically anchored by two or more major national tenants (Wal-Mart, Kohl’s, Target), home improvement stores (Home Depot, Lowe’s) and two or more medium-sized big-box tenants (such as Bed Bath & Beyond, TJ Maxx/Marshalls, Best Buy, Ross Stores), which generally offer day-to-day necessities, rather than high-priced luxury items. In addition, the Company seeks to reduce its operating and leasing risks through ownership of a portfolio of properties with a diverse geographic and tenant base.

     The retail shopping sector has been affected by the competitive nature of the retail business and the competition for market share where stronger retailers have out-positioned some of the weaker retailers. These shifts have forced some market share away from weaker retailers, in some cases, forced them to declare bankruptcy and/or close stores. Certain retailers have announced store closings even though they have not filed for bankruptcy protection. Notwithstanding any store closures, the Company does not expect to have any significant losses associated with these tenants. Overall, the Company’s portfolio remains stable. While negative news relating to troubled retail tenants tends to attract attention, the vacancies created by unsuccessful tenants may also create opportunities to increase rent.

     Although certain individual tenants within the Company’s portfolio have filed for bankruptcy protection, the Company believes that several of its major tenants, including Wal-Mart, Home Depot, Kohl’s, Target, Lowe’s, TJ Maxx, Bed Bath & Beyond and Best Buy, are financially secure retailers based upon their credit quality. This stability is further evidenced by the tenants’ relatively constant same-store sales growth in this economic environment. In addition, the Company believes that the quality of its shopping center portfolio is strong, as evidenced by the high historical occupancy rates,

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which have ranged from 92% to 96% since 1993. Also, average base rental rates have increased from $5.48 to $11.19 per square foot since the Company’s public offering in 1993.

Legal Matters

     The Company and its subsidiaries are subject to various legal proceedings, which, taken together, are not expected to have a material adverse effect on the Company. The Company is also subject to a variety of legal actions for personal injury or property damage arising in the ordinary course of its business, most of which are covered by insurance. While the resolution of all matters cannot be predicted with certainty, management believes that the final outcome of such legal proceedings and claims will not have a material adverse effect on the Company’s liquidity, financial position or results of operations.

New Accounting Standards

Share-Based Payment — SFAS 123(R)

     In December 2004, the Financial Accounting Standards Board (“FASB’) issued SFAS No. 123(R), “Share-Based Payment” (“SFAS 123(R)”). SFAS 123(R) is an amendment of SFAS 123 and requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements on the grant date using an option pricing model. The value of the portion of the restricted stock and performance awards issued prior to the adoption of SFAS 123(R) that is ultimately expected to vest is recognized as expense on a straight-line attribution basis over the requisite service periods in the Company’s consolidated financial statements. SFAS 123(R) requires forfeitures to be estimated at the time of grant in order to estimate the amount of share-based awards that will ultimately vest. The forfeiture rate is based on historical rates.

     The Company adopted SFAS 123(R) as required on January 1, 2006 using the modified prospective method. The Company’s condensed consolidated financial statements as of and for the nine-months ended September 30, 2006 reflects the impact of SFAS 123(R). In accordance with the modified prospective method, the Company’s condensed consolidated financial statements for prior periods have not been restated to reflect the impact of SFAS 123(R). Share-based compensation expense recognized in the Company’s condensed consolidated financial statements for the nine-months ended September 30, 2006 includes (i) compensation expense for share-based payment awards granted prior to, but not yet vested as of December 31, 2005, based on the grant-date fair value and (ii) compensation expense for the share-based payment awards granted subsequent to December 31, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R).

Accounting Changes and Error Corrections — SFAS 154

     In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections” (“SFAS 154”), which replaces APB Opinions No. 20, “Accounting Changes,” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements — An Amendment of APB Opinion No. 28.” SFAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. It establishes retrospective application, on the latest practicable date, as the required method for reporting a change in accounting principle and the reporting of a correction of an error. SFAS 154 was effective for the Company in the first quarter of 2006. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows.

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Accounting for Uncertainty in Income Taxes — FIN 48

     In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” — an interpretation of FASB Statement No. 109, “Accounting for Income Taxes” (“FIN 48”), regarding accounting for and disclosure of uncertain tax positions. This guidance seeks to reduce the diversity in practice associated with certain aspects of the recognition, disclosure and measurement related to accounting for income taxes. This interpretation is effective for fiscal years beginning after December 15, 2006. Although the Company is assessing the impacts of FIN 48, it does not expect the adoption to have a material impact on the Company’s results of operations, cash flows and financial position.

Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements – SAB 108

     In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” in order to address the observed diversity in quantification practices with respect to annual financial statements. This bulletin should be applied for the annual financial statements for the first fiscal year ending after November 15, 2006. The Company does not expect the application of this bulletin to have a material impact on the Company’s results of operations, cash flows and financial position.

Fair Value Measurements — SFAS 157

     In September 2006, the FASB issued SFAS 157, that establishes how companies should measure fair value when they are required to use a fair value measure for recognition or disclosure purposes under GAAP. This Statement addresses the need for increased consistency and comparability in fair value measurements and for expanded disclosures about fair value measurements. The key changes to current practice are: (1) the definition of fair value which focuses on an exit price rather than entry price; (2) the methods used to measure fair value such as emphasis that fair value is a market-based measurement, not an entity-specific measurement, as well as the inclusion of an adjustment for risk, restrictions and credit standing; and (3) the expanded disclosures about fair value measurements.

     This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those years. The Company is currently evaluating the impact of this Statement on its financial statements.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

     The Company’s primary market risk exposure is interest rate risk. The Company’s debt, excluding joint venture debt, is summarized as follows:

	September 30, 2006										September 30, 2005
			Weighted		Weighted								Weighted		Weighted
			Average		Average			Percentage					Average		Average			Percentage
	Amount		Maturity		Interest			of			Amount		Maturity		Interest			of
	(Millions)		(years)		Rate			Total			(Millions)		(years)		Rate			Total
Fixed Rate Debt (1)	$	3,608.6		5.2		5.6	%		88.5	%	$	2,739.5		6.5		5.8	%		71.4	%
Variable Rate Debt (1)	$	469.7		1.4		6.3	%		11.5	%	$	1,097.2		2.3		4.5	%		28.6	%

(1) Adjusted to reflect the $300 million of variable rate debt, which was swapped to a fixed rate at September 30, 2006 and $60 million of fixed rate debt, which was swapped to a variable rate at September 30, 2006 and 2005. As a result of the swaps entered into and effective in October 2006, the percentage of floating rate debt to total debt would have been 6.6% at September 30, 2006.

     The Company’s unconsolidated joint ventures’ fixed rate indebtedness, including $477.3 million and $75 million of variable rate debt, which was swapped to a weighted average fixed rate of approximately 5.3% and 5.4%, at September 30, 2006 and 2005, respectively, is summarized as follows:

	September 30, 2006									September 30, 2005
	Joint		Company’s		Weighted		Weighted			Joint		Company’s		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
Fixed Rate Debt	$	1,748.0	$	394.0		4.7		5.1	%	$	1,565.9	$	386.1		5.0		5.0	%
Variable Rate Debt	$	778.6	$	150.0		1.2		6.5	%	$	640.0	$	130.7		1.8		5.4	%

     The Company intends to utilize variable rate indebtedness available under its revolving credit facilities and construction loans in order to initially fund future acquisitions, developments and expansions of shopping centers. Thus, to the extent the Company incurs additional variable rate indebtedness, its exposure to increases in interest rates in an inflationary period would increase. The Company does not believe, however, that increases in interest expense as a result of inflation will significantly impact the Company’s distributable cash flow.

     The interest rate risk on the Company’s and its unconsolidated joint ventures’ variable rate debt described above has been mitigated through the use of interest rate swap agreements (the “Swaps”) with major financial institutions. At September 30, 2006, the interest rate on the Company’s $300 million consolidated floating rate debt and at September 30, 2006 and 2005, respectively, on $477.3 million and $75 million of joint venture floating rate debt (of which $69.2 million and $16.7 million, respectively, is the Company’s proportionate share) was swapped to fixed rates. The Company is exposed to credit risk in the event of non-performance by the counter-parties to the Swaps. The Company believes it mitigates its credit risk by entering into these Swaps with major financial institutions.

     At September 30, 2006 and December 31, 2005, the Company had a variable rate interest swap that carried a notional amount of $60 million, a fair value which represented a liability of $0.1 million

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and an asset of $0.3 million at September 30, 2006 and December 31, 2005, respectively, and converted fixed rate debt to a variable rate of 7.1% and 6.3%, respectively.

     In January 2006, one of the Company’s joint ventures terminated an interest rate swap aggregating $55 million after the underlying hedged instrument was repaid. The Company recorded a termination fee of approximately $0.4 million through equity in net income of joint venture.

     The fair value of the Company’s fixed rate debt adjusted to: (i) include the $300 million that was swapped to a fixed rate at September 30, 2006; (ii) exclude the $60 million which was swapped to a variable rate at September 30, 2006 and 2005; (iii) include the Company’s proportionate share of the joint venture fixed rate debt; and (iv) include the Company’s proportionate share of $69.2 million and $16.7 million that was swapped to a fixed rate at September 30, 2006 and 2005, respectively, and an estimate of the effect of a 100 point decrease in market interest rates, is summarized as follows:

	September 30, 2006								September 30, 2005
						100 Basis Point								100 Basis Point
	Carrying		Fair			Decrease in					Fair			Decrease in
	Value		Value			Market Interest			Carrying Value		Value			Market Interest
	(Millions)		(Millions)			Rates			(Millions)		(Millions)			Rates
Company’s fixed rate debt	$	3,608.6	$	3,600.0	(1)	$	3,742.0	(2)	$	2,739.5	$	2,787.9		$	2,915.2
Company’s proportionate share of joint venture fixed rate debt	$	394.0	$	393.0	(3)	$	411.4	(4)	$	386.1	$	389.7	(3)	$	406.5

(1)	Includes the fair value of interest rate swaps, which was a liability of $1.4 million at September 30, 2006.
(2)	Includes the fair value of interest rate swaps, which was a liability of $12.4 million at September 30, 2006.
(3)	Includes the fair value of interest rate swaps, which was a liability of $0.7 million and an asset of $0.4 million at September 30, 2006 and 2005, respectively.
(4)	Includes the fair value of interest rate swaps, which was a liability of $3.9 million at September 30, 2006.

     The sensitivity to changes in interest rates of the Company’s fixed rate debt was determined utilizing a valuation model based upon factors that measure the net present value of such obligations arising from the hypothetical estimate as discussed above.

     Further, a 100 basis point increase in short-term market interest rates at September 30, 2006 and 2005, would result in an increase in interest expense of approximately $3.5 million and $8.2 million, respectively, for the Company and for the respective nine-month periods and $1.1 million and $1.0 million, respectively, representing the Company’s proportionate share of the joint ventures’ interest expense relating to variable rate debt outstanding, for the nine-month respective periods. The estimated increase in interest expense for the nine-month periods does not give effect to possible changes in the daily balance for the Company’s or joint ventures’ outstanding variable rate debt.

     The Company also has made advances to several partnerships in the form of notes receivable that accrue interest at rates ranging from 6.9% to 12%. Maturity dates range from payment on demand to June 2020. The following table summarizes the aggregate notes receivable, the percentage at fixed rates with the remainder at variable rates, and the effect of a 100 basis point decrease in market interest rates. The estimated increase in interest income does not give effect to possible changes in the daily outstanding balance of the variable rate loan receivables.

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	September 30,
	2006			2005
Total Notes Receivable	$	28.5		$	131.3
% Fixed Rate Loans		55.1	%		89.9	%
Fair Value of Fixed Rate Loans	$	16.4		$	133.1
Impact on Fair Value of 100 Basis point Decrease in Market Interest rates	$	17.2		$	134.3

     The Company and its joint ventures intend to continually monitor and actively manage interest costs on their variable rate debt portfolio and may enter into swap positions based on market fluctuations. In addition, the Company believes that it has the ability to obtain funds through additional equity and/or debt offerings, including the issuance of medium term notes and joint venture capital. Accordingly, the cost of obtaining such protection agreements in relation to the Company’s access to capital markets will continue to be evaluated. The Company has not entered, and does not plan to enter, into any derivative financial instruments for trading or speculative purposes.

Item 4. Controls and Procedures

     Based on their evaluation as required by Securities Exchange Act Rules 13as-15(b) and 15d-15(b), the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have concluded that the Company’s disclosure controls and procedures (as defined in Securities Exchange Act rules 13a-15(e)) are effective as of the end of the period covered by this quarterly report on Form 10-Q to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and were effective as of the end of such period to ensure that information required to be disclosed by the Company issuer in reports that it fields or submits under the Securities Exchange Act is accumulated and communicated to the Company’s management, including its’ CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. During the three-month period ended September 30, 2006, there were no changes in our internal control over financial reporting that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     Other than routine litigation and administrative proceedings arising in the ordinary course of business, the Company is not presently involved in any litigation nor, to its knowledge, is any litigation threatened against the Company or its properties, which is reasonably likely to have a material adverse effect on the liquidity or results of operations of the Company.

ITEM 1a. RISK FACTORS

     In addition to the Company’s risk factors since those listed in the Company’s Annual Report on 10-K for the year ended December 31, 2005, the following risk should be considered.

Ÿ	The Company expects to continue to pursue international expansion opportunities that may subject us to different or greater risk from those associated with our domestic operations.
Ÿ	The Company holds an interest in a joint venture in Brazil and assets in Puerto Rico. The Company also expects to pursue additional expansion opportunities outside the United States. International development and ownership activities carry risks that are different from those the Company faces with the Company’s domestic properties and operations. These risks include:
	Ÿ	Adverse effects of changes in exchange rates for foreign currencies;
	Ÿ	Changes in foreign political environments, regionally, nationally, and locally;
	Ÿ	Challenges of complying with a wide variety of foreign laws including corporate governance, operations, taxes and litigation;
	Ÿ	Differing lending practices;
	Ÿ	Differences in cultures;
	Ÿ	Changes in applicable laws and regulations in the United States that affect foreign operations;
	Ÿ	Difficulties in managing international operations and
	Ÿ	Obstacles to the repatriation of earnings and cash.
	Although the Company’s international activities currently are a relatively small portion of the Company’s business to the extent that the Company expands the Company’s international activities, these risks could increase in significance and adversely affect the Company’s results of operations and financial condition.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     The Company repurchased 909,000 of its common shares in August 2006. This repurchase was approved by the Company’s Board of Directors. The Company does not currently have in effect a plan to repurchase any of its common shares in the open market at September 30, 2006.

ISSUER PURCHASES OF EQUITY SECURITIES

					(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
July 1 – 31, 2006		1,035	$	22.49		—		—
August 1 – 31, 2006		1,472	$	31.83				—
September 1 – 30, 2006		—		—		—		—
Total		2,507

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

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ITEM 5. OTHER INFORMATION

Employment Agreements

     On November 6, 2006, the Company entered into a separate amended and restated employment agreement with Joan U. Allgood, Richard A. Brown, Timothy J. Bruce and William H. Schafer and an employment agreement with Robin R. Walker-Gibbons, certain of the Company’s executive officers (each, an “Employment Agreement”).

     Each Employment Agreement contains an “evergreen” provision that provides for an automatic extension of the agreement for an additional year at the end of each fiscal year, subject to the parties’ termination rights. The agreement can be terminated by the Company by giving 90 days prior written notice to the executive or for “cause” (as defined below). The executive can terminate the agreement, which termination will be treated as a discharge by the Company without “cause,” if the Company materially changes the executive’s duties without consent, the executive’s place of employment is located more than 50 miles from Cleveland, Ohio or the agreement is materially breached by the Company and such breach is not cured within 30 days.

     The Employment Agreements provide for minimum base salaries of $270,000, $255,000, $290,000, $270,000 and $235,000 for Ms. Allgood, Messrs. Bruce, Brown and Schafer and Ms. Walker-Gibbons, respectively, and annual bonus amounts as a percentage of base salary generally ranging from 15% to 60% depending on the level of performance criteria achieved (in each case subject to increases approved by the Executive Compensation Committee of the Board of Directors). Each of the executives is also entitled to life, disability, medical, hospitalization and dental insurance, participation in retirement and other benefit plans offered by the Company, vacation and sick leave, participation in equity and other benefit plans made available to executive officers of the Company and reimbursement for travel, entertainment and other expenses reasonably and necessarily incurred in connection with the Company’s business. In some cases, the agreements provide for an automobile allowance and a membership in a golf or social club.

     If Ms. Allgood’s, Messrs. Brown’s, Bruce’s or Schafer’s or Ms. Walker-Gibbons’s employment is terminated by the Company without cause or due to death or disability, he or she is entitled to receive (a) a payment equal to such executive’s annual salary plus the amount of the annual bonus payable to such executive prorated up through the date of termination and accrued by the Company as of the month of termination, and (b) continued life, disability, medical, hospitalization and dental insurance for a period of one year following such termination. If a “Change in Control” and a “Triggering Event,” each as defined in the Change in Control Agreements discussed below, occur, then the payments to the executive will be governed by the Change in Control Agreement rather than the Employment Agreement.

     Under the Employment Agreements, the term “cause” means (a) the executive’s fraud, commission of a felony or of an act or series of acts which result in material injury to the business reputation of the Company, commission of an act or series of repeated acts of dishonesty which are materially inimical to the best interests of the Company, or the executive’s willful and repeated failure to perform his or her duties under his or her Employment Agreement, which failure has not been cured within 15 days after the Company gives notice thereof to the executive, or (b) the executive’s material breach of any provision of his or her Employment Agreement, which breach has not been cured in all substantial respects within 10 days after the Company gives notice thereof to the executive.

     The Employment Agreements also provide that to the extent that any of the payments to be made to the officer under such agreement or such executive’s Change in Control Agreement (as defined below) (including with respect to options and restricted shares, but excluding any units or awards granted or vested pursuant to any Outperformance Long-Term Incentive Plan Agreement or Performance Unit Agreement between the executive and the Company) constitute “excess parachute payments” under certain tax laws, the Company will pay the officer such additional amounts as are necessary to cause him or her to receive the same after-tax compensation that he or she would have but for the application of such tax laws.

     Each executive has also agreed in his or her Employment Agreement, for a period of one year after termination thereof, not to engage in certain activities that compete with the Company, divulge certain confidential information about the Company or solicit or induce the termination of employment of any of the Company’s or its subsidiaries’ employees.

     Copies of the Employment Agreements entered into with each of Ms. Allgood, Messrs. Brown, Bruce and Schafer and Ms. Walker-Gibbons are attached hereto as Exhibits 10.13 through 10.17, respectively.

Change in Control Agreements

     On November 6, 2006, the Company also entered into an amended and restated change in control agreement (a “Change in Control Agreement”) with Ms. Allgood, Messrs. Brown, Bruce and Schafer and Ms. Walker-Gibbons. Under the agreements, certain benefits are payable by the Company if a “Triggering Event” occurs within two years after a “Change in Control.”

     A “Triggering Event” occurs if within two years after a Change in Control (a) the Company terminates the employment of the executive officer, other than in the case of a “Termination For Cause” (as defined below), (b) the Company reduces the executive’s title, responsibilities, power or authority in comparison with his or her title, responsibilities, power or authority at the time of the Change in Control, (c) the Company assigns the executive duties that are inconsistent with the duties assigned to the executive on the date on which the Change in Control occurred and which duties the Company persists in assigning to the executive despite the prior written objection of that executive, (d) the Company reduces the executive’s base compensation, incentive opportunity bonus percentages of salary, his or her group health, life, disability or other insurance programs (including any such benefits provided such executive’s family), his or her pension, retirement or profit-sharing benefits or any benefits provided by the Company’s equity-based award plans, or any substitute therefor, (e) 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 officers of the Company, (f) fails to pay the executive any bonus compensation to which such executive is entitled through the achievement of the criteria and factors established for the payment of such bonus, (g) excludes him or her from any plan, program or arrangement in which the other similar officers of the Company are included, or (h) the Company requires the executive to be based at or generally work from any location more than 50 miles from the geographical center of Cleveland, Ohio.

     A “Change in Control” occurs if (a) the Board of Directors or shareholders of the Company approve a consolidation or merger in which the Company is not the surviving corporation, the sale of substantially all of the assets of the Company or the liquidation or dissolution of the Company, (b) any person or other entity (other than the Company, one of its subsidiaries or any of its employee benefit plans (including any trustee of any such plan acting in its capacity as trustee)) purchases any of the Company’s common shares (or securities convertible into common 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 Company representing 20% or more of the voting power of the Company’s outstanding securities, (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 the Company entitled to vote upon (i) a merger or consolidation of the Company with another real estate investment trust, partnership, corporation or other entity in which the Company is not the surviving or continuing entity or in which all or a substantial part of the outstanding common 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 the Company or (iii) the dissolution of the Company.

     A “Termination for Cause” occurs if the 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 the Company or its clients, customers, directors, officers or employees.

     Within five business days after the occurrence of a Triggering Event, the Company must pay the executive an amount equal to the sum of (a) two times the greater of the executive’s effective annual salary on the date of the Triggering Event or the Change in Control, and (b) two times the greater of the maximum bonus payable to the executive on the date of the Triggering Event or the Change in Control (assuming all performance goals have been achieved in the year of such event). In addition, the Company will provide continued insurance benefits that are comparable to or better than those provided to the executive at the time of the Triggering Event or, if greater, the Change in Control, until the earlier of two years from the date of the Triggering Event and the date the executive becomes eligible to receive comparable or better benefits from a new employer and outplacement services for a period of up to one year. If necessary to comply with Section 409A of the American Jobs Creation Act of 2004, these payments will delayed for six months following termination of employment.

     The Change in Control Agreements also provide that to the extent that any of the payments to be made to the executive under such agreement or such executive’s Employment Agreement (including with respect to options and restricted shares, but excluding any units or awards granted or vested pursuant to any Outperformance Long-Term Incentive Plan Agreement or Performance Unit Agreement between the executive and the Company) constitute “excess parachute payments” under certain tax laws, the Company will pay the executive such additional amounts as are necessary to cause him or her to receive the same after-tax compensation that he or she would have but for the application of such tax laws.

     Copies of the Change in Control Agreements entered into with each of Ms. Allgood, Messrs. Brown, Bruce and Schafer and Ms. Walker-Gibbons are attached hereto as Exhibits 10.18 through 10.22, respectively.

ITEM 6. EXHIBITS

10.1	Form of Restricted Share Agreement for Executive Officers under the 2004 Developers Diversified Realty Corporation Equity-Based Award Plan.
10.2	Form of Incentive Stock Option Grant Agreement for Executive Officers under the 2004 Developers Diversified Realty Corporation Equity-Based Award Plan.
10.3	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.
10.4	Form of Non-Qualified Stock Option Grant Agreement for Executive Officers under the 2004 Developers Diversified Realty Corporation Equity-Based Award Plan.
10.5	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.
10.6	Outperformance Long-Term Incentive Plan Agreement, dated as of August 18, 2006, by and between Developers Diversified Realty Corporation and Scott A. Wolstein.
10.7	Outperformance Long-Term Incentive Plan Agreement, dated as of August 18, 2006, by and between Developers Diversified Realty Corporation and Daniel B. Hurwitz.
10.8	Outperformance Long-Term Incentive Plan Agreement, dated as of February 23, 2006, by and between Developers Diversified Realty Corporation and Joan U. Allgood.
10.9	Outperformance Long-Term Incentive Plan Agreement, dated as of February 23, 2006, by and between Developers Diversified Realty Corporation and Richard E. Brown.
10.10	Outperformance Long-Term Incentive Plan Agreement, dated as of February 23, 2006, by and between Developers Diversified Realty Corporation and Timothy J. Bruce.
10.11	Outperformance Long-Term Incentive Plan Agreement, dated as of February 23, 2006, by and between Developers Diversified Realty Corporation and William H. Schafer.
10.12	Outperformance Long-Term Incentive Plan Agreement, dated as of February 23, 2006, by and between Developers Diversified Realty Corporation and Robin Walker-Gibbons.
10.13	Amended and Restated Employment Agreement, dated as of November 6, 2006, by and between Developers Diversified Realty Corporation and Joan U. Allgood.
10.14	Amended and Restated Employment Agreement, dated as of November 6, 2006, by and between Developers Diversified Realty Corporation and Richard E. Brown.

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10.15	Amended and Restated Employment Agreement, dated as of November 6, 2006, by and between Developers Diversified Realty Corporation and Timothy J. Bruce.
10.16	Amended and Restated Employment Agreement, dated as of November 6, 2006, by and between Developers Diversified Realty Corporation and William H. Schafer.
10.17	Employment Agreement, dated as of November 6, 2006, by and between Developers Diversified Realty Corporation and Robin R. Walker-Gibbons.
10.18	Amended and Restated Change in Control Agreement, dated as of November 6, 2006, by and between Developers Diversified Realty Corporation and Joan U. Allgood.
10.19	Amended and Restated Change in Control Agreement, dated as of November 6, 2006, by and between Developers Diversified Realty Corporation and Richard E. Brown.
10.20	Amended and Restated Change in Control Agreement, dated as of November 6, 2006, by and between Developers Diversified Realty Corporation and Timothy J. Bruce.
10.21	Amended and Restated Change in Control Agreement, dated as of November 6, 2006, by and between Developers Diversified Realty Corporation and William H. Schafer.
10.22	Amended and Restated Change in Control Agreement, dated as of November 6, 2006, by and between Developers Diversified Realty Corporation and Robin R. Walker-Gibbons.
31.1	Certification of principal executive officer pursuant to Rule 13a-14(a) of the Exchange Act of 1934
31.2	Certification of principal financial officer pursuant to Rule 13a-14(a) of the Exchange Act of 1934
32.1	Certification of CEO pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002 1
32.2	Certification of CFO pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002 1

₁ Pursuant to SEC Release No. 34-4751, these exhibits are deemed to accompany this report and are not “filed” as part of this report.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DEVELOPERS DIVERSIFIED REALTY CORPORATION

November 9, 2006	/s/ Scott A. Wolstein
(Date)	Scott A. Wolstein, Chief Executive Officer and
	Chairman of the Board
November 9, 2006	/s/ William H. Schafer
(Date)	William H. Schafer, Executive Vice President and
	Chief Financial Office (Principal Financial
	Officer and Principal Accounting Officer)

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EX-10.1

Exhibit 10.1

RESTRICTED SHARES AGREEMENT

     Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), has granted to                      (the “Holder”),                      (___) of the Company’s Common Shares, without par value (the “Restricted Shares”). The Restricted Shares have been granted pursuant to the Developers Diversified Realty Corporation 2004 Equity-Based Award Plan (the “Plan”) and are subject to all provisions of the Plan, which are hereby incorporated herein by reference, and to the following provisions of this Agreement (capitalized terms not defined herein are used as defined in the Plan):

     §1. Vesting. The Restricted Shares will vest                      (each such date a “Vesting Date”). The Restricted Shares will be issued in uncertificated form and held by the Company in an account for the benefit of the Holder until the applicable Vesting Date. The Company will transfer the vested Restricted Shares to the Holder’s account within a reasonable period of time after each Vesting Date, unless such Restricted Shares are subject to a deferral election, in which case the deferral election and the applicable deferral plan will govern treatment of the Restricted Shares upon vesting.

     §2. Purchase Price. The purchase price of the Restricted Shares is $___. The fair market value of the Restricted Shares is $                     per share.

     §3. Transferability. The Holder may transfer Restricted Shares prior to vesting, during his or her lifetime (i) to one or more members of such Holder’s family, (ii) to one or more trusts for the benefit of one or more of such Holder’s family, or (iii) to a partnership or partnerships of members of such Holder’s family, provided that no consideration is paid for the transfer and that the transfer would not result in the loss of any exemption under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, with respect to the Restricted Shares. The Restricted Shares are also transferable by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Internal Revenue Code or the Employment Retirement Income Security Act of 1974, as amended). The transferee of any Restricted Shares will be subject to all restrictions, terms, and conditions applicable to the Restricted Shares.

     §4. Termination of Employment. If the Holder’s employment by the Company or any Subsidiary or Affiliate terminates prior to all of the Restricted Shares vesting, the Restricted Shares will vest or be forfeited as follows:

     (a) Termination by Death. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of death, all Restricted Shares shall vest and any restriction lapse.

     (b) Termination by Reason of Disability. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of Disability, all Restricted Shares shall vest and any restriction lapse.

     (c) Other Termination. Unless otherwise determined by the Committee after the time of granting the Restricted Shares, if the Holder’s employment with the Company or any Subsidiary or Affiliate terminates for any reason other than death or Disability, any Restricted Shares which are unvested or subject to restrictions at the time of termination will be forfeited upon termination.

     (d) Leave of Absence. If the Holder is granted a leave of absence by the Company or any Subsidiary or Affiliate, his or her employment will not be considered terminated, and he or she will continue to be deemed an employee of the Company or Subsidiary or Affiliate during such leave of absence or any extension thereof granted by the Company, Subsidiary or Affiliate for purposes of the Plan.

     §5. Shareholder Rights and Restrictions. Except with regard to the disposition of Restricted Shares, the Holder will generally have all rights of a shareholder with respect to the Restricted Shares from the date of grant, including, without limitation, the right to receive dividends with respect to such Restricted Shares and the right to vote such Restricted Shares, subject to any restrictions in this Agreement or in the Plan.

     §6. Dividends. All dividends payable on the Restricted Shares (whether or not vested) will be payable in cash.

     §7. Taxes. The Holder hereby agrees to pay to the Company, in accordance with the terms of the Plan, any federal, state or local taxes of any kind required by law to be withheld and remitted by the Company with respect to the Restricted Shares. The Holder may satisfy such tax obligation, in whole or in part, by (i) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon vesting of the Restricted Shares with a Fair Market Value equal to the amount of such taxes, or (ii) delivering to the Company other Shares with a Fair Market Value equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined. If the Holder does not make such payment to the Company, the Company shall have the right to withhold from any payment of any kind otherwise due to the Holder from the Company, any federal, state or local taxes of any kind required by law to be withheld with respect to the award or vesting of the Restricted Shares.

     §8. Deferral. The Holder may, in his or her sole discretion, with respect to this award of Restricted Shares, elect to participate in any equity deferred compensation plan established by the Company.

     §9. Subject to the Plan. This Agreement is made and the Restricted Shares evidenced hereby are granted under and pursuant to, and they are expressly made subject to all of the terms and conditions of, the Plan, notwithstanding anything herein to the contrary. The Holder hereby acknowledges receipt of a copy of the Plan and that the Holder has read and understands the terms and conditions of the Plan.

     §10. Securities Law Compliance.

     (a) The Holder agrees that the Company may impose such restrictions on the Shares as are deemed advisable by the Company, including, without limitation, restrictions relating to listing or trading requirements. The Holder further agrees that certificates representing the Shares may bear such legends and statements as the Company shall deem appropriate or advisable to assure, among other things, compliance with applicable securities laws, rules and regulations.

     (b) The Holder agrees that any Shares which the Holder may acquire by virtue of this Agreement may not be transferred, sold, assigned, pledged, hypothecated or otherwise disposed of by the Holder unless (i) a registration statement or post-effective amendment to a registration statement under the Securities Act of 1933, as amended, with respect to such Shares has become effective so as to permit the sale or other disposition of such Shares by the Holder, or (ii) there is presented to the Company an opinion of counsel satisfactory to the Company to the effect that the sale or other proposed disposition of such Shares by the Holder may lawfully be made otherwise than pursuant to an effective registration statement or post-effective amendment to a registration statement relating to such Shares under the Securities Act of 1933, as amended.

     §11. Rights of the Holder. The granting of the Restricted Shares shall in and of itself not confer any right of the Holder to continue in the employ of the Company and shall not interfere in any way with the right of the Company to terminate the Holder’s employment at any time, subject to the terms of any employment agreement between the Company and the Holder.

     §12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, except to the extent otherwise governed by Federal law.

THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK

     IN WITNESS WHEREOF, the parties have subscribed their names hereto.

