Document:

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                                                                   EXHIBIT 10.37

                                  SALTON, INC.
                             2002 STOCK OPTION PLAN

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                                TABLE OF CONTENTS

                                                                     Page
                                                                     ----
Section 1.  Purpose................................................    1
Section 2.  Definition.............................................    1
Section 3.  Administration.........................................    3
Section 4.  Shares Subject to the Plan.............................    4
Section 5.  Eligibility............................................    5
Section 6.  Stock Options..........................................    5
Section 7.  Stock Appreciation Rights..............................    8
Section 8.  Restricted Stock.......................................   10
Section 9.  Performance Awards.....................................   10
Section 10. Other Stock Unit Awards................................   11
Section 11. Termination of Awards..................................   11
Section 12. Transferability of Awards..............................   13
Section 13. Change in Control......................................   13
Section 14. Amendments and Termination.............................   15
Section 15. General Provisions.....................................   15
Section 16. Term of Plan...........................................   17

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                                  SALTON, INC.
                             2002 STOCK OPTION PLAN

     THE PLAN. Salton, Inc., a Delaware corporation (the "Company"), hereby
establishes the Salton, Inc. 2002 Stock Option Plan (the "Plan"), effective as
of the Effective Date.

     SECTION 1. PURPOSE. The purposes of the Plan are to encourage employees of
the Company and its Affiliates to acquire an ownership interest in the growth
and performance of the Company and to increase their incentive to contribute to
the Company's future success, thus enhancing the value of the Company for the
benefit of stockholders, and enhancing the ability of the Company and its
Affiliates to attract and retain individuals upon whom, in large measure, the
progress, growth and profitability of the Company depends.

     SECTION 2. DEFINITIONS. The following terms have the meanings set forth
below:

     "Affiliate" means any Person that directly, or through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Company.

     "Award" means any Option, SAR, Restricted Stock Award, Performance Share,
Performance Unit or Other Stock Unit Award.

     "Award Agreement" means the written agreement or instrument by which every
Award is evidenced.

     "Board" means the Board of Directors of the Company.

     "Code" means the Internal Revenue Code of 1986, as amended from time to
time. References to a specific section of the Code shall also refer to any
successor provision, and any regulations promulgated under such section or
successor provision.

     "Committee" means the Stock Option Committee of the Board.

     "Company" means Salton, Inc.

     "Effective Date" means October 29, 2001, the date this Plan is adopted by
the Board; provided, however, that if the Plan is not approved by a majority of
the stockholders present and voting at an annual meeting of the stockholders of
the Company on or before January 15, 2002, this Plan shall not be effective and
this Plan and any Award theretofore made under this Plan shall be void.

     "Employee" means any employee of the Company or of any Affiliate.

     "Exchange Act" means the Securities Exchange Act of 1934.

     "Fair Market Value" means, with respect to a Share, (i) the closing price
of the Shares on the NYSE or any other national stock exchange on which the
Shares are then traded, or if no such reported sale of Shares shall have
occurred on such date, on the next preceding date on which there was such a
reported sale; or (ii) if the Shares are not listed for trading on a national
securities exchange or authorized for quotation on the NYSE, the average of the
closing bid and

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asked prices as reported by the NYSE or, if no such prices shall have been
reported for such date, on the next preceding date for which such prices were so
reported.

     "Incentive Stock Option" means an Option granted pursuant to Section 6(h)
that is intended to meet the requirements of Section 422 of the Code.

     "including" means including without limitation.

     "Limited Right" means an SAR which is exercisable only for a limited period
after a Change in Control as provided in Section 7(f).

     "Mature Shares" means Shares to which the holder thereof has good title,
free and clear of all liens and encumbrances, and which such holder either (i)
has held for at least six months or (ii) has purchased on the open market.

     "Nonstatutory Stock Option" means an Option granted to a Participant
pursuant to Section 6 that is not intended to be an Incentive Stock Option.

     "NYSE" means the New York Stock Exchange.

     "Option" means any right granted to a Participant under the Plan allowing
such Participant to purchase Shares at such price or prices and during such
period or periods as the Committee shall determine.

     "Optionee" means any Participant to whom an Option has been granted under
the Plan.

     "Option Price" means the per share purchase price of Shares subject to an
Option.

     "Other Stock Unit Award" means any right granted to a Participant by the
Committee pursuant to Section 10.

     "Participant" means an Employee who is selected by the Committee to receive
an Award under the Plan.

     "Performance Award" means any Award of Performance Shares or Performance
Units pursuant to Section 9.

     "Performance Period" means that period established by the Committee at the
time any Performance Award is granted or at any time thereafter during which any
performance goals specified by the Committee with respect to such Award are to
be measured.

