(EXECUTION COPY)
CEDAR SHOPPING CENTERS, INC.
SENIOR EXECUTIVE
DEFERRED COMPENSATION PLAN
CEDAR SHOPPING CENTERS, INC.
SENIOR EXECUTIVE
DEFERRED COMPENSATION PLAN
ARTICLE I PURPOSE..................................................1
ARTICLE II DEFINITIONS..............................................1
2.1 Account......................................................1
2.2 Administrator................................................1
2.3 Beneficiary..................................................1
2.4 Board of Directors...........................................1
2.5 Cause........................................................1
2.6 Company......................................................2
2.7 Determination Date...........................................2
2.8 Distribution Date............................................2
2.9 Dividends....................................................2
2.10 Dividend Deferral Election...................................2
2.11 Effective Date...............................................2
2.12 Employer Provided Benefit....................................3
2.13 Fair Market Value............................................3
2.14 Good Reason..................................................3
2.15 Participant..................................................3
2.16 Plan.........................................................3
2.17 Plan Benefit.................................................4
2.18 Plan Year....................................................4
2.19 Shares/Stock.................................................4
2.20 Trust........................................................4
2.21 Trustee......................................................4
ARTICLE III PARTICIPATION............................................4
3.1 Participation................................................4
ARTICLE IV EMPLOYER PROVIDED BENEFIT AND ACCOUNT....................5
4.1 Employer Provided Benefit....................................5
4.2 Dividends and Dividend Deferral Election.....................6
4.3 Vesting......................................................7
4.4 Alternative Forms of Dividend Distribution...................8
4.5 Determination of Account.....................................8
4.6 Statement of Account.........................................9
4.7 Unfunded Plan................................................9
ARTICLE V PLAN BENEFITS............................................9
5.1 Benefits-General.............................................9
5.2 Death Benefits...............................................9
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5.3 Payment to Guardian..........................................9
5.4 Source of Payment and Form of Distribution..................10
ARTICLE VI BENEFICIARY DESIGNATION.................................10
6.1 Beneficiary Designation.....................................10
6.2 Amendments..................................................11
6.3 No Beneficiary Designation..................................11
6.4 Effect of Payment...........................................11
ARTICLE VII DISTRIBUTIONS...........................................11
7.1 Benefit Payment Schedule....................................11
7.2 Premature Distribution......................................12
7.3 Continued Deferral..........................................13
7.4 Effect of Termination of Employment.........................13
ARTICLE VIII ADMINISTRATION..........................................13
8.1 Administrative Duties.......................................13
8.2 Agents......................................................14
8.3 Binding Effect of Decisions.................................14
ARTICLE IX AMENDMENT AND TERMINATION OF PLAN.......................14
9.1 Amendment...................................................14
9.2 Termination of Plan.........................................15
ARTICLE X MISCELLANEOUS...........................................15
10.1 Company's Obligations Limited...............................15
10.2 Nonassignability............................................16
10.3 Not a Contract of Employment................................16
10.4 Withholding.................................................16
10.5 Participant Cooperation.....................................17
10.6 Terms.......................................................17
10.7 Captions....................................................17
10.8 Governing Law...............................................17
10.9 Validity....................................................17
10.10 Notice......................................................17
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Exhibit A
Exhibit B
Schedule A
Schedule B
iii
CEDAR SHOPPING CENTERS, INC.
SENIOR EXECUTIVE
DEFERRED COMPENSATION PLAN
ARTICLE I
PURPOSE
-------
The purpose of this Senior Executive Deferred Compensation Plan (hereinafter
referred to as the "Plan") is to provide accumulation of supplemental benefits
on a tax-deferred basis for certain senior executives and directors of Cedar
Shopping Centers, Inc. and their beneficiaries. This Plan shall be effective as
of the Effective Date.
ARTICLE II
DEFINITIONS
-----------
For purposes of this Plan, the words and phrases set forth below shall have the
following meaning, unless the context clearly indicates otherwise:
2.1 Account. "Account" means an account maintained for a Participant by the
Administrator pursuant to Section 4.1.
2.2 Administrator. "Administrator" means the Board of Directors.
2.3 Beneficiary. "Beneficiary" means the person, persons, or entity designated
by the Participant, or as provided in Article VI, to receive any Plan Benefits
payable after a Participant's death.
2.4 Board of Directors. "Board of Directors" means the Board of Directors of the
Company.
2.5 Cause. "Cause" with respect to a Participant means (i) if the Participant
has an employment agreement in effect with the Company which contains a
definition of "cause", "termination for cause" or any other similar phrase, then
the definition of the term "Cause" for purposes of the Plan shall be as defined
in such employment agreement, or (ii) if the Participant does not have an
employment agreement in effect with the Company which contains a definition of
cause, then "Cause" for purposes of the Plan shall mean (A) any willful
misconduct of the Participant in connection with the performance of any of his
duties as an employee of the Company or an Affiliate including without
limitation misappropriation of funds or property of the Company or an affiliate
or securing or attempting to secure personally (whether directly or indirectly)
any profit in connection with any transaction entered into on behalf of the
Company or an Affiliate; (B) willful failure, neglect or refusal to perform the
Participant's duties which is not cured within 10 days after written notice
thereof and/or (C) conviction (or nolo contendere plea) in connection with a
felony.
2.6 Company. "Company" means Cedar Shopping Centers, Inc., and any successor
thereto which adopts this Plan.
