Exhibit 10.4

 

EMPLOYEE MATTERS AGREEMENT
BY AND BETWEEN
SIMON PROPERTY GROUP, INC.
SIMON PROPERTY GROUP, L.P.
WASHINGTON PRIME GROUP INC.
AND
WASHINGTON PRIME GROUP, L.P.

 

DATED AS OF MAY 28, 2014

 

EMPLOYEE MATTERS AGREEMENT

 

This EMPLOYEE MATTERS AGREEMENT (the “Agreement”), dated as of May 28, 2014, is
by and among SIMON PROPERTY GROUP, INC., a Delaware corporation (“SPG”), SIMON
PROPERTY GROUP, L.P., a Delaware limited partnership (“SPG L.P.”), WASHINGTON
PRIME GROUP INC., an Indiana corporation (“WPG”) and WASHINGTON PRIME GROUP,
L.P., an Indiana partnership (“WPG L.P.” and together with SPG, SPG L.P. and
WPG, each a “Party” and collectively, the “Parties”).

 

WHEREAS, the board of directors of SPG has determined that it is in the best
interests of SPG and its shareholders to create a new publicly traded company
which shall operate the WPG Business;

 

WHEREAS, in furtherance of the foregoing, the board of directors of SPG has
determined that it is appropriate and desirable to separate the WPG Business
from the SPG Business (the “Separation”);

 

WHEREAS, in furtherance of the foregoing, the Parties have entered into a
Separation and Distribution Agreement, dated as of May 27, 2014 (the “Separation
Agreement”), and have entered or will enter into other Transaction Documents
that will govern certain matters relating to the Distribution and the
relationship of SPG, WPG and their respective Affiliates prior to and following
the Distribution Date; and

 

WHEREAS, pursuant to the Separation Agreement, the Parties have agreed to enter
into this Agreement for the purpose of allocating assets, liabilities and
responsibilities with respect to certain human resources, employee compensation
and benefits matters between them to the extent not provided in, or varying
from, the Separation Agreement.

 

NOW, THEREFORE, in consideration of the premises and of the respective
agreements and covenants contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound hereby, agree as
follows:

 

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ARTICLE I
DEFINITIONS

 

1.1                               Definitions.  The following terms shall have
the following meanings:

 

“Affiliate” shall mean, when used with respect to a specified Person, a Person
that, directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such specified Person.  For the
purpose of this definition, “control” (including with correlative meanings,
“controlled by” and “under common control with”), when used with respect to any
specified Person shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or other interests, by
contract, agreement, obligation, indenture, instrument, lease, promise,
arrangement, release, warranty, commitment, undertaking or otherwise.  It is
expressly agreed that, prior to, at and after the Effective Time, for purposes
of the Transaction Documents (a) no member of the WPG Group shall be deemed to
be an Affiliate of any member of the SPG Group and (b) no member of the SPG
Group shall be deemed to be an Affiliate of any member of the WPG Group.

 

“Agreement” has the meaning ascribed thereto in the preamble to this Agreement.

 

“Benefit Plan” means, with respect to an entity, each plan, program,
arrangement, agreement or commitment that is an employment, consulting,
non-competition or deferred compensation agreement, or an executive
compensation, incentive bonus or other bonus, employee pension, profit-sharing,
savings, retirement, supplemental retirement, stock option, stock purchase,
stock appreciation rights, restricted stock, operating partnership unit, other
equity-based compensation, severance pay, salary continuation, life, health,
hospitalization, sick leave, vacation pay, paid time-off, disability or accident
insurance plan, program, arrangement, agreement or commitment, corporate-owned
or key-man life insurance or other employee benefit plan, program, arrangement,
agreement or commitment, including any “employee benefit plan” (as defined in
Section 3(3) of ERISA), sponsored or maintained by such entity (or to which such
entity contributes or is required to contribute).

 

“COBRA” means the continuation coverage requirements for “group health plans”
under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and as codified in Code Section 4980B and Sections 601 through 608 of
ERISA, and any similar state group health plan continuation Law, together with
all regulations and proposed regulations promulgated thereunder, including any
amendments or other modifications of such Laws and regulations that may be made
from time to time.

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

 

“Distribution” shall have the meaning set forth in the recitals to the
Separation Agreement.

 

“Distribution Date” shall mean the date of the consummation of the Distribution,
which shall be determined by the SPG Board in its sole and absolute discretion.

 

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“Effective Time” shall mean 11:59 p.m., New York City time, on the Distribution
Date.

 

“Employee” means any individual who is a full or part-time common law employee
of the applicable entity.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.

 

“Force Majeure” has the meaning ascribed thereto in the Separation Agreement.

 

“Former Employee” means any former Employee of SPG or an Affiliate of SPG or of
WPG or an Affiliate of WPG, as of immediately prior to the Effective Time,
whether having last been employed by a member of the SPG Group or a member of
the WPG Group, including retired and other inactive terminated Employees.  For
clarification purposes, former Employees who are on long-term disability leave
as of the Effective Time shall be considered Former Employees for purposes of
this Agreement.

