Exhibit
10.2


 


EMPLOYMENT AGREEMENT


 


This
Amended and Restated Employment Agreement (the “Agreement”),
entered into September 8, 2010 by and among General Growth Properties, Inc.,
a Delaware corporation (the “Company”),
General Growth Properties, L.P., a Delaware limited partnership (the “Partnership” and together with the Company, the “Companies”), and Thomas H. Nolan (the “Executive”),
shall be deemed to have been made and entered into as of the date of the order
of confirmation entered by the United States Bankruptcy Court for the Southern
District of New York with respect to the Companies’ Joint plan of
reorganization in the matter of In re General Growth Properties, Inc., et
al, Case No. 09-11977 (ALG) (such plan, the “Plan of
Reorganization” and such date, the “Confirmation
Date”) and shall become effective as of the effective date of the
Plan of Reorganization, or if earlier, January 1, 2011 (the “Effective Date”).


 


RECITALS


 


The
Executive is currently employed as the Company’s President and Chief Operating
Officer and the Company desires to extend the employment of the Executive on
and after the Effective Date upon and subject to the terms and conditions set
forth in this Agreement, and the Executive wishes to extend his employment upon
and subject to such terms and conditions;


 


The
parties are parties to that certain employment agreement dated November 2,
2008, effective as of October 26, 2008, and as amended effective as of March 6,
2009 (such employment agreement, together with amendments, the “Predecessor Agreement”) which remains in effect;


 


The
parties desire to enter into the Agreement and, in so doing, to amend and
restate the Predecessor Agreement in its entirety effective as of the Effective
Date;


 


The
Company has adopted and implemented or will adopt and implement an equity
incentive plan (“Equity Incentive Plan”) as of the
Confirmation Date, pursuant to the Plan of Reorganization;


 


NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:


 


1.             Employment Period.  The Company hereby agrees to continue to employ
the Executive, and the Executive hereby agrees to continue to work in the
employ of the Company, subject to the terms and conditions of this Agreement,
for the period commencing on the Effective Date and ending on the first
anniversary of the Effective Date (the “Employment Period”).


 


2.             Terms of Employment.


 


(a)           Position and Duties.


 


(i)            During the Employment Period, the Executive shall serve as President and
Chief Operating Officer of the Company and of the Partnership, with the
appropriate authority, duties and responsibilities attendant to such position
and any other duties commensurate with the position of President and Chief
Operating Officer of the Company and of the Partnership that may be reasonably
assigned by the Company’s 


 

















 


Chief
Executive Officer.  The Executive shall
report to the Company’s Chief Executive Officer.


 


(ii)           During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive agrees to devote
all of his business attention and time to the business and affairs of the
Company, and to use the Executive’s reasonable best efforts to perform such
responsibilities.  During the Employment
Period it shall not be a violation of this Agreement for the Executive to (A) serve
on corporate boards or committees on which he serves as of the Effective Date
and, with prior approval of the Board of Directors of the Company (the “Board”), on other corporate boards or committees, (B) serve
on civic or charitable boards or committees, and (C) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive’s responsibilities as an employee of the Company
in accordance with this Agreement; provided, however, that during the Employment
Period, the Executive shall not hold any other management positions at other
companies.


 


(b)           Compensation.


 


(i)            Annual Base Salary.  During the Employment Period, the Executive
shall receive an annual base salary (“Annual Base Salary”)
of $1,250,000 payable in equal installments in accordance with the Partnership’s
normal payroll practice for its senior executives, subject to the Executive’s
continued active employment with the Company and the Partnership.


 


(ii)           Bonus.  Commencing with the Company’s fiscal year
commencing on or immediately on or after the Effective Date and during the
Employment Period, the Executive shall be eligible under the Company’s annual
bonus plan in effect from time to time for a target annual bonus opportunity of
$2,400,000, which is the sum of the quarterly Fixed Bonus ($1.6 million per
year) and the Discretionary Bonus ($800,000 per year) amounts under the
Predecessor Agreement (the “Target Annual Bonus”),
subject to such performance measures and objectives as may be established by
the Board from time to time under the Company’s annual bonus plan, including
variations in amount based on the level of performance achieved, consistent
with the formula for other senior executives of the Company.  The Executive shall continue to participate
in the Cash Value Added Incentive Compensation Plan for the 2010 fiscal year.


 


(iii)          Equity Incentives.  Executive shall be granted 100,000 shares of
restricted common stock, par value $.01 of the Company (the “Restricted Stock Grant”) under the Equity Incentive Plan as
of the Effective Date.  Executive may
make a so-called “Section 83(b)” election with respect to the Restricted
Stock Grant within 30 days after the date of grant thereof .  The Restricted Stock Grant shall cliff vest
100% on the first anniversary of the grant date, and shall be subject to the
terms and conditions set forth in an award agreement under the Equity Incentive
Plan, which shall not be inconsistent herewith.


