Exhibit 10.4

 

SIMON PROPERTY GROUP
SERIES CEO LTIP UNIT AWARD AGREEMENT

 

This Series CEO LTIP Unit Award Agreement (“Agreement”) made as of the date set
forth below among Simon Property Group, Inc., a Delaware corporation (the
“Company”), its subsidiary, Simon Property Group, L.P., a Delaware limited
partnership and the entity through which the Company conducts substantially all
of its operations (the “Partnership”), and the person identified below as the
grantee (the “Grantee”).

 

Recitals

 

A.                                   The Grantee is an executive officer of the
Company or one of its affiliates and provides services to the Partnership.

 

B.                                     The Compensation Committee (the
“Committee”) of the Board of Directors of the Company (the “Board”) approved
this award (this “Award”) pursuant to the Partnership’s 1998 Stock Incentive
Plan (as further amended, restated or supplemented from time to time hereafter,
the “Plan”) and the Eighth Amended and Restated Agreement of Limited Partnership
of the Partnership, as amended, restated and supplemented from time to time
hereafter (the “Partnership Agreement”), to provide officers of the Company or
its affiliates, including the Grantee, in connection with their employment, with
the incentive compensation described in this Agreement, and thereby provide
additional incentive for them to promote the progress and success of the
business of the Company and its affiliates, including the Partnership. This
Award was approved by the Committee pursuant to authority delegated to it by the
Board as set forth in the Plan and the Partnership Agreement to make grants of
LTIP Units (as defined in the Partnership Agreement).

 

C.                                     This Agreement evidences an award of a
series of LTIP Units that have been designated as the Series CEO LTIP Units
pursuant to the Partnership Agreement and the Certificate of Designation of
Series CEO LTIP Units of the Partnership (the “Certificate of Designation”).

 

D.                                    Effective as of July 6, 2011, the
Committee has made an award to the Grantee of one million (1,000,000) LTIP Units
(the “Unvested LTIP Units”).

 

NOW, THEREFORE, the Company, the Partnership and the Grantee agree as follows:

 

1.                                       Administration.  This Award shall be
administered by the Committee which has the powers and authority as set forth in
the Plan.  Should there be any conflict between the terms of this Agreement and
the Certificate of Designation, on the one hand, and the Plan and the
Partnership Agreement, on the other hand, the terms of this Agreement and the
Certificate of Designation shall prevail.

 

2.                                       Definitions.  Capitalized terms used
herein without definitions shall have the meanings given to those terms in the
Plan; provided that any capitalized term used herein

 

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which is defined in the Employment Agreement shall have the meaning given to it
in the Employment Agreement.  In addition, as used herein:

 

“Agent” has the meaning set forth in Section 8(a).

 

“Award Date” means the date that the Unvested LTIP Units were granted as set
forth in the Recitals.

 

“Change of Control” means:

 

(i)                                     Any “person,” as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any of its
subsidiaries, or the estate of Melvin Simon, Herbert Simon or David Simon (the
“Simons”), or any trustee, fiduciary or other person or entity holding
securities under any employee benefit plan or trust of the Company or any of its
subsidiaries), together with all “affiliates” and “associates” (as such terms
are defined in Rule 12b-2 under the Exchange Act) of such person, shall become
the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing
twenty-five percent (25%) or more of the Company’s then outstanding voting
securities entitled to vote generally in the election of directors; provided
that for purposes of determining the “beneficial ownership” (as such term is
defined in Rule 13d-3 under the Exchange Act) of any “group” of which the Simons
or any of their affiliates or associates is a member (each such entity or
individual, a “Related Party”), there shall not be attributed to the beneficial
ownership of such group any shares beneficially owned by any Related Party;

 

(ii)                                  Individuals who, as of the date hereof,
constitute the Board of Directors of the Company (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board of Directors;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board of Directors;

 

(iii)                               Approval by the stockholders of the Company
of a reorganization, merger or consolidation, in each case unless, following
such reorganization, merger or consolidation, (A) more than sixty percent (60%)
of the combined voting power of the then outstanding voting securities of the
corporation resulting from such reorganization, merger or consolidation entitled
to vote generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners of the Company’s outstanding voting
securities immediately prior to such reorganization, merger or consolidation in
substantially the same proportions as

 