2.7 Determination Date. "Determination Date" means the last day of each calendar
year in which this Plan is in effect.
2.8 Distribution Date. "Distribution Date" with respect to any Account means the
first business day of the January next following the third anniversary of the
date on which units of Shares were first credited to the Participant's Account.
2.9 Dividends. "Dividends" means the dividends paid by the Company on Stock held
in the Trust.
2.10 Dividend Deferral Election. "Dividend Deferral Election" means an election
by a Participant to defer the distribution under the Plan of the Dividends paid
with respect to Shares equal in number to the Share units credited to the
Participant's Account.
2.11 Effective Date. "Effective Date" means October 29, 2003.
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2.12 Employer Provided Benefit. "Employer Provided Benefit" means the benefit
provided for under Article IV, initially consisting of units that are equivalent
to a number of Shares.
2.13 Fair Market Value. "Fair Market Value" on a specified date means the
closing price at which a Share is traded on the stock exchange, if any, on which
Shares are primarily traded or, if the Shares are not then traded on a stock
exchange, the closing price of a Share as reported on the NASDAQ National Market
System or, if the Shares are not then traded on the NASDAQ National Market
System, the average of the closing bid and asked prices at which a Share is
traded on the over-the-counter market, but if no Shares were traded on such
date, then on the last previous date on which a Share was so traded, or, if none
of the above are applicable, the value of a Share as established by the Board of
Directors for such date using any reasonable method of valuation.
2.14 Good Reason. "Good Reason" means (i) with respect to any Participant who
has an employment agreement in effect with the Company which contains a
definition of "good reason", "good reason" as defined in such employment
agreement, or (ii) with respect to any Participant that does not have an
employment agreement in effect with the Company which contains a definition of
"good reason", good reason shall mean (A) a material reduction in the
Participant's duties or responsibilities; (B) a reduction in the Participant's
salary; (C) a relocation of the Participant's office outside a fifty (50) mile
radius of his present location; or (D) a material breach by the Company of the
terms of an employment agreement (if any) with the Participant.
2.15 Participant. "Participant" shall have the meaning set forth in Article III.
2.16 Plan. "Plan" means this Cedar Shopping Centers, Inc. Senior Executive
Deferred Compensation Plan.
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2.17 Plan Benefit. "Plan Benefit" means at any given time an amount equal to the
value of the Participant's Accounts.
2.18 Plan Year. "Plan Year" means the calendar year.
2.19 Shares/Stock. "Shares" or "Stock" means shares of the common stock of the
Company.
2.20 Trust. "Trust" means the Cedar Shopping Centers, Inc. Deferred Compensation
Trust created by the Company pursuant to Section 4.1, to assist the Company in
meeting its obligations under this Plan, substantially in the form of Exhibit A
attached hereto.
2.21 Trustee. "Trustee" means the trustee of the Trust.
2.22 Unforeseeable Financial Emergency. "Unforeseeable Financial Emergency" with
respect to a Participant means an unanticipated emergency that is caused by an
event beyond the control of the Participant and that would result in severe
financial hardship to the Participant if a premature distribution were not
permitted, as may be occasioned by accident, illness or other emergency beyond
the control of the Participant; and in no event shall cash needs arising from
foreseeable events, such as the purchase of a residence or education expenses of
children, be considered the result of an unforeseeable financial emergency nor
shall a decline in the Fair Market Value of Shares, for any reason, be
considered the result of an unforeseeable financial emergency for purposes of
this definition.
ARTICLE III
PARTICIPATION
-------------
3.1 Participation. The Administrator shall determine from time to time those key
executive employees and directors (including non-employee directors) of the
Company who shall be entitled to awards under the Plan of units equivalent to a
number of Shares, and shall determine the number of Shares underlying each
award. The name of each initial Participant as of the Effective Date, and the
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respective number of Shares underlying each such initial Participant's award, is
listed on Schedule A hereto. In the case of any non-employee director who is
selected to participate in the Plan, references in the Plan to employment by the
Company shall be deemed to refer to such director's service as a director of the
Company.
ARTICLE IV
EMPLOYER PROVIDED BENEFIT AND ACCOUNT
-------------------------------------
4.1 Employer Provided Benefit. The Company shall establish a Trust in order to
provide the Participants with a benefit known as an Employer Provided Benefit
which shall initially consist of units that are equivalent to the number of
Shares underlying each award. On the Effective Date, or as soon as practicable
thereafter, the Company shall contribute to the Trust the aggregate number of
Shares representing the initial Employer Provided Benefit for the Participants
listed on Schedule A hereto. An Account shall be established by the
Administrator under the Plan in the name of each Participant which shall
initially be credited with units equal to the number of Shares underlying each
award. Thereafter, an Account shall be established by the Administrator for each
new Participant and each such Account shall be credited with units equal to the
number of Shares determined by the Administrator. A separate Account shall be
established for each subsequent award of units of Shares, and the Company shall
contribute to the Trust, on the date of such subsequent award or as soon as
practicable thereafter, the aggregate number of Shares underlying each such
award. Except as provided in Section 4.4, under no circumstance shall any
benefit be awarded, allocated or distributable to a Participant from his Account
except in the form of units of Stock (or Stock itself, in the case of a
distribution), nor shall a Participant's Account be credited with earnings that
are equivalent to any other investment. If there shall be a tender offer for
some or all Shares held in the Trust from a third party which, in the sole
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judgment of the Board of Directors, shall constitute a valid offer of sufficient
value, the Trustee shall be directed by the Administrator to tender the subject
Shares, and any cash or in-kind consideration received for such Shares from such
third party shall be invested by the Trustee in accordance with each
Participant's direction in such investment alternatives as are designated by the
Administrator. Any cash or in-kind consideration received for Stock and any
investment earnings therefrom shall be credited to the Account of the
Participant in a manner that reflects the Account values for each Participant
prior to such tender.