DEVELOPERS DIVERSIFIED REALTY
CORPORATION, an Ohio corporation
 

By:  

DATE OF GRANT:

                    , _______

ACCEPTANCE OF AGREEMENT

     The Holder hereby:

     (a) Acknowledges that he/she has received a copy of the Plan and a copy of the Company’s most recent Annual Report and other communications routinely distributed to the Company’s shareholders;

     (b) Accepts this Agreement and the Restricted Shares granted to him/her under this Agreement subject to all provisions of the Plan and this Agreement;

     (c) Represents and warrants to the Company that he/she is acquiring the Restricted Shares for his/her own account, for investment, and not with a view to or any present intention of selling or distributing the Restricted Shares either now or at any specific or determinable future time or period or upon the occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and

     (d) Agrees that no transfer of the Restricted shares will be made unless the Restricted Shares have been duly registered under all applicable Federal and state securities laws pursuant to a then effective registration which contemplates the proposed transfer or unless the Company has received the written opinion of, or satisfactory to, its legal counsel that the proposed transfer is exempt from such registration.

Holder’s Signature

Holder’s Social Security Number

EX-10.2

Exhibit 10.2

STOCK OPTION AGREEMENT

(Incentive Stock Option Grant to Executive Officers)

     THIS AGREEMENT is made as of                     , by and between DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the “Company”), and                     , an individual (the “Holder”).

W I T N E S S E T H:

     WHEREAS, the Company desires to provide the Holder with an option to purchase                      (___) Common Shares, without par value, of the Company (“Shares”), pursuant to the Company’s 2004 Equity-Based Award Plan (the “Plan”); and

     WHEREAS, the Holder desires to accept such option.

     NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the parties hereto hereby agree as follows:

     1. Grant of Option. The Company does hereby irrevocably grant to the Holder, and the Holder does hereby accept, the right and option (the “Option”) to purchase, at the option of the Holder,                      (___) Shares at the exercise price per Share of $___and upon and subject to the other terms and conditions hereof and the Plan.

     2. Term of the Option; Vesting. The Option is exercisable, in whole or in part, once vested, in accordance with the following schedule. If the Holder is then employed by the Company, the Option shall vest as follows:

Date                    No. of Shares Vesting

Shares for which the Option has become exercisable shall be referred to herein as “Vested Shares,” and Shares for which the Option has not become exercisable shall be referred to herein as “Unvested Shares.” The Option shall terminate on the tenth anniversary of the date hereof and must be exercised, if at all and to the extent exercisable, on or before such date and shall not thereafter be exercisable, notwithstanding anything herein to the contrary. Notwithstanding anything contained herein to the contrary, it shall be a condition to the Holder’s right to exercise the Option with respect to any Vested Shares that there shall have been filed with the Securities and Exchange Commission an effective registration statement on Form S-8 (or such other form as the Company shall deem necessary) with respect to the Shares to be received upon exercise.

     3. Exercise. Subject to the other terms and conditions hereof, the Option shall be exercisable from time to time by written notice to the Company (in the form required by the Company) which shall:

(a) state that the Option is thereby being exercised, the number of Shares with respect to which the Option is being exercised, each person in whose name any

certificates for the Shares should be registered and such person’s address and social security number;

(b)	be signed by the person or persons entitled to exercise the Option and, if the Option is being exercised by anyone other than the Holder, be accompanied by proof satisfactory to counsel for the Company of the right of such person or persons to exercise the Option under the Plan and all applicable laws and regulations; and
(c)	be accompanied by such representations, warranties or agreements with respect to the investment intent of such person or persons exercising the Option as the Company may reasonably request, in form and substance satisfactory to counsel for the Company.

     As conditions to the exercise of the Option and the obligation of the Company to issue Shares upon the exercise thereof, the proposed recipient of the Shares shall make any representation or warranty to comply with any applicable law or regulation or to confirm any factual matters reasonably requested by the Company or its counsel.

     Upon exercise of the Option and the satisfaction of all conditions thereto, the Company shall deliver a certificate or certificates for Shares to the specified person or persons at the specified time upon receipt of the aggregate exercise price for such Shares by any method of payment authorized by the Plan.

     4. Termination of Employment. Upon termination of the Holder’s employment with the Company, the Option will be governed by Section 5(b) of the Plan. If, for any reason, the Option is not treated as an Incentive Stock Option (as defined below), the Option will be governed as follows upon termination of the Holder’s employment with the Company:

     (a) Termination by Death. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of death, the Option shall become immediately and automatically vested and exercisable. If termination of the Holder’s employment is due to death, then the Option may thereafter be exercised by the estate of the Holder (acting through its fiduciary) at any time after the date of the Holder’s death (or as the Committee may specify after grant). Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof.

     (b) Termination by Reason of Disability. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of Disability, the Option shall become immediately and automatically vested and exercisable. If termination of the Holder’s employment is due to Disability, then the Option may thereafter be exercised by the Holder or by the Holder’s duly authorized legal representative if the Holder is unable to exercise the Option as a result of the Holder’s Disability, at any time after the date of such termination of employment (or such other period as the Committee may specify after grant). If the Holder dies before the Option is exercised, any unexercised Option held by the Holder shall thereafter be exercisable by the estate of the Holder (acting through its fiduciary) at any time after the date of the Holder’s death (or such other period as the Committee may specify after grant). Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof.

     (c) Termination for Cause. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates for Cause, the Option will be giverned by Section 5(b) of the Plan.

     (d) Other Termination. Unless otherwise determined by the Committee after the time of granting the Option, if the Holder’s employment with the Company or any Subsidiary or Affiliate terminates for any reason other than death, Disability, Retirement, or for Cause, any Vested Shares at the time of termination must be exercised by the Holder within three (3) months after the date the Holder’s employment terminates. Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof. Unless otherwise determined by the Committee, any Unvested Shares under the Option shall be forfeited upon termination.

     (e) Leave of Absence. If the Holder is granted a leave of absence by the Company or any Subsidiary or Affiliate, his or her employment will not be considered terminated, and he or she will continue to be deemed an employee of the Company or Subsidiary or Affiliate during such leave of absence or any exension thereof granted by the Company, Subsidiary or Affiliate for purposes of the Plan.

     5. Transferability. The Option and the Holder’s rights therein are not transferable by the Holder other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Internal Revenue Code or the Employment Retirement Income Security Act of 1974, as amended). If, for any reason, the Option is not treated as an Incentive Stock Option, the Holder may transfer the Option, during his or her lifetime (i) to one or more members of such Holder’s family, (ii) to one or more trusts for the benefit of one or more of such Holder’s family, (iii) to a partnership or partnerships of members of such Holder’s family, or (iv) to a charitable organization as defined in Section 501(c)(3) of the Code, provided that no consideration is paid for the transfer and that the transfer would not result in the loss of any exemption under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, with respect to any Option. The transferee of any Option will be subject to all restrictions, terms and conditions applicable to the Option prior to its transfer.

     6. Taxes. The Holder hereby agrees to pay to the Company, in accordance with the terms of the Plan, any federal, state or local taxes of any kind required by law to be withheld and remitted by the Company with respect to an exercise of the Option. The Holder may satisfy such tax obligation, in whole or in part, by (i) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon exercise of (or the lapse of restrictions relating to) the Option with a Fair Market Value equal to the amount of such taxes, or (ii) delivering to the Company Shares other than Shares issuable upon exercise of (or the lapse of restrictions relating to) the Option with a Fair Market Value equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined. If the Holder does not make such payment to the Company, the Company shall have the right to withhold from any payment of any kind otherwise due to the Holder from the Company, any federal, state or local taxes of any kind required by law to be withheld with respect to an exercise of the Option or the Shares which are the subject of such Option.

     7. Deferral. If the Company has adopted a deferred compensation plan with respect to equity-based awards, the Holder may, in his or her sole discretion, elect to particpate under the deferral plan.

     8. Subject to the Plan. This Agreement is made and the Option evidenced hereby is granted under and pursuant to, and they are expressly made subject to all of the terms and conditions of, the Plan, notwithstanding anything herein to the contrary. The Holder hereby acknowledges receipt of a copy of the Plan and that the Holder has read and understands the terms and conditions of the Plan.

     9. Intent. The Option is intended to be treated as an Incentive Stock Option within the meaning of Section 422 of the Internal Revenue Code (an “Incentive Stock Option”). The Option shall be construed and exercised consistent with such intention. It is acknowledged that the United States Treasury Department may amend or modify from time to time its regulations governing Incentive Stock

Options. Accordingly, it is understood and agreed by the Holder that the Company may amend or modify the Plan and this Agreement in any respect deemed by the Company to be necessary or desirable to comply with such regulations, as amended or modified from time to time or to meet the requirements for an Incentive Stock Option.

     10. Securities Law Compliance.

     (a) Notwithstanding any provision of this Agreement to the contrary, the Option shall not be exercisable unless, at the time the Holder attempts to exercise the Option, in the opinion of counsel for the Company, all applicable securities laws, rules and regulations have been complied with. The Holder agrees that the Company may impose such restrictions on the Shares as are deemed advisable by the Company, including, without limitation, restrictions relating to listing or trading requirements. The Holder further agrees that certificates representing the Shares may bear such legends and statements as the Company shall deem appropriate or advisable to assure, among other things, compliance with applicable securities laws, rules and regulations.

     (b) The Holder agrees that any Shares which the Holder may acquire by virtue of the Option may not be transferred, sold, assigned, pledged, hypothecated or otherwise disposed of by the Holder unless (i) a registration statement or post-effective amendment to a registration statement under the Securities Act of 1933, as amended, with respect to such Shares has become effective so as to permit the sale or other disposition of such Shares by the Holder, or (ii) there is presented to the Company an opinion of counsel satisfactory to the Company to the effect that the sale or other proposed disposition of such Shares by the Holder may lawfully be made otherwise than pursuant to an effective registration statement of post-effective amendment to a registration statement relating to such Shares under the Securities Act of 1933, as amended.

     11. Rights of the Holder. The granting of the Option shall in and of itself not confer any right on the Holder to continue in the employ of the Company and shall not interfere in any way with the right of the Company to terminate the Holder’s employment at any time, subject to the terms of any employment agreement between the Company and the Holder. The Holder shall have no dividend, voting or other rights of a stockholder with respect to the Shares which are subject to the Option prior to the purchase of such Shares upon exercise of the Option and the execution and delivery of all other documents and instruments deemed necessary or desirable by the Company.

     12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, except to the extent otherwise governed by Federal law.

     IN WITNESS WHEREOF, the parties have subscribed their names hereto as of the date first above written.

DEVELOPERS DIVERSIFIED REALTY

CORPORATION, an Ohio corporation

By:

Holder’s Signature:

Holder’s Social Security Number

EX-10.3

Exhibit 10.3

STOCK OPTION AGREEMENT

(Incentive Stock Option Grant to Executive Officers)

     THIS AGREEMENT is made as of                     , by and between DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the “Company”), and                     , an individual (the “Holder”).

W I T N E S S E T H:

     WHEREAS, the Company desires to provide the Holder with an option to purchase                      (___) Common Shares, without par value, of the Company (“Shares”), pursuant to the Company’s 2004 Equity-Based Award Plan (the “Plan”); and

     WHEREAS, the Holder desires to accept such option.

     NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the parties hereto hereby agree as follows:

     1. Grant of Option. The Company does hereby irrevocably grant to the Holder, and the Holder does hereby accept, the right and option (the “Option”) to purchase, at the option of the Holder,                      (___) Shares at the exercise price per Share of $                     and upon and subject to the other terms and conditions hereof and the Plan.

     2. Term of the Option; Vesting. The Option is exercisable, in whole or in part, once vested, in accordance with the following schedule. If the Holder is then employed by the Company, the Option shall vest as follows:

Date                    No. of Shares Vesting

Shares for which the Option has become exercisable shall be referred to herein as “Vested Shares,” and Shares for which the Option has not become exercisable shall be referred to herein as “Unvested Shares.” The Option shall terminate on the tenth anniversary of the date hereof and must be exercised, if at all and to the extent exercisable, on or before such date and shall not thereafter be exercisable, notwithstanding anything herein to the contrary. Notwithstanding anything contained herein to the contrary, it shall be a condition to the Holder’s right to exercise the Option with respect to any Vested Shares that there shall have been filed with the Securities and Exchange Commission an effective registration statement on Form S-8 (or such other form as the Company shall deem necessary) with respect to the Shares to be received upon exercise.

     3. Exercise. Subject to the other terms and conditions hereof, the Option shall be exercisable from time to time by written notice to the Company (in the form required by the Company) which shall:

(a) state that the Option is thereby being exercised, the number of Shares with respect to which the Option is being exercised, each person in whose name any

certificates for the Shares should be registered and such person’s address and social security number;

(b)	be signed by the person or persons entitled to exercise the Option and, if the Option is being exercised by anyone other than the Holder, be accompanied by proof satisfactory to counsel for the Company of the right of such person or persons to exercise the Option under the Plan and all applicable laws and regulations; and
(c)	be accompanied by such representations, warranties or agreements with respect to the investment intent of such person or persons exercising the Option as the Company may reasonably request, in form and substance satisfactory to counsel for the Company.

     As conditions to the exercise of the Option and the obligation of the Company to issue Shares upon the exercise thereof, the proposed recipient of the Shares shall make any representation or warranty to comply with any applicable law or regulation or to confirm any factual matters reasonably requested by the Company or its counsel.

     Upon exercise of the Option and the satisfaction of all conditions thereto, the Company shall deliver a certificate or certificates for Shares to the specified person or persons at the specified time upon receipt of the aggregate exercise price for such Shares by any method of payment authorized by the Plan.

     4. Termination of Employment. Upon termination of the Holder’s employment with the Company, the Option will be governed by Section 5(b) of the Plan. If, for any reason, the Option is not treated as an Incentive Stock Option (as defined below), the Option will be governed as follows upon termination of the Holder’s employment with the Company:

     (a) Termination by Death. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of death, the Option shall become immediately and automatically vested and exercisable. If termination of the Holder’s employment is due to death, then the Option may thereafter be exercised by the estate of the Holder (acting through its fiduciary) at any time after the date of the Holder’s death (or as the Committee may specify after grant). Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof.

     (b) Termination by Reason of Disability. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of Disability, the Option shall become immediately and automatically vested and exercisable. If termination of the Holder’s employment is due to Disability, then the Option may thereafter be exercised by the Holder or by the Holder’s duly authorized legal representative if the Holder is unable to exercise the Option as a result of the Holder’s Disability, at any time after the date of such termination of employment (or such other period as the Committee may specify after grant). If the Holder dies before the Option is exercised, any unexercised Option held by the Holder shall thereafter be exercisable by the estate of the Holder (acting through its fiduciary) at any time after the date of the Holder’s death (or such other period as the Committee may specify after grant). Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof.

     (c) Termination for Retirement. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of Retirement, the Option shall become immediately and automatically vested and exercisable. If termination of the Holder’s employment is due to Retirement, then the Option may thereafter be exercised by the Holder at any time after the date of such Retirement

(or such other period as the Committee may specify after grant). If the Holder is unable to exercise the Option as a result of the Holder’s Disability, then the Option may thereafter be exercised by the Holder’s duly authorized legal representative, at any time after the date of such Disability (or such other period as the Committee may specify after grant). If the Holder dies before the Option is exercised, any unexercised Option held by the Holder shall thereafter be exercisable by the estate of the Holder (acting through its fiduciary) at any time after the date of the Holder’s death (or such other period as the Committee may specify after grant). Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof. “Retirement” means retirement from active employment with the Company, a Subsidiary or Affiliate at the earlier to occur of: (i) a participant attaining the age of 55, or (ii) a participant attaining the age of 50 and accruing 15 years of credited service for the Company, a Subsidiary or Affiliate.

     (d) Termination for Cause. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates for Cause, the Option will be giverned by Section 5(b) of the Plan.

     (e) Other Termination. Unless otherwise determined by the Committee after the time of granting the Option, if the Holder’s employment with the Company or any Subsidiary or Affiliate terminates for any reason other than death, Disability, Retirement, or for Cause, any Vested Shares at the time of termination must be exercised by the Holder within three (3) months after the date the Holder’s employment terminates. Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof. Unless otherwise determined by the Committee, any Unvested Shares under the Option shall be forfeited upon termination.

     (f) Leave of Absence. If the Holder is granted a leave of absence by the Company or any Subsidiary or Affiliate, his or her employment will not be considered terminated, and he or she will continue to be deemed an employee of the Company or Subsidiary or Affiliate during such leave of absence or any exension thereof granted by the Company, Subsidiary or Affiliate for purposes of the Plan.

     5. Transferability. The Option and the Holder’s rights therein are not transferable by the Holder other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Internal Revenue Code or the Employment Retirement Income Security Act of 1974, as amended). If, for any reason, the Option is not treated as an Incentive Stock Option, the Holder may transfer the Option, during his or her lifetime (i) to one or more members of such Holder’s family, (ii) to one or more trusts for the benefit of one or more of such Holder’s family, (iii) to a partnership or partnerships of members of such Holder’s family, or (iv) to a charitable organization as defined in Section 501(c)(3) of the Code, provided that no consideration is paid for the transfer and that the transfer would not result in the loss of any exemption under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, with respect to any Option. The transferee of any Option will be subject to all restrictions, terms and conditions applicable to the Option prior to its transfer.

     6. Taxes. The Holder hereby agrees to pay to the Company, in accordance with the terms of the Plan, any federal, state or local taxes of any kind required by law to be withheld and remitted by the Company with respect to an exercise of the Option. The Holder may satisfy such tax obligation, in whole or in part, by (i) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon exercise of (or the lapse of restrictions relating to) the Option with a Fair Market Value equal to the amount of such taxes, or (ii) delivering to the Company Shares other than Shares issuable upon exercise of (or the lapse of restrictions relating to) the Option with a Fair Market Value equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined. If the Holder does not make such payment to the Company, the Company shall have the right to withhold from any payment of any kind otherwise due to the Holder from the Company, any federal, state or local taxes of any kind required by law to be withheld with respect to an exercise of the

Option or the Shares which are the subject of such Option.

     7. Deferral. If the Company has adopted a deferred compensation plan with respect to equity-based awards, the Holder may, in his or her sole discretion, elect to particpate under the deferral plan.

     8. Subject to the Plan. This Agreement is made and the Option evidenced hereby is granted under and pursuant to, and they are expressly made subject to all of the terms and conditions of, the Plan, notwithstanding anything herein to the contrary. The Holder hereby acknowledges receipt of a copy of the Plan and that the Holder has read and understands the terms and conditions of the Plan.

     9. Intent. The Option is intended to be treated as an Incentive Stock Option within the meaning of Section 422 of the Internal Revenue Code (an “Incentive Stock Option”). The Option shall be construed and exercised consistent with such intention. It is acknowledged that the United States Treasury Department may amend or modify from time to time its regulations governing Incentive Stock Options. Accordingly, it is understood and agreed by the Holder that the Company may amend or modify the Plan and this Agreement in any respect deemed by the Company to be necessary or desirable to comply with such regulations, as amended or modified from time to time or to meet the requirements for an Incentive Stock Option.

     10. Securities Law Compliance.

     (a) Notwithstanding any provision of this Agreement to the contrary, the Option shall not be exercisable unless, at the time the Holder attempts to exercise the Option, in the opinion of counsel for the Company, all applicable securities laws, rules and regulations have been complied with. The Holder agrees that the Company may impose such restrictions on the Shares as are deemed advisable by the Company, including, without limitation, restrictions relating to listing or trading requirements. The Holder further agrees that certificates representing the Shares may bear such legends and statements as the Company shall deem appropriate or advisable to assure, among other things, compliance with applicable securities laws, rules and regulations.

     (b) The Holder agrees that any Shares which the Holder may acquire by virtue of the Option may not be transferred, sold, assigned, pledged, hypothecated or otherwise disposed of by the Holder unless (i) a registration statement or post-effective amendment to a registration statement under the Securities Act of 1933, as amended, with respect to such Shares has become effective so as to permit the sale or other disposition of such Shares by the Holder, or (ii) there is presented to the Company an opinion of counsel satisfactory to the Company to the effect that the sale or other proposed disposition of such Shares by the Holder may lawfully be made otherwise than pursuant to an effective registration statement of post-effective amendment to a registration statement relating to such Shares under the Securities Act of 1933, as amended.

     11. Rights of the Holder. The granting of the Option shall in and of itself not confer any right on the Holder to continue in the employ of the Company and shall not interfere in any way with the right of the Company to terminate the Holder’s employment at any time, subject to the terms of any employment agreement between the Company and the Holder. The Holder shall have no dividend, voting or other rights of a stockholder with respect to the Shares which are subject to the Option prior to the purchase of such Shares upon exercise of the Option and the execution and delivery of all other documents and instruments deemed necessary or desirable by the Company.

     12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, except to the extent otherwise governed by Federal law.

     IN WITNESS WHEREOF, the parties have subscribed their names hereto as of the date first above written.

DEVELOPERS DIVERSIFIED REALTY

CORPORATION, an Ohio corporation

By:

Holder’s Signature:

Holder’s Social Security Number

EX-10.4

Exhibit 10.4

STOCK OPTION AGREEMENT

(Non-Qualified Stock Option Grant to Executive Officers)

     THIS AGREEMENT is made as of                     , by and between DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the “Company”), and                     , an individual (the “Holder”).

W I T N E S S E T H:

     WHEREAS, the Company desires to provide the Holder with an option to purchase                      (___) Common Shares, without par value, of the Company (“Shares”), pursuant to the Company’s 2004 Equity-Based Award Plan (the “Plan”) (terms not defined in this Agreement will have the meaning set forth in the Plan); and

     WHEREAS, the Holder desires to accept such option.

     NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the parties hereto hereby agree as follows:

     1. Grant of Option. The Company does hereby irrevocably grant to the Holder, and the Holder does hereby accept, the right and option (the “Option”) to purchase, at the option of the Holder,                      (___) Shares at the exercise price per Share of $                     and upon and subject to the other terms and conditions hereof and the Plan.

     2. Term of the Option; Vesting. The Option is exercisable, in whole or in part, once vested, in accordance with the following schedule. If the Holder is then employed by the Company, the Option shall vest as follows:

Date                    No. of Shares Vesting

Shares for which the Option has become exercisable shall be referred to herein as “Vested Shares,” and Shares for which the Option has not become exercisable shall be referred to herein as “Unvested Shares.” The Option shall terminate on the tenth anniversary of the date hereof and must be exercised, if at all and to the extent exercisable, on or before such date and shall not thereafter be exercisable, notwithstanding anything herein to the contrary. Notwithstanding anything contained herein to the contrary, it shall be a condition to the Holder’s right to exercise the Option with respect to any Vested Shares that there shall have been filed with the Securities and Exchange Commission an effective registration statement on Form S-8 (or such other form as the Company shall deem necessary) with respect to the Shares to be received upon exercise.

     3. Exercise. Subject to the other terms and conditions hereof, the Option shall be exercisable from time to time by written notice to the Company (in the form required by the Company) which shall:

(a)	state that the Option is thereby being exercised, the number of Shares with respect to which the Option is being exercised, each person in whose name any certificates for the Shares should be registered and such person’s address and social security number;
(b)	be signed by the person or persons entitled to exercise the Option and, if the Option is being exercised by anyone other than the Holder, be accompanied by proof satisfactory to counsel for the Company of the right of such person or persons to exercise the Option under the Plan and all applicable laws and regulations; and
(c)	be accompanied by such representations, warranties or agreements with respect to the investment intent of such person or persons exercising the Option as the Company may reasonably request, in form and substance satisfactory to counsel for the Company.

     As conditions to the exercise of the Option and the obligation of the Company to issue Shares upon the exercise thereof, the proposed recipient of the Shares shall make any representation or warranty to comply with any applicable law or regulation or to confirm any factual matters reasonably requested by the Company or its counsel.

     Upon exercise of the Option and the satisfaction of all conditions thereto, the Company shall deliver a certificate or certificates for Shares to the specified person or persons at the specified time upon receipt of the aggregate exercise price for such Shares by any method of payment authorized by the Plan.

     4. Termination of Option. Upon termination of the Holder’s employment with the Company, the Option will be governed as follows:

     (a) Termination by Death. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of death, the Option shall become immediately and automatically vested and exercisable. If termination of the Holder’s employment is due to death, then the Option may thereafter be exercised by the estate of the Holder (acting through its fiduciary) at any time after the date of the Holder’s death (or as the Committee may specify after grant). Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof.

     (b) Termination by Reason of Disability. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of Disability, the Option shall become immediately and automatically vested and exercisable. If termination of the Holder’s employment is due to Disability, then the Option may thereafter be exercised by the Holder or by the Holder’s duly authorized legal representative if the Holder is unable to exercise the Option as a result of the Holder’s Disability, at any time after the date of such termination of employment (or such other period as the Committee may specify after grant). If the Holder dies before the Option is exercised, any unexercised Option held by the Holder shall thereafter be exercisable by the estate of the Holder (acting through its fiduciary) at any time after the date of the Holder’s death (or such other period as the Committee may specify after grant). Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof.

     (c) Termination for Cause. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates for Cause, the Option will be governed by Section 5(b) of the Plan.

     (d) Other Termination. Unless otherwise determined by the Committee after the time of granting the Option, if the Holder’s employment with the Company or any Subsidiary or Affiliate terminates for any reason other than death, Disability, Retirement, or for Cause, any Vested Shares at the time of termination must be exercised by the Holder within three (3) months after the date the Holder’s employment terminates. Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof. Unless otherwise determined by the Committee, any Unvested Shares under the Option shall be forfeited upon termination.

     (e) Leave of Absence. If the Holder is granted a leave of absence by the Company or any Subsidiary or Affiliate, his or her employment will not be considered terminated, and he or she will continue to be deemed an employee of the Company or Subsidiary or Affiliate during such leave of absence or any exension thereof granted by the Company, Subsidiary or Affiliate for purposes of the Plan.

     5. Transferability. The Holder may transfer the Option, during his or her lifetime (i) to one or more members of such Holder’s family, (ii) to one or more trusts for the benefit of one or more of such Holder’s family, (iii) to a partnership or partnerships of members of such Holder’s family, or (iv) to a charitable organization as defined in Section 501(c)(3) of the Code, provided that no consideration is paid for the transfer and that the transfer would not result in the loss of any exemption under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, with respect to any Option. The Option and the Holder’s rights therein are also transferable by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Internal Revenue Code or the Employment Reitrement Income Security Act of 1974, as amended). The transferee of any Option will be subject to all restrictions, terms and conditions applicable to the Option prior to its transfer.

     6. Taxes. The Holder hereby agrees to pay to the Company, in accordance with the terms of the Plan, any federal, state or local taxes of any kind required by law to be withheld and remitted by the Company with respect to an exercise of the Option. The Holder may satisfy such tax obligation, in whole or in part, by (i) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon exercise of (or the lapse of restrictions relating to) the Option with a Fair Market Value equal to the amount of such taxes, or (ii) delivering to the Company Shares other than Shares issuable upon exercise of (or the lapse of restrictions relating to) the Option with a Fair Market Value equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined. If the Holder does not make such payment to the Company, the Company shall have the right to withhold from any payment of any kind otherwise due to the Holder from the Company, any federal, state or local taxes of any kind required by law to be withheld with respect to an exercise of the Option or the Shares which are the subject of such Option.

     7. Deferral. If the Company has adopted a deferred compensation plan with respect to equity-based awards, the Holder may, in his or her sole discretion, elect to participate under that deferral plan.

     8. Subject to the Plan. This Agreement is made and the Option evidenced hereby is granted under and pursuant to, and they are expressly made subject to all of the terms and conditions of, the Plan, notwithstanding anything herein to the contrary. The Holder hereby acknowledges receipt of a copy of the Plan and that the Holder has read and understands the terms and conditions of the Plan.

     9. Intent. The Option is intended to be treated as a Non-Qualified Stock Option and not as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code. The Option shall be construed and exercised consistent with such intention.

     10. Securities Law Compliance.

     (a) Notwithstanding any provision of this Agreement to the contrary, the Option shall not be exercisable unless, at the time the Holder attempts to exercise the Option, in the opinion of counsel for the Company, all applicable securities laws, rules and regulations have been complied with. The Holder agrees that the Company may impose such restrictions on the Shares as are deemed advisable by the Company, including, without limitation, restrictions relating to listing or trading requirements. The Holder further agrees that certificates representing the Shares may bear such legends and statements as the Company shall deem appropriate or advisable to assure, among other things, compliance with applicable securities laws, rules and regulations.

     (b) The Holder agrees that any Shares which the Holder may acquire by virtue of the Option may not be transferred, sold, assigned, pledged, hypothecated or otherwise disposed of by the Holder unless (i) a registration statement or post-effective amendment to a registration statement under the Securities Act of 1933, as amended, with respect to such Shares has become effective so as to permit the sale or other disposition of such Shares by the Holder, or (ii) there is presented to the Company an opinion of counsel satisfactory to the Company to the effect that the sale or other proposed disposition of such Shares by the Holder may lawfully be made otherwise than pursuant to an effective registration statement or post-effective amendment to a registration statement relating to such Shares under the Securities Act of 1933, as amended.

     11. Rights of the Holder. The granting of the Option shall in and of itself not confer any right on the Holder to continue in the employ of the Company and shall not interfere in any way with the right of the Company to terminate the Holder’s employment at any time, subject to the terms of any employment agreement between the Company and the Holder. The Holder shall have no dividend, voting or other rights of a stockholder with respect to the Shares which are subject to the Option prior to the purchase of such Shares upon exercise of the Option and the execution and delivery of all other documents and instruments deemed necessary or desirable by the Company.

     12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, except to the extent otherwise governed by Federal law.

     IN WITNESS WHEREOF, the parties have subscribed their names hereto as of the date first above written.

DEVELOPERS DIVERSIFIED REALTY

CORPORATION, an Ohio corporation

By:

Holder’s Signature:

Holder’s Social Security Number

EX-10.5

Exhibit 10.5

STOCK OPTION AGREEMENT

(Non-Qualified Stock Option Grant to Executive Officers)

     THIS AGREEMENT is made as of                     , by and between DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the “Company”), and                     , an individual (the “Holder”).

W I T N E S S E T H:

     WHEREAS, the Company desires to provide the Holder with an option to purchase one                      (___) Common Shares, without par value, of the Company (“Shares”), pursuant to the Company’s 2004 Equity-Based Award Plan (the “Plan”) (terms not defined in this Agreement will have the meaning set forth in the Plan); and

     WHEREAS, the Holder desires to accept such option.

     NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the parties hereto hereby agree as follows:

     1. Grant of Option. The Company does hereby irrevocably grant to the Holder, and the Holder does hereby accept, the right and option (the “Option”) to purchase, at the option of the Holder,                      (___) Shares at the exercise price per Share of $                     and upon and subject to the other terms and conditions hereof and the Plan.

     2. Term of the Option; Vesting. The Option is exercisable, in whole or in part, once vested, in accordance with the following schedule. If the Holder is then employed by the Company, the Option shall vest as follows:

Date                    No. of Shares Vesting

Shares for which the Option has become exercisable shall be referred to herein as “Vested Shares,” and Shares for which the Option has not become exercisable shall be referred to herein as “Unvested Shares.” The Option shall terminate on the tenth anniversary of the date hereof and must be exercised, if at all and to the extent exercisable, on or before such date and shall not thereafter be exercisable, notwithstanding anything herein to the contrary. Notwithstanding anything contained herein to the contrary, it shall be a condition to the Holder’s right to exercise the Option with respect to any Vested Shares that there shall have been filed with the Securities and Exchange Commission an effective registration statement on Form S-8 (or such other form as the Company shall deem necessary) with respect to the Shares to be received upon exercise.

     3. Exercise. Subject to the other terms and conditions hereof, the Option shall be exercisable from time to time by written notice to the Company (in the form required by the Company) which shall:

(a)	state that the Option is thereby being exercised, the number of Shares with respect to which the Option is being exercised, each person in whose name any certificates for the Shares should be registered and such person’s address and social security number;
(b)	be signed by the person or persons entitled to exercise the Option and, if the Option is being exercised by anyone other than the Holder, be accompanied by proof satisfactory to counsel for the Company of the right of such person or persons to exercise the Option under the Plan and all applicable laws and regulations; and
(c)	be accompanied by such representations, warranties or agreements with respect to the investment intent of such person or persons exercising the Option as the Company may reasonably request, in form and substance satisfactory to counsel for the Company.