 

“Governmental Authority” means any nation or government, any state, municipality
or other political subdivision thereof, and any entity, body, agency,
commission, department, board, bureau, court, tribunal or other instrumentality,
whether federal, state, local, domestic, foreign or multinational, exercising
executive, legislative, judicial, regulatory, administrative or other similar
functions of, or pertaining to, government and any executive official thereof.

 

“Group” shall mean either the WPG Group or the SPG Group, as the context
requires.

 

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996,
as amended.

 

“Law” means any national, supranational, federal, state, provincial, local or
similar law (including common law), statute, code, order, ordinance, rule,
regulation, treaty (including any income tax treaty), license, permit,
authorization, approval, consent, decree, injunction, binding judicial or
administrative interpretation or other requirement, in each case, enacted,
promulgated, issued or entered by a Governmental Authority.

 

“Liabilities” shall have the meaning ascribed thereto in the Separation
Agreement.

 

“Parties” has the meaning ascribed thereto in the preamble to this Agreement.

 

“Person” shall mean an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability entity, any other entity and any Governmental Authority.

 

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“Separation” has the meaning ascribed thereto in the recitals to this Agreement.

 

“Separation Agreement” has the meaning ascribed thereto in the recitals to this
Agreement.

 

“SPG 401(k) Plan” means the Simon Property Group & Adopting Entities Matching
Savings Plan.

 

“SPG Annual Bonus Plans” has the meaning ascribed thereto in Section 6.1 of this
Agreement.

 

“SPG Benefit Plan” means any Benefit Plan sponsored, maintained or contributed
to by SPG or any of its Affiliates.

 

“SPG Business” shall mean all businesses, operations and activities (whether or
not such businesses, operations or activities are or have been terminated,
divested or discontinued) conducted at any time prior to the Effective Time by
either Party or any member of its Group, other than the WPG Business.

 

“SPG Common Share” shall mean a common share, par value of $0.0001 per share, of
SPG.

 

“SPG Equity Plan” means the Simon Property Group, L.P. Amended and Restated 1998
Stock Incentive Plan.

 

“SPG Group” means SPG and each Person that is a Subsidiary of SPG (other than
any member of the WPG Group).

 

“SPG Group Employee” means any person who, immediately following the Effective
Time, is an Employee of any member of the SPG Group, including any such Employee
who is on an approved leave at such time.

 

“SPG Participant” means any SPG Group Employee or Former Employee and who is, at
any time prior to, on, or after the Effective Time, a participant in the
applicable SPG Benefit Plan or is a beneficiary, dependent or alternate payee of
such a participant.

 

“SPG Severance Benefits Program” means the SPG severance program which covers
employees of the WPG Group immediately prior to the Effective Time.

 

“SPG Share Fund” means the fund under the SPG 401(k) Plan which provides for
investment in SPG Common Shares.

 

“SPG Welfare Plans” has the meaning ascribed thereto in Section 4.1(a) of this
Agreement.

 

“Subsidiary” or “subsidiary” means, with respect to any Person, any corporation,
limited liability company, joint venture or partnership of which such Person
(i) beneficially owns, either directly or indirectly, more than fifty percent
(50%) of (A) the total combined

 

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voting power of all classes of voting securities of such Person, (B) the total
combined equity interests, or (C) the capital or profit interests, in the case
of a partnership, or (ii) otherwise has the power to vote, either directly or
indirectly, sufficient securities to elect a majority of the board of directors
or similar governing body.

 

“Transaction Documents” means all agreements entered into by the Parties or the
members of their respective Groups (but as to which no third party is a party)
in connection with the Separation, the Distribution, or the other transactions
contemplated by this Agreement, including this Agreement, the Separation
Agreement, the Transition Services Agreement, the Tax Matters Agreement, the
Property Management Agreements, the Property Development Agreement and the
Transfer Documents, as such terms are defined in the Separation Agreement (if
not defined in this Agreement).

 

“Transfer Period” has the meaning ascribed thereto in Section 3.1(c) of this
Agreement.

 

“Transition Services Agreement” means the Transition Services Agreement to be
entered into by and between SPG and WPG or any members of their respective
Groups in connection with the Separation, the Distribution or the other
transactions contemplated by the Separation Agreement.

 

“U.S.” means the United States of America.

 

“Welfare Plan” means a plan that provides for health, welfare or other insurance
benefits (within the meaning of Section 3(1) of ERISA).

 

“WPG” has the meaning ascribed thereto in the preamble to this Agreement.

 

“WPG 401(k) Plan” has the meaning ascribed thereto in Section 3.1(a) of this
Agreement.

 

“WPG Annual Bonus Plan” has the meaning ascribed thereto in Section 6.1 of this
Agreement.

 

“WPG Benefit Plan” means any Benefit Plan sponsored, maintained or contributed
to by a member of the WPG Group after the Effective Time, but excluding any SPG
Benefit Plan.

 

“WPG Business” shall mean the business, operations and activities of the SPG
Group relating to the WPG Properties as defined in the Separation Agreement as
conducted at any time prior to the Effective Time by either Party or any of
their current or former Subsidiaries.

 

“WPG Common Share” shall mean a share of common stock, par value $0.0001 per
share, of WPG.

 

“WPG Equity Plan” has the meaning ascribed thereto in Section 5.1 of this
Agreement.