 


(iv)          Indemnification and Liability Insurance. 
The Company shall continue to indemnify the Executive pursuant to the
Indemnification Agreement between 


 


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the
Company and the Executive, dated as of February 25, 2009 (the “Indemnification Agreement”), and the indemnification
provided therein shall continue for a period of 6 years following the time the
Executive’s employment is terminated, or for such longer period as may be
provided in the Company’s bylaws or permitted under applicable law.


 


(c)           Benefits.  During the
Employment Period, except as otherwise expressly provided herein, the Executive
shall be entitled to participate in all employee benefit and other plans,
practices, policies and programs and fringe benefits on a basis no less
favorable than that provided to other senior officers of the Company.  The Executive shall be entitled to paid
annual vacation totaling four weeks per year in accordance with the Company’s
vacation policy in effect from time to time.


 


(d)           Expenses.  The Company
shall reimburse Executive for all reasonable and necessary expenses actually
incurred by Executive in connection with the business affairs of the Company
and the performance of Executive’s duties hereunder, in accordance with Company
policy, as in effect from time to time.


 


3.             Termination of Employment.


 


(a)           Death or Disability.  The
Executive’s employment shall terminate automatically upon the Executive’s death
during the Employment Period.  If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice, in accordance
with Section 12(b), of its intention to terminate the Executive’s
employment.  In such event, the Executive’s
employment with the Company shall terminate effective on the 30th day after the
Company’s receipt of such notice by the Executive (the “Disability Effective Date”), provided,
that within the 30 days after such receipt, the Executive shall not have returned
to full-time performance of the Executive’s duties.  For purposes of this Agreement, “Disability”
shall have the meaning ascribed under the Company’s long term disability plan
applicable to the Executive.


 


(b)           Cause.  The Company
may terminate the Executive’s employment during the Employment Period with or
without Cause.  For purposes of this
Agreement, “Cause” shall mean the Executive’s:


 


(i)            conviction by a court of competent jurisdiction of a felony under Federal
law or the law of the state in which such action occurred;


 


(ii)           willful dishonesty in the course of fulfilling the Executive’s material
employment duties;


 


(iii)          commission of a material act of fraud or embezzlement;


 


(iv)          willful failure to substantially perform the Executive’s responsibilities
under this Agreement;


 


(v)           willfully (x) impeding, (y) endeavoring to influence, obstruct
or impede or (z) failure to materially cooperate with an investigation 


 


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authorized
by the Board, a self-regulatory organization empowered with self-regulatory
responsibilities under federal securities or state laws or a governmental
department or agency;


 


unless, in the case of
clauses (ii) through (v), the event constituting Cause is curable and has
been cured to the extent possible by the Executive within 30 business days of
his receipt of notice from the Company that an event constituting Cause has
occurred and specifying the details of such event.


 


For
purposes of this provision, no act or omission on the part of the Executive
shall be considered “willful” unless it is done or omitted in bad faith or
without reasonable belief that the act or omission was in the best interests of
the Company.  Any act or omission based
upon a resolution duly adopted by the Board or advice of counsel for the
Company shall be conclusively presumed to have been done or omitted in good
faith and in the best interests of the Company. 
“Cause” shall not include bad judgment or failure of the Company or
Partnership to meet financial performance objectives.  The cessation of the Executive’s employment
shall not be deemed to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire membership of the
Board (excluding the Executive) at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before
the Board) finding that, in the opinion of the Board, the Executive is guilty
of the conduct described above, and specifying the particulars thereof in
detail.  Notwithstanding the foregoing,
if the Board reasonably believes in good faith that facts exist that may
justify a termination for Cause, the Board retains the right to (i) immediately
terminate the Executive’s employment (without any obligation to pay or provide
any benefits described in Section 4), and (ii) call the Board meeting
and comply with the other requirements described in the preceding sentence
within 90 days thereafter (the “Determination Period”);
provided that promptly following the Determination Period, the Executive shall
be paid or provided the applicable benefits described in Section 4.  If the Company does not deliver to the
Executive a Notice of Termination within 90 days after any member of the Board
who is not a party to such act or omission has had knowledge, or should have
had knowledge, that an event constituting Cause has occurred, the event will no
longer constitute Cause.


 


(c)           Resignation.  The
Executive may terminate the Executive’s employment during the Employment Period
for any reason.  For purposes of this
Agreement, “Good Reason” shall
mean (i) a material adverse change in the Executive’s duties or
responsibilities, (ii) a material reduction of the Executive’s salary, (iii) a
requirement that the Executive report to any one other than the Chief Executive
Officer of the Company;  (iv) other material negative
change in Executive’s service relationship with the Company, it being
understood that under the circumstances a requirement to report to any one
other than Adam Metz, the Chief Executive Officer of the Company would be such
a material negative change; (v) the relocation of the Executive’s
principal place of employment, as of the Effective Date, to a location that
increases the Executive’s commuting distance by more than 50 miles, (vi) a
material breach of this Agreement by the Companies, or (vii) the failure
by the Companies to obtain written assumption of this Agreement by a purchaser
or successor of the Company; provided, that, the Executive must provide a 


 


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Notice of Termination to the Company within 60 days
of the occurrence of the event constituting Good Reason, and in the event the
Executive provides notice of Good Reason pursuant to clause (i), (ii), (iii) (vi) or
(vii) above, the Company shall have the opportunity to cure such event
constituting Good Reason within 30 days of receiving such notice.