     "Performance Share" means any grant pursuant to Section 9 of a unit valued
by reference to a designated number of Shares, which value may be paid to the
Participant by delivery of such property as the Committee shall determine,
including cash, Shares, or any combination thereof, upon achievement of such
performance goals during the Performance Period as the Committee shall establish
at the time of such grant or thereafter.

     "Performance Unit" means any grant pursuant to Section 9 of a unit valued
by reference to a designated amount of property other than Shares, which value
may be paid to the Participant by delivery of such property as the Committee
shall determine, including cash, Shares, or any

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combination thereof, upon achievement of such performance goals during the
Performance Period as the Committee shall establish at the time of such grant or
thereafter.

     "Permitted Transferee" means, in respect of any Participant, any member of
the Immediate Family of such Participant, any trust of which all of the primary
beneficiaries are such Participant or members of his or her Immediate Family, or
any partnership of which all of the partners are such Participant or members of
his or her Immediate Family. The "Immediate Family" of a Participant means the
Participant's spouse, children, stepchildren, grandchildren, parents,
stepparents, siblings, grandparents, nieces and nephews.

     "Person" means any individual, corporation, partnership, limited liability
company, association, trust, unincorporated organization, or government or
political subdivision thereof.

     "Restricted Stock" means any Share issued with the restriction that the
holder may not sell, transfer, pledge, or assign such Share and with such other
restrictions as the Committee, in its sole discretion, may impose (including any
restriction on the right to vote such Share, and the right to receive any cash
dividends), which restrictions may lapse separately or in combination at such
time or times, in installments or otherwise, as the Committee may specify.

     "Restricted Stock Award" means an Award of Restricted Stock pursuant to
Section 8.

     "SAR" means any right granted to a Participant pursuant to Section 7 to
receive, upon exercise by the Participant, an amount equal to the number of
Shares with respect to which the right is granted multiplied by the excess of
(i) the Fair Market Value of one Share on the date of exercise or, if the
Committee shall so determine in the case of any such right other than one
related to any Incentive Stock Option, at any time during a specified period
before the date of exercise, over (ii) the grant price of the right as specified
by the Committee.

     "Shares" means shares of the common stock of the Company.

     SECTION 3. ADMINISTRATION.

     (a)  General. The Plan is administered by the Committee. A majority of the
members of the Committee may determine its actions and fix the time and place of
its meetings. The Committee may appoint agents (who may be Employees) to assist
in the administration of the Plan, and may authorize such persons to execute
agreements or other documents on its behalf. No member of the Committee shall be
liable for any action or determination made with respect to the Plan or any
Award.

     (b)  Power and Authority of Committee. The Committee shall have full power
and authority, in its sole discretion subject to the provisions of the Plan, to:

          (i) determine the Employees to whom Awards may from time to time
     be granted;

          (ii) determine the type or types of Award to be granted to each
     Participant;

          (iii) determine the number of Shares or other amount to be covered by
     each Award, subject to the limitations of Section 4.

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          (iv) determine the terms and conditions, not inconsistent with the
     provisions of the Plan, of any Award;

          (v) determine whether, to what extent and under what circumstances
     Awards may be settled in cash, Shares or other property or canceled or
     suspended;

          (vi) determine whether, to what extent and on what terms and
     conditions cash, Shares and other property and other amounts payable with
     respect to an Award under this Plan shall be deferred, either automatically
     or at the election of the Participant;

          (vii) determine the existence or nonexistence of any fact or status
     relevant to Awards or the rights of Participants thereunder, including
     whether a Termination of Employment occurs by reason of cause, retirement,
     death or disability;

          (viii) construe and interpret the Plan, any Award Agreement, and any
     other instrument or agreement entered into under the Plan;

          (ix) adjust performance award criteria or the terms and conditions of
     other Awards in recognition of unusual or nonrecurring events affecting the
     Company or its financial statements or changes in applicable laws,
     regulations or accounting principles;

          (x) make such other determinations and waive such requirements as may
     be required or permitted by Sections 6, 7, 8, 9, 10 and 11 or other
     provisions of the Plan;

          (xi) administer the Plan and establish such rules and regulations,
     approve and prescribe such forms, and appoint such agents as it shall deem
     appropriate for the proper administration of the Plan;

          (xii) correct any defect, supply any omission or reconcile any
     inconsistency in the Plan or any Award in the manner and to the extent it
     shall deem desirable to carry it into effect;

          (xiii) make any other determination and take any other action that the
     Committee deems necessary or desirable for administration of the Plan.