 

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“WPG Group” shall mean (a) prior to the Effective Time, WPG and each Person that
will be a Subsidiary of WPG as of immediately after the Effective Time,
including the Transferred Entities (as defined in the Separation Agreement),
even if, prior to the Effective Time, such Person is not a Subsidiary of WPG;
and (b) on and after the Effective Time, WPG and each Person that is a
Subsidiary of WPG.

 

“WPG Group Employee” means any person who, immediately following the Effective
Time, is an Employee of any member of the WPG Group, including any such Employee
who is on an approved leave at such time other than long-term disability leave.

 

“WPG Participant” means any WPG Group Employee who was, prior to the Effective
Time, a participant in the applicable SPG Benefit Plan or is, after the
Effective Time, a participant in the applicable WPG Benefit Plan, or is a
beneficiary, dependent or alternate payee of such a participant.

 

“WPG Share Fund” has the meaning ascribed thereto in Section 3.1(c).

 

“WPG Welfare Plans” means Welfare Plans which are maintained or contributed to
by a member of the WPG Group, but excluding the SPG Welfare Plans.

 

ARTICLE II
EMPLOYMENT GENERALLY

 

2.1                               Continuation of Employment.  Except as
otherwise provided on Schedule 2.1 of this Agreement or as required by
applicable local Law, SPG and its Affiliates shall take all actions necessary to
ensure that, as of immediately prior to the Effective Time, (i) all Employees
intended by the Parties to be WPG Group Employees are employed by a member of
the WPG Group and (ii) all Employees intended by the Parties to be SPG Group
Employees are employed by a member of the SPG Group.

 

2.2                               Service Recognition.  WPG shall give, or shall
cause its Affiliates to give, each WPG Group Employee full credit for all
purposes under any WPG Benefit Plan for such WPG Group Employee’s service with
SPG or any of its Affiliates prior to the Effective Time to the same extent such
service was recognized by the corresponding SPG Benefit Plan immediately prior
to the Effective Time; provided, however, that such service shall not be
recognized to the extent that such recognition would result in the duplication
of benefits or as otherwise provided by applicable local Law.

 

2.3                               No Separation From Service or Termination of
Employment.  The Distribution and the assignment, transfer, or continuation of
employment of any Employee of SPG or any of its Affiliates in connection
therewith (including in accordance with Section 2.1 hereof) shall not be deemed
a separation from service or termination of employment entitling such Employee
to be eligible to participate in, or to receive payment of, severance or other
termination payments or benefits under any applicable Law, SPG Benefit Plan or
WPG Benefit Plan provided, however, that any Employee of SPG or any of its
Affiliates whose employment is not intended to be continued by SPG or any of its
Affiliates following the Effective Time and is not assigned to a member of the
WPG Group, and whose employment is involuntarily terminated

 

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by SPG as of the Effective Time, shall be deemed to have incurred a separation
from service and shall be eligible to receive severance and benefits as set
forth in Section 6.2 of this Agreement.

 

2.4                               Former Employees .  WPG shall have no
liability with respect to Former Employees, if any, as of the Effective Time.
SPG shall retain liability, if any, with respect to Former Employees.

 

ARTICLE III
RETIREMENT PLANS

 

3.1                               The SPG 401(k) Plan and WPG 401(k) Plan.

 

(a)                                 Establishment of Plan and Trust.  WPG or one
of its Affiliates shall adopt a retirement plan and related trust which are
qualified and tax-exempt pursuant to Code Sections 401(a) and 501(a),
respectively, and which is intended to meet the requirements of Code
Section 401(k) (the “WPG 401(k) Plan”), and any trust agreement or other plan
documents reasonably necessary in connection therewith, and shall cause a
trustee to be appointed for the WPG 401(k) Plan.  Such actions shall be
completed prior to, or as soon as reasonably practicable following, the
Effective Time.

 

(b)                                 Assumption of Liabilities Transfer of
Assets.  As soon as practicable after the Effective Time and subject to
completion of the Transfer Period, and subject to Section 3.1(c) and Applicable
Law:  (i) SPG shall cause the accounts (including any outstanding loan balances)
of each WPG Employee in the SPG 401(k) Plan to be transferred to the WPG
401(k) Plan and its related trust; (ii) the WPG 401(k) Plan shall assume and be
solely responsible for all Liabilities under the WPG 401(k) Plan relating to the
accounts that are so transferred as of and following the time of such transfer;
and (iii) WPG shall cause such transferred accounts to be accepted by the WPG
401(k) Plan and its related trust and shall cause the WPG 401(k) Plan to satisfy
all protected benefit requirements under the Code and applicable Law with
respect to the transferred accounts.  Such transfer shall be made in (i) cash
but, other than as set forth in Section 3.1(c), only to the extent it is not
practicable to transfer in kind (as determined by the administrator of the SPG
401(k) Plan) and (ii) promissory notes evidencing the transfer of outstanding
loans.