 


(d)           Notice of Termination.  Any
termination by the Company or by the Executive shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section 12(b).  For purposes of this Agreement, a “Notice of Termination” means a written
notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated and (iii) if
the Date of Termination (as defined below) is other than the date of receipt of
such notice, specifies the Date of Termination. 
The failure by the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Cause shall not waive
any right of the Company, hereunder, or preclude the Company, from asserting
such fact or circumstance in enforcing the Company’s rights hereunder.


 


(e)           Date of Termination.  “Date of Termination” means (i) if the
Executive’s employment is terminated by the Company other than for Disability,
the date of receipt of the Notice of Termination or any later date specified
therein within 90 days of such notice, (ii) if the Executive’s employment
is terminated by the Executive, 30 days after receipt of the Notice of
Termination (provided, that the Company may accelerate the Date of Termination
to an earlier date by providing the Executive with notice of such action) (iii) if
the Executive’s employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of the Executive’s death or the
Disability Effective Date, as the case may be, and (iv) if Executive’s
employment is terminated by expiration of this Agreement, the date of
expiration of this Agreement.


 


4.             Obligations of the Company upon Termination.


 


(a)           Other Than For Cause.  If, during
the Employment Period, the Company shall terminate the Executive’s employment
other than for Cause or Disability, or if Executive shall terminate his
employment for Good Reason, or if the Executive’s employment shall terminate
because of the expiration of the Agreement, the Company shall have no further
obligations to the Executive except as follows:


 


(i)            the Company shall pay or provide the Executive, to the extent not
theretofore paid,  (A) a lump sum in
cash within 5 days after the Date of Termination an amount equal to the sum of (1) the
Annual Base Salary (which shall be the Annual Base Salary prior to reduction if
the termination is for Good Reason because of a reduction in Annual Base
Salary) through the Date of Termination, and (2) the Annual Bonus earned
under the Cash Value Added Incentive Plan for years ending prior to the year in
which the Date of Termination occurs,  
and (B)  any other amounts or benefits required to be paid or
provided or to which the Executive is eligible to receive under any plan,
program, policy or practice or other contract or agreement of the Company and
its affiliated 


 


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companies
through the Date of Termination, (the total of (A) and (B), the “Accrued Benefits”);


 


(ii)           the Company shall pay the Executive a pro rata portion of the annual
bonus for the year in which the Date of Termination occurs, in an amount
determined by multiplying the annual bonus that would have been payable if
Executive had remained employed until the payment date for such annual bonus by
a fraction, the numerator of which is the number of days in the applicable
performance year prior to and including the Date of Termination and the
denominator of which is 365;  provided
that if the Date of Termination is the last day of the Employment Period, such
additional amount shall be the full amount of bonus payable for the year in
which the Date of Termination occurs, without pro ration.  The amount described in this Section 4(a)(ii) shall
be paid at the same time as the annual bonus for such year is paid to other
executives of the Company; provided it shall be paid no later than March 15
of the year following the year in which the Date of Termination occurs.


 


(iii)          the Company shall pay the Executive a lump sum in cash within 5 days
after the Date of Termination (subject to Section 4(d)) in an amount equal
to 75% of the sum of the Annual Base Salary plus the Target Annual Bonus;


 


(iv)          the Restricted Stock Grant shall become 100% vested and, if Executive has
been granted awards under the Equity Incentive Plan, then, such awards shall become
100% vested, and such options and equity awards shall remain exercisable until
the earlier of (1) the expiration of their term and (2) the one-year
anniversary of the Date of Termination, unless the award agreement provides for
more rapid vesting or a longer exercise period (in which case the terms of the
award agreement shall apply);


 


(v)           the Company shall provide coverage or pay an amount equal to the
applicable COBRA premium rate, if any, for the Executive, his spouse and his
eligible dependents (the “COBRA Benefits”)
through the eighteen-month anniversary of the Date of Termination with respect
to any welfare benefits for which the Executive elects COBRA coverage; and


 


(vi)          the shall transfer title to Executive, and Executive shall be entitled to
keep all Company-owned electronic equipment (BlackBerry, i-pad, laptop
computer, cell phone) used by the Executive during the Employment Period.


 


(b)           Death; Disability.  If, during
the Employment Period, the Executive’s employment shall terminate on account of
death (other than via death after delivery of a valid Notice of Termination
without Cause) or Disability, the Company shall have no further obligations to
the Executive other than to provide the Executive (or his estate) (i) the
Accrued Benefits;  (ii) a pro rata
amount of the Target Annual Bonus for the year in which the Date of Termination
occurs (in the same ratio that the number of days of actual employment through
the Date of Termination bears to 365 days), paid in a lump sum in 


 


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cash no later than five days after the Date of
Termination; (iii) the Restricted Stock Grant shall become 100% vested,
and (iv) unless the applicable award agreement provides for more rapid
vesting or a longer period to exercise (in which case the terms of the award
agreement shall apply), all of Executive’s outstanding stock options or other
equity-based awards shall vest, and such options and equity awards shall remain
exercisable until the earlier of (1) the expiration of their term and (2) the
one-year anniversary of the Date of Termination.