     As conditions to the exercise of the Option and the obligation of the Company to issue Shares upon the exercise thereof, the proposed recipient of the Shares shall make any representation or warranty to comply with any applicable law or regulation or to confirm any factual matters reasonably requested by the Company or its counsel.

     Upon exercise of the Option and the satisfaction of all conditions thereto, the Company shall deliver a certificate or certificates for Shares to the specified person or persons at the specified time upon receipt of the aggregate exercise price for such Shares by any method of payment authorized by the Plan.

     4. Termination of Option. Upon termination of the Holder’s employment with the Company, the Option will be governed as follows:

     (a) Termination by Death. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of death, the Option shall become immediately and automatically vested and exercisable. If termination of the Holder’s employment is due to death, then the Option may thereafter be exercised by the estate of the Holder (acting through its fiduciary) at any time after the date of the Holder’s death (or as the Committee may specify after grant). Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof.

     (b) Termination by Reason of Disability. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of Disability, the Option shall become immediately and automatically vested and exercisable. If termination of the Holder’s employment is due to Disability, then the Option may thereafter be exercised by the Holder or by the Holder’s duly authorized legal representative if the Holder is unable to exercise the Option as a result of the Holder’s Disability, at any time after the date of such termination of employment (or such other period as the Committee may specify after grant). If the Holder dies before the Option is exercised, any unexercised Option held by the Holder shall thereafter be exercisable by the estate of the Holder (acting through its fiduciary) at any time after the date of the Holder’s death (or such other period as the Committee may specify after grant). Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof.

     (c) Termination for Retirement. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of Retirement, the Option shall become immediately and automatically vested and exercisable. If termination of the Holder’s employment is due to Retirement, then the Option may thereafter be exercised by the Holder at any time after the date of such Retirement(or

such other period as the Committee may specify after grant). If the Holder is unable to exercise the Option as a result of the Holder’s Disability, then the Option may thereafter be exercised by the Holder’s duly authorized legal representative, at any time after the date of such Disability (or such other period as the Committee may specify after grant). If the Holder dies before the Option is exercised, any unexercised Option held by the Holder shall thereafter be exercisable by the estate of the Holder (acting through its fiduciary) at any time after the date of the Holder’s death (or such other period as the Committee may specify after grant). Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof. “Retirement” means retirement from active employment with the Company, a Subsidiary or Affiliate at the earlier to occur of: (i) a participant attaining the age of 55, or (ii) a participant attaining the age of 50 and accruing 15 years of credited service for the Company, a Subsidiary or Affiliate.

     (d) Termination for Cause. If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates for Cause, the Option will be governed by Section 5(b) of the Plan.

     (e) Other Termination. Unless otherwise determined by the Committee after the time of granting the Option, if the Holder’s employment with the Company or any Subsidiary or Affiliate terminates for any reason other than death, Disability, Retirement, or for Cause, any Vested Shares at the time of termination must be exercised by the Holder within three (3) months after the date the Holder’s employment terminates. Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof. Unless otherwise determined by the Committee, any Unvested Shares under the Option shall be forfeited upon termination.

     (f) Leave of Absence. If the Holder is granted a leave of absence by the Company or any Subsidiary or Affiliate, his or her employment will not be considered terminated, and he or she will continue to be deemed an employee of the Company or Subsidiary or Affiliate during such leave of absence or any exension thereof granted by the Company, Subsidiary or Affiliate for purposes of the Plan.

     5. Transferability. The Holder may transfer the Option, during his or her lifetime (i) to one or more members of such Holder’s family, (ii) to one or more trusts for the benefit of one or more of such Holder’s family, (iii) to a partnership or partnerships of members of such Holder’s family, or (iv) to a charitable organization as defined in Section 501(c)(3) of the Code, provided that no consideration is paid for the transfer and that the transfer would not result in the loss of any exemption under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, with respect to any Option. The Option and the Holder’s rights therein are also transferable by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Internal Revenue Code or the Employment Reitrement Income Security Act of 1974, as amended). The transferee of any Option will be subject to all restrictions, terms and conditions applicable to the Option prior to its transfer.

     6. Taxes. The Holder hereby agrees to pay to the Company, in accordance with the terms of the Plan, any federal, state or local taxes of any kind required by law to be withheld and remitted by the Company with respect to an exercise of the Option. The Holder may satisfy such tax obligation, in whole or in part, by (i) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon exercise of (or the lapse of restrictions relating to) the Option with a Fair Market Value equal to the amount of such taxes, or (ii) delivering to the Company Shares other than Shares issuable upon exercise of (or the lapse of restrictions relating to) the Option with a Fair Market Value equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined. If the Holder does not make such payment to the Company, the Company shall have the right to withhold from any payment of any kind otherwise due to the Holder from the Company, any federal, state or local taxes of any kind required by law to be withheld with respect to an exercise of the

Option or the Shares which are the subject of such Option.

     7. Deferral. If the Company has adopted a deferred compensation plan with respect to equity-based awards, the Holder may, in his or her sole discretion, elect to participate under that deferral plan.

     8. Subject to the Plan. This Agreement is made and the Option evidenced hereby is granted under and pursuant to, and they are expressly made subject to all of the terms and conditions of, the Plan, notwithstanding anything herein to the contrary. The Holder hereby acknowledges receipt of a copy of the Plan and that the Holder has read and understands the terms and conditions of the Plan.

     9. Intent. The Option is intended to be treated as a Non-Qualified Stock Option and not as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code. The Option shall be construed and exercised consistent with such intention.

     10. Securities Law Compliance.

     (a) Notwithstanding any provision of this Agreement to the contrary, the Option shall not be exercisable unless, at the time the Holder attempts to exercise the Option, in the opinion of counsel for the Company, all applicable securities laws, rules and regulations have been complied with. The Holder agrees that the Company may impose such restrictions on the Shares as are deemed advisable by the Company, including, without limitation, restrictions relating to listing or trading requirements. The Holder further agrees that certificates representing the Shares may bear such legends and statements as the Company shall deem appropriate or advisable to assure, among other things, compliance with applicable securities laws, rules and regulations.

     (b) The Holder agrees that any Shares which the Holder may acquire by virtue of the Option may not be transferred, sold, assigned, pledged, hypothecated or otherwise disposed of by the Holder unless (i) a registration statement or post-effective amendment to a registration statement under the Securities Act of 1933, as amended, with respect to such Shares has become effective so as to permit the sale or other disposition of such Shares by the Holder, or (ii) there is presented to the Company an opinion of counsel satisfactory to the Company to the effect that the sale or other proposed disposition of such Shares by the Holder may lawfully be made otherwise than pursuant to an effective registration statement or post-effective amendment to a registration statement relating to such Shares under the Securities Act of 1933, as amended.

     11. Rights of the Holder. The granting of the Option shall in and of itself not confer any right on the Holder to continue in the employ of the Company and shall not interfere in any way with the right of the Company to terminate the Holder’s employment at any time, subject to the terms of any employment agreement between the Company and the Holder. The Holder shall have no dividend, voting or other rights of a stockholder with respect to the Shares which are subject to the Option prior to the purchase of such Shares upon exercise of the Option and the execution and delivery of all other documents and instruments deemed necessary or desirable by the Company.

     12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, except to the extent otherwise governed by Federal law.

     IN WITNESS WHEREOF, the parties have subscribed their names hereto as of the date first above written.

DEVELOPERS DIVERSIFIED REALTY

CORPORATION, an Ohio corporation

By:

Holder’s Signature:

Holder’s Social Security Number

EX-10.6

Exhibit 10.6

OUTPERFORMANCE LONG-TERM INCENTIVE PLAN AGREEMENT

          This Outperformance Long-Term Incentive Plan Agreement (this “Agreement”) is effective as of January 1, 2005, by and between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and Scott A. Wolstein (the “Grantee”).

          WHEREAS, the Company desires to incentivize the Grantee to assist in causing the Company to achieve superior financial performance, and the Grantee desires to be so incentivized;

          NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as follows:

          1. Background; Purpose. The Company maintains the Developers Diversified Realty Corporation 2004 Equity-Based Award Plan (as amended, modified or supplemented from time to time, the “Plan”). Among the forms of compensation contemplated by the Plan are grants of common shares and performance awards. This Agreement is adopted in furtherance of the authority to make such grants and provides for grants of common shares (each, an “Award”) to certain senior executives of the Company based on the achievement of certain goals over a specified period of time. The Award shall be subject to the terms and conditions set forth herein and in the Plan and shall be evidenced by this Agreement.

          2. Administration. This Agreement and the Award shall be administered by the Executive Compensation Committee (the “Committee”) of the Board of Directors of the Company in accordance with the Plan. In the event of any merger, acquisition, consolidation, reorganization, combination, strategic redirection or other corporate or capitalization change; any material changes in accounting practices, in tax law or interpretation or other applicable law or regulation; or any extraordinary losses, gains or other similar events, the Committee shall make such substitutions or adjustments, if any, as are deemed necessary or equitable in its sole discretion to preserve the intent of the Plan and to avoid any unintended windfalls or hardships with respect to the number or valuation of Award Shares (as hereinafter defined). Without limiting the generality of the foregoing, if no Equity Appreciation Metric or FFO Metric is achieved in total during the Measurement Period, but after the Measurement Date the Committee determines in its sole discretion that any or all of such Metrics have been substantially achieved during the Measurement Period, then the Committee shall have the discretion to award to the Grantee an Award (in such form as the Committee in its sole discretion shall determine) equal to 25% of the Award Value that would have been awarded had all such Metrics been achieved in total.

          3. Definitions. Capitalized terms used herein without definitions shall have the meanings given to those terms in the Plan. In addition, as used herein:

          “Award Shares” shall mean the Common Shares issued by the Company in payment of the Award.

          “Award Value” shall mean the sum of (i) the FFO Award Value, (ii) the value, calculated as of the Valuation Date, of the Equity Appreciation Shares and (iii) the Discretionary Award Value.

          “Cause” shall mean (i) the Grantee’s fraud, commission of a felony or 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 Grantee’s willful and repeated failure to perform his duties as an employee of the Company, which failure has not been cured within fifteen (15) days after the Company gives notice thereof to the Grantee; or (ii) the Grantee’s material breach of any provision of this Agreement, which breach has not been cured in all substantial respects within ten (10) days after the Company gives notice thereof to the Grantee.

          “Change in Control” shall mean the occurrence of any of the following: (i) the business day immediately preceding the day on which a consolidation or merger in which the Company is not the surviving corporation, the sale of substantially all of the assets of the Company, or the liquidation or dissolution of the Company is scheduled to occur; provided, however, that prior to such business day (A) the shareholders of the Company shall have approved such consolidation, merger, sale, liquidation or dissolution and (B) there shall not exist on such business day any fact or circumstance that shall make it reasonably unlikely that such closing shall not occur as scheduled; or (ii) any person or other entity (other than the Company or a Subsidiary or any Company employee benefit plan (including any trustee of any such plan acting in its capacity as trustee)) becomes the beneficial owner of securities of the Company representing 51% or more of the voting power of the Company’s outstanding securities; or (iii) during any two-year period, individuals who at the beginning of such period constitute the entire Board cease to constitute a majority of the Board, 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.

          “Code” shall mean the Internal Revenue Code of 1986, as amended.

          “Common Share” shall mean a common share, without par value, of the Company.

          “Disabled” shall be the Grantee’s permanent disability and 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 Grantee, by reason of his physical or mental disability or illness, shall have been unable to discharge his duties as an employee of the Company. The date of disability shall be such one hundred twentieth (120^th) or ninetieth (90^th) day, as the case may be. In the event either the Company or the Grantee, after receipt of notice of the Grantee’s disability from the other, dispute that the Grantee’s permanent disability shall have occurred, the Grantee 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 Grantee 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.

          “Discretionary Award Percentage” shall mean (i) if in the judgment of the Committee the Discretionary Metrics are achieved by the Grantee, 100%, and (ii) if in the judgment of the Committee the Discretionary Metrics are not achieved by the Grantee, 0%.

          “Discretionary Award Value” shall mean the Discretionary Outperformance Amount multiplied by the Discretionary Award Percentage.

          “Discretionary Metrics” shall mean the non-financial performance criteria for the Grantee established by the Committee from time to time during the Measurement Period.

          “Discretionary Outperformance Amount” shall mean $1,500,000.

          “Effective Date” shall mean January 1, 2005.

          “Equity Appreciation” shall mean the increase in price of a Common Share during the Measurement Period.

          “Equity Appreciation Metrics” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “Equity Appreciation Shares” shall mean (i) if both of the Equity Appreciation Metrics are achieved by the Company, 53,680 Common Shares, (ii) if one of the Equity Appreciation Metrics is achieved by the Company, 33,560 Common Shares, and (iii) if none of the Equity Appreciation Metrics is achieved by the Company, no Common Shares; provided, however, that if the number of Equity Appreciation Shares shall be determined pursuant to clause (i) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $3,760,000, then the number of such Common Shares shall be equal to $3,760,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares; and provided further, that if the number of Equity Appreciation Shares shall be determined pursuant to clause (ii) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $2,350,000, then the number of such Common Shares shall be equal to $2,350,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares.

          “Equivalent Amount of Cash” shall mean an amount of cash equal to the Award Value.

          “FFO Award Percentage” shall mean (i) if the FFO Metric is achieved by the Company, 100%, and (ii) if the FFO Metric is not achieved by the Company, 0%.

          “FFO Award Value” shall mean the FFO Outperformance Amount multiplied by the FFO Award Percentage.

          “FFO Growth” shall mean the growth in the Company’s funds from operations per Common Share during the Measurement Period. FFO Growth shall be measured by assuming that (a) the Company’s funds from operations per Common Share on the Effective Date equaled the Company’s funds from operations per Share for the fiscal year ended December 31, 2004 and (b) the Company’s funds from operations per Common Share on the Valuation Date equaled the Company’s funds from operations per Common Share for the fiscal year ended December 31, 2009; provided, however, that if the Valuation Date shall be the date on which a Change in Control occurs, then the Company’s funds from operations per Common Share on such Valuation Date shall equal the higher of (i) the Company’s funds from operations for the immediately preceding fiscal year or (ii) the Company’s funds from operations budgeted for the fiscal year in which such Change in Control occurs.

          “FFO Metric” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “FFO Outperformance Amount” shall mean $1,500,000.

          “Measurement Date” shall mean December 31, 2007.

          “Measurement Period” shall mean the period commencing on the Effective Date and ending on the Valuation Date.

          “Metrics” shall mean the Discretionary Metrics, the FFO Metric and the Equity Appreciation Metrics.

          “Peer Group” shall mean the companies listed in Schedule B.

          “Share Price” shall mean the greater of (i) the average closing price of a Common Share as reported on the New York Stock Exchange over the 20 trading days ending on the Valuation Date and (ii) the closing price of a Common Share as reported on the New York Stock Exchange on the trading day immediately preceding the Valuation Date.

          “Valuation Date” shall mean, with respect to the Grantee, the earlier of (i) the Measurement Date and (ii) the date on which a Change in Control occurs.

          “Vesting Date” shall mean (i) if the Valuation Date shall be the Measurement Date, March 1, 2008, and (ii) if the Valuation Date shall be the date on which a Change in Control occurs, the Valuation Date.

          4. Award Grant. The Grantee is hereby granted an Award consisting of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares, (ii) the number of Equity Appreciation Shares

and (iii) the Discretionary Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares; provided, however, that if during the Measurement Period the Grantee shall die or become Disabled, or the employment of the Grantee shall be terminated by the Company without Cause, then the Award shall consist of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the product of (a) the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares plus (ii) the number of Equity Appreciation Shares plus (iii) the Discretionary Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares, multiplied by (b) a fraction, the numerator of which shall be the number of days in the Measurement Period occurring before the date of such death, Disability or termination of employment without Cause and the denominator of which shall equal the total number of days in the Measurement Period.

          5. Vesting. The Award shall vest on the Vesting Date, provided that the Grantee remains in continuous employment with the Company through the Vesting Date other than by reason of death, Disability or termination of employment without Cause.

          6. Effect of Certain Events During the Measurement Period. In the event the Grantee’s employment with the Company is terminated for Cause during the Measurement Period or in the event the Grantee voluntarily terminates his or her employment with the Company for any reason during the Measurement Period, the Grantee will immediately forfeit the Award, and any rights the Grantee had in Award Shares will terminate without further action.

          7. Transferability. This Agreement, the Award and the Award Shares will not be assignable or transferable by the Grantee; provided, however, that no provision in this Agreement will prevent the transfer of the Award or the Award Shares underlying such awards by will or the laws of descent and distribution in the event of the death of the Grantee.

          8. Payment.

          (a) The Company will issue to the Grantee (or to the estate, guardian or beneficiary of the Grantee, as the case may be) the Award Shares underlying the Award or the Equivalent Amount of Cash, at the Company’s option, as soon as reasonably practicable following the Vesting Date.

          (b) Except to the extent provided by Section 409A of the Code and permitted by the Company, no Common Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.

          (c) The Company’s obligations to the Grantee with respect to the Award will be satisfied in full upon the issuance of the Award Shares or the Equivalent Amount of Cash corresponding to the Award.

          9. Shareholder Rights and Restrictions.

          (a) The Grantee shall have no rights as a shareholder of the Company (including, without limitation, the right to receive dividends or voting rights) with respect to the Award or the Award Shares until the date on which a stock certificate (or certificates) representing Award Shares shall be issued.

          (b) The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Award Shares (or cash) in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

          10. American Jobs Creation Act. It is intended that this Agreement comply with the provisions of Section 409A of the Code. The Agreement will be administered in a manner that is intended to comply with Section 409A of the Code. Any provisions in this Agreement or in the Plan that would cause the Agreement to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). The Company is authorized to adopt rules or regulations deemed necessary or appropriate in connection therewith to anticipate and/or comply with the requirements thereof.

          11. Interpretation. Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of Treasury or the Internal Revenue Service.

          12. No Employment Rights. This award will not confer upon the Grantee any right with respect to continuance of employment by the Company.

          13. Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

          14. Subject to Plan. This award is subject to the terms of the Plan, and the Grantee is being delivered a copy of the Plan with this Agreement. To the extent any provision of this Agreement violates or is inconsistent with an express provisions of the Plan, the Plan provision will govern and any inconsistent provision in this Agreement will have no force or effect.

          15. Taxes. No later than the date as of which an amount first becomes includable in the gross income of the Grantee for federal income tax purposes with respect to the Award or the issuance of Award Shares pursuant to the Award, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state or local taxes or other items of any kind required by law to be withheld with respect to that amount. Subject to the following sentence, unless otherwise determined by the

Committee, withholding obligations may be settled with Award Shares. Notwithstanding the foregoing, any election by a Grantee subject to Section 16 of the Securities Act of 1934, as amended, to settle any tax withholding obligation with Award Shares shall be subject to approval by the Committee in its sole discretion. The obligations of the Company with respect to the Award shall be conditional on those payments or arrangements and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise payable to the Grantee.

          16. Governing Law. The laws of the State of Ohio will govern this award and all matters related hereto. If either party institutes a suit or other legal proceedings, whether in law or equity, the Company and the Grantee hereby irrevocably consent to the jurisdiction of the Common Pleas Court of the State of Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.

          17. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be an original but all of which together will represent one and the same agreement.

          18. Amendments/Entire Agreement. Any amendment to the Plan will be deemed to be an amendment to this Agreement. Except as provided in this Agreement, no amendment will reduce the FFO Outperformance Amount or adversely affect the number or value of the Grantee’s Award Shares or the Grantee’s rights with respect to vesting without the Grantee’s written consent. This Agreement cannot be changed or terminated orally. The Agreement and the Plan contain the entire agreement between the parties relating to the subject matter hereof.

          19. Notices. Notices, required or permitted to be made under this Agreement shall be sufficiently made if (a) sent by (i) registered or certified mail, (ii) a nationally recognized courier service or (iii) facsimile, and (b) addressed (x) to the Grantee at his or her address as set forth in the books and records of the Company or (y) to the Company or the Committee at the principal office of the Company. The Grantee is required to notify the Company promptly of any change of address.

          20. Binding on Successors. The terms and provisions of the Plan and this Agreement will be binding on any successor in interest to the Grantee, whether such successor attains such status through inheritance, the laws of descent or otherwise.

	DEVELOPERS DIVERSIFIED REALTY CORPORATION
DATE OF AWARD: August 18, 2006
	By:	/s/ Nan R. Zieleniec
		Senior Vice President

ACCEPTANCE OF AGREEMENT

          The Grantee hereby: (a) acknowledges that he or she has received a copy of the Plan and a copy of the Company’s most recent Annual Report and other communications routinely distributed to the Company’s shareholders; (b) accepts this Agreement and the Award granted under this Agreement, subject to all provisions of the Plan and this Agreement; (c) represents and warrants to the Company that he or she is accruing the Award and the underlying Award Shares for his or her own account, for investment, and not with a view to or any present intention of selling or distributing the Award or the Award Shares either now or at any specific or determinable future time or period or upon the occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and (d) agrees that no transfer of the Award or Common Shares acquired upon vesting of the Award will be made unless the Award Shares have been duly registered under all applicable Federal and State securities laws pursuant to a then-effective registration which contemplates the proposed transfer or unless the Company has received a written opinion or other evidence satisfactory to its legal counsel that the proposed transfer is exempt form such registration.

Date: August 18, 2006

/s/ Scott A. Wolstein  

Name of Grantee: Scott A. Wolstein 

SCHEDULE A

          “Equity Appreciation Metrics” shall mean (a) Equity Appreciation during the Measurement Period equal to or exceeding 8% per annum, calculated on a cumulative, compounded basis, and (b) Equity Appreciation during the Measurement Period equal to or exceeding the appreciation during the Measurement Period (calculated in the same manner as the Company’s Equity Appreciation) of the common stock of not less than 75% of the companies in the Peer Group.

          “FFO Metric” shall mean FFO Growth during the Measurement Period equal to or exceeding 8% per annum, calculated on a cumulative, compounded basis.

SCHEDULE B

Peer Group

Federal Realty Investment Trust
Heritage Property Investment Trust, Inc.
Kimco Realty Corporation
New Plan Excel Realty Trust
Regency Centers Corporation
Weingarten Realty Investors
Pan Pacific Retail Properties
Macerich
Taubman Centers, Inc.
PREIT
Mills
Simon Properties Group
CBL & Associates Properties, Inc.
General Growth Properties, Inc.
Glimcher Realty Trust

EX-10.7

Exhibit 10.7

OUTPERFORMANCE LONG-TERM INCENTIVE PLAN AGREEMENT

          This Outperformance Long-Term Incentive Plan Agreement (this “Agreement”) is effective as of January 1, 2005, by and between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and Daniel B. Hurwitz (the “Grantee”).

          WHEREAS, the Company desires to incentivize the Grantee to assist in causing the Company to achieve superior financial performance, and the Grantee desires to be so incentivized;

          NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as follows:

          1. Background; Purpose. The Company maintains the Developers Diversified Realty Corporation 2004 Equity-Based Award Plan (as amended, modified or supplemented from time to time, the “Plan”). Among the forms of compensation contemplated by the Plan are grants of common shares and performance awards. This Agreement is adopted in furtherance of the authority to make such grants and provides for grants of common shares (each, an “Award”) to certain senior executives of the Company based on the achievement of certain goals over a specified period of time. The Award shall be subject to the terms and conditions set forth herein and in the Plan and shall be evidenced by this Agreement.

          2. Administration. This Agreement and the Award shall be administered by the Executive Compensation Committee (the “Committee”) of the Board of Directors of the Company in accordance with the Plan. In the event of any merger, acquisition, consolidation, reorganization, combination, strategic redirection or other corporate or capitalization change; any material changes in accounting practices, in tax law or interpretation or other applicable law or regulation; or any extraordinary losses, gains or other similar events, the Committee shall make such substitutions or adjustments, if any, as are deemed necessary or equitable in its sole discretion to preserve the intent of the Plan and to avoid any unintended windfalls or hardships with respect to the number or valuation of Award Shares (as hereinafter defined). Without limiting the generality of the foregoing, if no Equity Appreciation Metric or FFO Metric is achieved in total during the Measurement Period, but after the Measurement Date the Committee determines in its sole discretion that any or all of such Metrics have been substantially achieved during the Measurement Period, then the Committee shall have the discretion to award to the Grantee an Award (in such form as the Committee in its sole discretion shall determine) equal to 25% of the Award Value that would have been awarded had all such Metrics been achieved in total.

          3. Definitions. Capitalized terms used herein without definitions shall have the meanings given to those terms in the Plan. In addition, as used herein:

          “Award Shares” shall mean the Common Shares issued by the Company in payment of the Award.

          “Award Value” shall mean the sum of (i) the FFO Award Value, (ii) the value, calculated as of the Valuation Date, of the Equity Appreciation Shares and (iii) the Discretionary Award Value.

          “Cause” shall mean (i) the Grantee’s fraud, commission of a felony or 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 Grantee’s willful and repeated failure to perform his duties as an employee of the Company, which failure has not been cured within fifteen (15) days after the Company gives notice thereof to the Grantee; or (ii) the Grantee’s material breach of any provision of this Agreement, which breach has not been cured in all substantial respects within ten (10) days after the Company gives notice thereof to the Grantee.

          “Change in Control” shall mean the occurrence of any of the following: (i) the business day immediately preceding the day on which a consolidation or merger in which the Company is not the surviving corporation, the sale of substantially all of the assets of the Company, or the liquidation or dissolution of the Company is scheduled to occur; provided, however, that prior to such business day (A) the shareholders of the Company shall have approved such consolidation, merger, sale, liquidation or dissolution and (B) there shall not exist on such business day any fact or circumstance that shall make it reasonably unlikely that such closing shall not occur as scheduled; or (ii) any person or other entity (other than the Company or a Subsidiary or any Company employee benefit plan (including any trustee of any such plan acting in its capacity as trustee)) becomes the beneficial owner of securities of the Company representing 51% or more of the voting power of the Company’s outstanding securities; or (iii) during any two-year period, individuals who at the beginning of such period constitute the entire Board cease to constitute a majority of the Board, 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.

          “Code” shall mean the Internal Revenue Code of 1986, as amended.

          “Common Share” shall mean a common share, without par value, of the Company.

          “Disabled” shall be the Grantee’s permanent disability and 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 Grantee, by reason of his physical or mental disability or illness, shall have been unable to discharge his duties as an employee of the Company. The date of disability shall be such one hundred twentieth (120^th) or ninetieth (90^th) day, as the case may be. In the event either the Company or the Grantee, after receipt of notice of the Grantee’s disability from the other, dispute that the Grantee’s permanent disability shall have occurred, the Grantee 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 Grantee 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.

          “Discretionary Award Percentage” shall mean (i) if in the judgment of the Committee the Discretionary Metrics are achieved by the Grantee, 100%, and (ii) if in the judgment of the Committee the Discretionary Metrics are not achieved by the Grantee, 0%.

          “Discretionary Award Value” shall mean the Discretionary Outperformance Amount multiplied by the Discretionary Award Percentage.

          “Discretionary Metrics” shall mean the non-financial performance criteria for the Grantee established by the Committee from time to time during the Measurement Period.

          “Discretionary Outperformance Amount” shall mean $750,000.

          “Effective Date” shall mean January 1, 2005.

          “Equity Appreciation” shall mean the increase in price of a Common Share during the Measurement Period.

          “Equity Appreciation Metrics” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “Equity Appreciation Shares” shall mean (i) if both of the Equity Appreciation Metrics are achieved by the Company, 26,840 Common Shares, (ii) if one of the Equity Appreciation Metrics is achieved by the Company, 16,780 Common Shares, and (iii) if none of the Equity Appreciation Metrics is achieved by the Company, no Common Shares; provided, however, that if the number of Equity Appreciation Shares shall be determined pursuant to clause (i) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $1,880,000, then the number of such Common Shares shall be equal to $1,880,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares; and provided further, that if the number of Equity Appreciation Shares shall be determined pursuant to clause (ii) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $1,175,000, then the number of such Common Shares shall be equal to $1,175,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares.

          “Equivalent Amount of Cash” shall mean an amount of cash equal to the Award Value.

          “FFO Award Percentage” shall mean (i) if the FFO Metric is achieved by the Company, 100%, and (ii) if the FFO Metric is not achieved by the Company, 0%.

          “FFO Award Value” shall mean the FFO Outperformance Amount multiplied by the FFO Award Percentage.

          “FFO Growth” shall mean the growth in the Company’s funds from operations per Common Share during the Measurement Period. FFO Growth shall be measured by assuming that (a) the Company’s funds from operations per Common Share on the Effective Date equaled the Company’s funds from operations per Share for the fiscal year ended December 31, 2004 and (b) the Company’s funds from operations per Common Share on the Valuation Date equaled the Company’s funds from operations per Common Share for the fiscal year ended December 31, 2009; provided, however, that if the Valuation Date shall be the date on which a Change in Control occurs, then the Company’s funds from operations per Common Share on such Valuation Date shall equal the higher of (i) the Company’s funds from operations for the immediately preceding fiscal year or (ii) the Company’s funds from operations budgeted for the fiscal year in which such Change in Control occurs.

          “FFO Metric” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “FFO Outperformance Amount” shall mean $750,000.

          “Measurement Date” shall mean December 31, 2007.

          “Measurement Period” shall mean the period commencing on the Effective Date and ending on the Valuation Date.

          “Metrics” shall mean the Discretionary Metrics, the FFO Metric and the Equity Appreciation Metrics.

          “Peer Group” shall mean the companies listed in Schedule B.

          “Share Price” shall mean the greater of (i) the average closing price of a Common Share as reported on the New York Stock Exchange over the 20 trading days ending on the Valuation Date and (ii) the closing price of a Common Share as reported on the New York Stock Exchange on the trading day immediately preceding the Valuation Date.

          “Valuation Date” shall mean, with respect to the Grantee, the earlier of (i) the Measurement Date and (ii) the date on which a Change in Control occurs.

          “Vesting Date” shall mean (i) if the Valuation Date shall be the Measurement Date, March 1, 2008, and (ii) if the Valuation Date shall be the date on which a Change in Control occurs, the Valuation Date.

          4. Award Grant. The Grantee is hereby granted an Award consisting of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares, (ii) the number of Equity Appreciation Shares

and (iii) the Discretionary Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares; provided, however, that if during the Measurement Period the Grantee shall die or become Disabled, or the employment of the Grantee shall be terminated by the Company without Cause, then the Award shall consist of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the product of (a) the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares plus (ii) the number of Equity Appreciation Shares plus (iii) the Discretionary Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares, multiplied by (b) a fraction, the numerator of which shall be the number of days in the Measurement Period occurring before the date of such death, Disability or termination of employment without Cause and the denominator of which shall equal the total number of days in the Measurement Period.

          5. Vesting. The Award shall vest on the Vesting Date, provided that the Grantee remains in continuous employment with the Company through the Vesting Date other than by reason of death, Disability or termination of employment without Cause.

          6. Effect of Certain Events During the Measurement Period. In the event the Grantee’s employment with the Company is terminated for Cause during the Measurement Period or in the event the Grantee voluntarily terminates his or her employment with the Company for any reason during the Measurement Period, the Grantee will immediately forfeit the Award, and any rights the Grantee had in Award Shares will terminate without further action.

          7. Transferability. This Agreement, the Award and the Award Shares will not be assignable or transferable by the Grantee; provided, however, that no provision in this Agreement will prevent the transfer of the Award or the Award Shares underlying such awards by will or the laws of descent and distribution in the event of the death of the Grantee.

          8. Payment.

          (a) The Company will issue to the Grantee (or to the estate, guardian or beneficiary of the Grantee, as the case may be) the Award Shares underlying the Award or the Equivalent Amount of Cash, at the Company’s option, as soon as reasonably practicable following the Vesting Date.

          (b) Except to the extent provided by Section 409A of the Code and permitted by the Company, no Common Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.

          (c) The Company’s obligations to the Grantee with respect to the Award will be satisfied in full upon the issuance of the Award Shares or the Equivalent Amount of Cash corresponding to the Award.