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their beneficial ownership, immediately prior to such reorganization, merger or
consolidation, of the Company’s outstanding voting securities, (B) no person
(excluding the Company, the Simons, any employee benefit plan or related trust
of the Company or such corporation resulting from such reorganization, merger or
consolidation and any person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly, twenty-five
percent (25%) or more of the Company’s outstanding voting securities)
beneficially owns, directly or indirectly, twenty-five percent (25%) or more of
the combined voting power of the then outstanding voting securities of the
corporation resulting from such reorganization, merger or consolidation entitled
to vote generally in the election of directors and (C) at least a majority of
the members of the board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the Incumbent Board at
the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or

 

(iv)                              Approval by the stockholders of the Company of
(A) a complete liquidation or dissolution of the Company or (B) the sale or
other disposition of all or substantially all of the assets of the Company,
other than to a corporation with respect to which following such sale or other
disposition (x) more than sixty percent (60%) of the combined voting power of
the then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners of the Company’s outstanding voting securities entitled to
vote generally in the election of directors immediately prior to such sale or
other disposition in substantially the same proportion as their beneficial
ownership, immediately prior to such sale or other disposition, of the Company’s
outstanding voting securities, (y) no person (excluding the Company, the Simons,
and any employee benefit plan or related trust of the Company or such
corporation and any person beneficially owning, immediately prior to such sale
or other disposition, directly or indirectly, twenty-five percent (25%) or more
of the Company’s outstanding voting securities) beneficially owns, directly or
indirectly, twenty-five percent (25%) or more of the combined voting power of
the then outstanding voting securities of such corporation entitled to vote
generally in the election of directors and (z) at least a majority of the
members of the board of directors of such corporation were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board of Directors of the Company providing for such sale or other
disposition of assets of the Company.

 

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

 

“Common Stock” means the Company’s common stock, par value $0.0001 per share,
either currently existing or authorized hereafter.

 

“Continuous Service” means the continuous service to the Company or any
subsidiary or affiliate, without interruption or termination, in any capacity of
employment. Continuous Service shall not be considered interrupted in the case
of:  (A) any approved leave of absence;

 

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(B) transfers among the Company and any subsidiary or affiliate, or any
successor, in any capacity of employment; or (C) any change in status as long as
the individual remains in the service of the Company and any subsidiary or
affiliate in any capacity of employment. An approved leave of absence shall
include sick leave (including, due to any mental or physical disability whether
or not such condition rises to the level of a Disability), military leave, or
any other authorized personal leave.

 

“Designation” means the Certificate of Designation of Series CEO LTIP Units of
the Partnership approved by the Company as the general partner of the
Partnership.

 

“Disability” means, with respect to the Grantee, a “permanent and total
disability” as defined in Section 22(e)(3) of the Code.

 

“Employment Agreement” means the Employment Agreement dated as of July 6, 2011,
between the Grantee and the Company as hereinafter amended or supplemented.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Family Member” has the meaning set forth in Section 7.

 

“Investor Services Program” means the program currently administered by Mellon
Bank, N.A. or any successor plan or program that facilitates the reinvestment of
dividends paid on the Common Stock in additional shares of Common Stock.

 

“LTIP Distribution Tax Component” means the amount as reasonably determined by
the Partnership equal to the federal, state and local income tax incurred by a
holder on the income allocated to the holder from the Partnership which is
attributable to the Unvested LTIP Units computed on the assumption that such
holder is subject to the highest marginal rate of U.S. federal income tax for
such taxable year and the highest marginal rates of state and local income tax
for such year imposed by the state and local governmental entities to which such
holder pays income taxes for such taxable year.  An estimate of the LTIP
Distribution Tax Component of each quarterly distribution shall be made by the
Partnership and the amount of the LTIP Distribution Tax Component of the
quarterly distributions for each year shall be adjusted following the issuance
of the Partnership’s annual Form K-1 by increasing or decreasing, as applicable,
the LTIP Distribution Tax Component in the following quarter(s).

 

“LTIP Units” means the Series CEO LTIP Units issued pursuant to the Designation.

 

“Partnership Units” or “Units” has the meaning provided in the Partnership
Agreement.

 

“Person” means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization, other
entity or “group” (as defined in the Exchange Act).

 

“Per Unit Purchase Price” has the meaning set forth in Section 5.

 

“Purchased Shares” has the meaning set forth in Section 8(a).

 

“Plan” has the meaning set forth in the Recitals.

 

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“Reinvestment Shares” has the meaning set forth in Section 8(b).

 

“Qualified Termination” has the meaning set forth in Section 4(b).