     In making such determinations, the Committee may take into consideration
the value of the services rendered by the respective individuals, their present
and potential contributions to the success of the Company and its Affiliates and
such other factors which the Committee may deem relevant in accomplishing the
purposes of the Plan. The Committee's determinations under the Plan need not be
uniform. The Committee may make such determinations selectively among persons
who receive, or are eligible to receive, Awards (whether or not such persons are
similarly situated). Decisions of the Committee shall be final and binding upon
all Persons.

     SECTION 4. SHARES SUBJECT TO THE PLAN.

     (a)  Aggregate Limit. Subject to adjustment as provided in Section 15(h), a
total of 600,000 Shares are reserved for grant pursuant to Awards under the
Plan. Any Shares issued hereunder may consist, in whole or in part, of
authorized and unissued Shares or treasury Shares. Shares shall be charged
against the foregoing limit upon the grant of each Award (other than a

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Performance Unit or Other Stock Unit not denominated in Shares), but if such
Shares are thereafter forfeited or such Award otherwise terminates without the
issuance of such Shares or of other consideration in lieu of such Shares, the
Shares so forfeited or related to the terminated portion of such Award shall be
restored to the foregoing limit and shall again be available for Awards under
the Plan. If Shares are applied to pay the Option Price upon exercise of an
Option or to pay federal, state and local taxes upon exercise of an Option or
other receipt of payment under an Award, the Shares so applied shall be added to
the foregoing limit and shall be available for Awards under the Plan.

     (b)  Individual Annual Limits. Awards to any one individual in any one
calendar year are subject to the following limits:

          (i) Options. The maximum number of Shares with respect to which
     Options may be granted during a calendar year to any Participant is
     200,000;

          (ii) SARs. The maximum number of SARs that may be granted during a
     calendar year to any Participant is 200,000;

          (iii) Aggregate Options and SARs. The sum of the number of Shares with
     respect to which Options may be granted and the number of SARs that may be
     granted in total during a calendar year to any Participant is 200,000;

          (iv) Other Share-Denominated Awards. The maximum number of Shares with
     respect to which Restricted Stock, Performance Shares, and Other Stock
     Units denominated in Shares in total may be granted during a calendar year
     to any Participant is 100,000; and

          (v) Dollar-Denominated Awards. The maximum dollar amount of
     compensation that may be represented by Performance Units and Other Stock
     Units not denominated in Shares awarded during calendar year to any
     Participant is 150% of the Participant's annual base salary in effect on
     the date of the Award multiplied by the number of whole and fractional
     years in the Performance Period for Performance Units.

     SECTION 5. ELIGIBILITY. The Committee may grant Awards to any Employee
(excluding any member of the Committee). An Employee may be granted more than
one Award, but only on the terms and subject to the restrictions hereinafter set
forth.

     SECTION 6. STOCK OPTIONS.

     (a)  Issuance. The Committee may grant Options to Participants either alone
or in addition to other Awards granted under the Plan.

     (b)  Award Agreements. Each Option shall be evidenced by an Award Agreement
in such form as the Committee may from time to time approve. The Committee may
require that any Participant shall, as consideration for the grant of the
Option, agree in writing to remain in the employ of the Company or of one of
Affiliates, at the pleasure of the Company or of such Affiliate, for at least
one year from the date of the granting of such Option or until earlier
termination of the Participant's employment effected or approved by the Company
or by such Affiliate, in which event if the Participant violates such agreement,
any Options still held by such

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person at the time of such violation shall automatically terminate. The
Committee may waive this requirement in the case of any Participant. Any Option
shall also be subject to the following terms and conditions and to such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall deem desirable.

     (c)  Date of Granting of Options. The date of grant of all Options shall be
the date designated by the Committee as the date of grant, provided that in no
event shall the date of grant be earlier than the date on which the Committee
approves the grant.

     (d)  Option Price. The Option Price per Share shall be determined by the
Committee in its sole discretion; provided that the Option Price shall not be
less than 100% of the Fair Market Value of a Share on the date of the grant of
the Option.

     (e)  Option Period. The term of each Option shall be fixed by the Committee
in its sole discretion and set forth in the Award Agreement, provided that the
Option and any related SAR shall not be exercisable after the expiration of 10
years from the date the Option was granted.

     (f)  Exercisability. Options shall be exercisable either in full or in
installments at such time or times as determined by the Committee at or
subsequent to grant, and set forth in the Award Agreement; provided that the
Committee may in its sole discretion subsequent to grant waive any restriction
on the exercise of an Option.