4.2 Dividends and Dividend Deferral Election. Except as hereinafter provided, an
amount equal to the Dividends paid on the number of Share units allocated to a
Participant's Account shall be paid to the Participant as soon as practicable
after such Dividends are received by the Trustee; provided, however, that a
Participant may elect to have all or a portion of the Dividends that would be
payable to him deferred under the Plan until the Distribution Date of the Shares
on which the Dividends are declared, by completing, within 30 days of receipt of
written notice of the award of an Employer Provided Benefit and in any event
prior to the date on which any such Dividends are declared, a Dividend Deferral
Election form provided by the Administrator. The amount of any deferred Dividend
will be credited pursuant to Section 4.4 to the Participant's Account to which
the Shares on which the Dividends are declared are allocated. Notwithstanding
anything to the contrary herein, with respect to those Participants who are
listed on Schedule B hereto, and with respect to any additional Participants who
are selected to participate in the Plan after the Effective Date and are
designated by the Administrator, in its sole discretion, at the time that the
Employer Provided Benefit is awarded, to be subject to this provision, in the
event that such Participant's employment with the Company is terminated by the
Company for Cause or in the event such Participant resigns without Good Reason,
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before the initial Distribution Date applicable to the Shares with respect to
which such Dividends are paid, then any Dividends declared on or after the date
of such termination or resignation but before such Distribution Date (and any
earnings thereon) shall be forfeited by, and shall not be distributed or
distributable with respect to, such Participant. Schedule B hereto lists those
Participants who, as of the Effective Date, are subject to a risk of forfeiture
of the portion of their Accounts attributable to Dividends, as provided above.
4.3 Vesting.
(a) Except for the portion of a Participant's Account attributable to any
Dividends (including earnings thereon) that are subject to a risk of forfeiture
as provided in Section 4.2, and except as hereinafter provided in Section
4.3(b), a Participant shall be 100% vested in his Plan Benefit at all times. A
Participant who is subject to a risk of forfeiture of a portion of his or her
Account attributable to Dividends, as provided in Section 4.2, shall become 100%
vested in any Dividends (and any earnings thereon) if and to the extent that
such Dividends are declared prior to any termination of such Participant's
employment by the Company for Cause or resignation by such Participant without
Good Reason which occurs before the initial Distribution Date applicable to the
Shares with respect to which the Dividends were declared.
(b) Notwithstanding the preceding or any other provision of the Plan to the
contrary, if a Participant elects to receive a premature distribution pursuant
to Section 7.2 and such distribution is not due to an Unforeseeable Financial
Emergency of the Participant as determined by the Administrator in accordance
with Section 7.2, the Participant shall forfeit a portion of his vested Account
balance which is equal to (i) 16% of the value of such premature distribution if
it occurs after the first anniversary, but before the second anniversary, of the
date as of which units of Shares were first credited to the Account, or (ii)
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11.11% of the value of such premature distribution if it occurs after the second
anniversary of the date as of which units of Shares were first credited to the
Account.
4.4 Alternative Forms of Dividend Distribution and Interest. An amount equal to
the Dividends deferred in accordance with Section 4.2 shall be credited to the
Participant's Account in which the Shares with respect to which the Dividends
were declared are held, and shall be credited thereon, in the form of additional
units of Shares (and fractional Shares) in such number of Shares which would be
issuable by the reinvestment of such Dividends in Shares as of the date of
receipt by the Trustee. Notwithstanding the preceding, a Participant may elect,
in such manner as prescribed by the Administrator, that the portion of his
Account attributable to Dividends be in the form of cash, in which case such
portion of the Account shall be credited with interest at an annual rate equal
to the rate which would be provided on a three-year certificate of deposit of a
major New York commercial bank as selected by the Administrator, which rate
shall be determined as of ten business days prior to the Effective Date and each
Determination Date thereafter, to be applied prospectively to the portion of the
year following the Effective Date and to the calendar year following each
Determination Date.
4.5 Determination of Account. A Participant's Account as of each Determination
Date shall consist of the balance of the Account as of the immediately preceding
Determination Date (or as of the date the Account was established, if the
Account was first established since the preceding Determination Date), adjusted
to reflect the earnings with respect to the Participant's Account since the
immediately preceding Determination Date (or the date the Account was
established, if applicable).
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4.6 Statement of Account. The Administrator shall submit to each Participant,
within 120 days after each Determination Date and at such other times as
determined by the Administrator, a statement setting forth the balance of the
Participant's Accounts.
4.7 Unfunded Plan. It is the intention of the Company that the arrangements
hereunder be unfunded for federal income tax purposes and for purposes of Title
I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
(if applicable). Each Participant shall have the status of a general unsecured
creditor of the Company. This Plan constitutes a mere promise by the Company to
make benefit payments in the future. The Company shall create the Trust in order
to identify assets to be used for the purposes designated herein. The Trust
shall be irrevocable, except as provided in Section 12 of the Trust.
ARTICLE V
PLAN BENEFITS
-------------
5.1 Benefits-General. Each Participant shall be entitled to receive payment of
his or her Plan Benefit as provided under this Article V and Article VII hereof.