 


(c)           For Cause; Resignation Without Good Reason.  If,
during the Employment Period, the Company shall terminate the Executive’s
employment for Cause or the Executive terminates his employment other than for
Good Reason, the Company shall have no further obligations to the Executive
other than the obligation to pay to the Executive the Accrued Benefits.


 


(d)           Condition.  The Company
shall not be required to make the payments and provide the benefits specified
in Section 4(a)(ii) through (vi) unless, prior to payment, the
parties hereto have entered into a release substantially in the form attached
hereto as Attachment A (for which the applicable 7-day revocation period has
expired) within 55 days following the Date of Termination, under which the
Executive releases the Company, its affiliates and its officers, directors and
employees from all liability (other than the payments and benefits under this
Agreement, the KEIP or any option or equity award).  The Company and the Partnership shall tender
the release to the Executive within 2 business days of the Executive’s Date of
Termination, and if the period within which Executive must execute the release
would begin in one calendar year and expire in the following calendar year,
then any payments contingent on execution (and non-revocation) of such release
shall be made in such following calendar year (regardless of the year of
execution of such release) if payment in such following calendar year is
required in order to avoid taxes, interest and penalties under Section 409A
of the Internal Revenue Code of 1986, as amended (“Section 409A”).


 


(e)           Resignation from Certain Positions. 
Following the Employment Period or the termination of the Executive’s
employment for any reason, if and to the extent requested by the Board, the
Executive agrees to resign from all fiduciary positions (including as trustee)
and from all other offices and positions he holds with the Company and any of
its affiliates; provided, however, that if the Executive refuses to tender his
resignation after the Board has made such request, then the Board shall be
empowered to tender the Executive’s resignation from such offices and
positions.


 


5.             KEIP Unaffected.  Executive is entitled to payments under that
certain General Growth Properties, Inc. Key Employee Incentive Plan (the “KEIP”).  Nothing in
this Agreement shall affect Executive’s rights under the KEIP, regardless of
whether Executive terminates employment for any reason prior to or at the
expiration of this Agreement.


 


6.             Full Settlement.  The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others.  In no event shall
the Executive be obligated to seek other employment, or take any other action
by way of mitigation of the amounts payable to the 


 


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Executive under any of the
provisions of this Agreement, and such amounts shall not be reduced whether or
not the Executive obtains other employment.


 


7.             Section 4999 of the Code.


 


(a)           General Rules.  Anything in
this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, award, benefit or distribution (or any
acceleration of any payment, award, benefit or distribution) by the Company (or
any of its affiliated entities) or any entity which effectuates a Change in
Control (or any of its affiliated entities) to or for the benefit of Executive
(whether pursuant to the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this Section 7)
(the “Payments”) would be subject
to the excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the “Code”), or
any interest or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise
Tax”), then the Company shall pay to Executive an additional payment
(a “Gross-Up Payment”) in an
amount such that after payment by Executive of all taxes (including any Excise
Tax) imposed upon the Gross-Up Payment, Executive retains an amount of the
Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the
Payments and (y) the product of any deductions disallowed because of the
inclusion of the Gross-Up Payment in Executive’s adjusted gross income and the
highest applicable marginal rate of federal income taxation for the calendar
year in which the Gross-Up Payment is to be made.  For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to (i) pay federal income
taxes at the Executive’s actual marginal rates of federal income taxation for
the calendar year in which the Gross-Up Payment is to be made, (ii) pay
applicable state and local income taxes at the Executive’s actual marginal rate
of taxation for the calendar year in which the Gross-Up Payment is to be made,
net of the actual reduction in federal income taxes which could be obtained
from deduction of such state and local taxes and (iii) have otherwise
allowable deductions for federal income tax purposes at least equal to those
which could be disallowed because of the inclusion of the Gross-Up Payment in
the Executive’s adjusted gross income. 
Notwithstanding the foregoing provisions of this Section 7(a), if
it shall be determined that Executive is entitled to a Gross-Up Payment, but
that the Payments would not be subject to the Excise Tax if the Payments were
reduced by an amount that is less than 10% of the portion of the Payments that
would be treated as “parachute payments” under Section 280G of the Code,
then the amounts payable to Executive under this Agreement shall be reduced
(but not below zero) to the maximum amount that could be paid to Executive
without giving rise to the Excise Tax (the “Safe
Harbor Cap”), and no Gross-Up Payment shall be made to
Executive.  In the event that the
Payments would be reduced as provided in this Section 7(a), then such
reduction shall be determined in a manner which has the least economic cost to
Executive and, to the extent the economic cost is equivalent, the Payments will
be reduced in the inverse order of when the Payments would have been made to
Executive until the reduction specified is achieved.  For purposes of reducing the Payments to the
Safe Harbor Cap, only amounts payable under this Agreement (and no other
Payments) shall be reduced.  If the
reduction of the amounts payable hereunder would not result in a reduction of
the Payments to the Safe Harbor Cap, no amounts payable under this Agreement
shall be reduced pursuant to this provision.