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Stock Dividend Tax Component” means the amount as reasonably determined by the
Company equal to the federal, state and local income tax incurred by a holder on
the quarterly dividends on the Purchased Shares and Reinvestment Shares computed
on the assumption that such holder is subject to the highest marginal rate of
U.S. federal income tax for such taxable year and the highest marginal rates of
state and local income tax for such year imposed by the state and local
governmental entities to which such holder pays income taxes for such taxable
year.  An estimate of the Stock Dividend Tax Component of each quarterly
distribution shall be made by the Company and the amount of the Stock Dividend
Tax Component of the quarterly distributions for each year shall be adjusted
following the issuance of the Company’s Form 1099 for such year by increasing or
decreasing, as applicable, the Stock Dividend Tax Component in the following
quarter(s).

 

“Transfer” has the meaning set forth in Section 7.

 

“Unvested LTIP Units” has the meaning set forth in the Recitals.

 

“Vesting Date” means (A) any one of the dates specified in Section 3(b), as
applicable or (B) the date upon which a Change of Control shall occur.

 

“Vested LTIP Units” means those Unvested LTIP Units that have fully vested in
accordance with the conditions of Section 3(b) or have vested on an accelerated
basis under Section 4.

 

3.                                       Award.

 

(a)                                  The Grantee is granted as of the Award
Date, 1,000,000 Unvested LTIP Units, which are subject to forfeiture provided in
this Section 3 and Section 4.  The Unvested LTIP Units will be forfeited unless
within ten (10) business days from the Award Date the Grantee executes and
delivers a fully executed copy of this Agreement and such other documents that
the Company and/or the Partnership reasonably request in order to comply with
all applicable legal requirements, including, without limitation, federal and
state securities laws, and the Grantee pays the Per Unit Purchase Price for each
such Unvested LTIP Unit issued.

 

(b)                                 The Unvested LTIP Units shall become Vested
LTIP Units in the following amounts and at the following times, provided that
the Continuous Service of the Grantee continues through and on the applicable
Vesting Date or the accelerated vesting date provided in Section 4:

 

(i)                                     333,333 of the Unvested LTIP Units shall
become Vested LTIP Units on July 5, 2017 (the “Tranche A Vesting Date”); and

 

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(ii)                                  333,333 of the Unvested LTIP Units shall
become Vested LTIP Units on July 5, 2018 (the “Tranche B Vesting Date”); and

 

(iii)                               333,334 of the Unvested LTIP Units shall
become Vested LTIP Units on July 5, 2019, (the “Tranche C Vesting Date,” and
each of the Tranche A Vesting Date, Tranche B Vesting Date and Tranche C Vesting
Date, a “Vesting Date”).

 

(c)                                  Except as otherwise provided under
Section 4, upon termination of Continuous Service before July 5, 2019, any
Unvested LTIP Units that have not become Vested LTIP Units pursuant to
Section 3(b) shall, without payment of any consideration by the Partnership
other than as provided in the last sentence of Section 5, automatically and
without notice be forfeited and be and become null and void, and neither the
Grantee nor any of his or her successors, heirs, assigns, or personal
representatives will thereafter have any further rights or interests in such
Unvested LTIP Units.

 

4.                                       Termination of Grantee’s Employment;
Death and Disability; Change of Control.

 

(a)                                  Notwithstanding the provisions of the Plan,
(i) if the Grantee ceases to be an employee of the Company or any of its
affiliates, the provisions of Sections 4(b) through Section 4(e) shall govern
the treatment of the Grantee’s Unvested LTIP Units exclusively, and (ii) if a
Change of Control occurs, Section 4(c) shall govern the treatment of the
Grantee’s Unvested LTIP Units exclusively.

 

(b)                                 In the event of termination of the Grantee’s
Continuous Service before July 5, 2019 by Grantee’s (A) death, (B) Disability,
(C) termination of employment by the Company without Cause or (D) resignation
for Good Reason (in the case of the preceding clauses (B), (C) and (D), in
accordance with the terms of the Employment Agreement and, in the case of the
preceding clauses (C) and (D), only if the Grantee delivers, and does not
revoke, an executed Release not later than the Release Deadline)  (each such
termination, a “Qualified Termination”), the Grantee will not forfeit all
Unvested LTIP Units upon such termination, but the following provisions of this
Section 4(b) shall modify the treatment of the Unvested LTIP Units:

 

(i)                                     if the Qualified Termination occurs
prior to July 5, 2013, one-half of the remaining Unvested LTIP Units (being
500,000 of the Unvested LTIP Units) shall become Vested LTIP Units and shall no
longer be subject to forfeiture pursuant to Section 3(c); and

 

(ii)                                  if the Qualified Termination occurs on or
after July 5, 2013, all remaining Unvested LTIP Units shall become Vested LTIP
Units and shall no longer be subject to forfeiture pursuant to Section 3(c).