5.2 Death Benefits. In the event of the death of a Participant before payment of
the Participant's entire vested Plan Benefit, the Company shall pay to the
Participant's Beneficiary an amount equal to 100% of the remaining vested but
unpaid balance of the Participant's Accounts (without any forfeiture). Such
payment shall be made in a lump sum, as soon as practicable following the
Participant's death.
5.3 Payment to Guardian. If a Plan Benefit is payable to a minor or a person
declared incompetent or to a person incapable of handling the disposition of
property, the Administrator may direct payment of such Plan Benefit to the
guardian, legal representative or person having the care and custody of such
minor or incompetent person. The Administrator may require proof of
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incompetency, minority, incapacity or guardianship, as it may deem appropriate
prior to distribution of the Plan Benefit. Such distribution shall completely
discharge the Administrator and the Company from all liability with respect to
such Plan Benefit.
5.4 Source of Payment and Form of Distribution. Subject to the terms of the
Trust, the Administrator shall direct the Trustee to make payment out of the
Trust of any Plan Benefit which has become payable under the terms of this Plan.
To the extent a Participant's Account is credited with units of Shares at a
Distribution Date, the Participant's Account shall be distributed in the form of
Shares equal in number to the number of Share units credited to the Account
(except that cash shall be paid in lieu of any fractional Share units) pursuant
to any direction from the Administrator to the Trustee for a benefit
distribution. To the extent a Participant has elected to have Dividends credited
to his Account in the form of cash, such portion of the Participant's Account
(including an amount equal to the deemed interest credited thereto pursuant to
Section 4.4) shall be distributed in cash. To the extent not satisfied by
distribution from the Trust, the Company shall remain liable to the Participants
and their Beneficiaries for the payment of any Plan Benefits due and payable
hereunder.
ARTICLE VI
BENEFICIARY DESIGNATION
-----------------------
6.1 Beneficiary Designation. A Participant shall have the right, at any time, to
designate any person or persons as his Beneficiary or Beneficiaries (primary
and/or contingent) to whom payment under this Plan shall be paid in the event of
death prior to complete distribution to the Participant of the benefits due
under the Plan. Each beneficiary designation shall be in a written form
prescribed by the Administrator (substantially the same as Exhibit B attached
hereto) and will be effective only when filed with the Administrator during the
Participant's lifetime.
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6.2 Amendments. Any beneficiary designation may be changed by the Participant
without the consent of any designated Beneficiary by the filing of a new
beneficiary designation with the Administrator. The filing of a new beneficiary
designation form will cancel all beneficiary designations previously filed.
6.3 No Beneficiary Designation. If any Participant fails to designate a
Beneficiary in the manner provided above, or if each Beneficiary designated by a
deceased Participant predeceases the Participant, the Administrator shall
distribute such Participant's benefits to the Participant's estate.
6.4 Effect of Payment. Payment to the Beneficiary, or estate as provided above,
shall completely discharge the Company's obligations under this Plan with
respect to the deceased Participant.
ARTICLE VII
DISTRIBUTIONS
-------------
7.1 Benefit Payment Schedule. Subject to the provisions of Sections 7.2, 7.3 and
7.4, Plan Benefits shall be payable or commence being paid on the Distribution
Date that relates to the Shares underlying the Plan Benefit. At the time a
Participant is initially selected to participate in the Plan, and each time the
Participant is granted an additional award of Shares which are deferred
hereunder, the Participant shall elect, in writing on a form prescribed by the
Administrator, whether the Participant's Account shall be paid in a lump sum
payment or in quarterly installments over a period of not more than 20 years.
Such election may be changed from time to time, but shall become irrevocable 12
months prior to the Distribution Date for the Account (including, if applicable,
any new Distribution Date pursuant to Section 7.3). A Participant may make
different elections with respect to different Accounts. Notwithstanding the
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foregoing, any election to receive a benefit in installments shall be subject to
the approval of the Administrator, in its discretion. If no election has been
made at least 12 months prior to the Distribution Date for the Account, any
benefit payable hereunder from the Account shall be paid in a single lump sum.
7.2 Premature Distribution. A Participant may elect, in writing on a form
prescribed by the Administrator, to receive a distribution, at any time after
the first anniversary of the date as of which units of Shares were first
credited to his Account (including after distributions have commenced being
paid), of the vested portion of his Account balance, subject to the forfeiture
provisions of Section 4.3(b). The Administrator shall direct the Trustee to make
such distribution in a lump sum, as soon as practicable after the Administrator
has received such election, in the form of Shares or cash, as applicable
pursuant to Section 5.4 (but treating the date of such distribution as a
Distribution Date for purposes hereof). Notwithstanding the preceding, in the
event that the Administrator, upon written application of the Participant,
determines that the Participant has incurred an Unforeseeable Financial
Emergency at any time, the Participant may receive a distribution of up to 100%
of the vested portion of his Account balance (without any forfeiture), but such
distribution shall in no event exceed the amount necessary to alleviate such
Unforeseeable Financial Emergency. The Administrator shall direct the Trustee to
make such distribution in a lump sum, as soon as practicable after the
Administrator has made such determination, in the form of Shares or cash, as
appplicable pursuant to Section 5.4 (but treating the date of such distribution
as a Distribution Date for purposes hereof). A Participant's Unforeseeable
Financial Emergency, and the amount necessary to alleviate the Unforeseeable
Financial Emergency, must be demonstrated in the written application of the
Participant and in such other documentation as the Administrator shall
reasonably require.