 


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(b)           Determinations.  Subject to
the provisions of Section 7(a), all determinations required to be made
under this Section 7, including whether and when a Gross-Up Payment is
required, the amount of such Gross-Up Payment, the amount of any Option
Redetermination (as defined below), the reduction of the Payments to the Safe
Harbor Cap and the assumptions to be utilized in arriving at such
determinations, shall be made by the public accounting firm that is retained by
the Company as of the date immediately prior to the Change in Control (the “Accounting Firm”) which shall provide
detailed supporting calculations both to the Company and Executive within 15
business days of the receipt of notice from the Company or the Executive that
there has been a Payment, or such earlier time as is requested by the Company
(collectively, the “Determination”).  For the avoidance of doubt, the Accounting
Firm may use the Option Redetermination amount in determining the reduction of
the Payments to the Safe Harbor Cap. 
Notwithstanding the foregoing, in the event (i) the Board shall
determine prior to the Change in Control that the Accounting Firm is precluded
from performing such services under applicable auditor independence rules or
(ii) the Audit Committee of the Board determines that it does not want the
Accounting Firm to perform such services because of auditor independence
concerns or (iii) the Accounting Firm is serving as accountant or auditor
for the individual, entity or group effecting the Change in Control, the Board
shall appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). 
All fees and expenses of the Accounting Firm shall be borne solely by
the Company and the Company shall enter into any agreement requested by the
Accounting Firm in connection with the performance of the services
hereunder.  The Gross-Up Payment under
this Section 7 with respect to any Payments shall be made no later than 30
days following such Payment.  If the
Accounting Firm determines that no Excise Tax is payable by Executive, it shall
furnish Executive with a written opinion to such effect, and to the effect that
failure to report the Excise Tax, if any, on Executive’s applicable federal
income tax return will not result in the imposition of a negligence or similar
penalty.  In the event the Accounting
Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it
shall furnish Executive with a written opinion to such effect.  The Determination by the Accounting Firm
shall be binding upon the Company and Executive.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the Determination,
it is possible that Gross-Up Payments which will not have been made by the
Company should have been made (“Underpayment”)
or Gross-Up Payments are made by the Company which should not have been made (“Overpayment”), consistent with the
calculations required to be made hereunder. 
In the event that the Executive thereafter is required to make payment
of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any such Underpayment
(together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code) shall be promptly paid by the Company to or for the benefit of
Executive.  In the event the amount of
the Gross-Up Payment exceeds the amount necessary to reimburse the Executive
for his or her Excise Tax, the Accounting Firm shall determine the amount of
the Overpayment that has been made and any such Overpayment (together with
interest at the rate provided in Section 1274(b)(2) of the Code)
shall be promptly paid by Executive (to the extent he or she has received a
refund if the applicable Excise Tax has been paid to the Internal Revenue
Service) to or for the benefit of the Company. 
Executive shall cooperate, to the extent his or her expenses are
reimbursed by the Company, with any reasonable requests by the 


 


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Company in connection with any contests or disputes
with the Internal Revenue Service in connection with the Excise Tax.  In the event that the Company makes a
Gross-Up Payment to the Executive and subsequently the Company determines that
the value of any accelerated vesting of stock options held by Executive shall
be redetermined within the context of Treasury Regulation §1.280G-1 Q/A 33 (the
“Option Redetermination”),
Executive shall (i) file with the Internal Revenue Service an amended
federal income tax return that claims a refund of the overpayment of the Excise
Tax attributable to such Option Redetermination and (ii) promptly pay the
refunded Excise Tax to the Company; provided that the Company shall pay all
reasonable professional fees incurred in the preparation of Executive’s amended
federal income tax return.  In the event
that amounts payable to Executive under this Agreement were reduced pursuant to
the third sentence of Section 7(a) and subsequently Executive
determines there has been an Option Redetermination that reduces the value of
the Payments attributable to such options, the Company shall promptly pay to
Executive any amounts payable under this Agreement that were not previously
paid solely as a result of the third sentence of Section 7(a) up to
the Safe Harbor Cap.


 


8.             Covenants Not to Solicit Company Employees; Confidential Information.


 


(a)           Non-Solicit.  During the
Employment Period, and for a one-year period after the Executive’s employment
is terminated for any reason, the Executive shall not (except in connection
with the performance of his duties for the Companies) in any manner, directly
or indirectly (without the prior written consent of the Company) Solicit anyone
who is then an employee of the Company or its affiliates (or who was an
employee of the Company or its affiliates within the prior 12 months) to resign
from the Company or its affiliates or to apply for or accept employment with
any other business or enterprise.  For
purposes of this Agreement, “Solicit”
means any direct or indirect communication of any kind, regardless of who
initiates it, that in any way invites, advises, encourages or requests any
person to take or refrain from taking any action.