     (g)  Method of Exercise. An Option shall be exercised by the delivery to
the Company (or an agent of the Company) during the period in which such Option
is exercisable of (x) written notice of exercise in a form acceptable to the
Committee for a specific number of Shares subject to the Option and (y) payment
in full of the Option Price of such specific number of Shares. Payment for the
Shares with respect to which an Option is exercised may be made by any one or
more of the following means:

          (i) cash, negotiable personal check or electronic funds transfer;

          (ii) the Committee in its sole discretion may permit payment through
     tender of Mature Shares, valued at their Fair Market Value on the date of
     exercise; provided that the Committee may impose whatever restrictions it
     deems necessary or desirable with respect to such method of payment;

          (iii) the Committee in its sole discretion may permit payment by
     submitting acceptable certification to the Committee of the ownership of
     Mature Shares, valued at their Fair Market Value on the date of exercise;
     in which event the Shares issued to the Optionee for the portion of any
     Option so exercised by shall not exceed the number of Shares covered by the
     such portion of the Option less the number of Shares for which proof of
     ownership is submitted in full or partial payment; or

          (iv) the Committee in its sole discretion may permit payment through
     the sale of the Shares acquired on exercise of the Option through a
     broker-dealer to whom the Optionee has submitted an irrevocable notice of
     exercise and irrevocable instructions to deliver promptly to the Company
     the amount of sale or loan proceeds sufficient to pay for

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     such Shares, together with, if requested by the Committee, the amount of
     federal, state, local or foreign withholding taxes payable by Optionee by
     reason of such exercise.

     (h)  Incentive Stock Options. At the time of the grant of any Option, the
Committee may designate in the Award Agreement that such Option shall be an
Incentive Stock Option, which shall be subject to the following terms and
conditions.

          (i) Option Term. The term of an Incentive Stock Option shall not
     exceed 10 years (five years in the case of a 10% Owner) from the grant
     date, and shall be subject to earlier termination as provided in the Plan
     or in the applicable Award Agreement.

          (ii) Option Price. The Option Price of an Incentive Stock Option shall
     (1) not be less than 100% of the Fair Market Value on the grant date of the
     Shares subject to the Option, or (2) in the case of a 10% Owner, not be
     less than 110% of the Fair Market Value on the Grant Date of the Shares
     subject to the Options.

          (iii) $100,000 Limit. The aggregate Fair Market Value (determined as
     of the time of grant) of the Shares with respect to which Incentive Stock
     Options held by any Participant which are exercisable for the first time by
     such Participant during any calendar year under the Plan (and under any
     other benefit plans of the Company or of any parent or subsidiary
     corporation of the Company) shall not exceed $100,000 or, if different, the
     maximum limitation in effect at the time of grant under Section 422 of the
     Code. To the extent the $100,000 Limit is exceeded, such Option shall be
     deemed to be a Nonstatutory Stock Option.

          (iv) Grant Date. Each Incentive Stock Option shall be granted within
     10 years from the earlier of the date the Plan is adopted or the date the
     Plan is approved by the stockholders of the Company.

          (v) Disqualifying Disposition. Each Incentive Stock Option shall
     require the holder of Shares issued upon exercise of such Incentive Stock
     Options to notify the Committee of any disposition of such Shares under the
     circumstances described in Section 421(b) of the Code (relating to certain
     disqualifying dispositions), within 10 days of such disposition.

          (vi) Nontransferability. Notwithstanding Section 12, a Participant may
     not transfer an Incentive Stock Option otherwise than upon death by will or
     under the applicable laws of descent and distribution or by designation of
     a beneficiary pursuant to Section 12(a); and during the lifetime of the
     Participant only the Participant may exercise an Incentive Stock Option.

          (vii) Other Requirements. The terms of any Incentive Stock Option
     shall comply in all respects with the provisions of Section 422 of the
     Code.

          (viii) Other Terms and Conditions. Except as otherwise provided in
     this subsection, all the provisions of the Plan shall apply to Incentive
     Stock Options.

     (i)  Form of Settlement. In its sole discretion, the Committee may provide,
at the time of grant, that the Shares to be issued upon an Option's exercise
shall be in the form of

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Restricted Stock or other similar securities, or may reserve the right so to
provide after the time of grant.

     (j)  Discretionary Share Withholding. The Committee in its sole discretion
may provide that when taxes are to be withheld in connection with the exercise
of an Option by delivering Shares in payment of the exercise price, or an
exercise of an SAR for stock, or upon the lapse of restrictions on Restricted
Stock received upon the exercise of an Option (the date on which such exercise
occurs or such restrictions lapse hereinafter referred to as the "Tax Date"),
the Optionee may elect to make payment for the withholding of federal, state and
local taxes, including Social Security and Medicare ("FICA") taxes, up to the
Optionee's marginal tax rate, by one or both of the following methods:

          (i) delivering part or all of the payment in previously-owned Mature
     Shares (which shall be valued at their Fair Market Value on the Tax Date);

          (ii) requesting the Company to withhold from those Shares that would
     otherwise be received upon exercise of the Option, upon exercise of an SAR
     for stock, or upon the lapse of restrictions on Restricted Stock, a number
     of Shares having a Fair Market Value on the Tax Date equal to the amount to
     be withheld.