 

(c)                                  If a Change of Control occurs before
July 5, 2019, all Unvested LTIP Units shall become Vested LTIP Units immediately
and automatically upon the occurrence of the Change of Control and shall no
longer be subject to forfeiture pursuant to Section 3(c).

 

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(d)                                 Notwithstanding the foregoing, in the event
any payment to be made hereunder after giving effect to this Section 4 is
determined to constitute “nonqualified deferred compensation” subject to
Section 409A of the Code, then, to the extent the Grantee is a “specified
employee” under Section 409A of the Code subject to the six-month delay
thereunder, any such payments to be made during the six-month period commencing
on the Grantee’s “separation from service” (as defined in Section 409A of the
Code) shall be delayed until the expiration of such six-month period.

 

(e)                                  In the event of a termination of the
Grantee’s employment other than a Qualified Termination, all Unvested LTIP Units
shall, without payment of any consideration by the Partnership other than as
provided in the last sentence of Section 5, automatically and without notice
terminate, be forfeited and be and become null and void, and neither the Grantee
nor any of his or her successors, heirs, assigns, or personal representatives
will thereafter have any further rights or interests in such Unvested LTIP
Units.

 

5.                                       Payments by Award Recipients. The
Grantee shall have no rights with respect to this Agreement (and the Award
evidenced hereby) unless he or she shall have accepted this Agreement prior to
the close of business on the date described in Section 3(a) by (a) making a
contribution to the capital of the Partnership by certified or bank check or
other instrument acceptable to the Committee (as defined in the Plan), of $0.25
(the “Per Unit Purchase Price”), multiplied by the number of Unvested LTIP
Units, (b) signing and delivering to the Partnership a copy of this Agreement
and (c) unless the Grantee is already a Limited Partner (as defined in the
Partnership Agreement), signing, as a Limited Partner, and delivering to the
Partnership a counterpart signature page to the Partnership Agreement (attached
as Exhibit A). The Per Unit Purchase Price paid by the Grantee shall be deemed a
contribution to the capital of the Partnership upon the terms and conditions set
forth herein and in the Partnership Agreement. Upon acceptance of this Agreement
by the Grantee, the Partnership Agreement shall be amended to reflect the
issuance to the Grantee of the LTIP Units so accepted. Thereupon, the Grantee
shall have all the rights of a Limited Partner of the Partnership with respect
to the number of Unvested LTIP Units, as set forth in the Designation and the
Partnership Agreement, subject, however, to the restrictions and conditions
specified herein. Unvested LTIP Units constitute and shall be treated for all
purposes as the property of the Grantee, subject to the terms of this Agreement
and the Partnership Agreement. In the event of the forfeiture of the Grantee’s
Unvested LTIP Units pursuant to this Agreement, the Partnership will pay the
Grantee an amount equal to the number of Unvested LTIP Units so forfeited
multiplied by the lesser of the Per Unit Purchase Price or the fair market value
of an Unvested LTIP Unit on the date of forfeiture as determined by the
Committee.

 

6.                                       Distributions and Dividends.

 

(a)                                  The LTIP Distribution Tax Component of each
cash distribution paid on the Unvested LTIP Units shall be paid to the Grantee
at the time the Partnership pays distributions to the holders of Partnership
Units.  The balance of all distributions on Unvested LTIP Units shall be used as
provided in Section 8 hereof.

 

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(b)                                 All distributions paid with respect to
Vested LTIP Units shall be fully vested and non-forfeitable and shall be paid to
the Grantee at the time that the Partnership pays distributions to the holders
of Partnership Units.

 

(c)                                  All dividends paid with respect to the
Purchased Shares and Reinvestment Shares shall be used as provided in Section 8
hereof.

 

7.                                       Restrictions on Transfer.

 

(a)                                  Except as otherwise permitted by the
Committee in its sole discretion, none of the Unvested LTIP Units or “Purchased
Shares” (as defined in Section 8(a)), “Reinvestment Shares” (as defined in
Section 8(b)) and cash held by the Agent under Section 8 shall be sold,
assigned, transferred, pledged, hypothecated, given away or in any other manner
disposed or encumbered, whether voluntarily or by operation of law (each such
action a “Transfer”).