 


(b)           Confidential Information.  The
Executive hereby acknowledges that, as an employee of the Company, he will be
making use of, acquiring and adding to confidential information of a special
and unique nature and value relating to the Company and its affiliates and
their strategic plan and financial operations. 
The Executive further recognizes and acknowledges that all confidential
information is the exclusive property of the Company and its affiliates, is
material and confidential, and is critical to the successful conduct of the
business of the Company and its affiliates. 
Accordingly, the Executive hereby covenants and agrees that he will use
confidential information for the benefit of the Company and its affiliates only
and shall not at any time, directly or indirectly, during the term of this
Agreement and thereafter divulge, reveal or communicate any confidential
information to any person, firm, corporation or entity whatsoever, or use any
confidential information for his own benefit or for the benefit of others.  Notwithstanding the foregoing, the Executive
shall be authorized to disclose confidential information (i) as may be
required by law or legal process after providing the Company with prior written
notice and an opportunity to respond to such disclosure (unless such notice is
prohibited by law), (ii) in any criminal proceeding against him after
providing the Company with prior written notice and (iii) with the prior
written consent of the Company.


 


10






 












 


(c)           Survival. 
Any termination of the Executive’s employment or of this Agreement (or
breach of this Agreement by the Executive or the Company) shall have no effect
on the continuing operation of this Section 7.


 


(d)           Cease Payments.  In the event that the Executive materially
breaches Section 7(a), 7(b) or 7(i), the Company’s obligation to make
or provide payments or benefits under Section 4 or 6 shall cease.


 


(e)           Non-disparagement.  During the Employment Period and thereafter,
the Executive shall not, in any manner, directly or indirectly make any
intentionally false or any disparaging or derogatory statements about the
Company, any of its affiliates or any of their employees, officers or
directors.  The Company, in turn, agrees
that it will not make, in any authorized corporate communications to third
parties, and it will direct the members of the Board, the Chief Executive
Officer, and his direct reports, not to in any manner, directly or indirectly
make any intentionally false or any disparaging or derogatory statements about
the Executive; provided, however, that nothing herein shall prevent either
party from giving truthful testimony, from otherwise making good faith
statements in connection with legal investigations or other proceedings, or
from responding to disparaging or derogatory remarks made by the other party
whether or not in breach of this Section 7.


 


9.             Successors.


 


(a)           This
Agreement is personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. 
This Agreement shall inure to the benefit of and be enforceable by the
Executive’s legal representatives.


 


(b)           This
Agreement shall inure to the benefit of and be binding upon the Companies and
their respective successors and assigns.


 


(c)           The
Companies will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Companies would be
required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid.


 


10.           Disputes.


 


(a)           Jurisdiction and Choice of Forum.  All disputes arising under or related to the
employment of the Executive or the provisions of this Agreement shall be settled
by arbitration under the rules of the American Arbitration Association
then in effect, such arbitration to be held in Chicago, Illinois, as the
sole and exclusive remedy of either party. The arbitration shall be heard by
one arbitrator mutually agreed upon by the parties, who must be a former
judge.  In the event that the parties
cannot agree upon the selection of the arbitrator within 10 days, each party
shall select one arbitrator and those arbitrators shall select a third
arbitrator who will serve as the sole arbitrator.  The 


 


11

















 


arbitrator shall have the authority to order
expedited discovery, hearing and decision, including the ability to set outside
time limits for such discovery, hearing and decision.  The parties shall direct the arbitrator to
render a decision not later than 90 days following the arbitration
hearing.  Judgment on any arbitration
award may be entered in any court of competent jurisdiction.


 


(b)           Governing Law.  This Agreement will be governed by and
construed in accordance with the law of the State of Illinois applicable to
contracts made and to be performed entirely within that State.


 


(c)           Costs. 
The Company shall reimburse all reasonable legal fees and expenses in
connection with (i) the negotiation of this Agreement and (ii) any
dispute, arbitration or legal proceeding relating to the employment of the
Executive or the provisions of this Agreement if the Executive substantially
prevails on any claim in any such dispute, arbitration or legal proceeding.


 


11.           Section 409A
of the Code.


 


(a)           This
Agreement shall be construed to avoid the imposition of additional taxes,
interest and penalties pursuant to Section 409A.  To the extent that the Executive would
otherwise be entitled to any payment under this Agreement or any plan or
arrangement of the Company or its affiliates that constitutes “deferred
compensation” subject to Section 409A, and that if paid during the six
months beginning on the Date of termination would be subject to the Section 409A
additional tax because the Executive is a “specified employee” (within the
meaning of Section 409A and as determined by the Company), the payment
will be paid to the Executive on the earlier of the six-month anniversary of
the Date of Termination, a change in ownership or effective control of the
Company (within the meaning of Section 409A) or the Executive’s
death.  In addition, any payment or
benefit due upon a termination of employment that represents a “deferral of
compensation” within the meaning of Section 409A shall be paid or provided
to the Executive only upon a “separation from service” as defined in Treas.
Reg. 1.409A-1(h).  To the extent
applicable, each severance payment made under this Agreement shall be deemed to
be separate payments, amounts payable under Section 4 of this Agreement
shall be deemed not to be a “deferral of compensation” subject to Section 409A
to the extent provided in the exceptions in Treas. Reg. 1.409A-1(b)(4) (“short-term
deferrals”) and (b)(9) (“separation pay plans,” including the exception
under subparagraph (iii)) and other applicable provisions of Treas. Reg.
1.409A-1 through 1.409A-6.