The Committee in its sole discretion may provide that the amount of tax
withholding to be satisfied by withholding Shares from the Option exercise shall
be the minimum amount of taxes, including FICA taxes, required to be withheld
under federal, state and local law, or shall be the entire amount of taxes,
including FICA taxes, required to be paid by Optionee under federal, state and
local law. An election by Optionee under this subsection is irrevocable. Any
fractional share amount and any additional withholding not paid by the
withholding or surrender of Shares must be paid in cash. If no timely election
is made, cash must be delivered to satisfy all tax withholding requirements.

     SECTION 7. STOCK APPRECIATION RIGHTS.

     (a)  Issuance. The Committee may grant SARs to Participants either alone or
in addition to other Awards granted under the Plan. Such SARs may, but need not,
be granted in connection with a specific Option granted under Section 6. Any SAR
related to a Nonstatutory Stock Option may be granted at the same time such
Option is granted or at any time thereafter before exercise or expiration of
such Option. Any SAR related to an Incentive Stock Option must be granted at the
same time such Option is granted. The Committee may impose such conditions or
restrictions on the exercise of any SAR as it shall deem appropriate.

     (b)  Award Agreements. Any SAR granted to a Participant under the Plan
shall be evidenced by an Award Agreement in such form and the Committee may
approve and shall contain such terms and conditions not inconsistent with other
provisions of the Plan as shall be determined from time to time by the
Committee.

     (c)  Grant Price. The grant price of a SAR shall be determined by the
Committee in its sole discretion; provided that the grant price shall not be
less than the lesser of 100% of the Fair Market Value of a Share on the date of
the grant of the SAR, or the Option Price under the Nonstatutory Stock Option to
which the SAR relates.

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     (d)  Exercise and Payment. Upon the exercise of SARs, an Optionee shall be
entitled to receive the value thereof. The Fair Market Value of a Share on the
date of exercise of SARs shall be determined in the same manner as the Fair
Market Value of a Share on the date of grant of an Option is determined. SARs
shall be deemed exercised on the date written notice of exercise in a form
acceptable to the Committee is received by the Secretary of the Company. Unless
the Award Agreement provides otherwise or reserves to the Committee or the
Participant or both the right to defer payment, the Company shall make payment
in respect of any SAR within five days of the date the SAR is exercised. Any
payment by the Company in respect of a SAR may be made in cash, Shares, other
property, or any combination thereof, as the Committee, in its sole discretion,
shall determine.

     (e)  Grant of Limited Rights.

          (i) The Committee in its sole discretion may grant Limited Rights upon
     or after the grant of any Option under the Plan. Each Limited Right shall
     be identified with a share of Stock subject to an Option of the Optionee.
     The number of Limited Rights granted to a Optionee shall equal the number
     of Shares subject to the Option with which such Limited Rights are
     identified. Upon the exercise, expiration, termination, forfeiture, or
     cancellation of an Optionee's Option, the Optionee's associated Limited
     Rights shall terminate.

          (ii) Limited Rights shall become exercisable upon the occurrence of a
     Change of Control. Limited Rights shall be exercised by delivery to the
     Company, within 90 days after the date of such Change of Control, of
     written notice of intent to exercise specific Limited Rights. The exercise
     of Limited Rights shall result in the cancellation of the Option with which
     such Limited Rights are identified, to the extent of such exercise.

          (iii) The Company shall notify all Optionees of the occurrence of a
     Change of Control promptly after its occurrence, but any failure of the
     Company so to notify shall not deprive any Optionee of any rights that
     accrued as a result of a Change of Control. Any such failure of the Company
     shall, if an Optionee does not otherwise know of the Change of Control,
     automatically extend the 90-day period specified above until 90 days after
     the Company notifies such Optionee or such Optionee otherwise knows of the
     Change of Control, whichever first occurs, but in no event beyond the
     maximum term of the identified Option specified in the applicable Award
     Agreement.

          (iv) Within five business days after the exercise of any Limited
     Rights, the Company shall pay to the Optionee, in cash (except that the
     Committee may cause the Company to pay such amount in Shares if it
     determines that a payment in cash would cause transaction to be ineligible
     for pooling of interests accounting), an amount equal to the difference
     between (A) the Change of Control Value, and (B) the Option Price of the
     Option.