 

(b)                                 The transferee in any permitted Transfer
must agree in writing with the Company and the Partnership to be bound by all
the terms and conditions of this Agreement and that any subsequent Transfers
shall be prohibited except those in accordance with this Section 7. 
Additionally, all such Transfers must be in compliance with all applicable
securities laws (including, without limitation, the Securities Act) and the
applicable terms and conditions of the Partnership Agreement. In connection with
any such Transfer, the Partnership may require the Grantee to provide an opinion
of counsel, satisfactory to the Partnership, that such Transfer is in compliance
with all federal and state securities laws (including, without limitation, the
Securities Act).  Any attempted Transfer not in accordance with the terms and
conditions of this Section 7 shall be null and void, and neither the Partnership
nor the Company shall reflect on its records any change in record ownership of
any Unvested LTIP Units, Purchased Shares or Reinvestment Shares as a result of
any such Transfer, shall otherwise refuse to recognize any such Transfer and
shall not in any way give effect to any such Transfer.  Except as provided in
this Section 7, this Agreement is personal to the Grantee, is non-assignable and
is not transferable in any manner, by operation of law or otherwise, other than
by will or the laws of descent and distribution.

 

8.                                       Reinvestment of Distributions on
Unvested LTIP Units; Restrictions on Transfer of Purchased Units.

 

(a)                                  Purchased Shares.  Each quarter, the
Partnership shall pay all quarterly cash distributions, net of the LTIP
Distribution Tax Component, on the Unvested LTIP Units to a broker or other
agent acceptable to the Grantee (the “Agent”) which shall use the funds received
to purchase shares of Common Stock on the pubic trading market (the “Purchased
Shares”).  The number of Purchased Shares shall be the maximum that can be
purchased with the cash then available to the Agent.  The Partnership shall bear
the costs of the Agent.  The Agent shall retain any cash not used in a quarter
to acquire Purchased Shares in the following quarter.  The Purchased Shares and
any cash retained by the Agent shall be released to Grantee or returned to the
Partnership in the event of forfeiture as provided in Section 8(c) and
Section 8(d), respectively.  The acquisition of the Purchased Shares pursuant to
this Agreement shall be pursuant to a contract or plan in

 

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compliance with SEC Rule 10b5-1 promulgated under the Exchange Act and any
successor thereto.

 

(b)                                 Reinvestment Shares.  The Agent shall enroll
the Purchased Shares in the Investor Services Program so that dividends paid on
the Purchased Shares (and any shares acquired through such program) may be
reinvested in additional shares of Common Stock.  All shares of Common Stock
acquired through the Investor Services Program are referred to herein as the
“Reinvestment Shares.” The Reinvestment Shares shall be held by the Agent for
the benefit of the Grantee.  The Agent shall direct that the Stock Dividend Tax
Component of the quarterly cash dividends paid on the Purchased Shares and the
Reinvestment Shares shall be paid to the Grantee and the remaining quarterly
dividends shall be used to acquire additional Reinvestment Shares through the
Investor Services Program.  The Reinvestment Shares, including any dividends
paid in Shares, shall be held by the Agent and shall be released to the Grantee
or returned to the Partnership in the event of forfeiture as provided in
Section 8(c) and Section 8(d), respectively.

 

(c)                                  Release to Grantee.  On each date that any
Unvested LTIP Units become Vested LTIP Units, a portion of the Purchased Shares,
Reinvestment Shares and cash then held by the Partnership or Agent pursuant to
Section 8(a) and Section 8(b) shall be released to the Grantee.  The number of
shares and amount of cash to be released on such date shall be determined by
multiplying the number of shares or amount of cash then retained on behalf of
the Grantee by a fraction, the numerator of which is the number of Unvested LTIP
Units that become Vested LTIP Units on that date and the denominator of which is
the number of Unvested LTIP Units held by the Grantee on the preceding day.  The
resulting amounts shall be rounded down to, in the case of shares, the nearest
whole number, and in the case of cash, the nearest whole cent.

 

(d)                                 Forfeiture.  Any Purchased Shares,
Reinvestment Shares and retained cash held by the Partnership or Agent pursuant
to this Section 8 that have not been released to Grantee on or before July 5,
2019 (except in the case where the failure to release was pursuant to
Section 4(d) of Section 9(e) hereof) shall be forfeited and, to the extent held
by the Agent, released to the Partnership, in the case of Purchased Shares and
Reinvestment Shares, for cancellation.

 

9.                                       Miscellaneous.

 

(a)                                  Amendments. This Agreement, and the
Certificate of Designation, may be amended or modified only with (i) the consent
of the Company and the Partnership acting through the Committee and (ii) the
written consent of the Grantee.