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7.3 Continued Deferral. Not less than twelve (12) nor more than fifteen (15)
months prior to a Distribution Date, a Participant who is then employed by the
Company may elect, in writing on a form prescribed by the Administrator, to
defer receipt of all or any part of the Plan Benefit that is otherwise payable
on such Distribution Date to the third, fourth or fifth anniversary of the
Distribution Date, and in any such case the date to which distribution is so
deferred shall be the new Distribution Date for the Account. Any election under
this Section 7.3 shall become irrevocable as of the date such election is
received by the Administrator. A Participant may make more than one election
under this Section 7.3 with respect to the same Account.
7.4 Effect of Termination of Employment. Notwithstanding any provision to the
contrary, in the event of a Participant's termination of employment with the
Company (other than due to death) prior to age 60, the vested portion of the
Participant's Plan Benefit shall be paid in a lump sum as soon as practicable
following the later of the date of such termination of employment or January 1,
2007.
ARTICLE VIII
ADMINISTRATION
--------------
8.1 Administrative Duties. This Plan shall be administered by the Administrator.
The Administrator shall have the following specific powers and duties:
(i) To interpret the provisions of the Plan and make any and all
determinations arising thereunder;
(ii) To maintain such records as it shall deem necessary or
appropriate for the proper administration of the Plan; and
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(iii) To establish such rules and procedures not inconsistent with
the terms of the Plan as it shall deem necessary or
appropriate to effectuate the purpose of the Plan.
8.2 Agents. The Administrator may appoint an individual to be the
Administrator's agent with respect to the day-to-day administration of the Plan.
In addition, the Administrator may, from time to time, employ other agents and
delegates to aid in such administrative duties as it sees fit, and may from time
to time consult with counsel who may be counsel to the Company.
8.3 Binding Effect of Decisions. The decision or action of the Administrator
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated by the Administrator hereunder shall be final and
binding upon all persons having any interest in the Plan.
ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN
---------------------------------
9.1 Amendment. The Board of Directors may at any time amend the Plan (other than
this Article IX) in whole or in part, provided, however, that no amendment shall
be effective as to a Participant to decrease or restrict a Plan Benefit as to
amount or timing or manner of distribution of any Account maintained under the
Plan without the consent of such Participant. Notwithstanding the preceding, in
the event that there is a change in the federal income tax treatment pertaining
to the Plan or Trust or any Plan Benefit from the treatment in effect as of the
Effective Date, then the Board of Directors may, without the consent of any
Participant or Beneficiary, amend the Plan in any manner as the Board of
Directors, in its sole discretion, deems advisable to provide reasonably similar
benefits to Participants to the extent practicable in light of such change in
tax treatment.
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9.2 Termination of Plan. Notwithstanding Section 9.1, the Board
of Directors may at any time terminate the Plan in its entirety. If the Plan is
terminated, the Board of Directors shall also determine either (i) that
previously awarded Plan Benefits will continue to vest and be paid out in
accordance with the terms of the Plan and any elections made by the Participants
prior to the date of Plan termination, or (ii) that all Plan Benefits shall be
100% vested and each Participant shall receive an immediate distribution of his
Plan Benefit (or the remainder of his Plan Benefit if distribution thereof has
commenced prior to the date of Plan termination). In the event of a termination
of the Plan and an immediate distribution to all Participants of their Plan
Benefits, the Company shall pay to each Participant an additional payment (a
"Tax Gross-Up Payment"), in an amount such that after payment by the Participant
of all applicable federal, state and local income taxes imposed upon the Tax
Gross-Up Payment, the Participant retains an amount of the Tax Gross-Up Payment
equal to the applicable federal, state and local income taxes imposed upon the
amount of the Participant's Plan Benefit being distributed on account of the
Plan termination. The amount of any Tax Gross-Up Payment shall be determined by
the Company's independent auditors (the "Accounting Firm"), based upon an
assumption that the Participant's rate of applicable federal, state and local
income taxes is at the highest marginal rate then in effect, and shall be paid
in a cash lump sum within ten days following such determination by the
Accounting Firm.
ARTICLE X
MISCELLANEOUS
-------------
10.1 Company's Obligations Limited. The Company shall have no obligation under
this Plan with respect to any individuals other than the Participants and their
Beneficiaries.
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10.2 Nonassignability. No Participant or any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt the amounts, if any, payable hereunder, or any part thereof. Except to
the extent required by law, no part of the amounts payable under the Plan shall,
prior to actual payment, be subject to seizure or separation for the payment of
any debts, judgments, alimony or separate maintenance owed by the Participant or
any other person, nor be transferable by operation of law in the event of the
Participant's or other person's bankruptcy or insolvency.
10.3 Not a Contract of Employment. The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between the Company and any
Participant, and the Participant (or the Participant's Beneficiaries) shall have
no rights against the Company, except as may otherwise be specifically provided
herein. Moreover, nothing in this Plan shall be deemed to give any Participant
the right to be retained in the service of the Company or to interfere with the
right of the Company to discipline or discharge any Participant at any time. Any
such rights shall be governed by independent and unrelated contractual
arrangements between the parties, should such arrangements be consummated.