          (v) "Change of Control Value" means the greater of (A) the highest
     Fair Market Value of a Share during the 180-day period preceding the date
     of the Company's receipt of notice of exercise of Limited Rights, or (B)
     the cash amount (or fair cash value, as determined by the Committee in its
     sole discretion, of consideration other than cash),

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     payable in respect of a Share to holders of Shares in connection with the
     Change of Control.

     (g)  Other Limitations. The Committee may at any time impose any other
limitations upon the exercise of SARs which, in the Committee's sole discretion,
are necessary or desirable in order for Participants to qualify for an exemption
from Section 16(b) of the Exchange Act.

     SECTION 8. RESTRICTED STOCK.

     (a)  Issuance. The Committee may issue Restricted Stock Awards to
Participants, for no cash consideration or for such minimum consideration as may
be required by applicable law, either alone or in addition to other Awards
granted under the Plan. The granting of Restricted Stock shall take place on the
date the Committee determines to grant the Restricted Stock.

     (b)  Registration. Any Restricted Stock may be evidenced in such manner as
the Committee in its sole discretion shall deem appropriate, including
book-entry registration or issuance of a stock certificate or certificates. In
the event any stock certificate is issued in respect of shares of Restricted
Stock awarded under the Plan, such certificate shall be registered in the name
of the Participant, shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award, and shall be held in
escrow by the Company. The Participant shall execute a stock power or powers
assigning the Shares of Restricted Stock back to the Company, which stock powers
shall be held in escrow by the Company and used only in the event of the
forfeiture of any of the Shares of Restricted Stock.

     (c)  Forfeiture. Except as otherwise determined by the Committee, no
Restricted Stock shall become free of restrictions prior to the date of the
first anniversary of the grant of the Restricted Stock. Unrestricted Shares,
evidenced in such manner as the Committee shall deem appropriate, shall be
issued to the Optionee promptly upon lapse of the period of forfeiture, as
determined or modified by the Committee.

     (d)  Share Withholding. The Committee in its sole discretion may provide
that a Participant who recognizes income under the federal income tax by reason
of the lapsing of restrictions on Shares of Restricted Stock may elect Share
withholding pursuant to Section 6(j).

     SECTION 9. PERFORMANCE AWARDS.

     (a)  Issuance. The Committee may issue Performance Awards to Participants,
for no cash consideration or for such minimum consideration as may be required
by applicable law, either alone or in addition to other Awards granted under the
Plan. Except as provided in Section 13, Performance Awards will be paid only
after the end of the relevant Performance Period. Performance Awards may be paid
in cash, Shares, other property or any combination thereof, in the sole
discretion of the Committee at the time of payment. Performance Awards may be
paid in a lump sum or in installments following the close of the Performance
Period or, in accordance with procedures established by the Committee, on a
deferred basis.

     (b)  Performance Measures. Unless and until the Committee proposes for
stockholder vote and stockholders approve a change in the general performance
measures set forth in this Section, the attainment of which shall determine the
degree of payout and/or vesting with respect

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to Awards, the performance measure(s) to be used for purposes of such Awards
shall be chosen from among the following:

          (i) Earnings either in the aggregate or on a per-share basis, before
     or after taxes, before or after depreciation and amortization, and before
     or after interest expense;

          (ii) Net income (before or after taxes);

          (iii) Operating income;

          (iv) Cash flow;

          (v) Return measures (including return on assets, equity, or sales);

          (vi) Share price (including growth measures and total stockholder
     return or attainment by the Shares of a specified value for a specified
     period of time);

          (vii) Reductions in expense levels in each case where applicable
     determined either in a Company-wide basis or in respect of any one or more
     business units;

          (viii) Net economic value; or

          (ix) Economic value added.

     The degree of attainment of the preestablished performance goals required
for an Award and the amounts of Awards may not be adjusted after the Award is
granted, except that the Committee may retain the discretion to decrease the
amount of an Award.

     SECTION 10. OTHER STOCK UNIT AWARDS.

     (a)  Stock and Administration. The Committee may grant other Awards of
Shares and other Awards that are valued in whole or in part by reference to, or
are otherwise based on, Shares or other property ("Other Stock Unit Awards")
hereunder to Participants, either alone or in addition to other Awards granted
under the Plan. Other Stock Unit Awards may be paid in Shares, cash or any other
form of property as the Committee shall determine. Subject to the provisions of
the Plan, the Committee shall have sole and complete authority to determine the
Employees to whom and the time or times at which such Awards shall be made, the
number of Shares to be granted pursuant to such Awards, and all other conditions
of the Awards, which may include attainment of goals based upon the performance
measures set forth in Section 9(b). The provisions of Other Stock Unit Awards
need not be the same with respect to each recipient.