 

(c)                                  Employer Securities.  The SPG 401(k) Plan
will provide, effective as of the Effective Time:  (i) for the establishment of
a share fund for WPG Common Shares (the “WPG Share Fund”); and (ii) that the WPG
Share Fund shall receive a transfer of and hold all WPG Common Shares
distributed in connection with the Distribution in respect of SPG Common Shares
held in the SPG Share Fund.  Each WPG Group Employee participating in the
SPG 401(k) Plan will be prohibited from allocating contributions to, or
transferring funds into, the SPG Share Fund and WPG Share Fund on and following
the Distribution Date, and shall have a period of at least 10 business days
following the Distribution Date, as determined by the administrator of the SPG
401(k) Plan (the “Transfer Period”), to transfer amounts invested in such funds
to any other investment fund offered under the SPG 401(k) Plan.  As soon as
practicable following the completion of the Transfer Period and prior to the
transfer of assets described in Section 3.1(b), to the extent amounts remain
invested on behalf of a WPG Group Employee in the SPG Share Fund and/or WPG
Share Fund, such invested amounts shall be

 

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(i) liquidated to cash, (ii) transferred in cash to the WPG 401(k) Plan in
accordance with Section 3.1(b), and (iii) invested on behalf of such employee in
a target date fund based on the age of such employee at the time of such
transfer, in accordance with such procedures as are determined by the
administrator of the WPG 401(k) Plan.

 

(d)                                 Contributions Under the SPG 401(k) Plan as
of the Effective Time.  All employer contributions, including employee
deferrals, matching contributions (including any true-up contributions, if
applicable), profit-sharing contributions, and employer non-elective
contributions, accrued by WPG Participants under the SPG 401(k) Plan through the
Effective Time, determined in accordance with the terms and provisions of the
SPG 401(k) Plan, ERISA and the Code, and based on all service performed and
compensation accrued through the Effective Time, shall be deposited by SPG to
the SPG 401(k) Plan and allocated to the SPG 401(k) Plan accounts of the proper
WPG Participants prior to the Effective Time.

 

3.2                               Reservation of Rights.  Except as provided in
Section 3.1, the Parties hereby acknowledge that nothing in this Article III
shall be construed to require (a) SPG or any of its Affiliates to continue the
SPG 401(k) Plan before or after the Effective Time, and (b) WPG or any of its
Affiliates to continue the WPG 401(k) Plan after the Effective Time following
its establishment and receipt of the asset and liability transfer described in
Section 3.1.  The Parties agree that (i) SPG reserves the right, in its sole
discretion, to amend or terminate the SPG 401(k) Plan at any time following the
date of this Agreement in accordance with its terms and applicable Law, and
(ii) WPG reserves the right, in its sole discretion, to amend or terminate the
WPG 401(k) Plan at any time following the date of this Agreement in accordance
with its terms and applicable Law; provided that no such amendment to either the
SPG 401(k) Plan or the WPG 401(k) Plan shall prevent the actions described in
Section 3.1.

 

ARTICLE IV
HEALTH AND WELFARE PLANS

 

4.1                               WPG Health and Welfare Plans.

 

(a)                                 Cessation of Participation in SPG Health and
Welfare Plans.  No later than the Effective Time, WPG (acting directly or
through its Affiliates) shall establish the WPG Welfare Plans, which shall
generally correspond to the SPG health and welfare plans in which WPG Group
Employees participate immediately prior to the Effective Time (“SPG Welfare
Plans”).  WPG shall cause WPG Group Employees and their covered dependents who
participate in SPG Welfare Plans immediately prior to the Effective Time to be
automatically enrolled as of the Effective Time in WPG Welfare Plans
corresponding to the SPG Welfare Plans in which the WPG Employee or his or her
covered dependents, if any, participated immediately before the Effective Time;
provided that, with respect to flexible spending accounts, if automatic
enrollment is not possible, WPG Group Employees shall be eligible to elect
coverage as of or as soon as reasonably practicable following the Effective Time
under each WPG Welfare Plan which is a flexible spending account plan and which
corresponds to an SPG Welfare Plan which is a flexible spending account plan.

 

(b)                                 Allocation of Health and Welfare Plan
Liabilities.  All outstanding Liabilities relating to, arising out of, or
resulting from health and welfare claims incurred by or

 

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on behalf of WPG Employees or their covered dependents under the SPG Welfare
Plans on or before the Effective Time, including claims incurred but not
reported, shall be retained by SPG.

 

(c)                                  Waiver of Conditions.  To the extent
permitted by applicable Law and the terms of the applicable WPG Welfare Plan,
WPG (acting directly or through its Affiliates) shall cause the WPG Welfare
Plans to (i) waive all limitations as to preexisting conditions, exclusions, and
service conditions with respect to participation and coverage requirements
applicable to any WPG Group Employee, other than limitations that were in effect
with respect to the WPG Group Employee under the corresponding SPG Welfare Plan
immediately prior to the Effective Time, and (ii) waive any waiting period
limitation or evidence of insurability requirement applicable to a WPG Group
Employee other than limitations or requirements that were in effect with respect
to such WPG Group Employee under the corresponding SPG Welfare Plan immediately
prior to the Effective Time.  Such waivers described in clauses (i) and (ii) of
the foregoing sentence, with respect to the WPG Welfare Plans, shall apply to
initial enrollment effective immediately following the Effective Time. 
Following the initial enrollment, pre-existing condition limitations,
exclusions, and services conditions under the WPG Welfare Plans shall apply only
to the extent allowable under HIPAA.