10.4 Withholding. The Company retains the right to make provision for the
reporting and withholding of any federal, state or local withholding taxes that
may be required to be withheld with respect to the payment of benefits pursuant
to the Plan, and each Participant and Beneficiary shall be required, promptly
following the request of the Company, to make sufficient funds available to the
Company to satisfy all applicable withholding obligations, except that the
Company may not withhold any such amount that has been withheld by the Trust.
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10.5 Participant Cooperation. Each Participant will cooperate with the Company
by furnishing any and all information requested by the Company in order to
facilitate the payment of benefits hereunder and such other action as may be
requested by the Company.
10.6 Terms. Whenever any words are used herein in the masculine, they shall be
construed as though they were used in the feminine in all cases where they would
so apply; and wherever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.
10.7 Captions. The captions of articles, sections and paragraphs of this Plan
are for convenience only and shall not control or affect the meaning or
construction of any of its provisions.
10.8 Governing Law. The provisions of this Plan shall be construed and
interpreted according to the laws of the State of New York.
10.9 Validity. In case any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein.
10.10 Notice. Any notice or filing required or permitted to be given to the
Administrator under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail, to the Chairman of the Board
with a copy to General Counsel of the Company. Such notice shall be deemed given
as of the date of delivery or, if delivery is made by mail, as of three days
following the date shown on the postmark or on the receipt for registration or
certification.
17
IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its
duly authorized officer as of the Effective Date.
CEDAR SHOPPING CENTERS, INC.
By: /s/ L.S. Ullman
-------------------------
Leo S. Ullman, President
18
EXHIBIT A
---------
CEDAR SHOPPING CENTERS, INC.
SENIOR EXECUTIVE
DEFERRED COMPENSATION PLAN
Trust Agreement
CEDAR SHOPPING CENTERS, INC. EXECUTIVE
DEFERRED COMPENSATION PLAN
TRUST AGREEMENT
THIS TRUST AGREEMENT, made as of the ____ day of ___________, 2003, by
and between Cedar Shopping Centers, Inc. ("Company") and
___________________________ ("Trustee").
W I T N E S S E T H :
WHEREAS, the Company has adopted the Cedar Shopping Centers, Inc.
Executive Deferred Compensation Plan (the "Plan") attached hereto as Appendix A;
WHEREAS, capitalized terms used in this Trust Agreement, unless
otherwise defined, shall have the same meanings as set forth in the Plan;
WHEREAS, the Company has incurred or expects to incur liability under
the terms of such Plan with respect to the individuals participating in such
Plan;
WHEREAS, the Company wishes to establish a trust (hereinafter called
the "Trust") and to contribute to the Trust assets that shall be held therein,
subject to the claims of the Company's creditors in the event of the Company's
Insolvency, as herein defined, until paid to the Plan Participants and their
Beneficiaries in such manner and at such times as specified in the Plan;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan for purposes of Title I of the Employee Retirement Income
Security Act of 1974 (if applicable);
WHEREAS, it is the intention of the Company to make contributions to
the Trust to provide itself with a source of funds to assist it in meeting its
liabilities under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST.
(a) The Company shall deposit with the Trustee in trust the amounts
determined pursuant to the Plan, which shall become the principal of the Trust
to be held, administered and disposed of by the Trustee as provided in this
Trust Agreement. Neither the Trustee nor any Plan Participant or Beneficiary
shall have any right to compel any contributions to the Trust.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which the Company
is the grantor, within the meaning of subpart E, part I, subchapter J, chapter
1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
(d) The principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of the Company and shall be used exclusively
for the uses and purposes of the Plan Participants and general creditors as
herein set forth. Plan Participants and their Beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any assets of the
Trust. Any rights created under the Plan and this Trust Agreement shall be mere
unsecured contractual rights of the Plan Participants and their Beneficiaries
against the Company. Any assets held by the Trust will be subject to the claims
of the Company's general creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) The Administrator shall deliver to the Trustee a schedule (the
"Payment Schedule") that indicates the amounts payable in respect of each Plan
Participant (and his or her Beneficiaries), that provides a formula or other
instructions acceptable to the Trustee for determining the amounts so payable,
the form in which such amount is to be paid (as provided for or available under
the Plan), and the time of commencement for payment of such amounts. Except as
A-2
otherwise provided herein, the Trustee shall make payments to the Plan
Participants and their Beneficiaries in accordance with such Payment Schedule.
The Trustee shall make provision for the reporting and withholding of any
federal, state or local withholding taxes that may be required to be withheld
with respect to the payment of benefits pursuant to the terms of the Plan and
shall pay amounts so withheld to the appropriate taxing authorities or determine
that such amounts have been reported, withheld and paid by the Company.
(b) The entitlement of a Plan Participant or his or her Beneficiaries
to benefits under the Plan shall be determined by the Administrator, and any
claim for such benefits shall be considered and reviewed in accordance with the
Plan.
(c) In the discretion of the Administrator, the Company may make
payment of benefits directly to Plan Participants or their Beneficiaries as they
become due under the terms of the Plan. The Administrator shall notify the
Trustee of its decision to make payment of benefits directly prior to the time
amounts are payable to Participants or their Beneficiaries. In addition, if the
principal of the Trust, and any earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Plan, the Company shall
make the balance of each such payment as it falls due. The Trustee shall notify
the Company where principal and earnings are not sufficient.
SECTION 3. THE TRUSTEES' RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN THE COMPANY IS INSOLVENT.