          9. Shareholder Rights and Restrictions.

          (a) The Grantee shall have no rights as a shareholder of the Company (including, without limitation, the right to receive dividends or voting rights) with respect to the Award or the Award Shares until the date on which a stock certificate (or certificates) representing Award Shares shall be issued.

          (b) The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Award Shares (or cash) in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

          10. American Jobs Creation Act. It is intended that this Agreement comply with the provisions of Section 409A of the Code. The Agreement will be administered in a manner that is intended to comply with Section 409A of the Code. Any provisions in this Agreement or in the Plan that would cause the Agreement to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). The Company is authorized to adopt rules or regulations deemed necessary or appropriate in connection therewith to anticipate and/or comply with the requirements thereof.

          11. Interpretation. Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of Treasury or the Internal Revenue Service.

          12. No Employment Rights. This award will not confer upon the Grantee any right with respect to continuance of employment by the Company.

          13. Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

          14. Subject to Plan. This award is subject to the terms of the Plan, and the Grantee is being delivered a copy of the Plan with this Agreement. To the extent any provision of this Agreement violates or is inconsistent with an express provisions of the Plan, the Plan provision will govern and any inconsistent provision in this Agreement will have no force or effect.

          15. Taxes. No later than the date as of which an amount first becomes includable in the gross income of the Grantee for federal income tax purposes with respect to the Award or the issuance of Award Shares pursuant to the Award, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state or local taxes or other items of any kind required by law to be withheld with respect to that amount. Subject to the following sentence, unless otherwise determined by the

Committee, withholding obligations may be settled with Award Shares. Notwithstanding the foregoing, any election by a Grantee subject to Section 16 of the Securities Act of 1934, as amended, to settle any tax withholding obligation with Award Shares shall be subject to approval by the Committee in its sole discretion. The obligations of the Company with respect to the Award shall be conditional on those payments or arrangements and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise payable to the Grantee.

          16. Governing Law. The laws of the State of Ohio will govern this award and all matters related hereto. If either party institutes a suit or other legal proceedings, whether in law or equity, the Company and the Grantee hereby irrevocably consent to the jurisdiction of the Common Pleas Court of the State of Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.

          17. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be an original but all of which together will represent one and the same agreement.

          18. Amendments/Entire Agreement. Any amendment to the Plan will be deemed to be an amendment to this Agreement. Except as provided in this Agreement, no amendment will reduce the FFO Outperformance Amount or adversely affect the number or value of the Grantee’s Award Shares or the Grantee’s rights with respect to vesting without the Grantee’s written consent. This Agreement cannot be changed or terminated orally. The Agreement and the Plan contain the entire agreement between the parties relating to the subject matter hereof.

          19. Notices. Notices, required or permitted to be made under this Agreement shall be sufficiently made if (a) sent by (i) registered or certified mail, (ii) a nationally recognized courier service or (iii) facsimile, and (b) addressed (x) to the Grantee at his or her address as set forth in the books and records of the Company or (y) to the Company or the Committee at the principal office of the Company. The Grantee is required to notify the Company promptly of any change of address.

          20. Binding on Successors. The terms and provisions of the Plan and this Agreement will be binding on any successor in interest to the Grantee, whether such successor attains such status through inheritance, the laws of descent or otherwise.

	DEVELOPERS DIVERSIFIED REALTY CORPORATION
DATE OF AWARD: August 18, 2006
	By:	/s/ Nan Zieleniec
		Senior Vice President

ACCEPTANCE OF AGREEMENT

          The Grantee hereby: (a) acknowledges that he or she has received a copy of the Plan and a copy of the Company’s most recent Annual Report and other communications routinely distributed to the Company’s shareholders; (b) accepts this Agreement and the Award granted under this Agreement, subject to all provisions of the Plan and this Agreement; (c) represents and warrants to the Company that he or she is accruing the Award and the underlying Award Shares for his or her own account, for investment, and not with a view to or any present intention of selling or distributing the Award or the Award Shares either now or at any specific or determinable future time or period or upon the occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and (d) agrees that no transfer of the Award or Common Shares acquired upon vesting of the Award will be made unless the Award Shares have been duly registered under all applicable Federal and State securities laws pursuant to a then-effective registration which contemplates the proposed transfer or unless the Company has received a written opinion or other evidence satisfactory to its legal counsel that the proposed transfer is exempt form such registration.

Date: August 18, 2006

/s/ Daniel B. Hurwitz  

Name of Grantee: Daniel B. Hurwitz 

SCHEDULE A

          “Equity Appreciation Metrics” shall mean (a) Equity Appreciation during the Measurement Period equal to or exceeding 8% per annum, calculated on a cumulative, compounded basis, and (b) Equity Appreciation during the Measurement Period equal to or exceeding the appreciation during the Measurement Period (calculated in the same manner as the Company’s Equity Appreciation) of the common stock of not less than 75% of the companies in the Peer Group.

          “FFO Metric” shall mean FFO Growth during the Measurement Period equal to or exceeding 8% per annum, calculated on a cumulative, compounded basis.

SCHEDULE B

Peer Group

Federal Realty Investment Trust
Heritage Property Investment Trust, Inc.
Kimco Realty Corporation
New Plan Excel Realty Trust
Regency Centers Corporation
Weingarten Realty Investors
Pan Pacific Retail Properties
Macerich
Taubman Centers, Inc.
PREIT
Mills
Simon Properties Group
CBL & Associates Properties, Inc.
General Growth Properties, Inc.
Glimcher Realty Trust

EX-10.8

Exhibit 10.8

OUTPERFORMANCE LONG-TERM INCENTIVE PLAN AGREEMENT

          This Outperformance Long-Term Incentive Plan Agreement (this “Agreement”) is effective as of January 1, 2005, by and between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and Joan U. Allgood (the “Grantee”).

          WHEREAS, the Company desires to incentivize the Grantee to assist in causing the Company to achieve superior financial performance, and the Grantee desires to be so incentivized;

          NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as follows:

          1. Background; Purpose. The Company maintains the Developers Diversified Realty Corporation Equity-Based Award Plan (as amended, modified or supplemented from time to time, the “Plan”). Among the forms of compensation contemplated by the Plan are grants of common shares and performance awards. This Agreement is adopted in furtherance of the authority to make such grants and provides for grants of common shares (each, an “Award”) to certain senior executives of the Company based on the achievement of certain goals over a specified period of time. The Award shall be subject to the terms and conditions set forth herein and in the Plan and shall be evidenced by this Agreement.

          2. Administration. This Agreement and the Award shall be administered by the Executive Compensation Committee (the “Committee”) of the Board of Directors of the Company in accordance with the Plan. In the event of any merger, acquisition, consolidation, reorganization, combination, strategic redirection or other corporate or capitalization change; any material changes in accounting practices, in tax law or interpretation or other applicable law or regulation; or any extraordinary losses, gains or other similar events, the Committee shall make such substitutions or adjustments, if any, as are deemed necessary or equitable in its sole discretion to preserve the intent of the Plan and to avoid any unintended windfalls or hardships with respect to the number or valuation of Award Shares (as hereinafter defined). Without limiting the generality of the foregoing, if no Metric is achieved in total during the Measurement Period, but after the Measurement Date the Committee determines in its sole discretion that any or all of the Metrics have been substantially achieved during the Measurement Period, then the Committee shall have the discretion to award to the Grantee an Award (in such form as the Committee in its sole discretion shall determine) equal to 25% of the Award Value that would have been awarded had all Metrics been achieved in total.

          3. Definitions. Capitalized terms used herein without definitions shall have the meanings given to those terms in the Plan. In addition, as used herein:

          “Award Shares” shall mean the Common Shares issued by the Company in payment of the Award.

          “Award Value” shall mean the sum of (i) the FFO Award Value and (ii) the value, calculated as of the Valuation Date, of the TRS Shares.

          “Cause” shall mean (i) the Grantee’s fraud, commission of a felony or 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 Grantee’s willful and repeated failure to perform her duties as an employee of the Company, which failure has not been cured within fifteen (15) days after the Company gives notice thereof to the Grantee; or (ii) the Grantee’s material breach of any provision of this Agreement, which breach has not been cured in all substantial respects within ten (10) days after the Company gives notice thereof to the Grantee.

          “Change in Control” shall mean the occurrence of any of the following: (i) the business day immediately preceding the day on which a consolidation or merger in which the Company is not the surviving corporation, the sale of substantially all of the assets of the Company, or the liquidation or dissolution of the Company is scheduled to occur; provided, however, that prior to such business day (A) the shareholders of the Company shall have approved such consolidation, merger, sale, liquidation or dissolution and (B) there shall not exist on such business day any fact or circumstance that shall make it reasonably unlikely that such closing shall not occur as scheduled; or (ii) any person or other entity (other than the Company or a Subsidiary or any Company employee benefit plan (including any trustee of any such plan acting in its capacity as trustee)) becomes the beneficial owner of securities of the Company representing 51% or more of the voting power of the Company’s outstanding securities; or (iii) during any two-year period, individuals who at the beginning of such period constitute the entire Board cease to constitute a majority of the Board, 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.

          “Code” shall mean the Internal Revenue Code of 1986, as amended.

          “Common Share” shall mean a common share, without par value, of the Company.

          “Disabled” shall be the Grantee’s permanent disability and 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 Grantee, by reason of her physical or mental disability or illness, shall have been unable to discharge her duties as an employee of the Company. The date of disability shall be such one hundred twentieth (120^th) or ninetieth (90^th) day, as the case may be. In the event either the Company or the Grantee, after receipt of notice of the Grantee’s disability from the other, dispute that the Grantee’s permanent disability shall have occurred, the Grantee 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 Grantee is capable of resuming her employment and devoting her 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.

          “Effective Date” shall mean January 1, 2005.

          “Equivalent Amount of Cash” shall mean an amount of cash equal to the Award Value.

          “FFO Award Percentage” shall mean (i) if the FFO Metric is achieved by the Company, 100%, and (ii) if the FFO Metric is not achieved by the Company, 0%.

          “FFO Award Value” shall mean the FFO Outperformance Amount multiplied by the FFO Award Percentage.

          “FFO Growth” shall mean the growth in the Company’s funds from operations per Common Share during the Measurement Period. FFO Growth shall be measured by assuming that (a) the Company’s funds from operations per Common Share on the Effective Date equaled the Company’s funds from operations per Share for the fiscal year ended December 31, 2004 and (b) the Company’s funds from operations per Common Share on the Valuation Date equaled the Company’s funds from operations per Common Share for the fiscal year ended December 31, 2009; provided, however, that if the Valuation Date shall be the date on which a Change in Control occurs, then the Company’s funds from operations per Common Share on such Valuation Date shall equal the higher of (i) the Company’s funds from operations for the immediately preceding fiscal year or (ii) the Company’s funds from operations budgeted for the fiscal year in which such Change in Control occurs.

          “FFO Metric” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “FFO Outperformance Amount” shall mean $417,000.

          “Measurement Date” shall mean December 31, 2009.

          “Measurement Period” shall mean the period commencing on the Effective Date and ending on the Valuation Date.

          “Metrics” shall mean the FFO Metric and the TRS Metrics.

          “Peer Group” shall mean the companies listed in Schedule B.

          “Share Price” shall mean the greater of (i) the average closing price of a Common Share as reported on the New York Stock Exchange over the 20 trading days ending on the Valuation Date and (ii) the closing price of a Common Share as reported on the New York Stock Exchange on the trading day immediately preceding the Valuation Date.

          “Total Return to Shareholders” shall mean the total annual return to the holders of Common Shares during the Measurement Period. Total Return to Shareholders shall be

measured by assuming a hypothetical investment of $100 in Common Shares on the first day of the Measurement Period (the “Initial Investment”) and calculating the value of such investment as of the Valuation Date, assuming all dividends paid on the Common Shares are reinvested into additional Common Shares (the “Total Return”). The difference between the Total Return and the Initial Investment will be divided by the Initial Investment and the resulting number further divided by the number of years in the Measurement Period to determine the Annualized Total Shareholder Return. For example, if the Total Return is $170 and the Measurement Period ends on the Measurement Date, the Annualized Total Shareholder Return is:

(170-100)/100=70%
                70/5=14%

          “TRS Metrics” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “TRS Shares” shall mean (i) if both of the TRS Metrics are achieved by the Company, 12,850 Common Shares, (ii) if one of the TRS Metrics is achieved by the Company, 8,000 Common Shares, and (iii) if none of the TRS Metrics is achieved by the Company, no Common Shares; provided, however, that if the number of TRS Shares shall be determined pursuant to clause (i) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $1,028,000, then the number of such Common Shares shall be equal to $1,028,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares; and provided further, that if the number of TRS Shares shall be determined pursuant to clause (ii) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $640,000, then the number of such Common Shares shall be equal to $640,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares.

          “Valuation Date” shall mean, with respect to the Grantee, the earlier of (i) the Measurement Date and (ii) the date on which a Change in Control occurs.

          “Vesting Date” shall mean (i) if the Valuation Date shall be the Measurement Date, March 1, 2010, and (ii) if the Valuation Date shall be the date on which a Change in Control occurs, the Valuation Date.

          4. Award Grant. The Grantee is hereby granted an Award consisting of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares and (ii) the number of TRS Shares; provided, however, that if during the Measurement Period the Grantee shall die or become Disabled, or the employment of the Grantee shall be terminated by the Company without Cause, then the Award shall consist of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the product of (a) the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares plus (ii) the number of TRS Shares, multiplied by (b) a fraction, the numerator of which shall be the number of days in the Measurement Period occurring before the date of such death, Disability or

termination of employment without Cause and the denominator of which shall equal the total number of days in the Measurement Period.

          5. Vesting. The Award shall vest on the Vesting Date, provided that the Grantee remains in continuous employment with the Company through the Vesting Date other than by reason of death, Disability or termination of employment without Cause.

          6. Effect of Certain Events During the Measurement Period. In the event the Grantee’s employment with the Company is terminated for Cause during the Measurement Period or in the event the Grantee voluntarily terminates his or her employment with the Company for any reason during the Measurement Period, the Grantee will immediately forfeit the Award, and any rights the Grantee had in Award Shares will terminate without further action.

          7. Transferability. This Agreement, the Award and the Award Shares will not be assignable or transferable by the Grantee; provided, however, that no provision in this Agreement will prevent the transfer of the Award or the Award Shares underlying such awards by will or the laws of descent and distribution in the event of the death of the Grantee.

          8. Payment.

          (a) The Company will issue to the Grantee (or to the estate, guardian or beneficiary of the Grantee, as the case may be) the Award Shares underlying the Award or the Equivalent Amount of Cash, at the Company’s option, as soon as reasonably practicable following the Vesting Date.

          (b) Except to the extent provided by Section 409A of the Code and permitted by the Company, no Common Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.

          (c) The Company’s obligations to the Grantee with respect to the Award will be satisfied in full upon the issuance of the Award Shares or the Equivalent Amount of Cash corresponding to the Award.

          9. Shareholder Rights and Restrictions.

          (a) The Grantee shall have no rights as a shareholder of the Company (including, without limitation, the right to receive dividends or voting rights) with respect to the Award or the Award Shares until the date on which a stock certificate (or certificates) representing Award Shares shall be issued.

          (b) The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Award Shares (or cash) in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

          10. American Jobs Creation Act. It is intended that this Agreement comply with the provisions of Section 409A of the Code. The Agreement will be administered in a manner that is intended to comply with Section 409A of the Code. Any provisions in this Agreement or in the Plan that would cause the Agreement to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). The Company is authorized to adopt rules or regulations deemed necessary or appropriate in connection therewith to anticipate and/or comply with the requirements thereof.

          11. Interpretation. Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of Treasury or the Internal Revenue Service.

          12. No Employment Rights. This award will not confer upon the Grantee any right with respect to continuance of employment by the Company.

          13. Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

          14. Subject to Plan. This award is subject to the terms of the Plan, and the Grantee is being delivered a copy of the Plan with this Agreement. To the extent any provision of this Agreement violates or is inconsistent with an express provisions of the Plan, the Plan provision will govern and any inconsistent provision in this Agreement will have no force or effect.

          15. Taxes. No later than the date as of which an amount first becomes includable in the gross income of the Grantee for federal income tax purposes with respect to the Award or the issuance of Award Shares pursuant to the Award, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state or local taxes or other items of any kind required by law to be withheld with respect to that amount. Subject to the following sentence, unless otherwise determined by the Committee, withholding obligations may be settled with Award Shares. Notwithstanding the foregoing, any election by a Grantee subject to Section 16 of the Securities Act of 1934, as amended, to settle any tax withholding obligation with Award Shares shall be subject to approval by the Committee in its sole discretion. The obligations of the Company with respect to the Award shall be conditional on those payments or arrangements and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise payable to the Grantee.

          16. Governing Law. The laws of the State of Ohio will govern this award and all matters related hereto. If either party institutes a suit or other legal proceedings, whether in law or equity, the Company and the Grantee hereby irrevocably consent to the jurisdiction of the

Common Pleas Court of the State of Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.

          17. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be an original but all of which together will represent one and the same agreement.

          18. Amendments/Entire Agreement. Any amendment to the Plan will be deemed to be an amendment to this Agreement. Except as provided in this Agreement, no amendment will reduce the FFO Outperformance Amount or adversely affect the number or value of the Grantee’s Award Shares or the Grantee’s rights with respect to vesting without the Grantee’s written consent. This Agreement cannot be changed or terminated orally. The Agreement and the Plan contain the entire agreement between the parties relating to the subject matter hereof.

          19. Notices. Notices, required or permitted to be made under this Agreement shall be sufficiently made if (a) sent by (i) registered or certified mail, (ii) a nationally recognized courier service or (iii) facsimile, and (b) addressed (x) to the Grantee at his or her address as set forth in the books and records of the Company or (y) to the Company or the Committee at the principal office of the Company. The Grantee is required to notify the Company promptly of any change of address.

          20. Binding on Successors. The terms and provisions of the Plan and this Agreement will be binding on any successor in interest to the Grantee, whether such successor attains such status through inheritance, the laws of descent or otherwise.

	DEVELOPERS DIVERSIFIED REALTY CORPORATION
DATE OF AWARD: February 23, 2006
	By:	/s/ Nan Zieleniec
		Senior Vice President

ACCEPTANCE OF AGREEMENT

     The Grantee hereby: (a) acknowledges that he or she has received a copy of the Plan and a copy of the Company’s most recent Annual Report and other communications routinely distributed to the Company’s shareholders; (b) accepts this Agreement and the Award granted under this Agreement, subject to all provisions of the Plan and this Agreement; (c) represents and warrants to the Company that he or she is accruing the Award and the underlying Award Shares for his or her own account, for investment, and not with a view to or any present intention of selling or distributing the Award or the Award Shares either now or at any specific or determinable future time or period or upon the occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and (d) agrees that no transfer of the Award or Common Shares acquired upon vesting of the Award will be made unless the Award Shares have been duly registered under all applicable Federal and State securities laws pursuant to a then-effective registration which contemplates the proposed transfer or unless the Company has received a written opinion or other evidence satisfactory to its legal counsel that the proposed transfer is exempt form such registration.

Date: February 23, 2006	/s/ Joan U. Allgood
	Name of Grantee: Joan U. Allgood

SCHEDULE A

     “FFO Metric” shall mean FFO Growth during the Measurement Period equal to or exceeding 8% per annum, calculated on a cumulative, compounded basis.

     “TRS Metrics” shall mean (a) a Total Return to Shareholders during the Measurement Period equal to or exceeding 17% per annum and (b) Total Return to Shareholders during the Measurement Period equal to or exceeding the Total Return to Shareholders during the Measurement Period (calculated in the same manner as the Company’s Total Return to Shareholders) of not less than 75% of the companies in the Peer Group.

SCHEDULE B

Peer Group

Federal Realty Investment Trust
Heritage Property Investment Trust, Inc.
Kimco Realty Corporation
New Plan Excel Realty Trust
Regency Centers Corporation
Weingarten Realty Investors
Pan Pacific Retail Properties
Macerich
Taubman Centers, Inc.
PREIT
Mills
Simon Properties Group
CBL & Associates Properties, Inc.
General Growth Properties, Inc.
Glimcher Realty Trust

EX-10.9

Exhibit 10.9

OUTPERFORMANCE LONG-TERM INCENTIVE PLAN AGREEMENT

          This Outperformance Long-Term Incentive Plan Agreement (this “Agreement”) is effective as of January 1, 2005, by and between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and Richard E. Brown (the “Grantee”).

          WHEREAS, the Company desires to incentivize the Grantee to assist in causing the Company to achieve superior financial performance, and the Grantee desires to be so incentivized;

          NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as follows:

          1. Background; Purpose. The Company maintains the Developers Diversified Realty Corporation Equity-Based Award Plan (as amended, modified or supplemented from time to time, the “Plan”). Among the forms of compensation contemplated by the Plan are grants of common shares and performance awards. This Agreement is adopted in furtherance of the authority to make such grants and provides for grants of common shares (each, an “Award”) to certain senior executives of the Company based on the achievement of certain goals over a specified period of time. The Award shall be subject to the terms and conditions set forth herein and in the Plan and shall be evidenced by this Agreement.

          2. Administration. This Agreement and the Award shall be administered by the Executive Compensation Committee (the “Committee”) of the Board of Directors of the Company in accordance with the Plan. In the event of any merger, acquisition, consolidation, reorganization, combination, strategic redirection or other corporate or capitalization change; any material changes in accounting practices, in tax law or interpretation or other applicable law or regulation; or any extraordinary losses, gains or other similar events, the Committee shall make such substitutions or adjustments, if any, as are deemed necessary or equitable in its sole discretion to preserve the intent of the Plan and to avoid any unintended windfalls or hardships with respect to the number or valuation of Award Shares (as hereinafter defined). Without limiting the generality of the foregoing, if no Metric is achieved in total during the Measurement Period, but after the Measurement Date the Committee determines in its sole discretion that any or all of the Metrics have been substantially achieved during the Measurement Period, then the Committee shall have the discretion to award to the Grantee an Award (in such form as the Committee in its sole discretion shall determine) equal to 25% of the Award Value that would have been awarded had all Metrics been achieved in total.

          3. Definitions. Capitalized terms used herein without definitions shall have the meanings given to those terms in the Plan. In addition, as used herein:

          “Award Shares” shall mean the Common Shares issued by the Company in payment of the Award.

          “Award Value” shall mean the sum of (i) the FFO Award Value and (ii) the value, calculated as of the Valuation Date, of the TRS Shares.

          “Cause” shall mean (i) the Grantee’s fraud, commission of a felony or 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 Grantee’s willful and repeated failure to perform his duties as an employee of the Company, which failure has not been cured within fifteen (15) days after the Company gives notice thereof to the Grantee; or (ii) the Grantee’s material breach of any provision of this Agreement, which breach has not been cured in all substantial respects within ten (10) days after the Company gives notice thereof to the Grantee.

          “Change in Control” shall mean the occurrence of any of the following: (i) the business day immediately preceding the day on which a consolidation or merger in which the Company is not the surviving corporation, the sale of substantially all of the assets of the Company, or the liquidation or dissolution of the Company is scheduled to occur; provided, however, that prior to such business day (A) the shareholders of the Company shall have approved such consolidation, merger, sale, liquidation or dissolution and (B) there shall not exist on such business day any fact or circumstance that shall make it reasonably unlikely that such closing shall not occur as scheduled; or (ii) any person or other entity (other than the Company or a Subsidiary or any Company employee benefit plan (including any trustee of any such plan acting in its capacity as trustee)) becomes the beneficial owner of securities of the Company representing 51% or more of the voting power of the Company’s outstanding securities; or (iii) during any two-year period, individuals who at the beginning of such period constitute the entire Board cease to constitute a majority of the Board, 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.

          “Code” shall mean the Internal Revenue Code of 1986, as amended.

          “Common Share” shall mean a common share, without par value, of the Company.

          “Disabled” shall be the Grantee’s permanent disability and 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 Grantee, by reason of his physical or mental disability or illness, shall have been unable to discharge his duties as an employee of the Company. The date of disability shall be such one hundred twentieth (120^th) or ninetieth (90^th) day, as the case may be. In the event either the Company or the Grantee, after receipt of notice of the Grantee’s disability from the other, dispute that the Grantee’s permanent disability shall have occurred, the Grantee 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 Grantee 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.

          “Effective Date” shall mean January 1, 2005.

          “Equivalent Amount of Cash” shall mean an amount of cash equal to the Award Value.

          “FFO Award Percentage” shall mean (i) if the FFO Metric is achieved by the Company, 100%, and (ii) if the FFO Metric is not achieved by the Company, 0%.

          “FFO Award Value” shall mean the FFO Outperformance Amount multiplied by the FFO Award Percentage.

          “FFO Growth” shall mean the growth in the Company’s funds from operations per Common Share during the Measurement Period. FFO Growth shall be measured by assuming that (a) the Company’s funds from operations per Common Share on the Effective Date equaled the Company’s funds from operations per Share for the fiscal year ended December 31, 2004 and (b) the Company’s funds from operations per Common Share on the Valuation Date equaled the Company’s funds from operations per Common Share for the fiscal year ended December 31, 2009; provided, however, that if the Valuation Date shall be the date on which a Change in Control occurs, then the Company’s funds from operations per Common Share on such Valuation Date shall equal the higher of (i) the Company’s funds from operations for the immediately preceding fiscal year or (ii) the Company’s funds from operations budgeted for the fiscal year in which such Change in Control occurs.

          “FFO Metric” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “FFO Outperformance Amount” shall mean $417,000.

          “Measurement Date” shall mean December 31, 2009.

          “Measurement Period” shall mean the period commencing on the Effective Date and ending on the Valuation Date.

          “Metrics” shall mean the FFO Metric and the TRS Metrics.

          “Peer Group” shall mean the companies listed in Schedule B.

          “Share Price” shall mean the greater of (i) the average closing price of a Common Share as reported on the New York Stock Exchange over the 20 trading days ending on the Valuation Date and (ii) the closing price of a Common Share as reported on the New York Stock Exchange on the trading day immediately preceding the Valuation Date.

          “Total Return to Shareholders” shall mean the total annual return to the holders of Common Shares during the Measurement Period. Total Return to Shareholders shall be

measured by assuming a hypothetical investment of $100 in Common Shares on the first day of the Measurement Period (the “Initial Investment”) and calculating the value of such investment as of the Valuation Date, assuming all dividends paid on the Common Shares are reinvested into additional Common Shares (the “Total Return”). The difference between the Total Return and the Initial Investment will be divided by the Initial Investment and the resulting number further divided by the number of years in the Measurement Period to determine the Annualized Total Shareholder Return. For example, if the Total Return is $170 and the Measurement Period ends on the Measurement Date, the Annualized Total Shareholder Return is:

(170-100)/100=70%
                70/5=14%

          “TRS Metrics” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “TRS Shares” shall mean (i) if both of the TRS Metrics are achieved by the Company, 12,850 Common Shares, (ii) if one of the TRS Metrics is achieved by the Company, 8,000 Common Shares, and (iii) if none of the TRS Metrics is achieved by the Company, no Common Shares; provided, however, that if the number of TRS Shares shall be determined pursuant to clause (i) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $1,028,000, then the number of such Common Shares shall be equal to $1,028,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares; and provided further, that if the number of TRS Shares shall be determined pursuant to clause (ii) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $640,000, then the number of such Common Shares shall be equal to $640,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares.

          “Valuation Date” shall mean, with respect to the Grantee, the earlier of (i) the Measurement Date and (ii) the date on which a Change in Control occurs.

          “Vesting Date” shall mean (i) if the Valuation Date shall be the Measurement Date, March 1, 2010, and (ii) if the Valuation Date shall be the date on which a Change in Control occurs, the Valuation Date.

          4. Award Grant. The Grantee is hereby granted an Award consisting of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares and (ii) the number of TRS Shares; provided, however, that if during the Measurement Period the Grantee shall die or become Disabled, or the employment of the Grantee shall be terminated by the Company without Cause, then the Award shall consist of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the product of (a) the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares plus (ii) the number of TRS Shares, multiplied by (b) a fraction, the numerator of which shall be the number of days in the Measurement Period occurring before the date of such death, Disability or

termination of employment without Cause and the denominator of which shall equal the total number of days in the Measurement Period.

          5. Vesting. The Award shall vest on the Vesting Date, provided that the Grantee remains in continuous employment with the Company through the Vesting Date other than by reason of death, Disability or termination of employment without Cause.

          6. Effect of Certain Events During the Measurement Period. In the event the Grantee’s employment with the Company is terminated for Cause during the Measurement Period or in the event the Grantee voluntarily terminates his or her employment with the Company for any reason during the Measurement Period, the Grantee will immediately forfeit the Award, and any rights the Grantee had in Award Shares will terminate without further action.

          7. Transferability. This Agreement, the Award and the Award Shares will not be assignable or transferable by the Grantee; provided, however, that no provision in this Agreement will prevent the transfer of the Award or the Award Shares underlying such awards by will or the laws of descent and distribution in the event of the death of the Grantee.

          8. Payment.

          (a) The Company will issue to the Grantee (or to the estate, guardian or beneficiary of the Grantee, as the case may be) the Award Shares underlying the Award or the Equivalent Amount of Cash, at the Company’s option, as soon as reasonably practicable following the Vesting Date.

          (b) Except to the extent provided by Section 409A of the Code and permitted by the Company, no Common Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.

          (c) The Company’s obligations to the Grantee with respect to the Award will be satisfied in full upon the issuance of the Award Shares or the Equivalent Amount of Cash corresponding to the Award.

          9. Shareholder Rights and Restrictions.

          (a) The Grantee shall have no rights as a shareholder of the Company (including, without limitation, the right to receive dividends or voting rights) with respect to the Award or the Award Shares until the date on which a stock certificate (or certificates) representing Award Shares shall be issued.

          (b) The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Award Shares (or cash) in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

          10. American Jobs Creation Act. It is intended that this Agreement comply with the provisions of Section 409A of the Code. The Agreement will be administered in a manner that is intended to comply with Section 409A of the Code. Any provisions in this Agreement or in the Plan that would cause the Agreement to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). The Company is authorized to adopt rules or regulations deemed necessary or appropriate in connection therewith to anticipate and/or comply with the requirements thereof.

          11. Interpretation. Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of Treasury or the Internal Revenue Service.

          12. No Employment Rights. This award will not confer upon the Grantee any right with respect to continuance of employment by the Company.

          13. Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

          14. Subject to Plan. This award is subject to the terms of the Plan, and the Grantee is being delivered a copy of the Plan with this Agreement. To the extent any provision of this Agreement violates or is inconsistent with an express provisions of the Plan, the Plan provision will govern and any inconsistent provision in this Agreement will have no force or effect.

          15. Taxes. No later than the date as of which an amount first becomes includable in the gross income of the Grantee for federal income tax purposes with respect to the Award or the issuance of Award Shares pursuant to the Award, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state or local taxes or other items of any kind required by law to be withheld with respect to that amount. Subject to the following sentence, unless otherwise determined by the Committee, withholding obligations may be settled with Award Shares. Notwithstanding the foregoing, any election by a Grantee subject to Section 16 of the Securities Act of 1934, as amended, to settle any tax withholding obligation with Award Shares shall be subject to approval by the Committee in its sole discretion. The obligations of the Company with respect to the Award shall be conditional on those payments or arrangements and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise payable to the Grantee.

          16. Governing Law. The laws of the State of Ohio will govern this award and all matters related hereto. If either party institutes a suit or other legal proceedings, whether in law or equity, the Company and the Grantee hereby irrevocably consent to the jurisdiction of the

Common Pleas Court of the State of Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.

          17. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be an original but all of which together will represent one and the same agreement.

          18. Amendments/Entire Agreement. Any amendment to the Plan will be deemed to be an amendment to this Agreement. Except as provided in this Agreement, no amendment will reduce the FFO Outperformance Amount or adversely affect the number or value of the Grantee’s Award Shares or the Grantee’s rights with respect to vesting without the Grantee’s written consent. This Agreement cannot be changed or terminated orally. The Agreement and the Plan contain the entire agreement between the parties relating to the subject matter hereof.

          19. Notices. Notices, required or permitted to be made under this Agreement shall be sufficiently made if (a) sent by (i) registered or certified mail, (ii) a nationally recognized courier service or (iii) facsimile, and (b) addressed (x) to the Grantee at his or her address as set forth in the books and records of the Company or (y) to the Company or the Committee at the principal office of the Company. The Grantee is required to notify the Company promptly of any change of address.