 

(b)                                 Incorporation of Plan and Designation;
Committee Determinations. The provisions of the Plan and the Designation are
hereby incorporated by reference as if set forth herein. The Committee will make
the determinations and certifications required by this Award as promptly as
reasonably practicable following the occurrence of the event or events
necessitating such determinations or certifications. In the event of a Change of
Control, the Committee will make such determinations within a

 

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period of time that enables the Company to make any payments due hereunder not
later than the date of consummation of the Change of Control.

 

(c)                                  Status of LTIP Units; Plan Matters. This
Award constitutes an incentive compensation award under the Plan. The LTIP Units
are equity interests in the Partnership. The Company will at all times reserve a
sufficient number of shares of Common Stock that would permit the conversion of
all Unvested LTIP Units and Vested LTIP Units into Partnership Units and the
exchange of such Partnership Units for shares of Common Stock on a one-for-one
basis.  The Company will have the right, at its option, as set forth in the
Partnership Agreement, to issue shares of Common Stock in exchange for
Partnership Units in accordance with the Partnership Agreement, subject to
certain limitations set forth in the Partnership Agreement, and such shares of
Common Stock, if issued, will be issued under the Plan. The Grantee acknowledges
that the Grantee will have no right to approve or disapprove such determination
by the Committee.

 

(d)                                 Legend.  The records of the Partnership
evidencing the LTIP Units shall bear an appropriate legend, as determined by the
Partnership in its sole discretion, to the effect that such LTIP Units are
subject to restrictions as set forth herein and in the Partnership Agreement.

 

(e)                                  Compliance With Law.  The Partnership and
the Grantee will make reasonable efforts to comply with all applicable
securities laws. In addition, notwithstanding any provision of this Agreement to
the contrary, no Unvested LTIP Units will become Vested LTIP Units at a time
that such vesting would result in a violation of any such law.

 

(f)                                    Grantee Representations; Registration.

 

(i)                                     The Grantee hereby represents and
warrants that (A) he or she understands that he or she is responsible for
consulting his or her own tax advisor with respect to the application of the
U.S. federal income tax laws, and the tax laws of any state, local or other
taxing jurisdiction to which the Grantee is or by reason of this Award may
become subject, to his or her particular situation; (B) the Grantee has not
received or relied upon business or tax advice from the Company, the Partnership
or any of their respective employees, agents, consultants or advisors, in their
capacity as such; (C) the Grantee provides services to the Partnership on a
regular basis and in such capacity has access to such information, and has such
experience of and involvement in the business and operations of the Partnership,
as the Grantee believes to be necessary and appropriate to make an informed
decision to accept this Award; (D) LTIP Units are subject to substantial risks;
(E) the Grantee has been furnished with, and has reviewed and understands,
information relating to this Award; (F) the Grantee has been afforded the
opportunity to obtain such additional information as he or she deemed necessary
before accepting this Award; and (G) the Grantee has had an opportunity to ask
questions of representatives of the Partnership and the Company, or persons
acting on their behalf, concerning this Award.

 

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(ii)                                  The Grantee hereby acknowledges that:
(A) there is no public market for LTIP Units or Partnership Units into which
Vested LTIP Units may be converted and neither the Partnership nor the Company
has any obligation or intention to create such a market; (B) sales of LTIP
Units, Partnership Units and Common Stock are subject to restrictions under the
Securities Act and applicable state securities laws; (C) because of the
restrictions on transfer or assignment of LTIP Units and Partnership Units set
forth in the Partnership Agreement and in this Agreement, the Grantee may have
to bear the economic risk of his or her ownership of the LTIP Units covered by
this Award for an indefinite period of time; (D) shares of Common Stock issued
under the Plan in exchange for Partnership Units, if any, will be covered by a
Registration Statement on Form S-8 (or a successor form under applicable
rules and regulations of the Securities and Exchange Commission) under the
Securities Act, to the extent that the Grantee is eligible to receive such
shares under the Plan at the time of such issuance and such Registration
Statement is then effective under the Securities Act; and (E) resales of shares
of Common Stock issued under the Plan in exchange for Partnership Units, if any,
shall only be made in compliance with all applicable restrictions (including in
certain cases “blackout periods” forbidding sales of Company securities) set
forth in the then applicable Company employee manual or insider trading policy
and in compliance with the registration requirements of the Securities Act or
pursuant to an applicable exemption therefrom.