(a) The Trustee shall cease payment of benefits to Plan Participants
and their Beneficiaries if the Company is Insolvent. The Company shall be
considered "Insolvent" for purposes of this Trust Agreement if (i) the Company
is unable to pay its debts as they become due, or (ii) the Company is subject to
A-3
a pending proceeding as a debtor under the United States Bankruptcy Code. The
term "Insolvency" shall mean the Company's being or becoming Insolvent.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of the Company under federal and state law as set
forth below.
(i) The Administrator shall have the duty to inform the Trustee
in writing of the Company's Insolvency. If a person claiming
to be a creditor of the Company alleges in writing to the
Trustee that the Company has become Insolvent, the Trustee
shall inquire of the Administrator whether the Company is
Insolvent and, pending a response from the Administrator, the
Trustee shall discontinue payment of benefits to Plan
Participants or their Beneficiaries.
(ii) Unless the Trustee has been notified by the Administrator of
the Company's Insolvency, or has received notice from the
Administrator or a person claiming to be a creditor alleging
that the Company is Insolvent, the Trustee shall have no duty
to inquire whether the Company is Insolvent. The Trustee may
in all events rely on such evidence concerning the Company's
solvency as may be furnished to the Trustee and that provides
the Trustee with a reasonable basis for making a
determination concerning the Company's solvency.
(iii) If at any time the Trustee has been notified by the
Administrator that the Company is Insolvent, the Trustee
shall discontinue payments to Plan Participants or their
Beneficiaries and shall hold the assets of the Trust for the
A-4
benefit of the Company's general creditors. Nothing in this
Trust Agreement shall in any way diminish any rights of Plan
Participants or their Beneficiaries to pursue their rights as
general creditors of the Company with respect to benefits due
under the Plan or otherwise.
(iv) The Trustee shall resume the payment of benefits to Plan
Participants or their Beneficiaries in accordance with
Section 2 of this Trust Agreement only after the Trustee has
been notified by the Administrator that the Company is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
Participants or their Beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
Participants or their Beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
SECTION 4. PAYMENTS TO COMPANY.
Except as provided in Section 3 hereof, the Company shall have no right or power
to direct the Trustee to return to the Company or to divert to others any of the
Trust assets before all payment of benefits have been made to Plan Participants
and their Beneficiaries pursuant to the terms of the Plan.
SECTION 5. INVESTMENT AUTHORITY.
(a) The Trustee may invest in securities (including Shares or rights to
acquire Shares) or obligations issued by the Company. All rights associated with
assets of the Trust shall be exercised by the Trustee or the person or persons
A-5
designated by the Trustee, and shall in no event be exercisable by or rest with
Plan Participants, except that voting rights with respect to Shares of the
Company shall be exercised by the Company.
(b) The initial principal of the Trust shall be deposited by the
Company in the form of Shares of the Company. Except as provided below, the
assets of the Trust shall remain invested in Shares, and Dividends thereon which
are not distributed to Plan Participants shall be reinvested in Shares.
(c) An amount equal to the amount of deferred Dividends, with respect
to each Participant who has elected to have the portion of his Account
attributable to Dividends be in the form of cash, shall be deposited by the
Company with the Trustee in the form of cash, and shall be held by the Trustee
in cash or a cash equivalent, as determined by the Administrator.
SECTION 6. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust, net of expenses
and withholding taxes, shall be accumulated and reinvested.
SECTION 7. ACCOUNTING BY THE TRUSTEE.
The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between the
Company and the Trustee. Within 60 days following the close of each calendar
year and within 60 days after the removal or resignation of the Trustee, the
Trustee shall deliver to the Administrator a written account of its
administration of the Trust during such year or during the period from the close
of the last preceding year to the date of such removal or resignation, setting
forth all investments, receipts, disbursements and other transactions effected
by it, including a description of all securities and investments purchased and
sold with the cost or net proceeds of such purchases or sales (accrued interest
A-6
paid or receivable being shown separately), and showing all cash, securities and
other property held in the Trust at the end of such year or as of the date of
such removal or resignation, as the case may be.
SECTION 8. RESPONSIBILITY OF THE TRUSTEES.
(a) The Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that the
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by the Administrator which is
contemplated by, and in conformity with, the terms of the Plan or this Trust and
is given in writing by the Administrator. In the event of a dispute between the
Company and a party, the Trustee may apply to a court of competent jurisdiction
to resolve the dispute.
(b) If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the Trustee against
the Trustee's costs, expenses and liabilities (including, without limitation,
reasonable attorneys' fees and expenses) actually incurred by or on behalf of
the Trustee in connection with this Trust (other than with respect to any
litigation arising out of the Trustee's gross negligence or willful misconduct).
If the Company does not pay such costs, expenses and liabilities in a reasonably
timely manner, the Trustee may obtain payment from the Trust.
(c) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(d) The Trustee may consult with legal counsel (who may also be counsel
for the Company generally) with respect to any of its duties or obligations
A-7
hereunder. The Trustee shall not be liable for the negligence of any legal
counsel with which it consults with respect to its duties or obligations
hereunder.
(e) The Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
the Trustee shall have no power to name a beneficiary of the policy other than
the Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor trustee, or to loan to any person the
proceeds of any borrowing against such policy, and provided further, however,
that the Trustee may loan to the Company the proceeds of any borrowing against
an insurance policy held as an asset of the Trust.
(f) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or to applicable law, the Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
SECTION 9. COMPENSATION AND EXPENSES OF THE TRUSTEE.
The Company shall pay all administrative and Trustee's fees and expenses. If not
so paid, the fees and expenses shall be paid from the Trust.