 

(d)                                 Deductibles, Etc.  To the extent permitted
by applicable Law and the terms of the applicable WPG Welfare Plan, expenses
incurred by any WPG Group Employee and credited during the year which includes
the Distribution Date for purposes of calculating deductibles, co-payments and
out-of-pocket maximums under an SPG Welfare Plan shall be taken into account as
if such expense had been incurred under the corresponding WPG Welfare Plan.

 

4.2                               COBRA and HIPAA Compliance.  SPG shall
continue to be responsible for compliance with the health care continuation
requirements of COBRA (including the requirements under the American Recovery
and Reinvestment Act), the certificate of creditable coverage requirements of
HIPAA, and the corresponding provisions of the SPG Welfare Plans with respect to
any WPG Group Employees or any of their covered dependents who incur a
qualifying event or loss of coverage under COBRA at or before the Effective Time
(including as a result of the Separation and Distribution).  WPG shall assume
responsibility for compliance with the health care continuation requirements of
COBRA, the certificate of creditable coverage requirements of HIPAA, and the
corresponding provisions of the WPG Welfare Plans, with respect to any WPG Group
Employees or any of their covered dependents who incur a qualifying event or
loss of coverage under the WPG Welfare Plans after the Effective Time.

 

4.3                               Time-Off Benefits.  WPG shall credit each WPG
Group Employee immediately following the Effective Time with the amount of
accrued but unused paid time-off as such WPG Group Employee had under the
applicable SPG paid time-off policy immediately prior to the Effective Time.

 

4.4                               Incurred Claim Definition.  For purposes of
this Article IV, a claim or Liability is deemed to be incurred:  (a) with
respect to medical, dental, vision and/or prescription drug benefits, upon the
rendering of health services giving rise to such claim or Liability; (b) with
respect to life insurance, accidental death and dismemberment and business
travel accident insurance, upon the occurrence of the event giving rise to such
claim or Liability; (c) with

 

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respect to disability benefits, upon the date of an Employee’s disability, as
determined by the disability benefit insurance carrier or claim administrator,
giving rise to such claim or Liability; and (d) with respect to a period of
continuous hospitalization, upon the date of admission to the hospital.

 

4.5                               Workers Compensation.  The ownership and
administration of workers compensation insurance shall be governed by
Section 5.1 of the Separation Agreement regarding insurance matters.  For the
avoidance of doubt, nothing in this Agreement shall be interpreted to allocate
between the Parties the claims and Liabilities under any workers compensation
insurance policies.

 

4.6                               Reservation of Rights.  WPG shall maintain
Welfare Plans that are substantially comparable in the aggregate to the SPG
Welfare Plans in effect immediately prior to the Effective Time for the period
commencing as of Effective Time through December 31, 2014.  The Parties hereby
acknowledge and agree that nothing in this Article IV shall be construed to
require (a) SPG or any of its Affiliates to continue any SPG Benefit Plan before
or after the Effective Time, or (b) WPG or any of its Affiliates to continue any
WPG Benefit Plan before or after the Effective Time, in each case, except as set
forth in Article VI and this Section 4.6.  Each of SPG and WPG reserves the
right, in its sole discretion, to amend or terminate any SPG Benefit Plan and
any WPG Benefit Plan, respectively, at any time after the date of this
Agreement, to the extent permitted or required under the terms of the applicable
SPG Benefit Plan, WPG Benefit Plan or applicable Law; provided that no such
amendment or termination shall prevent the actions described in Article IV.

 

ARTICLE V
EQUITY PLANS

 

5.1                               Establishment of WPG Equity Plan.  As of or
prior to the Effective Time, WPG shall adopt an equity compensation plan (the
“WPG Equity Plan”) pursuant to which equity awards may be granted to WPG Group
Employees.  The WPG Equity Plan shall provide for the same types of awards as
the SPG Equity Plan.  SPG and WPG shall take all actions as may be necessary or
advisable to adopt and obtain shareholder and/or board of directors approval of
the WPG Equity Plan (and the awards in respect of WPG Common Shares thereunder)
in order to satisfy the requirement of Rule 16b-3 under the Exchange Act, and
the applicable rules and regulations of any applicable exchange on which WPG
Common Shares will be traded.  The WPG Equity Plan shall be approved prior to
the Effective Time by SPG as WPG’s sole shareholder.

 

5.2                               Liabilities for Settlement of Awards.  SPG
shall be responsible for all Liabilities associated with awards made under the
SPG Equity Plan, including without limitation such awards made to WPG Group
Employees.  WPG shall be responsible for all Liabilities associated with awards
made under the WPG Equity Plan.