          20. Binding on Successors. The terms and provisions of the Plan and this Agreement will be binding on any successor in interest to the Grantee, whether such successor attains such status through inheritance, the laws of descent or otherwise.

	DEVELOPERS DIVERSIFIED REALTY CORPORATION
DATE OF AWARD: February 23, 2006
	By:	/s/ Nan Zieleniec
		Senior Vice President

ACCEPTANCE OF AGREEMENT

          The Grantee hereby: (a) acknowledges that he or she has received a copy of the Plan and a copy of the Company’s most recent Annual Report and other communications routinely distributed to the Company’s shareholders; (b) accepts this Agreement and the Award granted under this Agreement, subject to all provisions of the Plan and this Agreement; (c) represents and warrants to the Company that he or she is accruing the Award and the underlying Award Shares for his or her own account, for investment, and not with a view to or any present intention of selling or distributing the Award or the Award Shares either now or at any specific or determinable future time or period or upon the occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and (d) agrees that no transfer of the Award or Common Shares acquired upon vesting of the Award will be made unless the Award Shares have been duly registered under all applicable Federal and State securities laws pursuant to a then-effective registration which contemplates the proposed transfer or unless the Company has received a written opinion or other evidence satisfactory to its legal counsel that the proposed transfer is exempt form such registration.

Date: February 23, 2006
	/s/ Richard E. Brown
	Name of Grantee: Richard E. Brown

SCHEDULE A

          “FFO Metric” shall mean FFO Growth during the Measurement Period equal to or exceeding 8% per annum, calculated on a cumulative, compounded basis.

          “TRS Metrics” shall mean (a) a Total Return to Shareholders during the Measurement Period equal to or exceeding 17% per annum and (b) Total Return to Shareholders during the Measurement Period equal to or exceeding the Total Return to Shareholders during the Measurement Period (calculated in the same manner as the Company’s Total Return to Shareholders) of not less than 75% of the companies in the Peer Group.

SCHEDULE B

Peer Group

Federal Realty Investment Trust
Heritage Property Investment Trust, Inc.
Kimco Realty Corporation
New Plan Excel Realty Trust
Regency Centers Corporation
Weingarten Realty Investors
Pan Pacific Retail Properties
Macerich
Taubman Centers, Inc.
PREIT
Mills
Simon Properties Group
CBL & Associates Properties, Inc.
General Growth Properties, Inc.
Glimcher Realty Trust

EX-10.10

Exhibit 10.10

OUTPERFORMANCE LONG-TERM INCENTIVE PLAN AGREEMENT

          This Outperformance Long-Term Incentive Plan Agreement (this “Agreement”) is effective as of January 1, 2005, by and between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and Timothy J. Bruce (the “Grantee”).

          WHEREAS, the Company desires to incentivize the Grantee to assist in causing the Company to achieve superior financial performance, and the Grantee desires to be so incentivized;

          NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as follows:

          1. Background; Purpose. The Company maintains the Developers Diversified Realty Corporation Equity-Based Award Plan (as amended, modified or supplemented from time to time, the “Plan”). Among the forms of compensation contemplated by the Plan are grants of common shares and performance awards. This Agreement is adopted in furtherance of the authority to make such grants and provides for grants of common shares (each, an “Award”) to certain senior executives of the Company based on the achievement of certain goals over a specified period of time. The Award shall be subject to the terms and conditions set forth herein and in the Plan and shall be evidenced by this Agreement.

          2. Administration. This Agreement and the Award shall be administered by the Executive Compensation Committee (the “Committee”) of the Board of Directors of the Company in accordance with the Plan. In the event of any merger, acquisition, consolidation, reorganization, combination, strategic redirection or other corporate or capitalization change; any material changes in accounting practices, in tax law or interpretation or other applicable law or regulation; or any extraordinary losses, gains or other similar events, the Committee shall make such substitutions or adjustments, if any, as are deemed necessary or equitable in its sole discretion to preserve the intent of the Plan and to avoid any unintended windfalls or hardships with respect to the number or valuation of Award Shares (as hereinafter defined). Without limiting the generality of the foregoing, if no Metric is achieved in total during the Measurement Period, but after the Measurement Date the Committee determines in its sole discretion that any or all of the Metrics have been substantially achieved during the Measurement Period, then the Committee shall have the discretion to award to the Grantee an Award (in such form as the Committee in its sole discretion shall determine) equal to 25% of the Award Value that would have been awarded had all Metrics been achieved in total.

          3. Definitions. Capitalized terms used herein without definitions shall have the meanings given to those terms in the Plan. In addition, as used herein:

          “Award Shares” shall mean the Common Shares issued by the Company in payment of the Award.

          “Award Value” shall mean the sum of (i) the FFO Award Value and (ii) the value, calculated as of the Valuation Date, of the TRS Shares.

          “Cause” shall mean (i) the Grantee’s fraud, commission of a felony or 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 Grantee’s willful and repeated failure to perform his duties as an employee of the Company, which failure has not been cured within fifteen (15) days after the Company gives notice thereof to the Grantee; or (ii) the Grantee’s material breach of any provision of this Agreement, which breach has not been cured in all substantial respects within ten (10) days after the Company gives notice thereof to the Grantee.

          “Change in Control” shall mean the occurrence of any of the following: (i) the business day immediately preceding the day on which a consolidation or merger in which the Company is not the surviving corporation, the sale of substantially all of the assets of the Company, or the liquidation or dissolution of the Company is scheduled to occur; provided, however, that prior to such business day (A) the shareholders of the Company shall have approved such consolidation, merger, sale, liquidation or dissolution and (B) there shall not exist on such business day any fact or circumstance that shall make it reasonably unlikely that such closing shall not occur as scheduled; or (ii) any person or other entity (other than the Company or a Subsidiary or any Company employee benefit plan (including any trustee of any such plan acting in its capacity as trustee)) becomes the beneficial owner of securities of the Company representing 51% or more of the voting power of the Company’s outstanding securities; or (iii) during any two-year period, individuals who at the beginning of such period constitute the entire Board cease to constitute a majority of the Board, 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.

          “Code” shall mean the Internal Revenue Code of 1986, as amended.

          “Common Share” shall mean a common share, without par value, of the Company.

          “Disabled” shall be the Grantee’s permanent disability and 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 Grantee, by reason of his physical or mental disability or illness, shall have been unable to discharge his duties as an employee of the Company. The date of disability shall be such one hundred twentieth (120^th) or ninetieth (90^th) day, as the case may be. In the event either the Company or the Grantee, after receipt of notice of the Grantee’s disability from the other, dispute that the Grantee’s permanent disability shall have occurred, the Grantee 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 Grantee 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.

          “Effective Date” shall mean January 1, 2005.

          “Equivalent Amount of Cash” shall mean an amount of cash equal to the Award Value.

          “FFO Award Percentage” shall mean (i) if the FFO Metric is achieved by the Company, 100%, and (ii) if the FFO Metric is not achieved by the Company, 0%.

          “FFO Award Value” shall mean the FFO Outperformance Amount multiplied by the FFO Award Percentage.

          “FFO Growth” shall mean the growth in the Company’s funds from operations per Common Share during the Measurement Period. FFO Growth shall be measured by assuming that (a) the Company’s funds from operations per Common Share on the Effective Date equaled the Company’s funds from operations per Share for the fiscal year ended December 31, 2004 and (b) the Company’s funds from operations per Common Share on the Valuation Date equaled the Company’s funds from operations per Common Share for the fiscal year ended December 31, 2009; provided, however, that if the Valuation Date shall be the date on which a Change in Control occurs, then the Company’s funds from operations per Common Share on such Valuation Date shall equal the higher of (i) the Company’s funds from operations for the immediately preceding fiscal year or (ii) the Company’s funds from operations budgeted for the fiscal year in which such Change in Control occurs.

          “FFO Metric” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “FFO Outperformance Amount” shall mean $500,000.

          “Measurement Date” shall mean December 31, 2009.

          “Measurement Period” shall mean the period commencing on the Effective Date and ending on the Valuation Date.

          “Metrics” shall mean the FFO Metric and the TRS Metrics.

          “Peer Group” shall mean the companies listed in Schedule B.

          “Share Price” shall mean the greater of (i) the average closing price of a Common Share as reported on the New York Stock Exchange over the 20 trading days ending on the Valuation Date and (ii) the closing price of a Common Share as reported on the New York Stock Exchange on the trading day immediately preceding the Valuation Date.

          “Total Return to Shareholders” shall mean the total annual return to the holders of Common Shares during the Measurement Period. Total Return to Shareholders shall be

measured by assuming a hypothetical investment of $100 in Common Shares on the first day of the Measurement Period (the “Initial Investment”) and calculating the value of such investment as of the Valuation Date, assuming all dividends paid on the Common Shares are reinvested into additional Common Shares (the “Total Return”). The difference between the Total Return and the Initial Investment will be divided by the Initial Investment and the resulting number further divided by the number of years in the Measurement Period to determine the Annualized Total Shareholder Return. For example, if the Total Return is $170 and the Measurement Period ends on the Measurement Date, the Annualized Total Shareholder Return is:

(170-100)/100=70%
                70/5=14%

          “TRS Metrics” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “TRS Shares” shall mean (i) if both of the TRS Metrics are achieved by the Company, 15,400 Common Shares, (ii) if one of the TRS Metrics is achieved by the Company, 9,500 Common Shares, and (iii) if none of the TRS Metrics is achieved by the Company, no Common Shares; provided, however, that if the number of TRS Shares shall be determined pursuant to clause (i) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $1,232,000, then the number of such Common Shares shall be equal to $1,232,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares; and provided further, that if the number of TRS Shares shall be determined pursuant to clause (ii) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $760,000, then the number of such Common Shares shall be equal to $760,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares.

          “Valuation Date” shall mean, with respect to the Grantee, the earlier of (i) the Measurement Date and (ii) the date on which a Change in Control occurs.

          “Vesting Date” shall mean (i) if the Valuation Date shall be the Measurement Date, March 1, 2010, and (ii) if the Valuation Date shall be the date on which a Change in Control occurs, the Valuation Date.

          4. Award Grant. The Grantee is hereby granted an Award consisting of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares and (ii) the number of TRS Shares; provided, however, that if during the Measurement Period the Grantee shall die or become Disabled, or the employment of the Grantee shall be terminated by the Company without Cause, then the Award shall consist of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the product of (a) the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares plus (ii) the number of TRS Shares, multiplied by (b) a fraction, the numerator of which shall be the number of days in the Measurement Period occurring before the date of such death, Disability or

termination of employment without Cause and the denominator of which shall equal the total number of days in the Measurement Period.

          5. Vesting. The Award shall vest on the Vesting Date, provided that the Grantee remains in continuous employment with the Company through the Vesting Date other than by reason of death, Disability or termination of employment without Cause.

          6. Effect of Certain Events During the Measurement Period. In the event the Grantee’s employment with the Company is terminated for Cause during the Measurement Period or in the event the Grantee voluntarily terminates his or her employment with the Company for any reason during the Measurement Period, the Grantee will immediately forfeit the Award, and any rights the Grantee had in Award Shares will terminate without further action.

          7. Transferability. This Agreement, the Award and the Award Shares will not be assignable or transferable by the Grantee; provided, however, that no provision in this Agreement will prevent the transfer of the Award or the Award Shares underlying such awards by will or the laws of descent and distribution in the event of the death of the Grantee.

          8. Payment.

          (a) The Company will issue to the Grantee (or to the estate, guardian or beneficiary of the Grantee, as the case may be) the Award Shares underlying the Award or the Equivalent Amount of Cash, at the Company’s option, as soon as reasonably practicable following the Vesting Date.

          (b) Except to the extent provided by Section 409A of the Code and permitted by the Company, no Common Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.

          (c) The Company’s obligations to the Grantee with respect to the Award will be satisfied in full upon the issuance of the Award Shares or the Equivalent Amount of Cash corresponding to the Award.

          9. Shareholder Rights and Restrictions.

          (a) The Grantee shall have no rights as a shareholder of the Company (including, without limitation, the right to receive dividends or voting rights) with respect to the Award or the Award Shares until the date on which a stock certificate (or certificates) representing Award Shares shall be issued.

          (b) The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Award Shares (or cash) in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

          10. American Jobs Creation Act. It is intended that this Agreement comply with the provisions of Section 409A of the Code. The Agreement will be administered in a manner that is intended to comply with Section 409A of the Code. Any provisions in this Agreement or in the Plan that would cause the Agreement to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). The Company is authorized to adopt rules or regulations deemed necessary or appropriate in connection therewith to anticipate and/or comply with the requirements thereof.

          11. Interpretation. Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of Treasury or the Internal Revenue Service.

          12. No Employment Rights. This award will not confer upon the Grantee any right with respect to continuance of employment by the Company.

          13. Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

          14. Subject to Plan. This award is subject to the terms of the Plan, and the Grantee is being delivered a copy of the Plan with this Agreement. To the extent any provision of this Agreement violates or is inconsistent with an express provisions of the Plan, the Plan provision will govern and any inconsistent provision in this Agreement will have no force or effect.

          15. Taxes. No later than the date as of which an amount first becomes includable in the gross income of the Grantee for federal income tax purposes with respect to the Award or the issuance of Award Shares pursuant to the Award, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state or local taxes or other items of any kind required by law to be withheld with respect to that amount. Subject to the following sentence, unless otherwise determined by the Committee, withholding obligations may be settled with Award Shares. Notwithstanding the foregoing, any election by a Grantee subject to Section 16 of the Securities Act of 1934, as amended, to settle any tax withholding obligation with Award Shares shall be subject to approval by the Committee in its sole discretion. The obligations of the Company with respect to the Award shall be conditional on those payments or arrangements and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise payable to the Grantee.

          16. Governing Law. The laws of the State of Ohio will govern this award and all matters related hereto. If either party institutes a suit or other legal proceedings, whether in law or equity, the Company and the Grantee hereby irrevocably consent to the jurisdiction of the

Common Pleas Court of the State of Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.

          17. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be an original but all of which together will represent one and the same agreement.

          18. Amendments/Entire Agreement. Any amendment to the Plan will be deemed to be an amendment to this Agreement. Except as provided in this Agreement, no amendment will reduce the FFO Outperformance Amount or adversely affect the number or value of the Grantee’s Award Shares or the Grantee’s rights with respect to vesting without the Grantee’s written consent. This Agreement cannot be changed or terminated orally. The Agreement and the Plan contain the entire agreement between the parties relating to the subject matter hereof.

          19. Notices. Notices, required or permitted to be made under this Agreement shall be sufficiently made if (a) sent by (i) registered or certified mail, (ii) a nationally recognized courier service or (iii) facsimile, and (b) addressed (x) to the Grantee at his or her address as set forth in the books and records of the Company or (y) to the Company or the Committee at the principal office of the Company. The Grantee is required to notify the Company promptly of any change of address.

          20. Binding on Successors. The terms and provisions of the Plan and this Agreement will be binding on any successor in interest to the Grantee, whether such successor attains such status through inheritance, the laws of descent or otherwise.

	DEVELOPERS DIVERSIFIED REALTY CORPORATION
DATE OF AWARD: February 23, 2006
	By:	/s/ Nan R. Zieleniec
		Senior Vice President

ACCEPTANCE OF AGREEMENT

     The Grantee hereby: (a) acknowledges that he or she has received a copy of the Plan and a copy of the Company’s most recent Annual Report and other communications routinely distributed to the Company’s shareholders; (b) accepts this Agreement and the Award granted under this Agreement, subject to all provisions of the Plan and this Agreement; (c) represents and warrants to the Company that he or she is accruing the Award and the underlying Award Shares for his or her own account, for investment, and not with a view to or any present intention of selling or distributing the Award or the Award Shares either now or at any specific or determinable future time or period or upon the occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and (d) agrees that no transfer of the Award or Common Shares acquired upon vesting of the Award will be made unless the Award Shares have been duly registered under all applicable Federal and State securities laws pursuant to a then-effective registration which contemplates the proposed transfer or unless the Company has received a written opinion or other evidence satisfactory to its legal counsel that the proposed transfer is exempt form such registration.

Date: February 23, 2006
	/s/ Timothy J. Bruce
	Name of Grantee: Timothy J. Bruce

SCHEDULE A

          “FFO Metric” shall mean FFO Growth during the Measurement Period equal to or exceeding 8% per annum, calculated on a cumulative, compounded basis.

          “TRS Metrics” shall mean (a) a Total Return to Shareholders during the Measurement Period equal to or exceeding 17% per annum and (b) Total Return to Shareholders during the Measurement Period equal to or exceeding the Total Return to Shareholders during the Measurement Period (calculated in the same manner as the Company’s Total Return to Shareholders) of not less than 75% of the companies in the Peer Group.

SCHEDULE B

Peer Group

Federal Realty Investment Trust
Heritage Property Investment Trust, Inc.
Kimco Realty Corporation
New Plan Excel Realty Trust
Regency Centers Corporation
Weingarten Realty Investors
Pan Pacific Retail Properties
Macerich
Taubman Centers, Inc.
PREIT
Mills
Simon Properties Group
CBL & Associates Properties, Inc.
General Growth Properties, Inc.
Glimcher Realty Trust

EX-10.11

Exhibit 10.11

OUTPERFORMANCE LONG-TERM INCENTIVE PLAN AGREEMENT

          This Outperformance Long-Term Incentive Plan Agreement (this “Agreement”) is effective as of January 1, 2005, by and between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and William H. Schafer (the “Grantee”).

          WHEREAS, the Company desires to incentivize the Grantee to assist in causing the Company to achieve superior financial performance, and the Grantee desires to be so incentivized;

          NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as follows:

          1. Background; Purpose. The Company maintains the Developers Diversified Realty Corporation Equity-Based Award Plan (as amended, modified or supplemented from time to time, the “Plan”). Among the forms of compensation contemplated by the Plan are grants of common shares and performance awards. This Agreement is adopted in furtherance of the authority to make such grants and provides for grants of common shares (each, an “Award”) to certain senior executives of the Company based on the achievement of certain goals over a specified period of time. The Award shall be subject to the terms and conditions set forth herein and in the Plan and shall be evidenced by this Agreement.

          2. Administration. This Agreement and the Award shall be administered by the Executive Compensation Committee (the “Committee”) of the Board of Directors of the Company in accordance with the Plan. In the event of any merger, acquisition, consolidation, reorganization, combination, strategic redirection or other corporate or capitalization change; any material changes in accounting practices, in tax law or interpretation or other applicable law or regulation; or any extraordinary losses, gains or other similar events, the Committee shall make such substitutions or adjustments, if any, as are deemed necessary or equitable in its sole discretion to preserve the intent of the Plan and to avoid any unintended windfalls or hardships with respect to the number or valuation of Award Shares (as hereinafter defined). Without limiting the generality of the foregoing, if no Metric is achieved in total during the Measurement Period, but after the Measurement Date the Committee determines in its sole discretion that any or all of the Metrics have been substantially achieved during the Measurement Period, then the Committee shall have the discretion to award to the Grantee an Award (in such form as the Committee in its sole discretion shall determine) equal to 25% of the Award Value that would have been awarded had all Metrics been achieved in total.

          3. Definitions. Capitalized terms used herein without definitions shall have the meanings given to those terms in the Plan. In addition, as used herein:

          “Award Shares” shall mean the Common Shares issued by the Company in payment of the Award.

          “Award Value” shall mean the sum of (i) the FFO Award Value and (ii) the value, calculated as of the Valuation Date, of the Equity Appreciation Shares.

          “Cause” shall mean (i) the Grantee’s fraud, commission of a felony or 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 Grantee’s willful and repeated failure to perform his duties as an employee of the Company, which failure has not been cured within fifteen (15) days after the Company gives notice thereof to the Grantee; or (ii) the Grantee’s material breach of any provision of this Agreement, which breach has not been cured in all substantial respects within ten (10) days after the Company gives notice thereof to the Grantee.

          “Change in Control” shall mean the occurrence of any of the following: (i) the business day immediately preceding the day on which a consolidation or merger in which the Company is not the surviving corporation, the sale of substantially all of the assets of the Company, or the liquidation or dissolution of the Company is scheduled to occur; provided, however, that prior to such business day (A) the shareholders of the Company shall have approved such consolidation, merger, sale, liquidation or dissolution and (B) there shall not exist on such business day any fact or circumstance that shall make it reasonably unlikely that such closing shall not occur as scheduled; or (ii) any person or other entity (other than the Company or a Subsidiary or any Company employee benefit plan (including any trustee of any such plan acting in its capacity as trustee)) becomes the beneficial owner of securities of the Company representing 51% or more of the voting power of the Company’s outstanding securities; or (iii) during any two-year period, individuals who at the beginning of such period constitute the entire Board cease to constitute a majority of the Board, 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.

          “Code” shall mean the Internal Revenue Code of 1986, as amended.

          “Common Share” shall mean a common share, without par value, of the Company.

          “Disabled” shall be the Grantee’s permanent disability and 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 Grantee, by reason of his physical or mental disability or illness, shall have been unable to discharge his duties as an employee of the Company. The date of disability shall be such one hundred twentieth (120^th) or ninetieth (90^th) day, as the case may be. In the event either the Company or the Grantee, after receipt of notice of the Grantee’s disability from the other, dispute that the Grantee’s permanent disability shall have occurred, the Grantee 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 Grantee 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.

          “Effective Date” shall mean January 1, 2005.

          “Equity Appreciation” shall mean the increase in price of a Common Share during the Measurement Period.

          “Equity Appreciation Metrics” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “Equity Appreciation Shares” shall mean (i) if both of the Equity Appreciation Metrics are achieved by the Company, 12,850 Common Shares, (ii) if one of the Equity Appreciation Metrics is achieved by the Company, 8,000 Common Shares, and (iii) if none of the Equity Appreciation Metrics is achieved by the Company, no Common Shares; provided, however, that if the number of Equity Appreciation Shares shall be determined pursuant to clause (i) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $1,028,000, then the number of such Common Shares shall be equal to $1,028,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares; and provided further, that if the number of Equity Appreciation Shares shall be determined pursuant to clause (ii) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $640,000, then the number of such Common Shares shall be equal to $640,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares.

          “Equivalent Amount of Cash” shall mean an amount of cash equal to the Award Value.

          “FFO Award Percentage” shall mean (i) if the FFO Metric is achieved by the Company, 100%, and (ii) if the FFO Metric is not achieved by the Company, 0%.

          “FFO Award Value” shall mean the FFO Outperformance Amount multiplied by the FFO Award Percentage.

          “FFO Growth” shall mean the growth in the Company’s funds from operations per Common Share during the Measurement Period. FFO Growth shall be measured by assuming that (a) the Company’s funds from operations per Common Share on the Effective Date equaled the Company’s funds from operations per Share for the fiscal year ended December 31, 2004 and (b) the Company’s funds from operations per Common Share on the Valuation Date equaled the Company’s funds from operations per Common Share for the fiscal year ended December 31, 2009; provided, however, that if the Valuation Date shall be the date on which a Change in Control occurs, then the Company’s funds from operations per Common Share on such Valuation Date shall equal the higher of (i) the Company’s funds from operations for the immediately preceding fiscal year or (ii) the Company’s funds from operations budgeted for the fiscal year in which such Change in Control occurs.

          “FFO Metric” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “FFO Outperformance Amount” shall mean $417,000.

          “Measurement Date” shall mean December 31, 2009.

          “Measurement Period” shall mean the period commencing on the Effective Date and ending on the Valuation Date.

          “Metrics” shall mean the FFO Metric and the Equity Appreciation Metrics.

          “Peer Group” shall mean the companies listed in Schedule B.

          “Share Price” shall mean the greater of (i) the average closing price of a Common Share as reported on the New York Stock Exchange over the 20 trading days ending on the Valuation Date and (ii) the closing price of a Common Share as reported on the New York Stock Exchange on the trading day immediately preceding the Valuation Date.

          “Valuation Date” shall mean, with respect to the Grantee, the earlier of (i) the Measurement Date and (ii) the date on which a Change in Control occurs.

          “Vesting Date” shall mean (i) if the Valuation Date shall be the Measurement Date, March 1, 2010, and (ii) if the Valuation Date shall be the date on which a Change in Control occurs, the Valuation Date.

          4. Award Grant. The Grantee is hereby granted an Award consisting of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares and (ii) the number of Equity Appreciation Shares; provided, however, that if during the Measurement Period the Grantee shall die or become Disabled, or the employment of the Grantee shall be terminated by the Company without Cause, then the Award shall consist of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the product of (a) the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares plus (ii) the number of Equity Appreciation Shares, multiplied by (b) a fraction, the numerator of which shall be the number of days in the Measurement Period occurring before the date of such death, Disability or termination of employment without Cause and the denominator of which shall equal the total number of days in the Measurement Period.

          5. Vesting. The Award shall vest on the Vesting Date, provided that the Grantee remains in continuous employment with the Company through the Vesting Date other than by reason of death, Disability or termination of employment without Cause.

          6. Effect of Certain Events During the Measurement Period. In the event the Grantee’s employment with the Company is terminated for Cause during the Measurement

Period or in the event the Grantee voluntarily terminates his or her employment with the Company for any reason during the Measurement Period, the Grantee will immediately forfeit the Award, and any rights the Grantee had in Award Shares will terminate without further action.

          7. Transferability. This Agreement, the Award and the Award Shares will not be assignable or transferable by the Grantee; provided, however, that no provision in this Agreement will prevent the transfer of the Award or the Award Shares underlying such awards by will or the laws of descent and distribution in the event of the death of the Grantee.

          8. Payment.

          (a) The Company will issue to the Grantee (or to the estate, guardian or beneficiary of the Grantee, as the case may be) the Award Shares underlying the Award or the Equivalent Amount of Cash, at the Company’s option, as soon as reasonably practicable following the Vesting Date.

          (b) Except to the extent provided by Section 409A of the Code and permitted by the Company, no Common Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.

          (c) The Company’s obligations to the Grantee with respect to the Award will be satisfied in full upon the issuance of the Award Shares or the Equivalent Amount of Cash corresponding to the Award.

          9. Shareholder Rights and Restrictions.

          (a) The Grantee shall have no rights as a shareholder of the Company (including, without limitation, the right to receive dividends or voting rights) with respect to the Award or the Award Shares until the date on which a stock certificate (or certificates) representing Award Shares shall be issued.

          (b) The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Award Shares (or cash) in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

          10. American Jobs Creation Act. It is intended that this Agreement comply with the provisions of Section 409A of the Code. The Agreement will be administered in a manner that is intended to comply with Section 409A of the Code. Any provisions in this Agreement or in the Plan that would cause the Agreement to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). The Company is authorized to adopt rules or regulations deemed necessary or appropriate in connection therewith to anticipate and/or comply with the requirements thereof.

          11. Interpretation. Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of Treasury or the Internal Revenue Service.

          12. No Employment Rights. This award will not confer upon the Grantee any right with respect to continuance of employment by the Company.

          13. Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

          14. Subject to Plan. This award is subject to the terms of the Plan, and the Grantee is being delivered a copy of the Plan with this Agreement. To the extent any provision of this Agreement violates or is inconsistent with an express provisions of the Plan, the Plan provision will govern and any inconsistent provision in this Agreement will have no force or effect.

          15. Taxes. No later than the date as of which an amount first becomes includable in the gross income of the Grantee for federal income tax purposes with respect to the Award or the issuance of Award Shares pursuant to the Award, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state or local taxes or other items of any kind required by law to be withheld with respect to that amount. Subject to the following sentence, unless otherwise determined by the Committee, withholding obligations may be settled with Award Shares. Notwithstanding the foregoing, any election by a Grantee subject to Section 16 of the Securities Act of 1934, as amended, to settle any tax withholding obligation with Award Shares shall be subject to approval by the Committee in its sole discretion. The obligations of the Company with respect to the Award shall be conditional on those payments or arrangements and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise payable to the Grantee.

          16. Governing Law. The laws of the State of Ohio will govern this award and all matters related hereto. If either party institutes a suit or other legal proceedings, whether in law or equity, the Company and the Grantee hereby irrevocably consent to the jurisdiction of the Common Pleas Court of the State of Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.

          17. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be an original but all of which together will represent one and the same agreement.

          18. Amendments/Entire Agreement. Any amendment to the Plan will be deemed to be an amendment to this Agreement. Except as provided in this Agreement, no

amendment will reduce the FFO Outperformance Amount or adversely affect the number or value of the Grantee’s Award Shares or the Grantee’s rights with respect to vesting without the Grantee’s written consent. This Agreement cannot be changed or terminated orally. The Agreement and the Plan contain the entire agreement between the parties relating to the subject matter hereof.

          19. Notices. Notices, required or permitted to be made under this Agreement shall be sufficiently made if (a) sent by (i) registered or certified mail, (ii) a nationally recognized courier service or (iii) facsimile, and (b) addressed (x) to the Grantee at his or her address as set forth in the books and records of the Company or (y) to the Company or the Committee at the principal office of the Company. The Grantee is required to notify the Company promptly of any change of address.

          20. Binding on Successors. The terms and provisions of the Plan and this Agreement will be binding on any successor in interest to the Grantee, whether such successor attains such status through inheritance, the laws of descent or otherwise.

	DEVELOPERS DIVERSIFIED REALTY
	CORPORATION
DATE OF AWARD: February 23, 2006
	By:	/s/ Nan R. Zieleniec Senior Vice President

ACCEPTANCE OF AGREEMENT

          The Grantee hereby: (a) acknowledges that he or she has received a copy of the Plan and a copy of the Company’s most recent Annual Report and other communications routinely distributed to the Company’s shareholders; (b) accepts this Agreement and the Award granted under this Agreement, subject to all provisions of the Plan and this Agreement; (c) represents and warrants to the Company that he or she is accruing the Award and the underlying Award Shares for his or her own account, for investment, and not with a view to or any present intention of selling or distributing the Award or the Award Shares either now or at any specific or determinable future time or period or upon the occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and (d) agrees that no transfer of the Award or Common Shares acquired upon vesting of the Award will be made unless the Award Shares have been duly registered under all applicable Federal and State securities laws pursuant to a then-effective registration which contemplates the proposed transfer or unless the Company has received a written opinion or other evidence satisfactory to its legal counsel that the proposed transfer is exempt form such registration.

Date: February 23, 2006
	/s/ William H. Schafer Name of Grantee: William H. Schafer

SCHEDULE A

          “Equity Appreciation Metrics” shall mean (a) Equity Appreciation during the Measurement Period equal to or exceeding 8% per annum, calculated on a cumulative, compounded basis, and (b) Equity Appreciation during the Measurement Period equal to or exceeding the appreciation during the Measurement Period (calculated in the same manner as the Company’s Equity Appreciation) of the common stock of not less than 75% of the companies in the Peer Group.

          “FFO Metric” shall mean FFO Growth during the Measurement Period equal to or exceeding 8% per annum, calculated on a cumulative, compounded basis.

SCHEDULE B

Peer Group

Federal Realty Investment Trust
Heritage Property Investment Trust, Inc.
Kimco Realty Corporation
New Plan Excel Realty Trust
Regency Centers Corporation
Weingarten Realty Investors
Pan Pacific Retail Properties
Macerich
Taubman Centers, Inc.
PREIT
Mills
Simon Properties Group
CBL & Associates Properties, Inc.
General Growth Properties, Inc.
Glimcher Realty Trust

EX-10.12

Exhibit 10.12

OUTPERFORMANCE LONG-TERM INCENTIVE PLAN AGREEMENT

          This Outperformance Long-Term Incentive Plan Agreement (this “Agreement”) is effective as of January 1, 2005, by and between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and Robin R. Walker-Gibbons (the “Grantee”).

          WHEREAS, the Company desires to incentivize the Grantee to assist in causing the Company to achieve superior financial performance, and the Grantee desires to be so incentivized;

          NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as follows:

          1. Background; Purpose. The Company maintains the Developers Diversified Realty Corporation Equity-Based Award Plan (as amended, modified or supplemented from time to time, the “Plan”). Among the forms of compensation contemplated by the Plan are grants of common shares and performance awards. This Agreement is adopted in furtherance of the authority to make such grants and provides for grants of common shares (each, an “Award”) to certain senior executives of the Company based on the achievement of certain goals over a specified period of time. The Award shall be subject to the terms and conditions set forth herein and in the Plan and shall be evidenced by this Agreement.