     (b)  Terms and Conditions. Subject to the provisions of this Plan and any
applicable Award Agreement, Shares subject to Awards made under this Section 10
may not be sold, assigned, transferred, pledged or otherwise encumbered prior to
the date on which the Shares are issued, or, if later, the date on which any
applicable restriction, performance or deferral period lapses. Shares granted
under this Section 10 may be issued for no cash consideration or for such
minimum consideration as may be required by applicable law.

                                       11
<PAGE>

     SECTION 11. TERMINATION OF EMPLOYMENT. Except as otherwise provided in this
Section, all Awards not vested shall terminate upon a Participant's Termination
of Employment. For purposes of this Section, a Participant's Termination of
Employment occurs on the last day on which the Participant performs services as
an Employee; or if earlier on the date on which an Affiliate which employs the
Participant ceases to be an Affiliate (unless the Participant continues to be
employed by the Company or an Affiliate which continues to be an Affiliate).

     (a)  Options and SARs.

          (i) Except as otherwise provided in this Section, upon a Participant's
     Termination of Employment, all Options and SARs not vested and exercisable
     immediately before such Termination of Employment shall terminate and no
     Option or SAR may be exercised after such Termination of Employment.

          (ii) If Termination of Employment occurs for a reason other than
     retirement, death, disability or cause, Options and SARs which were vested
     and exercisable immediately before such Termination of Employment shall
     remain exercisable for a period of 90 days following such Termination of
     Employment (but not for more than 10 years from the grant date of the
     Option) and shall then terminate.

          (iii) If Termination of Employment occurs by reason of retirement,
     death or disability, Options and SARs which were vested and exercisable
     immediately before such Termination of Employment shall remain exercisable
     for a period of one year following such Termination of Employment (but not
     for more than 10 years from the grant date of the Option) and shall then
     terminate.

     (b)  Restricted Stock. Except as otherwise provided in this Section, upon a
Participant's Termination of Employment, all Shares of Restricted Stock still
subject to restrictions shall be forfeited by the Participant (and the
Participant shall sign any document and take any other action required to assign
such Shares back to the Company) and reacquired by the Company.

     (c)  Performance Awards:

          (i) If Termination of Employment occurs during a Performance Period
     for a reason other than retirement, disability or death, all Performance
     Awards shall be forfeited upon such Termination of Employment.

          (ii) If Termination of Employment occurs during a Performance Period
     by reason of retirement, disability or death, the Participant shall be
     entitled to payment at or after conclusion of the Performance Period in
     accordance with the terms of the Award of that portion of the Performance
     Award equal to the amount that would be payable if the Participant
     continued in employment for the remainder of the Performance Period
     multiplied by a fraction, the numerator of which is the number of days in
     the Performance Period preceding such Termination of Employment and the
     denominator of which is the total number of days in the Performance Period.

     (d)  Waiver by Committee. Notwithstanding the foregoing provisions of this
Section, the Committee may in its sole discretion as to all or part of any Award
as to any Participant, at

                                       12
<PAGE>

the time the Award is granted or thereafter, determine that Awards shall become
exercisable or vested upon a Termination of Employment, determine that Awards
shall continue to become exercisable or vested in full or in installments after
Termination of Employment, extend the period for exercise of Options or SARs
following Termination of Employment (but not beyond 10 years from the date of
grant of the Option or SAR), or provide that any Performance Award shall in
whole or in part not be forfeited upon such Termination of Employment.

     SECTION 12. TRANSFERABILITY OF AWARDS.

     (a)  No Award shall be transferable by the Participant otherwise than upon
death by will or under the applicable laws of descent and distribution; except
that a Participant may, by written instrument in a manner specified by the
Committee in the Award Agreement or thereafter, designate in writing a
beneficiary to exercise an Option or otherwise receive payment under any Award
after the death of the Participant. The Committee in its sole discretion may
authorize the transfer of a Nonstatutory Stock Option for no consideration to a
Permitted Transferee.

     (b)  Following the transfer of an Option to a Permitted Transferee, the
Permitted Transferee shall have all of the rights and obligations of the
Participant to whom the Option was granted and such Participant shall not retain
any rights with respect to the transferred Option, except that (i) the payment
of any tax attributable to the exercise of the Option shall remain the
obligation of the Participant, and (ii) the period during which the Option shall
become exercisable or remain exercisable under Section 11 shall depend on the
employment status of the original Optionee.