 

(g)                                 Section 83(b) Election.  The Grantee hereby
agrees to make an election each quarter to include the Unvested LTIP Units,
Purchased Shares and Reinvestment Shares in gross income in the year in which
the Unvested LTIP Units are issued, or Purchased Shares and Reinvestment Shares
are purchased pursuant to Section 8(a) and 8(b), pursuant to Section 83(b) of
the Code substantially in the form attached as Exhibit B and to supply the
necessary information in accordance with the regulations promulgated thereunder.
The Grantee agrees to file such election (or to permit the Partnership to file
such election on the Grantee’s behalf) within thirty (30) days after the Award
Date (with respect to the Unvested LTIP Units) or date of purchase (with respect
to Purchased Shares or Reinvestment Shares) with the IRS Service Center where
the Grantee files his or her personal income tax returns, to provide a copy of
such election to the Partnership and the Company, and to file a copy of such
election with the Grantee’s U.S. federal income tax return for the taxable year
in which the Unvested LTIP Units are issued to the Grantee or Purchased Shares
or Reinvestment Shares are purchased, as applicable. So long as the Grantee
holds any Unvested LTIP Units, or the Partnership holds any Purchased Shares or
Reinvestment Shares in the name of the Grantee, the Grantee shall disclose to
the Partnership in writing such information as may be reasonably requested with
respect to ownership of LTIP Units, Purchased Shares and Reinvestment Shares as
the Partnership may deem reasonably necessary to ascertain and to establish
compliance with provisions of the Code applicable to the Partnership or to
comply with requirements of any other appropriate taxing authority.

 

(h)                                 Tax Consequences.  The Grantee acknowledges
that (i) neither the Company nor the Partnership has made any representations or
given any advice with respect to the tax consequences of acquiring, holding,
selling or converting LTIP Units,

 

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Purchased Shares or Reinvestment Shares, or making any tax election (including
the election pursuant to Section 83(b) of the Code) with respect thereto, and
(ii) the Grantee is relying upon the advice of his or her own tax advisor in
determining such tax consequences.

 

(i)                                     Severability.  If, for any reason, any
provision of this Agreement is held invalid, such invalidity shall not affect
any other provision of this Agreement not so held invalid, and each such other
provision shall to the full extent consistent with law continue in full force
and effect.

 

(j)                                     Governing Law.  This Agreement is made
under, and will be construed in accordance with, the laws of the State of
Delaware, without giving effect to the principles of conflict of laws of such
state.

 

(k)                                  No Obligation to Continue Position as an
Employee, Consultant or Advisor.  Neither the Company nor any affiliate is
obligated by or as a result of this Agreement to continue to have the Grantee as
an employee, consultant or advisor and this Agreement shall not interfere in any
way with the right of the Company or any affiliate to terminate the Grantee’s
employment at any time.

 

(l)                                     Notices.  Any notice to be given to the
Company shall be addressed to the Secretary of the Company at 225 West
Washington Street, Indianapolis, Indiana 46204 and any notice to be given to the
Grantee shall be addressed to the Grantee at the Grantee’s address as it appears
on the employment records of the Company, or at such other address as the
Company or the Grantee may hereafter designate in writing to the other.

 

(m)                               Withholding and Taxes.  No later than the date
as of which an amount first becomes includible in the gross income of the
Grantee for income tax purposes or subject to the Federal Insurance
Contributions Act withholding with respect to this Award, the Grantee will pay
to the Company or, if appropriate, any of its affiliates, or make arrangements
satisfactory to the Committee regarding the payment of any United States
federal, state or local or foreign taxes of any kind required by law to be
withheld with respect to such amount; provided, however, that if any LTIP Units,
Partnership Units or shares of Common Stock are withheld (or returned), the
number of such securities so withheld (or returned) shall be limited to the
number which have a fair market value on the date of withholding equal to the
aggregate amount of such liabilities based on the minimum statutory withholding
rates for federal, state, local and foreign income tax and payroll tax purposes
that are applicable to such supplemental taxable income. The obligations of the
Company under this Agreement will be conditional on such payment or
arrangements, and the Company and its affiliates shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment otherwise due
to the Grantee.

 

(n)                                 Headings.  The headings of paragraphs of
this Agreement are included solely for convenience of reference and shall not
control the meaning or interpretation of any of the provisions of this
Agreement.

 

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(o)                                 Counterparts.  This Agreement may be
executed in multiple counterparts with the same effect as if each of the signing
parties had signed the same document. All counterparts shall be construed
together and constitute the same instrument.

 

(p)                                 Successors and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties and any successors
to the Company and the Partnership, on the one hand, and any successors to the
Grantee, on the other hand, by will or the laws of descent and distribution, but
this Agreement shall not otherwise be assignable or otherwise subject to
hypothecation by the Grantee.