          2. Administration. This Agreement and the Award shall be administered by the Executive Compensation Committee (the “Committee”) of the Board of Directors of the Company in accordance with the Plan. In the event of any merger, acquisition, consolidation, reorganization, combination, strategic redirection or other corporate or capitalization change; any material changes in accounting practices, in tax law or interpretation or other applicable law or regulation; or any extraordinary losses, gains or other similar events, the Committee shall make such substitutions or adjustments, if any, as are deemed necessary or equitable in its sole discretion to preserve the intent of the Plan and to avoid any unintended windfalls or hardships with respect to the number or valuation of Award Shares (as hereinafter defined). Without limiting the generality of the foregoing, if no Metric is achieved in total during the Measurement Period, but after the Measurement Date the Committee determines in its sole discretion that any or all of the Metrics have been substantially achieved during the Measurement Period, then the Committee shall have the discretion to award to the Grantee an Award (in such form as the Committee in its sole discretion shall determine) equal to 25% of the Award Value that would have been awarded had all Metrics been achieved in total.

          3. Definitions. Capitalized terms used herein without definitions shall have the meanings given to those terms in the Plan. In addition, as used herein:

          “Award Shares” shall mean the Common Shares issued by the Company in payment of the Award.

          “Award Value” shall mean the sum of (i) the FFO Award Value and (ii) the value, calculated as of the Valuation Date, of the TRS Shares.

          “Cause” shall mean (i) the Grantee’s fraud, commission of a felony or 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 Grantee’s willful and repeated failure to perform her duties as an employee of the Company, which failure has not been cured within fifteen (15) days after the Company gives notice thereof to the Grantee; or (ii) the Grantee’s material breach of any provision of this Agreement, which breach has not been cured in all substantial respects within ten (10) days after the Company gives notice thereof to the Grantee.

          “Change in Control” shall mean the occurrence of any of the following: (i) the business day immediately preceding the day on which a consolidation or merger in which the Company is not the surviving corporation, the sale of substantially all of the assets of the Company, or the liquidation or dissolution of the Company is scheduled to occur; provided, however, that prior to such business day (A) the shareholders of the Company shall have approved such consolidation, merger, sale, liquidation or dissolution and (B) there shall not exist on such business day any fact or circumstance that shall make it reasonably unlikely that such closing shall not occur as scheduled; or (ii) any person or other entity (other than the Company or a Subsidiary or any Company employee benefit plan (including any trustee of any such plan acting in its capacity as trustee)) becomes the beneficial owner of securities of the Company representing 51% or more of the voting power of the Company’s outstanding securities; or (iii) during any two-year period, individuals who at the beginning of such period constitute the entire Board cease to constitute a majority of the Board, 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.

          “Code” shall mean the Internal Revenue Code of 1986, as amended.

          “Common Share” shall mean a common share, without par value, of the Company.

          “Disabled” shall be the Grantee’s permanent disability and 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 Grantee, by reason of her physical or mental disability or illness, shall have been unable to discharge her duties as an employee of the Company. The date of disability shall be such one hundred twentieth (120^th) or ninetieth (90^th) day, as the case may be. In the event either the Company or the Grantee, after receipt of notice of the Grantee’s disability from the other, dispute that the Grantee’s permanent disability shall have occurred, the Grantee 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 Grantee is capable of resuming her employment and devoting her 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.

          “Effective Date” shall mean January 1, 2005.

          “Equivalent Amount of Cash” shall mean an amount of cash equal to the Award Value.

          “FFO Award Percentage” shall mean (i) if the FFO Metric is achieved by the Company, 100%, and (ii) if the FFO Metric is not achieved by the Company, 0%.

          “FFO Award Value” shall mean the FFO Outperformance Amount multiplied by the FFO Award Percentage.

          “FFO Growth” shall mean the growth in the Company’s funds from operations per Common Share during the Measurement Period. FFO Growth shall be measured by assuming that (a) the Company’s funds from operations per Common Share on the Effective Date equaled the Company’s funds from operations per Share for the fiscal year ended December 31, 2004 and (b) the Company’s funds from operations per Common Share on the Valuation Date equaled the Company’s funds from operations per Common Share for the fiscal year ended December 31, 2009; provided, however, that if the Valuation Date shall be the date on which a Change in Control occurs, then the Company’s funds from operations per Common Share on such Valuation Date shall equal the higher of (i) the Company’s funds from operations for the immediately preceding fiscal year or (ii) the Company’s funds from operations budgeted for the fiscal year in which such Change in Control occurs.

          “FFO Metric” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “FFO Outperformance Amount” shall mean $417,000.

          “Measurement Date” shall mean December 31, 2009.

          “Measurement Period” shall mean the period commencing on the Effective Date and ending on the Valuation Date.

          “Metrics” shall mean the FFO Metric and the TRS Metrics.

          “Peer Group” shall mean the companies listed in Schedule B.

          “Share Price” shall mean the greater of (i) the average closing price of a Common Share as reported on the New York Stock Exchange over the 20 trading days ending on the Valuation Date and (ii) the closing price of a Common Share as reported on the New York Stock Exchange on the trading day immediately preceding the Valuation Date.

          “Total Return to Shareholders” shall mean the total annual return to the holders of Common Shares during the Measurement Period. Total Return to Shareholders shall be

measured by assuming a hypothetical investment of $100 in Common Shares on the first day of the Measurement Period (the “Initial Investment”) and calculating the value of such investment as of the Valuation Date, assuming all dividends paid on the Common Shares are reinvested into additional Common Shares (the “Total Return”). The difference between the Total Return and the Initial Investment will be divided by the Initial Investment and the resulting number further divided by the number of years in the Measurement Period to determine the Annualized Total Shareholder Return. For example, if the Total Return is $170 and the Measurement Period ends on the Measurement Date, the Annualized Total Shareholder Return is:

(170-100)/100=70%
                70/5=14%

          “TRS Metrics” shall mean the performance criteria designated as such set forth on Schedule A attached hereto.

          “TRS Shares” shall mean (i) if both of the TRS Metrics are achieved by the Company, 12,850 Common Shares, (ii) if one of the TRS Metrics is achieved by the Company, 8,000 Common Shares, and (iii) if none of the TRS Metrics is achieved by the Company, no Common Shares; provided, however, that if the number of TRS Shares shall be determined pursuant to clause (i) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $1,028,000, then the number of such Common Shares shall be equal to $1,028,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares; and provided further, that if the number of TRS Shares shall be determined pursuant to clause (ii) and the value, calculated as of the Valuation Date, of the Common Shares to be awarded shall be greater than $640,000, then the number of such Common Shares shall be equal to $640,000 divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares.

          “Valuation Date” shall mean, with respect to the Grantee, the earlier of (i) the Measurement Date and (ii) the date on which a Change in Control occurs.

          “Vesting Date” shall mean (i) if the Valuation Date shall be the Measurement Date, March 1, 2010, and (ii) if the Valuation Date shall be the date on which a Change in Control occurs, the Valuation Date.

          4. Award Grant. The Grantee is hereby granted an Award consisting of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares and (ii) the number of TRS Shares; provided, however, that if during the Measurement Period the Grantee shall die or become Disabled, or the employment of the Grantee shall be terminated by the Company without Cause, then the Award shall consist of a number of Common Shares, calculated and valued as of the Valuation Date, equal to the product of (a) the sum of (i) the FFO Award Value divided by the Share Price with fractional Common Shares rounded up to the nearest whole number of Common Shares plus (ii) the number of TRS Shares, multiplied by (b) a fraction, the numerator of which shall be the number of days in the Measurement Period occurring before the date of such death, Disability or

termination of employment without Cause and the denominator of which shall equal the total number of days in the Measurement Period.

          5. Vesting. The Award shall vest on the Vesting Date, provided that the Grantee remains in continuous employment with the Company through the Vesting Date other than by reason of death, Disability or termination of employment without Cause.

          6. Effect of Certain Events During the Measurement Period. In the event the Grantee’s employment with the Company is terminated for Cause during the Measurement Period or in the event the Grantee voluntarily terminates his or her employment with the Company for any reason during the Measurement Period, the Grantee will immediately forfeit the Award, and any rights the Grantee had in Award Shares will terminate without further action.

          7. Transferability. This Agreement, the Award and the Award Shares will not be assignable or transferable by the Grantee; provided, however, that no provision in this Agreement will prevent the transfer of the Award or the Award Shares underlying such awards by will or the laws of descent and distribution in the event of the death of the Grantee.

          8. Payment.

          (a) The Company will issue to the Grantee (or to the estate, guardian or beneficiary of the Grantee, as the case may be) the Award Shares underlying the Award or the Equivalent Amount of Cash, at the Company’s option, as soon as reasonably practicable following the Vesting Date.

          (b) Except to the extent provided by Section 409A of the Code and permitted by the Company, no Common Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.

          (c) The Company’s obligations to the Grantee with respect to the Award will be satisfied in full upon the issuance of the Award Shares or the Equivalent Amount of Cash corresponding to the Award.

          9. Shareholder Rights and Restrictions.

          (a) The Grantee shall have no rights as a shareholder of the Company (including, without limitation, the right to receive dividends or voting rights) with respect to the Award or the Award Shares until the date on which a stock certificate (or certificates) representing Award Shares shall be issued.

          (b) The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Award Shares (or cash) in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

          10. American Jobs Creation Act. It is intended that this Agreement comply with the provisions of Section 409A of the Code. The Agreement will be administered in a manner that is intended to comply with Section 409A of the Code. Any provisions in this Agreement or in the Plan that would cause the Agreement to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). The Company is authorized to adopt rules or regulations deemed necessary or appropriate in connection therewith to anticipate and/or comply with the requirements thereof.

          11. Interpretation. Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of Treasury or the Internal Revenue Service.

          12. No Employment Rights. This award will not confer upon the Grantee any right with respect to continuance of employment by the Company.

          13. Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

          14. Subject to Plan. This award is subject to the terms of the Plan, and the Grantee is being delivered a copy of the Plan with this Agreement. To the extent any provision of this Agreement violates or is inconsistent with an express provisions of the Plan, the Plan provision will govern and any inconsistent provision in this Agreement will have no force or effect.

          15. Taxes. No later than the date as of which an amount first becomes includable in the gross income of the Grantee for federal income tax purposes with respect to the Award or the issuance of Award Shares pursuant to the Award, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state or local taxes or other items of any kind required by law to be withheld with respect to that amount. Subject to the following sentence, unless otherwise determined by the Committee, withholding obligations may be settled with Award Shares. Notwithstanding the foregoing, any election by a Grantee subject to Section 16 of the Securities Act of 1934, as amended, to settle any tax withholding obligation with Award Shares shall be subject to approval by the Committee in its sole discretion. The obligations of the Company with respect to the Award shall be conditional on those payments or arrangements and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise payable to the Grantee.

          16. Governing Law. The laws of the State of Ohio will govern this award and all matters related hereto. If either party institutes a suit or other legal proceedings, whether in law or equity, the Company and the Grantee hereby irrevocably consent to the jurisdiction of the

Common Pleas Court of the State of Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.

          17. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be an original but all of which together will represent one and the same agreement.

          18. Amendments/Entire Agreement. Any amendment to the Plan will be deemed to be an amendment to this Agreement. Except as provided in this Agreement, no amendment will reduce the FFO Outperformance Amount or adversely affect the number or value of the Grantee’s Award Shares or the Grantee’s rights with respect to vesting without the Grantee’s written consent. This Agreement cannot be changed or terminated orally. The Agreement and the Plan contain the entire agreement between the parties relating to the subject matter hereof.

          19. Notices. Notices, required or permitted to be made under this Agreement shall be sufficiently made if (a) sent by (i) registered or certified mail, (ii) a nationally recognized courier service or (iii) facsimile, and (b) addressed (x) to the Grantee at his or her address as set forth in the books and records of the Company or (y) to the Company or the Committee at the principal office of the Company. The Grantee is required to notify the Company promptly of any change of address.

          20. Binding on Successors. The terms and provisions of the Plan and this Agreement will be binding on any successor in interest to the Grantee, whether such successor attains such status through inheritance, the laws of descent or otherwise.

	DEVELOPERS DIVERSIFIED REALTY CORPORATION
DATE OF AWARD: February 23, 2006
	By:	/s/ Nan R. Zieleniec Senior Vice President

ACCEPTANCE OF AGREEMENT

          The Grantee hereby: (a) acknowledges that he or she has received a copy of the Plan and a copy of the Company’s most recent Annual Report and other communications routinely distributed to the Company’s shareholders; (b) accepts this Agreement and the Award granted under this Agreement, subject to all provisions of the Plan and this Agreement; (c) represents and warrants to the Company that he or she is accruing the Award and the underlying Award Shares for his or her own account, for investment, and not with a view to or any present intention of selling or distributing the Award or the Award Shares either now or at any specific or determinable future time or period or upon the occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and (d) agrees that no transfer of the Award or Common Shares acquired upon vesting of the Award will be made unless the Award Shares have been duly registered under all applicable Federal and State securities laws pursuant to a then-effective registration which contemplates the proposed transfer or unless the Company has received a written opinion or other evidence satisfactory to its legal counsel that the proposed transfer is exempt form such registration.

Date: February 23, 2006

/s/ Robin R. Walker-Gibbons Name of Grantee: Robin R. Walker-Gibbons

SCHEDULE A

          “FFO Metric” shall mean FFO Growth during the Measurement Period equal to or exceeding 8% per annum, calculated on a cumulative, compounded basis.

          “TRS Metrics” shall mean (a) a Total Return to Shareholders during the Measurement Period equal to or exceeding 17% per annum and (b) Total Return to Shareholders during the Measurement Period equal to or exceeding the Total Return to Shareholders during the Measurement Period (calculated in the same manner as the Company’s Total Return to Shareholders) of not less than 75% of the companies in the Peer Group.

SCHEDULE B

Peer Group

Federal Realty Investment Trust
Heritage Property Investment Trust, Inc.
Kimco Realty Corporation
New Plan Excel Realty Trust
Regency Centers Corporation
Weingarten Realty Investors
Pan Pacific Retail Properties
Macerich
Taubman Centers, Inc.
PREIT
Mills
Simon Properties Group
CBL & Associates Properties, Inc.
General Growth Properties, Inc.
Glimcher Realty Trust

EX-10.13

Exhibit 10.13

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

             THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as of the 6^th day of November, 2006, between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and Joan U. Allgood (the “Executive”).

W I T N E S S E T H:

             WHEREAS, the Company desires to employ the Executive, and the Executive desires to be employed by the Company, on the terms and subject to the conditions set forth herein; and

             WHEREAS, the Company and the Executive desire for this Amended and Restated Employment Agreement to amend and supersede any prior Employment Agreements between the Company and the Executive.

             NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties agree as follows:

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 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, 2006, 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 articles of incorporation and code of regulations of the Company, as the same may be

amended from time to time, and the Indemnification Agreement dated June 30, 2004 between the Company and the Executive (the “Indemnification Agreement”).

(c) If:

(i)	the Company materially changes the Executive’s duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without her consent;
(ii)	the Executive’s 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 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 November 6, 2006, 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 the Executive hereunder up to and including the effective date of such termination.

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 Company’s usual pay practices (and in any event no less frequently than monthly) of not less than Two Hundred Seventy Thousand Dollars ($270,000) 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, then the

Page 2

	Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of each fiscal year or, if applicable, the date of termination of employment, as the case may be, prorated on a per diem basis for partial fiscal years, determined and calculated in accordance with the percentages set forth on Exhibit B attached hereto. The Company’s 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.
(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 Agreement shall or shall be deemed to in any way affect the Executive’s 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 Company’s 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 Executive’s participation in and benefits under any such plan shall be on the terms and subject to the conditions specified in the governing documents of the particular plan.
(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 Company’s 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 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 Executive for the amount of any charge actually and reasonably incurred at The Shoreby Club in the conduct of the Company’s business.

4. Payment in the Event of Death or Disability.

(a) In the event of the Executive’s death or if the Executive becomes “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

Page 3

death) an amount equal to the sum of (i) the Executive’s then effective per annum rate of salary, as determined under Paragraph 3(a), plus (ii) a bonus amount prorated up to and including the effective date of termination and determined in accordance with Paragraph 3(b) based on the aggregate amount accrued for bonuses for the then current fiscal year as presented in the Company’s general ledger for the month in which the Executive’s termination occurs, and shall continue the benefits described in Paragraph 3(c) for the Executive (except in the case of death) and the Executive’s family for a period of one (1) year.

(b)

The benefit to be paid pursuant to Paragraph 4(a) shall be paid within ninety (90) days after the date of death or disability, as the case may be.

(c)

For purposes of this Employment Agreement, the Executive shall become “disabled” only in the event of a permanent disability. Executive’s “disability” shall be deemed to have occurred after one hundred twenty (120) days in the aggregate during any consecutive twelve (12) month period, or after ninety (90) consecutive days, during which one hundred twenty (120) or ninety (90) days, as the case may be, the Executive, by reason of 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 Executive’s disability from the other, dispute that the Executive’s permanent disability shall have occurred, the Executive shall promptly submit to a physical examination by the chief of medicine of any major accredited hospital in the Cleveland, Ohio, area and, unless such physician shall issue his written statement to the effect that in his opinion, based on his diagnosis, the Executive is capable of resuming 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 Executive’s fraud, commission of a felony or of an act or series of acts which result in material injury to the business reputation of the Company, commission of an act or series of repeated acts of dishonesty which are materially inimical to the best interests of the Company, or the Executive’s willful and repeated failure to perform 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 Executive’s material breach of any provision of this Employment Agreement, which breach has not been cured in all substantial respects

Page 4

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 such termination date.

	The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Company’s sole remedy if such right to terminate arises. Upon any termination of this Employment Agreement, the Executive shall be deemed to have resigned from all offices and directorships held by the Executive in the Company.
(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 Executive’s 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 effective date of such termination.
(d)	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 (i) the Executive’s then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (ii) a bonus amount prorated up to and including the effective date of termination and determined in accordance with Paragraph 3(b) based on the aggregate amount accrued for bonuses for the then current fiscal year as presented in the Company’s general ledger for the month in which the Executive’s termination occurs, and shall continue the benefits described in Paragraph 3(c) for a period of one (1) year.
(e)	Notwithstanding anything herein to the contrary, the Company shall not be obligated to make any payment or provide any benefit pursuant to Paragraph 4(a) or Paragraph 5(d) unless (i) the Executive executes a release of all current and future claims, known or unknown, arising on or before the date of the release against the Company and its

Page 5

subsidiaries and the directors, officers and affiliates of any of them, in a form approved by the Company (or, in the case of death, the Executive’s estate executes such release or such other documents as may be reasonably requested by the Company) and (ii) the Executive (or the Executive’s estate) does not revoke any required release during any applicable revocation period.

6. Covenants and Confidential Information.

(a) The Executive acknowledges the Company’s reliance and expectation of the Executive’s continued commitment to performance of the Executive’s 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 Company’s 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 Company’s 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 Executive’s 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 Executive’s 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 6 will be inadequate and that the damages following from such breach are not readily susceptible to being measured in monetary terms.

Page 6

Accordingly, it is acknowledged that, upon adequate proof of the Executive’s violation of any legally enforceable provision of this Paragraph 6, 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 6 shall be deemed to limit the Company’s remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 6 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 6, 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 Executive’s 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.

7. Tax Adjustment Payments. If all or any portion of the amounts payable to 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; but excluding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company or any Outperformance Long-Term Incentive Plan Agreement between the Executive and the Company) constitutes “excess parachute payments” within the meaning of Section 280G of the Code that are subject to the excise tax imposed by Section 4999 of the Code (or any similar tax or assessment), the amounts payable to the Executive shall be increased to the extent necessary to place the Executive in the same after-tax position as the Executive would have been in had no such tax been imposed on any such amount paid or payable to the Executive under this Employment Agreement, the Change in Control Agreement or any other amount that the Executive may receive pursuant thereto (other than pursuant to a Performance Unit Agreement or an Outperformance Long-Term Incentive Plan Agreement). The determination of the amount of any such tax and the incremental payment required hereby in connection therewith shall be made by the accounting firm employed by the Executive within thirty (30) calendar days after such payment and said incremental payment shall be made within five (5) calendar days after determination has been made. If, after the date upon which the payment required by this Paragraph 7 has been made, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of competent jurisdiction, Internal Revenue Service audit assessment or otherwise) that the amount of excise or other similar taxes payable by the Executive is greater than the amount initially so determined, then the Company shall pay the Executive an amount equal to the sum of: (i) such additional excise or other taxes, plus (ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse the Executive for any income, excise or other tax assessment payable by the Executive with respect to the receipt of the amounts specified in (i) and (ii) above, and the reimbursement provided by this clause (iii), in the manner described above in this Paragraph 7. Payment thereof shall be made within five (5) calendar days after the date upon which such subsequent determination is made.

8. 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

Page 7

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 Executive’s 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 Executive’s 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 8(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 6 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 constitute a waiver of such party’s right to assert all other legal remedies available to it under the circumstances.

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(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.

[Signatures on the following page.]

Page 9

          IN WITNESS WHEREOF, the parties have executed this Amended and Restated Employment Agreement on the day and year first set forth herein.

DEVELOPERS DIVERSIFIED REALTY
CORPORATION
By:	/s/ Nan R. Zieleniec Nan R. Zieleniec,
	Senior Vice President of Human Resources
	/s/ Joan U. Allgood Joan U. Allgood

EXHIBIT B

INCENTIVE OPPORTUNITY

Bonus As
% of Salary

Threshold	Target	Maximum
20%	40%	60%

EX-10.14

Exhibit 10.14

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as of the 6th day of November, 2006, between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and Richard E. Brown (the “Executive”).

W I T N E S S E T H:

     WHEREAS, the Company desires to employ the Executive, and the Executive desires to be employed by the Company, on the terms and subject to the conditions set forth herein; and

     WHEREAS, the Company and the Executive desire for this Amended and Restated Employment Agreement to amend and supersede any prior Employment Agreements between the Company and the Executive.

     NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties agree as follows:

1. Employment.

(a)

The Company hereby employs the Executive as its Executive Vice President of Real Estate Operations, 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 Real Estate Operations 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 Real Estate Operations 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, 2006, 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 Real Estate Operations 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 the Indemnification Agreement dated July 1, 2004 between the Company and the Executive (the “Indemnification Agreement”).
(c)	If:

(i)	the Company materially changes the Executive’s duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without his consent;
(ii)	the Executive’s 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 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 November 6, 2006, 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 the Executive hereunder up to and including the effective date of such termination.

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 Company’s usual pay practices (and in any event no less frequently than monthly) of not less than Two Hundred Fifty-Five Thousand Dollars ($255,000) 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, then the

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	Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of each fiscal year or, if applicable, the date of termination of employment, as the case may be, prorated on a per diem basis for partial fiscal years, determined and calculated in accordance with the percentages set forth on Exhibit B attached hereto. The Company’s 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.
(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 Agreement shall or shall be deemed to in any way affect the Executive’s 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 Company’s 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 Executive’s participation in and benefits under any such plan shall be on the terms and subject to the conditions specified in the governing documents of the particular plan.
(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 Company’s 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 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) In the event of the Executive’s death or if the Executive becomes “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 (i) the Executive’s then effective per annum rate of salary, as determined under Paragraph 3(a), plus (ii) a bonus amount prorated up to and including the effective date of termination and determined in accordance with Paragraph 3(b) based on the aggregate amount accrued for bonuses for the then current fiscal year as

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	presented in the Company’s general ledger for the month in which the Executive’s termination occurs, and shall continue the benefits described in Paragraph 3(c) for the Executive (except in the case of death) and the Executive’s family for a period of one (1) year.
(b)	The benefit to be paid pursuant to Paragraph 4(a) shall be paid within ninety (90) days after the date of death or disability, as the case may be.
(c)	For purposes of this Employment Agreement, the Executive shall become “disabled” only in the event of a permanent disability. Executive’s “disability” shall be deemed to have occurred after one hundred twenty (120) days in the aggregate during any consecutive twelve (12) month period, or after ninety (90) consecutive days, during which one hundred twenty (120) or ninety (90) days, as the case may be, the Executive, by reason of his physical or mental disability or illness, shall have been unable to discharge his duties under this Employment Agreement. The date of disability shall be such one hundred twentieth (120th) or ninetieth (90th) day, as the case may be. In the event either the Company or the Executive, after receipt of notice of the Executive’s disability from the other, dispute that the Executive’s permanent disability shall have occurred, the Executive shall promptly submit to a physical examination by the chief of medicine of any major accredited hospital in the Cleveland, Ohio, area and, unless such physician shall issue his written statement to the effect that in his opinion, based on his diagnosis, the Executive is capable of resuming his employment and devoting 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 Executive’s fraud, commission of a felony or of an act or series of acts which result in material injury to the business reputation of the Company, commission of an act or series of repeated acts of dishonesty which are materially inimical to the best interests of the Company, or the Executive’s willful and repeated failure to perform his duties under this Employment Agreement, which failure has not been cured within fifteen (15) days after the Company gives notice thereof to the Executive; or

(B)

The Executive’s 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 such termination date.

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	The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Company’s sole remedy if such right to terminate arises. Upon any termination of this Employment Agreement, the Executive shall be deemed to have resigned from all offices and directorships held by the Executive in the Company.
(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 Executive’s 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 effective date of such termination.
(d)	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 (i) the Executive’s then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (ii) a bonus amount prorated up to and including the effective date of termination and determined in accordance with Paragraph 3(b) based on the aggregate amount accrued for bonuses for the then current fiscal year as presented in the Company’s general ledger for the month in which the Executive’s termination occurs, and shall continue the benefits described in Paragraph 3(c) for a period of one (1) year.
(e)	Notwithstanding anything herein to the contrary, the Company shall not be obligated to make any payment or provide any benefit pursuant to Paragraph 4(a) or Paragraph 5(d) unless (i) the Executive executes a release of all current and future claims, known or unknown, arising on or before the date of the release against the Company and its subsidiaries and the directors, officers and affiliates of any of them, in a form approved by the Company (or, in the case of death, the Executive’s estate executes such release or such other documents as may be reasonably requested by the Company) and (ii) the Executive (or the Executive’s estate) does not revoke any required release during any applicable revocation period.

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     6. Covenants and Confidential Information.

(a) The Executive acknowledges the Company’s reliance and expectation of the Executive’s continued commitment to performance of the Executive’s 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 Company’s 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 Company’s 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 Executive’s 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 Executive’s 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 6 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 Executive’s violation of any legally enforceable provision of this Paragraph 6, 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 6 shall be deemed to limit the Company’s remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 6 which may be pursued or availed of by the Company.

Page 6

(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 6, 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 Executive’s 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.

7.

Tax Adjustment Payments. If all or any portion of the amounts payable to 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; but excluding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company or any Outperformance Long-Term Incentive Plan Agreement between the Executive and the Company) constitutes “excess parachute payments” within the meaning of Section 280G of the Code that are subject to the excise tax imposed by Section 4999 of the Code (or any similar tax or assessment), the amounts payable to the Executive shall be increased to the extent necessary to place the Executive in the same after-tax position as the Executive would have been in had no such tax been imposed on any such amount paid or payable to the Executive under this Employment Agreement, the Change in Control Agreement or any other amount that the Executive may receive pursuant thereto (other than pursuant to a Performance Unit Agreement or an Outperformance Long-Term Incentive Plan Agreement). The determination of the amount of any such tax and the incremental payment required hereby in connection therewith shall be made by the accounting firm employed by the Executive within thirty (30) calendar days after such payment and said incremental payment shall be made within five (5) calendar days after determination has been made. If, after the date upon which the payment required by this Paragraph 7 has been made, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of competent jurisdiction, Internal Revenue Service audit assessment or otherwise) that the amount of excise or other similar taxes payable by the Executive is greater than the amount initially so determined, then the Company shall pay the Executive an amount equal to the sum of: (i) such additional excise or other taxes, plus (ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse the Executive for any income, excise or other tax assessment payable by the Executive with respect to the receipt of the amounts specified in (i) and (ii) above, and the reimbursement provided by this clause (iii), in the manner described above in this Paragraph 7. Payment thereof shall be made within five (5) calendar days after the date upon which such subsequent determination is made.

8.

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 Executive’s 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 Executive’s

Page 7

	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 8(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 6 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 party’s 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.

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(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.

[Signatures on the following page.]

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     IN WITNESS WHEREOF, the parties have executed this Amended and Restated Employment Agreement on the day and year first set forth herein.

DEVELOPERS DIVERSIFIED REALTY CORPORATION
By:	/s/ Nan R. Zieleniec
	Nan R. Zieleniec,
	Senior Vice President of Human Resources
	/s/ Richard E. Brown
	Richard E. Brown

EXHIBIT B

INCENTIVE OPPORTUNITY

Bonus As
% of Salary

Threshold	Target			Maximum
15%		25	%		50	%

EX-10.15

Exhibit 10.15

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as of the 6th day of November, 2006, between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and Timothy J. Bruce (the “Executive”).

W I T N E S S E T H:

     WHEREAS, the Company desires to employ the Executive, and the Executive desires to be employed by the Company, on the terms and subject to the conditions set forth herein; and

     WHEREAS, the Company and the Executive desire for this Amended and Restated Employment Agreement to amend and supersede any prior Employment Agreements between the Company and the Executive.

     NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties agree as follows:

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, 2006, 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,

	and the Indemnification Agreement dated June 30, 2004 between the Company and the Executive (the “Indemnification Agreement”).
(c)	If:

(i)	the Company materially changes the Executive’s duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without his consent;
(ii)	the Executive’s 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 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 November 6, 2006, 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 the Executive hereunder up to and including the effective date of such termination.

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 Company’s usual pay practices (and in any event no less frequently than monthly) of not less than Two Hundred Ninety Thousand ($290,000) 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, then the

Page 2

	Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of each fiscal year or, if applicable, the date of termination of employment, as the case may be, prorated on a per diem basis for partial fiscal years, determined and calculated in accordance with the percentages set forth on Exhibit B attached hereto. The Company’s 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.
(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 Agreement shall or shall be deemed to in any way affect the Executive’s 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 Company’s 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 Executive’s participation in and benefits under any such plan shall be on the terms and subject to the conditions specified in the governing documents of the particular plan.
(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 Company’s 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 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) In the event of the Executive’s death or if the Executive becomes “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 (i) the Executive’s then effective per annum rate of salary, as determined under Paragraph 3(a), plus (ii) a bonus amount prorated up to and including the effective date of termination and determined in accordance with Paragraph 3(b) based on the aggregate amount accrued for bonuses for the then current fiscal year as

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	presented in the Company’s general ledger for the month in which the Executive’s termination occurs, and shall continue the benefits described in Paragraph 3(c) for the Executive (except in the case of death) and the Executive’s family for a period of one (1) year.
(b)	The benefit to be paid pursuant to Paragraph 4(a) shall be paid within ninety (90) days after the date of death or disability, as the case may be.
(c)	For purposes of this Employment Agreement, the Executive shall become “disabled” only in the event of a permanent disability. Executive’s “disability” shall be deemed to have occurred after one hundred twenty (120) days in the aggregate during any consecutive twelve (12) month period, or after ninety (90) consecutive days, during which one hundred twenty (120) or ninety (90) days, as the case may be, the Executive, by reason of his physical or mental disability or illness, shall have been unable to discharge his duties under this Employment Agreement. The date of disability shall be such one hundred twentieth (120th) or ninetieth (90th) day, as the case may be. In the event either the Company or the Executive, after receipt of notice of the Executive’s disability from the other, dispute that the Executive’s permanent disability shall have occurred, the Executive shall promptly submit to a physical examination by the chief of medicine of any major accredited hospital in the Cleveland, Ohio, area and, unless such physician shall issue his written statement to the effect that in his opinion, based on his diagnosis, the Executive is capable of resuming his employment and devoting 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 Executive’s fraud, commission of a felony or of an act or series of acts which result in material injury to the business reputation of the Company, commission of an act or series of repeated acts of dishonesty which are materially inimical to the best interests of the Company, or the Executive’s willful and repeated failure to perform his duties under this Employment Agreement, which failure has not been cured within fifteen (15) days after the Company gives notice thereof to the Executive; or

(B)

The Executive’s 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 such termination date.