 

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ARTICLE VI
ADDITIONAL COMPENSATION MATTERS; SEVERANCE

 

6.1                               Annual Cash Incentive Awards. Immediately
prior to the Effective Time, WPG Group Employees shall cease participating in
each SPG annual bonus plan or policy (“SPG Annual Bonus Plans”) and, as of the
Effective Time, there shall be an accrual on the financial statements of WPG
equal to the amount accrued by SPG on its financial statements for the portion
of the calendar year ending immediately prior to the Effective Time for WPG
Group Employees under such plans as appropriate based on the results achieved to
date and the forecasted achievement of applicable annual targets.  As of the
Effective Time, (i) WPG shall establish annual bonus plans or policies (“WPG
Annual Bonus Plans”) substantially similar to the SPG Bonus Plans in effect
immediately prior to the Effective Time which shall provide annual incentive
bonuses for the entire calendar year in which occurs the Effective Time and
(ii) WPG Group Employees who were eligible to participate in the SPG Bonus Plans
shall be eligible to participate in the WPG Bonus Plans.  WPG shall be solely
responsible for funding, paying and discharging all obligations under the WPG
Annual Bonus Plans and SPG shall have no liability with respect to annual
bonuses to be paid to WPG group employees with respect to the calendar year in
which occurs the Effective Time.

 

6.2                               Assumption of Severance Liabilities.

 

(a)                                 Severance Liabilities.  WPG Group Employees
who are terminated in connection with the Distribution prior to, on, or within
eighteen (18) months following, the Effective Time shall be entitled to receive
severance benefits that are no less favorable than the severance benefits
provided under the terms of the SPG Severance Benefits Program in effect as of
the applicable termination of employment or, if earlier, the Effective Time;
provided, however, that such severance benefits shall not result in the
duplication of benefits.  WPG shall adopt a severance program that has terms
substantially similar to the SPG Severance Benefits Program as in effect as of
the Effective Time.

 

(b)                                 Severance Agreements.  In the event any WPG
Group Employee who is a salaried employee is eligible for severance benefits on
account of a termination of employment within eighteen (18) months following the
Effective Time, unless agreed otherwise by the Chief Human Resources Officers of
WPG and SPG and such employee, WPG shall require such employee, as a condition
of receiving severance benefits, to agree in writing to a release of existing
claims and confidentiality and noncompete provisions in favor of WPG and SPG, in
substantially the form of the Separation Agreement and Release and
Confidentiality and Non-Compete Letter Agreement attached as Exhibit A hereto.

 

6.3                               Code Section 409A.  Notwithstanding anything
to the contrary herein, if any of the provisions of this Agreement would result
in imposition of taxes and/or penalties under Section 409A of the Code, SPG and
WPG shall cooperate in good faith to modify the applicable provision so that
such taxes and/or penalties do not apply in order to comply with the provisions
of Section 409A of the Code, other applicable provisions of the Code and/or any
rules, regulations or other regulatory guidance issued under such statutory
provisions.

 

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6.4                               Reservation of Rights.  The Parties hereby
acknowledge that, except for the obligations described in this Article VI,
nothing in this Article VI shall be construed to require either SPG or WPG (and
their respective Affiliates) to continue any cash incentive awards program,
deferred compensation plan, or severance plan after the Effective Time.  The
Parties agree that each of SPG and WPG reserves the right, in its sole
discretion, to amend or terminate any cash incentive awards program, deferred
compensation plan, or severance plan maintained by the SPG Group or the WPG
Group, respectively, at any time after the Effective Time to the extent
permitted under the terms of the applicable cash incentive awards program,
deferred compensation plan, or severance plan and applicable Law; provided that
no such amendment shall prevent the actions described in this Article VI.

 

ARTICLE VII
GENERAL AND ADMINISTRATIVE

 

7.1                               Non-Termination of Employment; No Third-Party
Beneficiaries.  Except as expressly provided for in this Agreement or the
Separation Agreement, no provision of this Agreement or any of the other
Transaction Documents shall be construed to create any right, or accelerate
entitlement, to any compensation or benefit whatsoever on the part of any SPG
Group Employee, WPG Group Employee or any Former Employee, or future Employee of
SPG or any of its Affiliates or WPG or any of its Affiliates under any SPG
Benefit Plan or WPG Benefit Plan or otherwise, nor shall any such provision be
construed as an amendment to any employee benefit plan or other employee
compensatory or benefit arrangement.  Furthermore, nothing in this Agreement is
intended to confer upon any Employee or Former Employee any right to continued
employment, any recall or similar rights to an Employee on layoff or any type of
approved leave, or to change the employment status of any Employee from “at
will.”

 

7.2                               Beneficiary Designation/Release of
Information/Right to Reimbursement.  To the extent permitted by applicable Law
and except as otherwise provided for in this Agreement, all beneficiary
designations, authorizations for the release of Information (as defined in the
Separation Agreement) and rights to reimbursement made by or relating to WPG
Participants under SPG Benefit Plans shall be transferred to and be in full
force and effect under the corresponding WPG Benefit Plans until such
beneficiary designations, authorizations or rights are replaced or revoked by,
or no longer apply, to the relevant WPG Participant.

 

7.3                               Not a Change in Control.  The Parties
acknowledge and agree that the transactions contemplated by the Separation
Agreement and this Agreement do not constitute a “change in control” for
purposes of any SPG Benefit Plan or WPG Benefit Plan.