 


(b)           Notwithstanding
anything to the contrary in this Agreement or elsewhere, any payment or benefit
under this Agreement or otherwise that is exempt from Section 409A
pursuant to Treas. Reg. 1.409A-1(b)(9)(v)(A) or (C) shall be paid or
provided to the Executive only to the extent that the expenses are not
incurred, or the benefits are not provided, beyond the last day of the
Executive’s second taxable year following the Executive’s taxable year in which
the “separation from service” occurs; and provided further that such expenses
shall be reimbursed no later than the last day of the Executive’s third taxable
year following the taxable year in which the Executive’s “separation from
service” occurs.  Except as otherwise
expressly provided herein, to the extent any expense reimbursement or the
provision of any in-kind benefit under this 


 


12

















 


Agreement is determined to be subject to Section 409A,
the amount of any such expenses eligible for reimbursement, or the provision of
any in-kind benefit, in one calendar year shall not affect the expenses
eligible for reimbursement in any other calendar year (except for any life-time
or other aggregate limitation applicable to medical expenses), in no event
shall any expenses be reimbursed after the last day of the calendar year
following the calendar year in which the Executive incurred such expenses, and
in no event shall any right to reimbursement or the provision of any in-kind
benefit be subject to liquidation or exchange for another benefit.


 


12.           Miscellaneous.


 


(a)           Amendment. 
This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.


 


(b)           Notices. 
All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:


 


If
to the Executive:


 


at
the Executive’s primary residential address

as shown on the records of the Company


 


If
to the Company:


 


General
Growth Properties, Inc.

110 North Wacker Drive

Chicago, IL 60606

Telecopy Number:  312-960-5485

Attention:  Office of the General Counsel


 


or
to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice
and communications shall be effective when actually received by the addressee.


 


(c)           Severability.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.


 


(d)           Tax Withholding.  The Company may withhold from any amounts
payable under this Agreement such federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law or regulation.


 


(e)           No Waiver. 
The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the Company’s right to terminate the Executive for Cause pursuant
to Section 3(b) (subject to 


 


13

















 


the limitation in the last sentence of Section 3(b)),
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.


 


(f)            No Strict Construction.  It is the parties’ intention that this
Agreement not be construed more strictly with regard to the Executive or the
Company.


 


(g)           Entire Agreement.  From and after the Effective Date, this
Agreement shall supersede any other employment or severance agreement or
similar arrangements between the parties, and shall supersede any prior
understandings, agreements or representations by or among the parties, written
or oral, whether in term sheets, presentations or otherwise, relating to the subject
matter hereof.


 


(h)           Section References; Captions.  Any reference to a Section herein is a
reference to a section of this Agreement unless otherwise stated.  The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect.


 


IN
WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from their respective Boards of Directors or
other duly authorized governing body, the Companies have caused these presents
to be executed in its name on their behalf, all as of the Effective Date.


 


	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  /s/
  Thomas H. Nolan

  
	
   

  	
  Thomas
  H. Nolan

  
	
   

  	
   

  
	
   

  	
  GENERAL
  GROWTH PROPERTIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ronald Gern

  
	
   

  	
   

  	
  Name:

  	
  Ronald
  Gern

  
	
   

  	
   

  	
  Title:

  	
  General
  Counsel

  
	
   

  	
   

  
	
   

  	
  GGP
  LIMITED PARTNERSHIP

  
	
   

  	
  By:

  	
  General
  Growth Properties, Inc., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ronald Gern

  
	
   

  	
   

  	
  Name:

  	
  Ronald
  Gern

  
	
   

  	
   

  	
  Title:

  	
  General Counsel

  



 


14

















 


ATTACHMENT A


 


WAIVER AND RELEASE AGREEMENT


 


This
Waiver and Release Agreement (hereinafter “Release”) is entered into among
Thomas H. Nolan (hereinafter “Executive”), General Growth Properties, Inc.,
a Delaware corporation (the “Company”), and General Growth Properties, L.P., a
Delaware limited partnership (the “Partnership” and collectively, the “Companies”).


 


The
parties previously entered into an employment agreement dated
                      
      , 2010 pursuant to which Executive is
entitled to certain payments and benefits upon termination of employment
subject to the execution and non-revocation of this Release.  Executive has had a termination of employment
pursuant to such employment agreement.