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	The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Company’s sole remedy if such right to terminate arises. Upon any termination of this Employment Agreement, the Executive shall be deemed to have resigned from all offices and directorships held by the Executive in the Company.
(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 Executive’s 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 effective date of such termination.
(d)	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 (i) the Executive’s then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (ii) a bonus amount prorated up to and including the effective date of termination and determined in accordance with Paragraph 3(b) based on the aggregate amount accrued for bonuses for the then current fiscal year as presented in the Company’s general ledger for the month in which the Executive’s termination occurs, and shall continue the benefits described in Paragraph 3(c) for a period of one (1) year.
(e)	Notwithstanding anything herein to the contrary, the Company shall not be obligated to make any payment or provide any benefit pursuant to Paragraph 4(a) or Paragraph 5(d) unless (i) the Executive executes a release of all current and future claims, known or unknown, arising on or before the date of the release against the Company and its subsidiaries and the directors, officers and affiliates of any of them, in a form approved by the Company (or, in the case of death, the Executive’s estate executes such release or such other documents as may be reasonably requested by the Company) and (ii) the Executive (or the Executive’s estate) does not revoke any required release during any applicable revocation period.

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6. Covenants and Confidential Information.

(a) The Executive acknowledges the Company’s reliance and expectation of the Executive’s continued commitment to performance of the Executive’s 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 Company’s 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 Company’s 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 Executive’s 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 Executive’s 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 6 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 Executive’s violation of any legally enforceable provision of this Paragraph 6, 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 6 shall be deemed to limit the Company’s remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 6 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 him and the rights and remedies conferred upon the Company under this Paragraph 6, 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 Executive’s 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.

7.

Tax Adjustment Payments. If all or any portion of the amounts payable to 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; but excluding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company or any Outperformance Long-Term Incentive Plan Agreement between the Executive and the Company) constitutes “excess parachute payments” within the meaning of Section 280G of the Code that are subject to the excise tax imposed by Section 4999 of the Code (or any similar tax or assessment), the amounts payable to the Executive shall be increased to the extent necessary to place the Executive in the same after-tax position as the Executive would have been in had no such tax been imposed on any such amount paid or payable to the Executive under this Employment Agreement, the Change in Control Agreement or any other amount that the Executive may receive pursuant thereto (other than pursuant to a Performance Unit Agreement or an Outperformance Long-Term Incentive Plan Agreement). The determination of the amount of any such tax and the incremental payment required hereby in connection therewith shall be made by the accounting firm employed by the Executive within thirty (30) calendar days after such payment and said incremental payment shall be made within five (5) calendar days after determination has been made. If, after the date upon which the payment required by this Paragraph 7 has been made, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of competent jurisdiction, Internal Revenue Service audit assessment or otherwise) that the amount of excise or other similar taxes payable by the Executive is greater than the amount initially so determined, then the Company shall pay the Executive an amount equal to the sum of: (i) such additional excise or other taxes, plus (ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse the Executive for any income, excise or other tax assessment payable by the Executive with respect to the receipt of the amounts specified in (i) and (ii) above, and the reimbursement provided by this clause (iii), in the manner described above in this Paragraph 7. Payment thereof shall be made within five (5) calendar days after the date upon which such subsequent determination is made.

8.

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 Executive’s 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 Executive’s

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	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 8(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 6 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 party’s 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.

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(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.

[Signatures on the following page.]

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     IN WITNESS WHEREOF, the parties have executed this Amended and Restated Employment Agreement on the day and year first set forth herein.

DEVELOPERS DIVERSIFIED REALTY CORPORATION
By:	/s/ Nan R. Zieleniec
	Nan R. Zieleniec,
	Senior Vice President of Human Resources
	/s/ Timothy J. Bruce
	Timothy J. Bruce

EXHIBIT B

INCENTIVE OPPORTUNITY

Bonus As
% of Salary

Threshold	Target			Maximum
20%		40	%		60	%

EX-10.16

Exhibit 10.16

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as of the 6th day of November, 2006, between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and William H. Schafer (the “Executive”).

W I T N E S S E T H:

     WHEREAS, the Company desires to employ the Executive, and the Executive desires to be employed by the Company, on the terms and subject to the conditions set forth herein; and

     WHEREAS, the Company and the Executive desire for this Amended and Restated Employment Agreement to amend and supersede any prior Employment Agreements between the Company and the Executive.

     NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties agree as follows:

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, 2006, 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,

	and the Indemnification Agreement dated June 30, 2004 between the Company and the Executive (the “Indemnification Agreement”).
(c)	If:

(i)	the Company materially changes the Executive’s duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without his consent;
(ii)	the Executive’s 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 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 November 6, 2006, 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 the Executive hereunder up to and including the effective date of such termination.

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 Company’s usual pay practices (and in any event no less frequently than monthly) of not less than Two Hundred Seventy Thousand Dollars ($270,000) 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, then the

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	Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of each fiscal year or, if applicable, the date of termination of employment, as the case may be, prorated on a per diem basis for partial fiscal years, determined and calculated in accordance with the percentages set forth on Exhibit B attached hereto. The Company’s 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.
(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 Agreement shall or shall be deemed to in any way affect the Executive’s 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 Company’s 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 Executive’s participation in and benefits under any such plan shall be on the terms and subject to the conditions specified in the governing documents of the particular plan.
(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 Company’s 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 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 Company’s 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 Company’s business.

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4. Payment in the Event of Death or Disability.

(a)	In the event of the Executive’s death or if the Executive becomes “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 (i) the Executive’s then effective per annum rate of salary, as determined under Paragraph 3(a), plus (ii) a bonus amount prorated up to and including the effective date of termination and determined in accordance with Paragraph 3(b) based on the aggregate amount accrued for bonuses for the then current fiscal year as presented in the Company’s general ledger for the month in which the Executive’s termination occurs, and shall continue the benefits described in Paragraph 3(c) for the Executive (except in the case of death) and the Executive’s family for a period of one (1) year.
(b)	The benefit to be paid pursuant to Paragraph 4(a) shall be paid within ninety (90) days after the date of death or disability, as the case may be.
(c)	For purposes of this Employment Agreement, the Executive shall become “disabled” only in the event of a permanent disability. Executive’s “disability” shall be deemed to have occurred after one hundred twenty (120) days in the aggregate during any consecutive twelve (12) month period, or after ninety (90) consecutive days, during which one hundred twenty (120) or ninety (90) days, as the case may be, the Executive, by reason of his physical or mental disability or illness, shall have been unable to discharge his duties under this Employment Agreement. The date of disability shall be such one hundred twentieth (120th) or ninetieth (90th) day, as the case may be. In the event either the Company or the Executive, after receipt of notice of the Executive’s disability from the other, dispute that the Executive’s permanent disability shall have occurred, the Executive shall promptly submit to a physical examination by the chief of medicine of any major accredited hospital in the Cleveland, Ohio, area and, unless such physician shall issue his written statement to the effect that in his opinion, based on his diagnosis, the Executive is capable of resuming his employment and devoting 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 Executive’s fraud, commission of a felony or of an act or series of acts which result in material injury to the business reputation of the Company, commission of an act or series of repeated acts of dishonesty which are materially inimical to the best interests of the Company, or the Executive’s willful and repeated failure to perform his duties under this

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	Employment Agreement, which failure has not been cured within fifteen (15) days after the Company gives notice thereof to the Executive; or
(B)	The Executive’s 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 such termination date.

	The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Company’s sole remedy if such right to terminate arises. Upon any termination of this Employment Agreement, the Executive shall be deemed to have resigned from all offices and directorships held by the Executive in the Company.
(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 Executive’s 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 effective date of such termination.
(d)	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 (i) the Executive’s then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (ii) a bonus amount prorated up to and including the effective date of termination and determined in accordance with Paragraph 3(b) based on the aggregate amount accrued for bonuses for the then current fiscal year as presented in the Company’s general ledger for the month in which the Executive’s termination occurs, and shall continue the benefits described in Paragraph 3(c) for a period of one (1) year.

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(e) Notwithstanding anything herein to the contrary, the Company shall not be obligated to make any payment or provide any benefit pursuant to Paragraph 4(a) or Paragraph 5(d) unless (i) the Executive executes a release of all current and future claims, known or unknown, arising on or before the date of the release against the Company and its subsidiaries and the directors, officers and affiliates of any of them, in a form approved by the Company (or, in the case of death, the Executive’s estate executes such release or such other documents as may be reasonably requested by the Company) and (ii) the Executive (or the Executive’s estate) does not revoke any required release during any applicable revocation period.

6. Covenants and Confidential Information.

(a) The Executive acknowledges the Company’s reliance and expectation of the Executive’s continued commitment to performance of the Executive’s 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 Company’s 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 Company’s 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 Executive’s 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 Executive’s 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.

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(c)

The Executive agrees and understands that the remedy at law for any breach by the Executive of this Paragraph 6 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 Executive’s violation of any legally enforceable provision of this Paragraph 6, 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 6 shall be deemed to limit the Company’s remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 6 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 6, 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 Executive’s 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.

7. Tax Adjustment Payments. If all or any portion of the amounts payable to 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; but excluding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company or any Outperformance Long-Term Incentive Plan Agreement between the Executive and the Company) constitutes “excess parachute payments” within the meaning of Section 280G of the Code that are subject to the excise tax imposed by Section 4999 of the Code (or any similar tax or assessment), the amounts payable to the Executive shall be increased to the extent necessary to place the Executive in the same after-tax position as the Executive would have been in had no such tax been imposed on any such amount paid or payable to the Executive under this Employment Agreement, the Change in Control Agreement or any other amount that the Executive may receive pursuant thereto (other than pursuant to a Performance Unit Agreement or an Outperformance Long-Term Incentive Plan Agreement). The determination of the amount of any such tax and the incremental payment required hereby in connection therewith shall be made by the accounting firm employed by the Executive within thirty (30) calendar days after such payment and said incremental payment shall be made within five (5) calendar days after determination has been made. If, after the date upon which the payment required by this Paragraph 7 has been made, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of competent jurisdiction, Internal Revenue Service audit assessment or otherwise) that the amount of excise or other similar taxes payable by the Executive is greater than the amount initially so determined, then the Company shall pay the Executive an amount equal to the sum of: (i) such additional excise or other taxes, plus (ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse the Executive for any income, excise or other tax assessment payable by the Executive with respect to the receipt of the amounts specified in (i) and (ii) above, and the reimbursement provided by this clause (iii), in the manner described above in this Paragraph 7. Payment thereof shall be made within five (5) calendar days after the date upon which such subsequent determination is made.

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8. 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 Executive’s 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 Executive’s 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 8(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 6 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

Page 8

	constitute a waiver of such party’s 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.

[Signatures on the following page.]

Page 9

     IN WITNESS WHEREOF, the parties have executed this Amended and Restated Employment Agreement on the day and year first set forth herein.

DEVELOPERS DIVERSIFIED REALTY CORPORATION
By:	/s/ Nan R. Zieleniec
	Nan R. Zieleniec,
	Senior Vice President of Human Resources
	/s/ William H. Schafer
	William H. Schafer

EXHIBIT B

INCENTIVE OPPORTUNITY

Bonus As
% of Salary

Threshold	Target			Maximum
20%		40	%		60	%

EX-10.17

Exhibit 10.17

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT is entered into as of the 6th day of November, 2006, between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and Robin R. Walker-Gibbons (the “Executive”).

W I T N E S S E T H:

     WHEREAS, the Company desires to employ the Executive, and the Executive desires to be employed by the Company, on the terms and subject to the conditions set forth herein; and

     NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties agree as follows:

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 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, 2006, 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 the Indemnification Agreement dated November 6, 2006 between the Company and the Executive (the “Indemnification Agreement”).
(c)	If:

(i)	the Company materially changes the Executive’s duties and responsibilities as set forth in Paragraphs 1(b) and 2(b) without her consent;
(ii)	the Executive’s 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 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 November 6, 2006, 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 the Executive hereunder up to and including the effective date of such termination.

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 Company’s usual pay practices (and in any event no less frequently than monthly) of not less than Two Hundred Thirty-Five Thousand Dollars ($235,000) 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, then the Company shall pay to the Executive bonus compensation for such fiscal year, not later than 75 days following the end of each fiscal year or, if applicable, the date of termination of employment, as the case may be, prorated on a per diem basis for partial fiscal years, determined and calculated in accordance with the percentages set forth on Exhibit B attached hereto. The Company’s award of bonus compensation to the

Page 2

	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.
(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 Agreement shall or shall be deemed to in any way affect the Executive’s 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 Company’s 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 Executive’s participation in and benefits under any such plan shall be on the terms and subject to the conditions specified in the governing documents of the particular plan.
(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 Company’s 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)

In the event of the Executive’s death or if the Executive becomes “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 (i) the Executive’s then effective per annum rate of salary, as determined under Paragraph 3(a), plus (ii) a bonus amount prorated up to and including the effective date of termination and determined in accordance with Paragraph 3(b) based on the aggregate amount accrued for bonuses for the then current fiscal year as presented in the Company’s general ledger for the month in which the Executive’s termination occurs, and shall continue the benefits described in Paragraph 3(c) for the Executive (except in the case of death) and the Executive’s family for a period of one (1) year.

(b)

The benefit to be paid pursuant to Paragraph 4(a) shall be paid within ninety (90) days after the date of death or disability, as the case may be.

Page 3

(c) For purposes of this Employment Agreement, the Executive shall become “disabled” only in the event of a permanent disability. Executive’s “disability” shall be deemed to have occurred after one hundred twenty (120) days in the aggregate during any consecutive twelve (12) month period, or after ninety (90) consecutive days, during which one hundred twenty (120) or ninety (90) days, as the case may be, the Executive, by reason of 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 (120^th) or ninetieth (90^th) day, as the case may be. In the event either the Company or the Executive, after receipt of notice of the Executive’s disability from the other, dispute that the Executive’s permanent disability shall have occurred, the Executive shall promptly submit to a physical examination by the chief of medicine of any major accredited hospital in the Cleveland, Ohio, area and, unless such physician shall issue his written statement to the effect that in his opinion, based on his diagnosis, the Executive is capable of resuming 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 Executive’s fraud, commission of a felony or of an act or series of acts which result in material injury to the business reputation of the Company, commission of an act or series of repeated acts of dishonesty which are materially inimical to the best interests of the Company, or the Executive’s willful and repeated failure to perform 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 Executive’s 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 such termination date.

The exercise by the Company of its rights of termination under this Paragraph 5 shall be the Company’s sole remedy if such right to terminate arises. Upon any termination of this Employment Agreement, the Executive shall be deemed to have resigned from all offices and directorships held by the Executive in the Company.

(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

Page 4

	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 Executive’s 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 effective date of such termination.
(d)	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 (i) the Executive’s then effective per annum rate of salary, as determined under Paragraph 3(a), plus, (ii) a bonus amount prorated up to and including the effective date of termination and determined in accordance with Paragraph 3(b) based on the aggregate amount accrued for bonuses for the then current fiscal year as presented in the Company’s general ledger for the month in which the Executive’s termination occurs, and shall continue the benefits described in Paragraph 3(c) for a period of one (1) year.
(e)	Notwithstanding anything herein to the contrary, the Company shall not be obligated to make any payment or provide any benefit pursuant to Paragraph 4(a) or Paragraph 5(d) unless (i) the Executive executes a release of all current and future claims, known or unknown, arising on or before the date of the release against the Company and its subsidiaries and the directors, officers and affiliates of any of them, in a form approved by the Company (or, in the case of death, the Executive’s estate executes such release or such other documents as may be reasonably requested by the Company) and (ii) the Executive (or the Executive’s estate) does not revoke any required release during any applicable revocation period.

6. Covenants and Confidential Information.

(a) The Executive acknowledges the Company’s reliance and expectation of the Executive’s continued commitment to performance of the Executive’s 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

Page 5

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 Company’s 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 Company’s 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 Executive’s 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 Executive’s 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 6 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 Executive’s violation of any legally enforceable provision of this Paragraph 6, 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 6 shall be deemed to limit the Company’s remedies at law or in equity for any breach by the Executive of any of the provisions of this Paragraph 6 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 6, 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 Executive’s sole means of support, are fully required to protect the legitimate interests

Page 6

of the Company and do not confer a benefit upon the Company disproportionate to the detriment to the Executive.

7.

Tax Adjustment Payments. If all or any portion of the amounts payable to 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; but excluding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company or any Outperformance Long-Term Incentive Plan Agreement between the Executive and the Company) constitutes “excess parachute payments” within the meaning of Section 280G of the Code that are subject to the excise tax imposed by Section 4999 of the Code (or any similar tax or assessment), the amounts payable to the Executive shall be increased to the extent necessary to place the Executive in the same after-tax position as the Executive would have been in had no such tax been imposed on any such amount paid or payable to the Executive under this Employment Agreement, the Change in Control Agreement or any other amount that the Executive may receive pursuant thereto (other than pursuant to a Performance Unit Agreement or an Outperformance Long-Term Incentive Plan Agreement). The determination of the amount of any such tax and the incremental payment required hereby in connection therewith shall be made by the accounting firm employed by the Executive within thirty (30) calendar days after such payment and said incremental payment shall be made within five (5) calendar days after determination has been made. If, after the date upon which the payment required by this Paragraph 7 has been made, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of competent jurisdiction, Internal Revenue Service audit assessment or otherwise) that the amount of excise or other similar taxes payable by the Executive is greater than the amount initially so determined, then the Company shall pay the Executive an amount equal to the sum of: (i) such additional excise or other taxes, plus (ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse the Executive for any income, excise or other tax assessment payable by the Executive with respect to the receipt of the amounts specified in (i) and (ii) above, and the reimbursement provided by this clause (iii), in the manner described above in this Paragraph 7. Payment thereof shall be made within five (5) calendar days after the date upon which such subsequent determination is made.

8.

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 Executive’s 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 Executive’s 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,

Page 7

	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 8(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 6 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 constitute a waiver of such party’s 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.

Page 8

[Signatures on the following page.]

Page 9

     IN WITNESS WHEREOF, the parties have executed this Employment Agreement on the day and year first set forth herein.

DEVELOPERS DIVERSIFIED REALTY CORPORATION
By:	/s/ Nan R. Zieleniec
	Nan R. Zieleniec,
	Senior Vice President of Human Resources

/s/ Robin R. Walker-Gibbons  

Robin R. Walker-Gibbons 

EXHIBIT B

INCENTIVE OPPORTUNITY

Bonus As
% of Salary

Threshold	Target	Maximum
15%	25%	50%

EX-10.18

Exhibit 10.18

AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT

     THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (this “Agreement”), is between Developers Diversified Realty Corporation, an Ohio corporation (the “Employer”), and Joan U. Allgood (“Executive”) made this 6^th day of November, 2006.

RECITALS

     WHEREAS, Executive is presently employed by Employer as its Executive Vice President of Corporate Transactions and Governance and Secretary;

     WHEREAS, Employer wishes to induce Executive to continue as its Executive Vice President of Corporate Transactions and Governance and Secretary and, accordingly, to provide certain employment security to Executive in the event of a “Change in Control” (as hereinafter defined);

     WHEREAS, Employer believes that it is in the best interest of its shareholders for Executive to continue in her position on an objective and impartial basis and without distraction or conflict of interest as a result of a possible or actual Change in Control;

     WHEREAS, In consideration of this Agreement Executive is willing to continue as Employer’s Executive Vice President of Corporate Transactions and Governance and Secretary; and

     WHEREAS, Employer and Executive desire for this Amended and Restated Change in Control Agreement to amend and supersede the Change in Control Agreement, dated as of May 24, 1999, between Employer and Executive, and any other Amended and Restated Change in Control Agreements entered into prior to the date hereof (the “Prior Change in Control Agreements”).

     NOW THEREFORE, IN CONSIDERATION OF EXECUTIVE CONTINUING AS THE EXECUTIVE VICE PRESIDENT OF CORPORATE TRANSACTIONS AND GOVERNANCE AND SECRETARY OF EMPLOYER AND OF THE MUTUAL PROMISES HEREIN CONTAINED, EXECUTIVE AND EMPLOYER, INTENDING TO BE LEGALLY BOUND, HEREBY AGREE AS FOLLOWS:

ARTICLE I

DEFINITIONS

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 Employer’s outstanding securities;
(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 Executive’s title, responsibilities, power or authority in comparison with the Executive’s title, responsibilities, power or authority at the time of the Change in Control;
(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;
(d)	Within two years from the date on which the Change in Control occurred, Employer (i) reduces Executive’s base compensation, her incentive opportunity bonus percentages of salary, her group health, life, disability or other insurance programs (including any such benefits provided to Executive’s family), her pension, retirement or profit-sharing benefits or any benefits provided by any of Employer’s equity-based award plans, or any substitute therefor, (ii) establishes criteria and factors to be achieved for the payment of bonus compensation that are substantially different than the criteria and factors

Page 2

	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 bonus, or (iv) excludes the Executive from any plan, program or arrangement in which similar executive officers of Employer are included; 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.

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. “Executive’s Annual Bonus” means Executive’s annual bonus at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher, calculated on the basis of the maximum bonus available to Executive and the assumption that all performance goals have been or will be achieved by Employer and Executive in the year in which such Triggering Event or such Change in Control, as the case may be, occurred.

8. “Executive’s Annual Salary” means Executive’s annual base salary at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher.

ARTICLE II

SEVERANCE PAYMENT

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. This lump sum severance payment will be paid by Employer to Executive within five business days after the occurrence of a Triggering Event in immediately available funds in an amount equal to the sum of (i) two times Executive’s Annual Bonus plus (ii) two times Executive’s Annual Salary. In addition, Employer shall, at its expense, provide Executive, and his family, with life, disability, medical, hospitalization, vision, dental, 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 (i) 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 his family received from Employer or (ii) the second anniversary of the date of the Triggering Event. Notwithstanding the foregoing, in the event that it is determined that any payment to be made hereunder is considered “nonqualified deferred compensation” subject to Section 409A of the American Jobs Creation Act of 2004, payment under this Section will be delayed for six months following termination of employment.

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2. Employer shall provide Executive, at Employer’s expense, with outplacement services and support, the scope and provider of which will be selected by Executive, for a period of one year following the date of the Triggering Event.

3. If all or any portion of the amounts payable to Executive under this Agreement or the Executive’s 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, but excluding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company or any Outperformance Long-Term Incentive Plan Agreement between the Executive and the Company) constitutes “excess parachute payments” within the meaning of Section 280G of the Code that are subject to the excise tax imposed by Section 4999 of the Code (or any similar tax or assessment), the amounts payable to Executive shall be increased to the extent necessary to place Executive in the same after-tax position as the Executive would have been in had no such tax been imposed on any such amount paid or payable to Executive under this Agreement, the Executive’s Amended and Restated Employment Agreement or any other amount that Executive may receive pursuant thereto (other than pursuant to a Performance Unit Agreement or an Outperformance Long-Term Incentive Plan Agreement). The determination of the amount of any such tax and the incremental payment required hereby in connection therewith shall be made by the accounting firm employed by Executive within thirty (30) calendar days after the severance payment is made pursuant to Paragraph 1 of this Article II and said incremental payment shall be made within five (5) calendar days after determination has been made. If, after the date upon which the payment required by this Article II, Paragraph 3 has been made, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of competent jurisdiction, Internal Revenue Service audit assessment or otherwise) that the amount of excise or other similar taxes payable by Executive is greater than the amount initially so determined, then Employer shall pay Executive an amount equal to the sum of: (i) such additional excise or other taxes, plus (ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse Executive for any income, excise or other tax assessment payable by Executive with respect to the receipt of the amounts specified in (i) and (ii) above, and the reimbursement provided by this clause (iii), in the manner described above in this Article II, Paragraph 3. Payment thereof shall be made within five (5) calendar days after the date upon which such subsequent determination is made.

ARTICLE III

SETOFF

     No amounts otherwise due or payable under this Agreement will be subject to setoff or counterclaim by either party hereto.

ARTICLE IV

ATTORNEY’S FEES

     All attorney’s fees and related expenses incurred by Executive in connection with or relating to the enforcement by her of her rights under this Agreement will be paid for by Employer.

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ARTICLE V

SUCCESSORS AND PARTIES IN INTEREST

     This Agreement will be binding upon and will inure to the benefit of Employer and its successors and assigns, including, without limitation, any corporation which acquires, directly or indirectly, by purchase, merger, consolidation or otherwise, all or substantially all of the business or assets of Employer. Without limitation of the foregoing, Employer will require any such successor, by agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that it is required to be performed by Employer. This Agreement will be binding upon and will inure to the benefit of Executive, her heirs at law and her personal representatives.

ARTICLE VI

ATTACHMENT

     Neither this Agreement nor any benefits payable hereunder will be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge or to execution, attachment, levy or similar process at law, whether voluntary or involuntary.

ARTICLE VII

EMPLOYMENT CONTRACT

     This Agreement will not in any way constitute an employment agreement between Employer and Executive and it will not oblige Executive to continue in the employ of Employer, nor will it oblige Employer to continue to employ Executive, but it will merely require Employer to pay severance benefits to Executive under certain circumstances, as aforesaid. In addition, this Agreement will be considered terminated, and of no further force and effect, if Executive ceases to be a Board-elected officer or an appointed officer or a key employee (as determined by the Board of Directors of Employer in its sole discretion and reflected in the minutes of Board of Directors after notice to such Executive) of Employer prior to a Change in Control of Employer.

ARTICLE VIII

RIGHTS UNDER OTHER PLANS AND AGREEMENTS

     Except as provided in the Amended and Restated Employment Agreement between the Employer and Executive, the severance benefits herein provided will be in addition to, and are not intended to reduce, restrict or eliminate, any benefit to which Executive may otherwise be entitled by virtue of her termination of employment or otherwise.

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ARTICLE IX

NOTICES

     All notices and other communications required to be given hereunder shall be in writing and will be deemed to have been delivered or made when mailed, by certified mail, return receipt requested, if to Executive, to the last address which Executive shall provide to Employer, in writing, for this purpose, but if Executive has not then provided such an address, then to the last address of Executive then on file with Employer; and if to Employer, then to the last address which Employer shall provide to Executive, in writing, for this purpose, but if Employer has not then provided Executive with such an address, then to:

Corporate Secretary
Developers Diversified Realty Corporation
3300 Enterprise Parkway
Beachwood, Ohio 44122

ARTICLE X

GOVERNING LAW AND JURISDICTION

     This Agreement will be governed by, and construed in accordance with, the laws of the State of Ohio, except for the laws governing conflict of laws. If either party institutes a suit or other legal proceedings, whether in law or equity, Executive and Employer hereby irrevocably consent to the jurisdiction of the Common Pleas Court of the State of Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.

ARTICLE XI

ENTIRE AGREEMENT

     This Agreement constitutes the entire understanding between Employer and Executive concerning the subject matter hereof and supersedes all prior written or oral agreements or understandings between the parties hereto, including, without limitation, the Prior Change in Control Agreements. No term or provision of this Agreement may be changed, waived, amended or terminated except by a written instrument.

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          IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Agreement, the parties have hereunto set their hands as of the date and year first above written.

DEVELOPERS DIVERSIFIED REALTY CORPORATION
By:	/s/ Nan R. Zieleniec
	NAN R. ZIELENIEC Senior Vice President of Human Resources
/s/ Joan U. Allgood
JOAN U. ALLGOOD

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EX-10.19

Exhibit 10.19

AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT

     THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (this “Agreement”), is between Developers Diversified Realty Corporation, an Ohio corporation (the “Employer”), and Richard E. Brown (“Executive”) made this 6^th day of November, 2006.

RECITALS

     WHEREAS, Executive is presently employed by Employer as its Executive Vice President of Real Estate Operations;

     WHEREAS, Employer wishes to induce Executive to continue as its Executive Vice President of Real Estate Operations and, accordingly, to provide certain employment security to Executive in the event of a “Change in Control” (as hereinafter defined);

     WHEREAS, Employer believes that it is in the best interest of its shareholders for Executive to continue in his position on an objective and impartial basis and without distraction or conflict of interest as a result of a possible or actual Change in Control;

     WHEREAS, In consideration of this Agreement Executive is willing to continue as Employer’s Executive Vice President of Real Estate Operation; and

     WHEREAS, Employer and Executive desire for this Amended and Restated Change in Control Agreement to amend and supersede the Change in Control Agreement, dated as of March 1, 2002, between Employer and Executive, and any other Change in Control Agreements between Employer and Executive entered into prior to the date hereof (the “Prior Change in Control Agreements”).

     NOW THEREFORE, IN CONSIDERATION OF EXECUTIVE CONTINUING AS THE EXECUTIVE VICE PRESIDENT OF REAL ESTATE OPERATIONS OF EMPLOYER AND OF THE MUTUAL PROMISES HEREIN CONTAINED, EXECUTIVE AND EMPLOYER, INTENDING TO BE LEGALLY BOUND, HEREBY AGREE AS FOLLOWS:

ARTICLE I

DEFINITIONS

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 Employer’s outstanding securities;
(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 Executive’s title, responsibilities, power or authority in comparison with the Executive’s title, responsibilities, power or authority at the time of the Change in Control;
(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;
(d)	Within two years from the date on which the Change in Control occurred, Employer (i) reduces Executive’s base compensation, his incentive opportunity bonus percentages of salary, his group health, life, disability or other insurance programs (including any such benefits provided to Executive’s family), his pension, retirement or profit-sharing benefits or any benefits provided by any of Employer’s equity-based award plans, or any substitute therefor, (ii) establishes criteria and factors to be achieved for the payment of bonus compensation that are substantially different than the criteria and factors

Page 2

	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 bonus, or (iv) excludes the Executive from any plan, program or arrangement in which similar executive officers of Employer are included; 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.

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. “Executive’s Annual Bonus” means Executive’s annual bonus at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher, calculated on the basis of the maximum bonus available to Executive and the assumption that all performance goals have been or will be achieved by Employer and Executive in the year in which such Triggering Event or such Change in Control, as the case may be, occurred.

8. “Executive’s Annual Salary” means Executive’s annual base salary at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher.

ARTICLE II

SEVERANCE PAYMENT

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. This lump sum severance payment will be paid by Employer to Executive within five business days after the occurrence of a Triggering Event in immediately available funds in an amount equal to the sum of (i) two times Executive’s Annual Bonus plus (ii) two times Executive’s Annual Salary. In addition, Employer shall, at its expense, provide Executive, and his family, with life, disability, medical, hospitalization, vision, dental 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 (i) 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 his family received from Employer or (ii) the second anniversary of the date of the Triggering Event. Notwithstanding the foregoing, in the event that it is determined that any payment to be made hereunder is considered “nonqualified deferred compensation” subject to Section 409A of the American Jobs Creation Act of 2004, payment under this Section will be delayed for six months following termination of employment.

Page 3

2. Employer shall provide Executive, at Employer’s expense, with outplacement services and support, the scope and provider of which will be selected by Executive, for a period of one year following the date of the Triggering Event.

3. If all or any portion of the amounts payable to Executive under this Agreement or the Executive’s 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, but excluding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company or any Outperformance Long-Term Incentive Plan Agreement between the Executive and the Company) constitutes “excess parachute payments” within the meaning of Section 280G of the Code that are subject to the excise tax imposed by Section 4999 of the Code (or any similar tax or assessment), the amounts payable to Executive shall be increased to the extent necessary to place Executive in the same after-tax position as the Executive would have been in had no such tax been imposed on any such amount paid or payable to Executive under this Agreement, the Executive’s Amended and Restated Employment Agreement or any other amount that Executive may receive pursuant thereto (other than pursuant to a Performance Unit Agreement or an Outperformance Long-Term Incentive Plan Agreement). The determination of the amount of any such tax and the incremental payment required hereby in connection therewith shall be made by the accounting firm employed by Executive within thirty (30) calendar days after the severance payment is made pursuant to Paragraph 1 of this Article II and said incremental payment shall be made within five (5) calendar days after determination has been made. If, after the date upon which the payment required by this Article II, Paragraph 3 has been made, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of competent jurisdiction, Internal Revenue Service audit assessment or otherwise) that the amount of excise or other similar taxes payable by Executive is greater than the amount initially so determined, then Employer shall pay Executive an amount equal to the sum of: (i) such additional excise or other taxes, plus (ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse Executive for any income, excise or other tax assessment payable by Executive with respect to the receipt of the amounts specified in (i) and (ii) above, and the reimbursement provided by this clause (iii), in the manner described above in this Article II, Paragraph 3. Payment thereof shall be made within five (5) calendar days after the date upon which such subsequent determination is made.