 

ARTICLE VIII
MISCELLANEOUS

 

8.1                               Relationship of Parties.  Nothing in this
Agreement shall be deemed or construed by the Parties or any third party as
creating the relationship of principal and agent, partnership or joint venture
between the Parties, it being understood and agreed that no provision contained
therein, and no act of the Parties, shall be deemed to create any relationship
between the Parties other than the relationship set forth herein.

 

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8.2                               Affiliates.  Each of SPG and WPG shall cause
to be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth in this Agreement to be performed by each
of their respective Affiliates.

 

8.3                               Corporate Power.  SPG represents on behalf of
itself and on behalf of other members of the SPG Group, and WPG represents on
behalf of itself and on behalf of other members of the WPG Group, as follows:

 

(a)                                 each such Person has the requisite corporate
power and authority and has taken all corporate action necessary in order to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby and thereby; and

 

(b)                                 this Agreement has been duly executed and
delivered by it and constitutes a valid and binding agreement of it enforceable
in accordance with the terms thereof.

 

8.4                               Governing Law.  This Agreement (and any claims
or disputes arising out of or related hereto or to the transactions contemplated
hereby or to the inducement of any party to enter herein, whether for breach of
contract, tortious conduct or otherwise and whether predicated on common law,
statute or otherwise) shall be governed by and construed and interpreted in
accordance with the Laws of the State of Indiana irrespective of the choice of
laws principles of the State of Indiana including all matters of validity,
construction, effect, enforceability, performance and remedies.

 

8.5                               Survival of Covenants.  Except as expressly
set forth in any other Transaction Document, the covenants and other agreements
contained in this Agreement, and Liability for the breach of any obligations
contained herein or therein, shall survive each of the transactions described in
the Plan of Reorganization (as defined in the Separation Agreement) and the
Distribution and shall remain in full force and effect.

 

8.6                               Force Majeure.  No Party shall be deemed in
default of this Agreement or, unless otherwise expressly provided therein, any
other Transaction Document for any delay or failure to fulfill any obligation
(other than a payment obligation) hereunder or thereunder so long as and to the
extent to which any delay or failure in the fulfillment of such obligation is
prevented, frustrated, hindered or delayed as a consequence of circumstances of
Force Majeure.  In the event of any such excused delay, the time for performance
of such obligations (other than a payment obligation) shall be extended for a
period equal to the time lost by reason of the delay.  A Party claiming the
benefit of this provision shall, as soon as reasonably practicable after the
occurrence of any such event, (a) provide written notice to the other Party of
the nature and extent of any such Force Majeure condition; and (b) use
commercially reasonable efforts to remove any such causes and resume performance
under the Transaction Documents, as applicable, as soon as reasonably
practicable.

 

8.7                               Notices.  All notices, requests, claims,
demands and other communications under this Agreement shall be in writing and
shall be given or made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by overnight courier service, by facsimile or
electronic transmission with receipt confirmed (followed by delivery of an
original via overnight courier service) or by registered or certified mail
(postage prepaid, return receipt

 

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requested) to the respective Parties at the following addresses (or at such
other address for a Party as shall be specified in a notice given in accordance
with this Section 8.7):

 

If to SPG Property, to:

 

Simon Property Group, Inc.

225 West Washington Street, 14th Floor

Indianapolis, Indiana 46204

Attention:

General Counsel

Facsimile:

(317) 685-7377

 

with a copy (until the Effective Time) to:

 

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attention:

Adam O. Emmerich

 

Karessa L. Cain

Facsimile:

(212) 403-2000

 

if to WPG:

 

Washington Prime Group Inc.

7315 Wisconsin Avenue — 5th Floor

Bethesda, Maryland 20814

Attention:

General Counsel

Facsimile:

(240) 380-2721

 

with a copy (until the Effective Time) to:

 

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attention:

Adam O. Emmerich

 

Karessa L. Cain

Facsimile:

(212) 403-2000

 

8.8                               Termination.  Notwithstanding any provision to
the contrary, this Agreement may be terminated and the Distribution abandoned at
any time prior to the Effective Time by and in the sole discretion of SPG
without the prior approval of any Person, including WPG.  In the event of such
termination, this Agreement shall become void and no Party, or any of its
officers and directors, shall have any liability to any Person by reason of this
Agreement.  After the Effective Time, this Agreement may not be terminated
except by an agreement in writing signed by each of the Parties.

 

8.9                               Severability.  If any provision of this
Agreement or any Ancillary Agreement or the application thereof to any Person or
circumstance is determined by a court of competent jurisdiction to be invalid,
void or unenforceable, the remaining provisions hereof or thereof, or

 

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the application of such provision to Persons or circumstances or in
jurisdictions other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby.  Upon such determination, the Parties
shall negotiate in good faith in an effort to agree upon such a suitable and
equitable provision to effect the original intent of the Parties

 

8.10                        Entire Agreement.  Except as otherwise expressly
provided in this Agreement, this Agreement (including the Schedules hereto) and
the applicable provisions of the Separation Agreement together constitute the
entire agreement of the Parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and undertakings, both written and
oral, between or on behalf of the Parties with respect to the subject matter of
this Agreement.

 

8.11                        Indemnification; Dispute Resolutions.  Article IV of
the Separation Agreement governs the Parties’ indemnification rights and
obligations and Article VII of the Separation Agreement governs the resolution
of any dispute between the Parties.