 

(q)                                 Section 409A.  This Agreement shall be
construed, administered and interpreted in accordance with a good faith
interpretation of Section 409A of the Code, to the extent applicable. Any
provision of this Agreement that is inconsistent with applicable provisions of
Section 409A of the Code, or that may result in penalties under Section 409A of
the Code, shall be amended, with the reasonable cooperation of the Grantee and
the Company and the Partnership, to the extent necessary to exempt it from, or
bring it into compliance with, Section 409A of the Code.

 

(r)                                    Exchange.  The Grantee acknowledges that
any exchange of Partnership Units for Common Stock or cash, as selected by the
General Partner, may not be effective until six (6) months from the date the
Vested LTIP Units that were converted into Partnership Units became fully
vested.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as
of the 6th day of July, 2011.

 

 

SIMON PROPERTY GROUP, INC., a Delaware corporation

 

 

 

 

 

By:

/s/ Stephen E. Sterrett

 

Name:

Stephen E. Sterrett

 

Title:

Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

 

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

 

 

 

 

By:

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

 

 

 

 

 

 

 

By:

/s/ Stephen E. Sterrett

 

Name:

Stephen E. Sterrett

 

Title:

Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

 

GRANTEE

 

 

 

 

 

 

 

 

/s/ David Simon

 

Name:

David Simon

 

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EXHIBIT A

 

FORM OF LIMITED PARTNER SIGNATURE PAGE

 

The Grantee, desiring to become one of the within named Limited Partners of
Simon Property Group, L.P., hereby accepts all of the terms and conditions of
and becomes a party to, the Eighth Amended and Restated Agreement of Limited
Partnership, dated as of May 8, 2008, of Simon Property Group, L.P. as amended
through this date (the “Partnership Agreement”). The Grantee agrees that this
signature page may be attached to any counterpart of the Partnership Agreement.

 

 

 

Signature Line for Limited Partner:

 

 

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

Date:

 

 

 

 

 

 

Address of Limited Partner:

 

 

 

 

 

 

 

 

 

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EXHIBIT B

 

ELECTION TO INCLUDE IN GROSS INCOME IN YEAR OF TRANSFER OF
PROPERTY PURSUANT TO SECTION 83(b) OF THE INTERNAL REVENUE CODE

 

The undersigned hereby makes an election pursuant to Section 83(b) of the
Internal Revenue Code with respect to the property described below and supplies
the following information in accordance with the regulations promulgated
thereunder:

 

1.                   The name, address and taxpayer identification number of the
undersigned are:

 

Name:                                                                                                  
          (the “Taxpayer”)

 

Address:                                                                                                                

 

Social Security No./Taxpayer Identification No.:       -      -

 

Description of property with respect to which the election is being made: 
[Series CEO LTIP Units (“LTIP Units”) in Simon Property Group, L.P. (the
“Partnership”).][Shares of common stock of Simon Property Group, Inc.
(“Purchased or Reinvestment Shares”).]

 

The date on which the [LTIP Units were issued][Purchased Shares or Reinvestment
Shares were purchased] is                , 201    .  The taxable year to which
this election relates is calendar year 201    .

 

4.                                       Nature of restrictions to which the
[LTIP Units][ Purchased Shares or Reinvestment Shares] are subject:

 

With limited exceptions, until the [LTIP Units] [Purchased Shares or
Reinvestment Shares] vest, the Taxpayer may not transfer in any manner any
portion of the [LTIP Units] [Purchased Shares or Reinvestment Shares] without
the consent of the Partnership.

 

The Taxpayer’s [LTIP Units] [Purchased Shares or Reinvestment Shares] are
subject to forfeiture until they vest in accordance with the provisions in the
applicable Award Agreement [and Certificate of Designation for the LTIP Units].

 

5.               The fair market value at time of issue (determined without
regard to any restrictions other than restrictions which by their terms will
never lapse) of the [LTIP Units] [Purchased Shares or Reinvestment Shares] with
respect to which this election is being made was $[        ] per [LTIP Unit]
[Purchased Share or Reinvestment Share].

 

The amount paid by the Taxpayer for the [LTIP Units was $[0.25 per LTIP Unit]
[Purchased Shares or Reinvestment Shares was $[        ] per share].

 

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A copy of this statement has been furnished to the Partnership and Simon
Property Group, Inc.

 

 

Dated:

 

 

 

 

 

 

 

 

 

 

Name:

 

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