ARTICLE III

SETOFF

     No amounts otherwise due or payable under this Agreement will be subject to setoff or counterclaim by either party hereto.

ARTICLE IV

ATTORNEY’S FEES

     All attorney’s fees and related expenses incurred by Executive in connection with or relating to the enforcement by him of his rights under this Agreement will be paid for by Employer.

Page 4

ARTICLE V

SUCCESSORS AND PARTIES IN INTEREST

     This Agreement will be binding upon and will inure to the benefit of Employer and its successors and assigns, including, without limitation, any corporation which acquires, directly or indirectly, by purchase, merger, consolidation or otherwise, all or substantially all of the business or assets of Employer. Without limitation of the foregoing, Employer will require any such successor, by agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that it is required to be performed by Employer. This Agreement will be binding upon and will inure to the benefit of Executive, his heirs at law and his personal representatives.

ARTICLE VI

ATTACHMENT

     Neither this Agreement nor any benefits payable hereunder will be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge or to execution, attachment, levy or similar process at law, whether voluntary or involuntary.

ARTICLE VII

EMPLOYMENT CONTRACT

     This Agreement will not in any way constitute an employment agreement between Employer and Executive and it will not oblige Executive to continue in the employ of Employer, nor will it oblige Employer to continue to employ Executive, but it will merely require Employer to pay severance benefits to Executive under certain circumstances, as aforesaid. In addition, this Agreement will be considered terminated, and of no further force and effect, if Executive ceases to be a Board-elected officer or an appointed officer or a key employee (as determined by the Board of Directors of Employer in its sole discretion and reflected in the minutes of Board of Directors after notice to such Executive) of Employer prior to a Change in Control of Employer.

ARTICLE VIII

RIGHTS UNDER OTHER PLANS AND AGREEMENTS

     Except as provided in the Amended and Restated Employment Agreement between the Employer and Executive, the severance benefits herein provided will be in addition to, and are not intended to reduce, restrict or eliminate, any benefit to which Executive may otherwise be entitled by virtue of his termination of employment or otherwise.

Page 5

ARTICLE IX

NOTICES

     All notices and other communications required to be given hereunder shall be in writing and will be deemed to have been delivered or made when mailed, by certified mail, return receipt requested, if to Executive, to the last address which Executive shall provide to Employer, in writing, for this purpose, but if Executive has not then provided such an address, then to the last address of Executive then on file with Employer; and if to Employer, then to the last address which Employer shall provide to Executive, in writing, for this purpose, but if Employer has not then provided Executive with such an address, then to:

Corporate Secretary
Developers Diversified Realty Corporation
3300 Enterprise Parkway
Beachwood, Ohio 44122

ARTICLE X

GOVERNING LAW AND JURISDICTION

     This Agreement will be governed by, and construed in accordance with, the laws of the State of Ohio, except for the laws governing conflict of laws. If either party institutes a suit or other legal proceedings, whether in law or equity, Executive and Employer hereby irrevocably consent to the jurisdiction of the Common Pleas Court of the State of Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.

ARTICLE XI

ENTIRE AGREEMENT

     This Agreement constitutes the entire understanding between Employer and Executive concerning the subject matter hereof and supersedes all prior written or oral agreements or understandings between the parties hereto, including, without limitation, the Prior Change in Control Agreements. No term or provision of this Agreement may be changed, waived, amended or terminated except by a written instrument.

Page 6

     IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Agreement, the parties have hereunto set their hands as of the date and year first above written.

DEVELOPERS DIVERSIFIED REALTY CORPORATION
By:	Nan R. Zieleniec
	NAN R. ZIELENIEC,
	Senior Vice President of Human Resources

/s/ Richard E. Brown  

RICHARD E. BROWN 

Page 7

EX-10.20

Exhibit 10.20

AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT

     THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (this “Agreement”), is between Developers Diversified Realty Corporation, an Ohio corporation (the “Employer”), and Timothy J. Bruce (“Executive”) made this 6^th day of November, 2006.

RECITALS

     WHEREAS, Executive is presently employed by Employer as its Executive Vice President of Development;

     WHEREAS, Employer wishes to induce Executive to continue as its Executive Vice President of Development and, accordingly, to provide certain employment security to Executive in the event of a “Change in Control” (as hereinafter defined);

     WHEREAS, Employer believes that it is in the best interest of its shareholders for Executive to continue in his position on an objective and impartial basis and without distraction or conflict of interest as a result of a possible or actual Change in Control;

     WHEREAS, In consideration of this Agreement Executive is willing to continue as Employer’s Executive Vice President of Development; and

     WHEREAS, Employer and Executive desire for this Amended and Restated Change in Control Agreement to amend and supersede the Change in Control Agreement, dated as of November 15, 2002, between Employer and Executive, and any other Change in Control Agreement between Employer and Executive entered into prior to the date hereof (the “Prior Change in Control Agreements”).

     NOW THEREFORE, IN CONSIDERATION OF EXECUTIVE CONTINUING AS THE EXECUTIVE VICE PRESIDENT OF DEVELOPMENT OF EMPLOYER AND OF THE MUTUAL PROMISES HEREIN CONTAINED, EXECUTIVE AND EMPLOYER, INTENDING TO BE LEGALLY BOUND, HEREBY AGREE AS FOLLOWS:

ARTICLE I

DEFINITIONS

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 Employer’s outstanding securities;
(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 Executive’s title, responsibilities, power or authority in comparison with the Executive’s title, responsibilities, power or authority at the time of the Change in Control;
(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;
(d)	Within two years from the date on which the Change in Control occurred, Employer (i) reduces Executive’s base compensation, his incentive opportunity bonus percentages of salary, his group health, life, disability or other insurance programs (including any such benefits provided to Executive’s family), his pension, retirement or profit-sharing benefits or any benefits provided by any of Employer’s equity-based award plans, or any substitute therefor, (ii) establishes criteria and factors to be achieved for the payment of bonus compensation that are substantially different than the criteria and factors

Page 2

	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 bonus, or (iv) excludes the Executive from any plan, program or arrangement in which similar executive officers of Employer are included; 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.

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.	“Executive’s Annual Bonus” means Executive’s annual bonus at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher, calculated on the basis of the maximum bonus available to Executive and the assumption that all performance goals have been or will be achieved by Employer and Executive in the year in which such Triggering Event or such Change in Control, as the case may be, occurred.
8.	“Executive’s Annual Salary” means Executive’s annual base salary at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher.

ARTICLE II

SEVERANCE PAYMENT

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. This lump sum severance payment will be paid by Employer to Executive within five business days after the occurrence of a Triggering Event in immediately available funds in an amount equal to the sum of (i) two times Executive’s Annual Bonus plus (ii) two times Executive’s Annual Salary. In addition, Employer shall, at its expense, provide Executive, and his family, with life, disability, medical, hospitalization, vision, dental 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 (i) 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 his family received from Employer or (ii) the second anniversary of the date of the Triggering Event. Notwithstanding the foregoing, in the event that it is determined that any payment to be made hereunder is considered “nonqualified deferred compensation” subject to Section 409A of the American Jobs Creation Act of 2004, payment under this Section will be delayed for six months following termination of employment.

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2.

Employer shall provide Executive, at Employer’s expense, with outplacement services and support, the scope and provider of which will be selected by Executive, for a period of one year following the date of the Triggering Event.

3.

If all or any portion of the amounts payable to Executive under this Agreement or the Executive’s 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, but excluding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company or any Outperformance Long-Term Incentive Plan Agreement between the Executive and the Company) constitutes “excess parachute payments” within the meaning of Section 280G of the Code that are subject to the excise tax imposed by Section 4999 of the Code (or any similar tax or assessment), the amounts payable to Executive shall be increased to the extent necessary to place Executive in the same after-tax position as the Executive would have been in had no such tax been imposed on any such amount paid or payable to Executive under this Agreement, the Executive’s Amended and Restated Employment Agreement or any other amount that Executive may receive pursuant thereto (other than pursuant to a Performance Unit Agreement or an Outperformance Long-Term Incentive Plan Agreement). The determination of the amount of any such tax and the incremental payment required hereby in connection therewith shall be made by the accounting firm employed by Executive within thirty (30) calendar days after the severance payment is made pursuant to Paragraph 1 of this Article II and said incremental payment shall be made within five (5) calendar days after determination has been made. If, after the date upon which the payment required by this Article II, Paragraph 3 has been made, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of competent jurisdiction, Internal Revenue Service audit assessment or otherwise) that the amount of excise or other similar taxes payable by Executive is greater than the amount initially so determined, then Employer shall pay Executive an amount equal to the sum of: (i) such additional excise or other taxes, plus (ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse Executive for any income, excise or other tax assessment payable by Executive with respect to the receipt of the amounts specified in (i) and (ii) above, and the reimbursement provided by this clause (iii), in the manner described above in this Article II, Paragraph 3. Payment thereof shall be made within five (5) calendar days after the date upon which such subsequent determination is made.

ARTICLE III

SETOFF

     No amounts otherwise due or payable under this Agreement will be subject to setoff or counterclaim by either party hereto.

ARTICLE IV

ATTORNEY’S FEES

     All attorney’s fees and related expenses incurred by Executive in connection with or relating to the enforcement by him of his rights under this Agreement will be paid for by Employer.

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ARTICLE V

SUCCESSORS AND PARTIES IN INTEREST

     This Agreement will be binding upon and will inure to the benefit of Employer and its successors and assigns, including, without limitation, any corporation which acquires, directly or indirectly, by purchase, merger, consolidation or otherwise, all or substantially all of the business or assets of Employer. Without limitation of the foregoing, Employer will require any such successor, by agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that it is required to be performed by Employer. This Agreement will be binding upon and will inure to the benefit of Executive, his heirs at law and his personal representatives.

ARTICLE VI

ATTACHMENT

     Neither this Agreement nor any benefits payable hereunder will be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge or to execution, attachment, levy or similar process at law, whether voluntary or involuntary.

ARTICLE VII

EMPLOYMENT CONTRACT

     This Agreement will not in any way constitute an employment agreement between Employer and Executive and it will not oblige Executive to continue in the employ of Employer, nor will it oblige Employer to continue to employ Executive, but it will merely require Employer to pay severance benefits to Executive under certain circumstances, as aforesaid. In addition, this Agreement will be considered terminated, and of no further force and effect, if Executive ceases to be a Board-elected officer or an appointed officer or a key employee (as determined by the Board of Directors of Employer in its sole discretion and reflected in the minutes of Board of Directors after notice to such Executive) of Employer prior to a Change in Control of Employer.

ARTICLE VIII

RIGHTS UNDER OTHER PLANS AND AGREEMENTS

     Except as provided in the Amended and Restated Employment Agreement between the Employer and Executive, the severance benefits herein provided will be in addition to, and are not intended to reduce, restrict or eliminate, any benefit to which Executive may otherwise be entitled by virtue of his termination of employment or otherwise.

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ARTICLE IX

NOTICES

     All notices and other communications required to be given hereunder shall be in writing and will be deemed to have been delivered or made when mailed, by certified mail, return receipt requested, if to Executive, to the last address which Executive shall provide to Employer, in writing, for this purpose, but if Executive has not then provided such an address, then to the last address of Executive then on file with Employer; and if to Employer, then to the last address which Employer shall provide to Executive, in writing, for this purpose, but if Employer has not then provided Executive with such an address, then to:

Corporate Secretary
Developers Diversified Realty Corporation
3300 Enterprise Parkway
Beachwood, Ohio 44122

ARTICLE X

GOVERNING LAW AND JURISDICTION

     This Agreement will be governed by, and construed in accordance with, the laws of the State of Ohio, except for the laws governing conflict of laws. If either party institutes a suit or other legal proceedings, whether in law or equity, Executive and Employer hereby irrevocably consent to the jurisdiction of the Common Pleas Court of the State of Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.

ARTICLE XI

ENTIRE AGREEMENT

     This Agreement constitutes the entire understanding between Employer and Executive concerning the subject matter hereof and supersedes all prior written or oral agreements or understandings between the parties hereto, including, without limitation, the Prior Change in Control Agreements. No term or provision of this Agreement may be changed, waived, amended or terminated except by a written instrument.

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     IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Agreement, the parties have hereunto set their hands as of the date and year first above written.

DEVELOPERS DIVERSIFIED REALTY CORPORATION
By:	/s/ Nan R. Zieleniec
	NAN R. ZIELENIEC,
	Senior Vice President of Human Resources

/s/ Timothy J Bruce  

TIMOTHY J. BRUCE 

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EX-10.21

Exhibit 10.21

AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT

     THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (this “Agreement”), is between Developers Diversified Realty Corporation, an Ohio corporation (the “Employer”), and William H. Schafer (“Executive”) made this 6^th day of November, 2006.

RECITALS

     WHEREAS, Executive is presently employed by Employer as its Executive Vice President and Chief Financial Officer;

     WHEREAS, Employer wishes to induce Executive to continue as its Executive Vice President and Chief Financial Officer and, accordingly, to provide certain employment security to Executive in the event of a “Change in Control” (as hereinafter defined);

     WHEREAS, Employer believes that it is in the best interest of its shareholders for Executive to continue in his position on an objective and impartial basis and without distraction or conflict of interest as a result of a possible or actual Change in Control;

     WHEREAS, In consideration of this Agreement Executive is willing to continue as Employer’s Executive Vice President and Chief Financial Officer; and

     WHEREAS, Employer and Executive desire for this Amended and Restated Change in Control Agreement to amend and supersede the Change in Control Agreement, dated March 24, 1999, between Employer and Executive, and any other Change in Control Agreement between Employer and Executive entered into prior to the date hereof (the “Prior Change in Control Agreements”).

     NOW THEREFORE, IN CONSIDERATION OF EXECUTIVE CONTINUING AS THE EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER OF EMPLOYER AND OF THE MUTUAL PROMISES HEREIN CONTAINED, EXECUTIVE AND EMPLOYER, INTENDING TO BE LEGALLY BOUND, HEREBY AGREE AS FOLLOWS:

ARTICLE I

DEFINITIONS

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 Employer’s outstanding securities;
(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 Executive’s title, responsibilities, power or authority in comparison with the Executive’s title, responsibilities, power or authority at the time of the Change in Control;
(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;
(d)	Within two years from the date on which the Change in Control occurred, Employer (i) reduces Executive’s base compensation, his incentive opportunity bonus percentages of salary, his group health, life, disability or other insurance programs (including any such benefits provided to Executive’s family), his pension, retirement or profit-sharing benefits or any benefits provided by any of Employer’s equity-based award plans, or any substitute therefor, (ii) establishes criteria and factors to be achieved for the payment of bonus compensation that are substantially different than the criteria and factors

Page 2

	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 bonus, or (iv) excludes the Executive from any plan, program or arrangement in which similar executive officers of Employer are included; 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.

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.	“Executive’s Annual Bonus” means Executive’s annual bonus at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher, calculated on the basis of the maximum bonus available to Executive and the assumption that all performance goals have been or will be achieved by Employer and Executive in the year in which such Triggering Event or such Change in Control, as the case may be, occurred.
8.	“Executive’s Annual Salary” means Executive’s annual base salary at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher.

ARTICLE II

SEVERANCE PAYMENT

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. This lump sum severance payment will be paid by Employer to Executive within five business days after the occurrence of a Triggering Event in immediately available funds in an amount equal to the sum of (i) two times Executive’s Annual Bonus plus (ii) two times Executive’s Annual Salary. In addition, Employer shall, at its expense, provide Executive, and his family, with life, disability, medical, hospitalization, vision, dental 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 (i) 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 his family received from Employer or (ii) the second anniversary of the date of the Triggering Event. Notwithstanding the foregoing, in the event that it is determined that any payment to be made hereunder is considered “nonqualified deferred compensation” subject to Section 409A of the American Jobs Creation Act of 2004, payment under this Section will be delayed for six months following termination of employment.

Page 3

2.

Employer shall provide Executive, at Employer’s expense, with outplacement services and support, the scope and provider of which will be selected by Executive, for a period of one year following the date of the Triggering Event.

3.

If all or any portion of the amounts payable to Executive under this Agreement or the Executive’s 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, but excluding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company or any Outperformance Long-Term Incentive Plan Agreement between the Executive and the Company) constitutes “excess parachute payments” within the meaning of Section 280G of the Code that are subject to the excise tax imposed by Section 4999 of the Code (or any similar tax or assessment), the amounts payable to Executive shall be increased to the extent necessary to place Executive in the same after-tax position as the Executive would have been in had no such tax been imposed on any such amount paid or payable to Executive under this Agreement, the Executive’s Amended and Restated Employment Agreement or any other amount that Executive may receive pursuant thereto (other than pursuant to a Performance Unit Agreement or an Outperformance Long-Term Incentive Plan Agreement). The determination of the amount of any such tax and the incremental payment required hereby in connection therewith shall be made by the accounting firm employed by Executive within thirty (30) calendar days after the severance payment is made pursuant to Paragraph 1 of this Article II and said incremental payment shall be made within five (5) calendar days after determination has been made. If, after the date upon which the payment required by this Article II, Paragraph 3 has been made, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of competent jurisdiction, Internal Revenue Service audit assessment or otherwise) that the amount of excise or other similar taxes payable by Executive is greater than the amount initially so determined, then Employer shall pay Executive an amount equal to the sum of: (i) such additional excise or other taxes, plus (ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse Executive for any income, excise or other tax assessment payable by Executive with respect to the receipt of the amounts specified in (i) and (ii) above, and the reimbursement provided by this clause (iii), in the manner described above in this Article II, Paragraph 3. Payment thereof shall be made within five (5) calendar days after the date upon which such subsequent determination is made.

ARTICLE III

SETOFF

     No amounts otherwise due or payable under this Agreement will be subject to setoff or counterclaim by either party hereto.

ARTICLE IV

ATTORNEY’S FEES

     All attorney’s fees and related expenses incurred by Executive in connection with or relating to the enforcement by him of his rights under this Agreement will be paid for by Employer.

Page 4

ARTICLE V

SUCCESSORS AND PARTIES IN INTEREST

     This Agreement will be binding upon and will inure to the benefit of Employer and its successors and assigns, including, without limitation, any corporation which acquires, directly or indirectly, by purchase, merger, consolidation or otherwise, all or substantially all of the business or assets of Employer. Without limitation of the foregoing, Employer will require any such successor, by agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that it is required to be performed by Employer. This Agreement will be binding upon and will inure to the benefit of Executive, his heirs at law and his personal representatives.

ARTICLE VI

ATTACHMENT

     Neither this Agreement nor any benefits payable hereunder will be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge or to execution, attachment, levy or similar process at law, whether voluntary or involuntary.

ARTICLE VII

EMPLOYMENT CONTRACT

     This Agreement will not in any way constitute an employment agreement between Employer and Executive and it will not oblige Executive to continue in the employ of Employer, nor will it oblige Employer to continue to employ Executive, but it will merely require Employer to pay severance benefits to Executive under certain circumstances, as aforesaid. In addition, this Agreement will be considered terminated, and of no further force and effect, if Executive ceases to be a Board-elected officer or an appointed officer or a key employee (as determined by the Board of Directors of Employer in its sole discretion and reflected in the minutes of Board of Directors after notice to such Executive) of Employer prior to a Change in Control of Employer.

ARTICLE VIII

RIGHTS UNDER OTHER PLANS AND AGREEMENTS

     Except as provided in the Amended and Restated Employment Agreement between the Employer and Executive, the severance benefits herein provided will be in addition to, and are not intended to reduce, restrict or eliminate, any benefit to which Executive may otherwise be entitled by virtue of his termination of employment or otherwise.

Page 5

ARTICLE IX

NOTICES

     All notices and other communications required to be given hereunder shall be in writing and will be deemed to have been delivered or made when mailed, by certified mail, return receipt requested, if to Executive, to the last address which Executive shall provide to Employer, in writing, for this purpose, but if Executive has not then provided such an address, then to the last address of Executive then on file with Employer; and if to Employer, then to the last address which Employer shall provide to Executive, in writing, for this purpose, but if Employer has not then provided Executive with such an address, then to:

Corporate Secretary
Developers Diversified Realty Corporation
3300 Enterprise Parkway
Beachwood, Ohio 44122

ARTICLE X

GOVERNING LAW AND JURISDICTION

     This Agreement will be governed by, and construed in accordance with, the laws of the State of Ohio, except for the laws governing conflict of laws. If either party institutes a suit or other legal proceedings, whether in law or equity, Executive and Employer hereby irrevocably consent to the jurisdiction of the Common Pleas Court of the State of Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.

ARTICLE XI

ENTIRE AGREEMENT

     This Agreement constitutes the entire understanding between Employer and Executive concerning the subject matter hereof and supersedes all prior written or oral agreements or understandings between the parties hereto, including, without limitation, the Prior Change in Control Agreements. No term or provision of this Agreement may be changed, waived, amended or terminated except by a written instrument.

Page 6

     IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Agreement, the parties have hereunto set their hands as of the date and year first above written.

DEVELOPERS DIVERSIFIED REALTY CORPORATION
By:	/s/ Nan R. Zieleniec NAN R. ZIELENIEC,
	Senior Vice President of Human Resources

/s/ William H. Schafer

WILLIAM H. SCHAFER

Page 7

EX-10.22

Exhibit 10.22

AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT

     THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (this “Agreement”), is between Developers Diversified Realty Corporation, an Ohio corporation (the “Employer”), and Robin R. Walker-Gibbons (“Executive”) made this 6^th day of November, 2006.

RECITALS

     WHEREAS, Executive is presently employed by Employer as its Executive Vice President of Leasing;

     WHEREAS, Employer wishes to induce Executive to continue as its Executive Vice President of Leasing and, accordingly, to provide certain employment security to Executive in the event of a “Change in Control” (as hereinafter defined);

     WHEREAS, Employer believes that it is in the best interest of its shareholders for Executive to continue in her position on an objective and impartial basis and without distraction or conflict of interest as a result of a possible or actual Change in Control;

     WHEREAS, In consideration of this Agreement Executive is willing to continue as Employer’s Executive Vice President of Leasing; and

     WHEREAS, Employer and Executive desire for this Amended and Restated Change in Control Agreement to amend and supersede the Change in Control Agreement, dated April 27, 2005, between Employer and Executive, and any Change in Control Agreements between Employer and Executive entered into prior to the date hereof (the “Prior Change in Control Agreements”).

     NOW THEREFORE, IN CONSIDERATION OF EXECUTIVE CONTINUING AS THE EXECUTIVE VICE PRESIDENT OF LEASING OF EMPLOYER AND OF THE MUTUAL PROMISES HEREIN CONTAINED, EXECUTIVE AND EMPLOYER, INTENDING TO BE LEGALLY BOUND, HEREBY AGREE AS FOLLOWS:

ARTICLE I

DEFINITIONS

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 Employer’s outstanding securities;
(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 Executive’s title, responsibilities, power or authority in comparison with the Executive’s title, responsibilities, power or authority at the time of the Change in Control;
(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;
(d)	Within two years from the date on which the Change in Control occurred, Employer (i) reduces Executive’s base compensation, her incentive opportunity bonus percentages of salary, her group health, life, disability or other insurance programs (including any such benefits provided to Executive’s family), her pension, retirement or profit-sharing benefits or any benefits provided by any of Employer’s equity-based award plans, or any substitute therefor, (ii) establishes criteria and factors to be achieved for the payment of bonus compensation that are substantially different than the criteria and factors

Page 2

	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 bonus, or (iv) excludes the Executive from any plan, program or arrangement in which similar executive officers of Employer are included; 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.

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.	“Executive’s Annual Bonus” means Executive’s annual bonus at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher, calculated on the basis of the maximum bonus available to Executive and the assumption that all performance goals have been or will be achieved by Employer and Executive in the year in which such Triggering Event or such Change in Control, as the case may be, occurred.
8.	“Executive’s Annual Salary” means Executive’s annual base salary at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher.

ARTICLE II

SEVERANCE PAYMENT

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. This lump sum severance payment will be paid by Employer to Executive within five business days after the occurrence of a Triggering Event in immediately available funds in an amount equal to the sum of (i) two times Executive’s Annual Bonus plus (ii) two times Executive’s Annual Salary. In addition, Employer shall, at its expense, provide Executive, and his family, with life, disability, medical, hospitalization, vision, dental 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 (i) 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 her family received from Employer or (ii) the second anniversary of the date of the Triggering Event. Notwithstanding the foregoing, in the event that it is determined that any payment to be made hereunder is considered “nonqualified deferred compensation” subject to Section 409A of the American Jobs Creation Act of 2004, payment under this Section will be delayed for six months following termination of employment.

Page 3

2. Employer shall provide Executive, at Employer’s expense, with outplacement services and support, the scope and provider of which will be selected by Executive, for a period of one year following the date of the Triggering Event.

3. If all or any portion of the amounts payable to Executive under this Agreement or the Executive’s 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, but excluding any units or awards granted or vested pursuant to any Performance Unit Agreement between the Executive and the Company or any Outperformance Long-Term Incentive Plan Agreement between the Executive and the Company) constitutes “excess parachute payments” within the meaning of Section 280G of the Code that are subject to the excise tax imposed by Section 4999 of the Code (or any similar tax or assessment), the amounts payable to Executive shall be increased to the extent necessary to place Executive in the same after-tax position as the Executive would have been in had no such tax been imposed on any such amount paid or payable to Executive under this Agreement, the Executive’s Amended and Restated Employment Agreement or any other amount that Executive may receive pursuant thereto (other than pursuant to a Performance Unit Agreement or an Outperformance Long-Term Incentive Plan Agreement). The determination of the amount of any such tax and the incremental payment required hereby in connection therewith shall be made by the accounting firm employed by Executive within thirty (30) calendar days after the severance payment is made pursuant to Paragraph 1 of this Article II and said incremental payment shall be made within five (5) calendar days after determination has been made. If, after the date upon which the payment required by this Article II, Paragraph 3 has been made, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of competent jurisdiction, Internal Revenue Service audit assessment or otherwise) that the amount of excise or other similar taxes payable by Executive is greater than the amount initially so determined, then Employer shall pay Executive an amount equal to the sum of: (i) such additional excise or other taxes, plus (ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse Executive for any income, excise or other tax assessment payable by Executive with respect to the receipt of the amounts specified in (i) and (ii) above, and the reimbursement provided by this clause (iii), in the manner described above in this Article II, Paragraph 3. Payment thereof shall be made within five (5) calendar days after the date upon which such subsequent determination is made.

ARTICLE III

SETOFF

     No amounts otherwise due or payable under this Agreement will be subject to setoff or counterclaim by either party hereto.

ARTICLE IV

ATTORNEY’S FEES

     All attorney’s fees and related expenses incurred by Executive in connection with or relating to the enforcement by her of her rights under this Agreement will be paid for by Employer.

Page 4

ARTICLE V

SUCCESSORS AND PARTIES IN INTEREST

     This Agreement will be binding upon and will inure to the benefit of Employer and its successors and assigns, including, without limitation, any corporation which acquires, directly or indirectly, by purchase, merger, consolidation or otherwise, all or substantially all of the business or assets of Employer. Without limitation of the foregoing, Employer will require any such successor, by agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that it is required to be performed by Employer. This Agreement will be binding upon and will inure to the benefit of Executive, her heirs at law and her personal representatives.

ARTICLE VI

ATTACHMENT

     Neither this Agreement nor any benefits payable hereunder will be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge or to execution, attachment, levy or similar process at law, whether voluntary or involuntary.

ARTICLE VII

EMPLOYMENT CONTRACT

     This Agreement will not in any way constitute an employment agreement between Employer and Executive and it will not oblige Executive to continue in the employ of Employer, nor will it oblige Employer to continue to employ Executive, but it will merely require Employer to pay severance benefits to Executive under certain circumstances, as aforesaid. In addition, this Agreement will be considered terminated, and of no further force and effect, if Executive ceases to be a Board-elected officer or an appointed officer or a key employee (as determined by the Board of Directors of Employer in its sole discretion and reflected in the minutes of Board of Directors after notice to such Executive) of Employer prior to a Change in Control of Employer.

ARTICLE VIII

RIGHTS UNDER OTHER PLANS AND AGREEMENTS

     Except as provided in the Amended and Restated Employment Agreement between the Employer and Executive, the severance benefits herein provided will be in addition to, and are not intended to reduce, restrict or eliminate, any benefit to which Executive may otherwise be entitled by virtue of her termination of employment or otherwise.

Page 5

ARTICLE IX

NOTICES

     All notices and other communications required to be given hereunder shall be in writing and will be deemed to have been delivered or made when mailed, by certified mail, return receipt requested, if to Executive, to the last address which Executive shall provide to Employer, in writing, for this purpose, but if Executive has not then provided such an address, then to the last address of Executive then on file with Employer; and if to Employer, then to the last address which Employer shall provide to Executive, in writing, for this purpose, but if Employer has not then provided Executive with such an address, then to:

Corporate Secretary
Developers Diversified Realty Corporation
3300 Enterprise Parkway
Beachwood, Ohio 44122

ARTICLE X

GOVERNING LAW AND JURISDICTION

     This Agreement will be governed by, and construed in accordance with, the laws of the State of Ohio, except for the laws governing conflict of laws. If either party institutes a suit or other legal proceedings, whether in law or equity, Executive and Employer hereby irrevocably consent to the jurisdiction of the Common Pleas Court of the State of Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.

ARTICLE XI

ENTIRE AGREEMENT

     This Agreement constitutes the entire understanding between Employer and Executive concerning the subject matter hereof and supersedes all prior written or oral agreements or understandings between the parties hereto, including, without limitation, the Prior Change in Control Agreements. No term or provision of this Agreement may be changed, waived, amended or terminated except by a written instrument.

Page 6

     IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Agreement, the parties have hereunto set their hands as of the date and year first above written.

DEVELOPERS DIVERSIFIED REALTY CORPORATION
By:	/s/ Nan R. Zieleniec NAN R. ZIELENIEC,
	Senior Vice President of Human Resources

/s/ Robin R. Walker-Gibbons ROBIN R. WALKER-GIBBONS

Page 7

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Scott A. Wolstein, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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. DDR’s 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 DDR’s 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;
d)	disclosed in this report any change in DDR’s internal control over financial reporting that occurred during DDR’s most recent fiscal quarter (DDR’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, DDR’s internal control over financial reporting; and

5. DDR’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to DDR’s auditors and the audit committee of DDR’s board of directors:

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 DDR’s 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 DDR’s internal control over financial reporting.

November 9, 2006

Date

/s/ Scott A. Wolstein

Signature

Chief Executive Officer and Chairman of the Board

Title

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, William H. Schafer, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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. DDR’s 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 DDR’s 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;
d)	disclosed in this report any change in DDR’s internal control over financial reporting that occurred during DDR’s most recent fiscal quarter (DDR’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, DDR’s internal control over financial reporting; and

5. DDR’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to DDR’s auditors and the audit committee of DDR’s board of directors:

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 DDR’s 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 DDR’s internal control over financial reporting.

November 9, 2006

Date

/s/ William H. Schafer

Signature

Executive Vice President and Chief Financial Officer

Title

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     I, Scott A. Wolstein, Chairman of the Board and Chief Executive Officer of Developers Diversified Realty Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The quarterly report on Form 10-Q of the Company for the period ended September 30, 2006 which this certification accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Scott A. Wolstein

Scott A. Wolstein

Chairman of the Board and Chief Executive Officer

November 9, 2006

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     I, William H. Schafer, Executive Vice President and Chief Financial Officer of Developers Diversified Realty Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The quarterly report on Form 10-Q of the Company for the period ended September 30, 2006 which this certification accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ William H. Schafer

William H. Schafer

Executive Vice President and Chief Financial Officer

November 9, 2006