 

8.12                        Assignment; No Third-Party Beneficiaries.  This
Agreement shall not be assigned by any Party without the prior written consent
of the other Parties, except that SPG may assign (i) any or all of its rights
and obligations under this Agreement to any of its Affiliates and (ii) any or
all of its rights and obligations under this Agreement in connection with a sale
or disposition of any assets or entities or lines of business of SPG; provided,
however, that, in each case, no such assignment shall release SPG from any
liability or obligation under this Agreement nor change any of the steps in the
Plan of Reorganization (as defined in the Separation Agreement).  Except as
provided in Article IV of the Separation Agreement with respect to Indemnified
Parties (as defined in the Separation Agreement), this Agreement is for the sole
benefit of the Parties and members of their respective Group and their permitted
successors and assigns and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

8.13                        Public Announcements.  From and after the Effective
Time, SPG and WPG shall consult with each other before issuing, and give each
other the opportunity to review and comment upon, any press release or other
public statements with respect to the transactions contemplated by this
Agreement, and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by applicable
Law, court process or by obligations pursuant to any listing agreement with any
national securities exchange or national securities quotation system.

 

8.14                        Specific Performance.  Subject to the provisions of
Article VII of the Separation Agreement, in the event of any actual or
threatened default in, or breach of, any of the terms, conditions and provisions
of this Agreement, the Party or Parties who are or are to be thereby aggrieved
shall have the right to specific performance and injunctive or other equitable
relief (on an interim or permanent basis) of its rights under this Agreement, in
addition to any and all other rights and remedies at law or in equity, and all
such rights and remedies shall be cumulative.  The Parties agree that the
remedies at law for any breach or threatened breach, including monetary damages,
may be inadequate compensation for any loss and that any defense in any action
for specific performance that a remedy at law would be adequate is waived.  Any

 

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requirements for the securing or posting of any bond with such remedy are waived
by each of the Parties.

 

8.15                        Amendment.  No provision of this Agreement may be
amended or modified except by a written instrument signed by all the Parties. 
No waiver by any Party of any provision of this Agreement shall be effective
unless explicitly set forth in writing and executed by the Party so waiving. 
The waiver by any Party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any other subsequent breach.

 

8.16                        Rules of Construction.  Interpretation of this
Agreement shall be governed by the following rules of construction (i) words in
the singular shall be held to include the plural and vice versa and words of one
gender shall be held to include the other gender as the context requires,
(ii) references to the terms Article, Section, paragraph, clause, Exhibit and
Schedule are references to the Articles, Sections, paragraphs, clauses, Exhibits
and Schedules of this Agreement unless otherwise specified, (iii) the terms
“hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer to
this entire Agreement, including the Schedules and Exhibits hereto,
(iv) references to “$” shall mean U.S. dollars, (v) the word “including” and
words of similar import when used in this Agreement shall mean “including
without limitation,” unless otherwise specified, (vi) the word “or” shall not be
exclusive, (vii) references to “written” or “in writing” include in electronic
form, (viii) unless the context requires otherwise, references to “Party” shall
mean SPG or WPG, as appropriate, and references to “Parties” shall mean SPG and
WPG, (ix) provisions shall apply, when appropriate, to successive events and
transactions, (x) the table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement, (xi) SPG and WPG have each participated in the
negotiation and drafting of this Agreement and if an ambiguity or question of
interpretation should arise, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or burdening either Party by virtue of the authorship of any of the
provisions in this Agreement or any interim drafts of this Agreement, and
(xii) a reference to any Person includes such Person’s successors and permitted
assigns.

 

8.17                        Counterparts.  This Agreement may be executed in one
or more counterparts, and by the different Parties in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.  Delivery of an
executed counterpart of a signature page to this Agreement by facsimile or
portable document format (PDF) shall be as effective as delivery of a manually
executed counterpart of any such Agreement.

 

[Remainder of this page intentionally left blank.]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
as of the day and year first above written.

 

 

SIMON PROPERTY GROUP, INC,

 

 

 

 

 

By:

/s/ James M. Barkley

 

 

Name: James M. Barkley

 

 

Title: Secretary and General Counsel

 

 

 

 

 

SIMON PROPERTY GROUP, L.P. a Delaware limited partnership

 

 

 

 

 

 

By:

Simon Property Group, Inc., a Delaware corporation, its general partner

 

 

 

 

 

By:

/s/ James M. Barkley

 

 

Name: James M. Barkley

 

 

Title: Secretary and General Counsel

 

 

 

 

 

WASHINGTON PRIME GROUP INC.

 

 

 

 

 

 

By:

/s/ Robert P. Demchak

 

 

Name: Robert P. Demchak

 

 

Title: Secretary and General Counsel

 

 

 

 

 

WASHINGTON PRIME GROUP, L.P.,

 

an Indiana limited partnership

 

 

 

 

 

 

 

 

By:

Washington Prime Group Inc.,
an Indiana corporation, its general partner

 

 

 

 

 

By:

/s/ Robert P. Demchak

 

 

Name: Robert P. Demchak

 

 

Title: Secretary and General Counsel

 

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