 


NOW
THEREFORE, in consideration of certain payments and benefits under his
employment agreement, Executive and the Companies agree as follows:


 


1.             Executive expressly waives and
releases the Companies, their respective affiliates and related entities,
parent corporations and subsidiaries, and all current and former directors,
administrators, supervisors, managers, agents, officers, partners,
stockholders, attorneys, insurers and employees of the Companies and their
affiliates, related entities, parent corporations and subsidiaries, and their
successors and assigns, from any and all claims, actions and causes of action,
at law or in equity, known or unknown, including those directly or indirectly
relating to or connected with Executive’s employment with the Companies or
termination of such employment, including but not limited to any and all claims
under the Illinois Human Rights Act, the Employee Retirement Income Security
Act of 1974, Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act (“ADEA”), the Americans with Disabilities Act, as such Acts
have been amended, and all other forms of employment discrimination whether
under federal, state or local statute or ordinance, wrongful termination,
retaliatory discharge, breach of express, implied, or oral contract,
interference with contractual relations, defamation, intentional infliction of
emotional distress and any other tort or contract claim under common law of any
state or for attorneys’ fees, based on any act, transaction, circumstance or
event arising up to and including the date of Executive’s execution of this
Release; provided, however, nothing herein shall limit or impede Executive’s
right to file or pursue an administrative charge with, or participate in, any
investigation before the Equal Employment Opportunity Commission (“EEOC”), or
any similar local, state or federal agency, or, to file a claim for
unemployment compensation benefits, and/or any causes of action which by law
Executive may not legally waive.  Executive agrees, however, that if
Executive or anyone acting on Executive’s behalf, brings any action concerning
or related to any cause of action or liability released in this Agreement,
Executive waives any right to, and will not accept, any payments, monies,
damages, or other relief, awarded in connection therewith.


 


15

















 


4.             Executive acknowledges:  (a) that Executive has been advised in
writing hereby to consult with an attorney before signing this Release, and (b) that
Executive has had at least twenty-one (21) days after receipt of this
information and Release to consider whether to accept or reject this
Release.  Executive understands that
Executive may sign this Release prior to the end of such twenty-one (21) day
period, but is not required to do so.  In
addition, Executive has seven (7) days after Executive signs this Release
to revoke it.  Such revocation must be in
writing and delivered either by hand or mailed and postmarked within the seven (7) day
revocation period. If sent by mail, it is requested that it be sent by
certified mail, return receipt requested to the Company, in care of the office
of the General Counsel.  If Executive
revokes this Release as provided herein, it shall be null and void.  If Executive does not revoke this Release
within seven (7) days after signing it, this Release shall become
enforceable and effective on the eighth (8th) day after the Executive signs
this Release (“Effective Date”).


 


5.             Executive and the Companies agree
that neither this Release nor the performance hereunder constitutes an
admission by either the Company or the Partnership of any violation of any
federal, state or local law, regulation, or common law, or any breach of any
contract or any other wrongdoing of any type.


 


6.             This Release shall be construed and
enforced pursuant to the laws of the State of Illinois as to substance and procedure,
including all questions of conflicts of laws.


 


7.             This Release constitutes the entire
agreement between the parties concerning the subject matter hereof and
supersedes all prior and contemporaneous agreements, if any, between the
parties relating to the subject matter thereof; provided that this Release does
not apply to: (a) any claims under employee benefit plans subject to the
Employee Retirement Income Security Act of 1974 (“ERISA”) in accordance with
the terms of the applicable employee benefit plan, the General Growth
Properties, Inc. Key Employee Incentive Plan, or any option agreement or
other agreement pursuant to which Executive may exercise rights after
termination of employment to acquire stock or other equity of the Company or
the Partnership, (b) any claim under or based on a breach of this Release
or Sections 4, 5, 8(e), 9, or 10 of the Employment Agreement after the date
that Executive signs this release; (c) rights or claims that may arise
under the Age Discrimination in Employment Act or otherwise after the date that
Executive signs this Release; or (d) any right to indemnification or
directors and officers liability insurance coverage to with the Executive is
otherwise entitled in accordance with Executive’s Employment Agreement.


 


9.             EXECUTIVE ACKNOWLEDGES THAT
EXECUTIVE HAS FULLY READ AND FULLY UNDERSTANDS THIS RELEASE; AND THAT EXECUTIVE
ENTERED INTO IT FREELY AND VOLUNTARILY AND WITHOUT COERCION OR PROMISES NOT
CONTAINED IN THIS RELEASE.


 


16

















 


	
  EXECUTIVE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Thomas
  H. Nolan

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GENERAL
  GROWTH PROPERTIES, INC.

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Ronald
  Gern

  	
   

  	
   

  
	
   

  	
  Title:

  	
  General
  Counsel

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  GGP
  LIMITED PARTNERSHIP

  	
   

  	
   

  
	
  By:

  	
  General
  Growth Properties, Inc., its general partner

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Ronald
  Gern

  	
   

  	
   

  
	
   

  	
  Title:

  	
  General
  Counsel

  	
   

  	
   

  



 


17