SECTION 10. RESIGNATION AND REMOVAL OF THE TRUSTEE.
(a) The Trustee may resign at any time by written notice to the
Administrator, which shall be effective thirty (30) days after receipt of such
notice unless the Company and the Trustee agree otherwise.
(b) The Trustee may be removed by the Company on thirty (30) days
written notice or upon shorter notice accepted by the Trustee.
A-8
(c) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within thirty (30) days after receipt
of notice of resignation, removal or transfer, unless the Company extends the
time limit.
(d) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraph(s) (a) or (b) of this section. If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses of
the Trustee in connection with the proceeding shall be allowed as administrative
expenses of the Trust.
SECTION 11. APPOINTMENT OF SUCCESSOR.
(a) If the Trustee resigns or is removed, in accordance with Section
10(a) or (b) hereof, the Company may appoint any third party, such as a bank
trust department or other party that may be granted corporate trustee powers
under state law, as a successor to replace the Trustee upon resignation or
removal. The appointment shall be effective when accepted in writing by the new
Trustee, who shall have all of the rights and powers of the former Trustee,
including ownership rights in the Trust assets. The former Trustee shall execute
any instrument necessary or reasonably requested by the Company or the successor
Trustee to evidence the transfer.
(b) The successor Trustee need not examine the records and acts of any
prior Trustee or of any continuing Trustee prior to the effective date of the
successor Trustee's appointment and may retain or dispose of existing Trust
assets, subject to Sections 7 and 8 hereof. The successor Trustee shall not be
responsible for and the Company shall indemnify and defend the successor Trustee
from any claim or liability resulting from any action or inaction of any prior
A-9
Trustee or from any other past event, or any condition existing at the effective
date of such successor Trustee's appointment.
SECTION 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan or shall make the Trust
revocable.
(b) The Company may terminate the Trust as of any date on which Plan
Participants and their Beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan. Upon termination of the Trust, any assets remaining in
the Trust shall be returned to the Company.
(c) Upon written approval of all Participants or Beneficiaries entitled
to payment of benefits pursuant to the terms of the Plan, the Company may
terminate this Trust prior to the time all benefit payments under the Plan have
been made. All assets in the Trust at termination shall be returned to the
Company.
SECTION 13. MISCELLANEOUS.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan Participants and their Beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 14. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be the date first written
above.
A-10
IN WITNESS WHEREOF, the parties hereto have duly executed this Trust
Agreement as of the date first written above.
CEDAR SHOPPING CENTERS, INC.
By:
----------------------------------
[TRUSTEE]
By:
----------------------------------
A-11
EXHIBIT B
---------
SENIOR EXECUTIVE DEFERRED COMPENSATION PLAN
DESIGNATION OF BENEFICIARY
I hereby designate the following to receive from Cedar Shopping Centers, Inc.
Senior Executive Deferred Compensation Plan any amount payable by reason of my
death:
Beneficiary Designations
Primary Beneficiary
(Beneficiaries) Address SSN Date of birth %
- ----------------------------- -------------------------------- ----------------- ----------------- --------
- ----------------------------- -------------------------------- ----------------- ----------------- --------
- ----------------------------- -------------------------------- ----------------- ----------------- --------
- ----------------------------- -------------------------------- ----------------- ----------------- --------
- ----------------------------- -------------------------------- ----------------- ----------------- --------
- ----------------------------- -------------------------------- ----------------- ----------------- --------
Contingent Beneficiary (Beneficiaries)
Contingent
Beneficiary
(Beneficiaries) Address SSN Date of birth %
- ----------------------------- -------------------------------- ----------------- ----------------- --------
- ----------------------------- -------------------------------- ----------------- ----------------- --------
- ----------------------------- -------------------------------- ----------------- ----------------- --------
- ----------------------------- -------------------------------- ----------------- ----------------- --------
- ----------------------------- -------------------------------- ----------------- ----------------- --------
- ----------------------------- -------------------------------- ----------------- ----------------- --------
-----------------------------------------------------
See additional pages for additional beneficiary designations
Unless I have a Designation of Beneficiary in effect at the time an amount
becomes payable to my Beneficiary, that amount will be paid to my estate in
accordance with Article VI of the Plan.
B-1
This designation is intended to replace all prior designations made by me for
such amounts. I reserve the right to change any Beneficiary named herein without
the consent of such Beneficiary by properly completing and delivering to the
Administrator a new Designation of Beneficiary. I will promptly notify the
Administrator of any change in the name or address of a Beneficiary.
- ------------------------------ ---------------------
[Name] Date
- ------------------------------
Witness Signature
B-2
SCHEDULE A
----------
CEDAR SHOPPING CENTERS, INC.
SENIOR EXECUTIVE DEFERRED
COMPENSATION PLAN
PARTICIPANTS AS OF EFFECTIVE DATE
Participant Name Share Number
---------------- ------------
Brenda J. Walker 51,246
Thomas J. O'Keefe 150,725
Thomas B. Richey 48,986
Stuart H. Widowski 37,681
Ann Maneri 30,435
SCHEDULE B
----------
CEDAR SHOPPING CENTERS, INC.
SENIOR EXECUTIVE DEFERRED
COMPENSATION PLAN
The following Participants are subject to a risk of forfeiture of the portion of
their Accounts attributable to Dividends to the extent provided in Section 4.2:
Thomas J. O'Keefe
Stuart H. Widowski
Thomas B. Richey