     (c)  If for any reason an Option or SAR is exercised by a person other than
the original Participant, or payment or distribution under any other Award is to
be made to a person other than the original Participant, the person exercising
or receiving payment or distribution under such Award shall, as a condition to
such exercise or receipt, supply the Committee with such evidence as the
Committee may reasonably require to establish the identity of such person and
such person's right to exercise or receive payment or distribution under such
Award.

     (d)  No Award shall be assigned, negotiated or pledged in any way (whether
by operation of law or otherwise) except as permitted by Section 12(a), and no
Award shall be subject to execution, attachment or similar process.

     SECTION 13. CHANGE IN CONTROL.

     (a)  In order to maintain the Participants' rights in the event of any
Change in Control of the Company, as hereinafter defined, the Committee, as
constituted before such Change in Control, may, in its sole discretion, as to
any Award, either at the time an Award is made or any time thereafter, take any
one or more of the following actions: (i) provide for the acceleration of any
time periods relating to the exercise or realization of any such Award so that
such Award may be exercised or realized in full on or before a date fixed by the
Committee; (ii) provide for the purchase of any such Award with or without the
Participant's consent for an amount of cash equal to the amount that could have
been attained upon the exercise of such Award or realization of the
Participant's rights had such Award been currently exercisable or payable or
exercisable or payable during a stipulated period prior to the Change of
Control; (iii) make such adjustment to

                                       13
<PAGE>

any such Award then outstanding as the Committee deems appropriate to reflect
such Change in Control; or (iv) cause any such Award then outstanding to be
assumed, or new rights substituted therefor, by the acquiring or surviving
corporation after such Change in Control. The Committee may, in its discretion,
include such further provisions and limitations respecting a Change in Control
in any Award Agreement as it may deem equitable and in the best interests of the
Company.

     (b)  A "Change in Control" shall be deemed to have occurred if:

          (i) for any reason at any time less than 75% of the members of the
     Board shall be individuals who fall into any of the following categories:
     (A) individuals who were members of the Board on the Effective Date; or (B)
     individuals whose election, or nomination for election by the Company's
     stockholders (other than an election or nomination of an individual (an
     "Excluded Individual") whose initial assumption of office ins in connection
     with an actual or threatened "election contest" relating to the election of
     the directors of the Company (as such term is used in Rule 14a-11 under the
     Exchange Act), a "tender officer" (as such term is used in Section 14(d) of
     the Exchange Act) or a proposed transaction described in (iii) below) was
     approved by a vote of at least 75% of the members of the Board then still
     in office who were members of the Board on the Effective Date; or (C)
     individuals (other than Excluded Individuals) whose election, or nomination
     for election, by the Company's stockholders, was approved by a vote of at
     least 75% of the members of the Board then still in office who were elected
     in the manner described in (A) or (B) above; or

          (ii) any "person" (as such term is used in Sections 13(d) and 14(d)(2)
     of the Exchange Act) or "group" (as such term is defined in Sections
     3(a)(9) and 13(d)(3) of the Exchange Act) shall have become after the
     Effective Date, according to a public announcement or filing, the
     "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
     directly or indirectly, of securities of the Company representing 35% or
     more (calculated in accordance with Rule 13d-3) of the combined voting
     power of the Company's then outstanding voting securities; or

          (iii) the stockholders of the Company shall have approved a merger,
     consolidation or dissolution of the Company, or a sale, lease, exchange or
     disposition of all or substantially all of the Company's assets, if persons
     who were the beneficial owners of the combined voting power of the
     Company's voting securities immediately before any such merger,
     consolidation, dissolution, sale, lease, exchange or disposition do not
     immediately thereafter beneficially own, directly or indirectly, in
     substantially the same proportions, more than 60% of the combined voting
     power of the corporation resulting from any such transaction.

     (c)  Notwithstanding any other provision of the Plan to the contrary, (i)
in the event that the consummation of a Change in Control is contingent on using
pooling of interests accounting methodology; the Committee may take any action
necessary to preserve the use of pooling of interests accounting, and (ii) if
the Committee determines, in its discretion exercised prior to a sale or merger
of the Company (whether or not in connection with a Change in Control) that in
the Committee's judgment is reasonably likely to occur, that the exercise of
Awards would preclude the use of pooling-of-interests accounting ("pooling")
after the

                                       14
<PAGE>

consummation of such sale or merger and that such preclusion of pooling would
have a material adverse effect on such sale or merger, the Committee may (A)
unilaterally cancel such Awards prior to the sale or merger in consideration for
reasonably equivalent value, (B) cause the Company to pay the benefit
attributable to such Awards in the form of Shares if the Committee determines
that such payment would not cause the transaction to become ineligible for
pooling, (C) defer the payment, distribution or exercise date of any Award, or
(D) substitute another form of Award of reasonably equivalent value; in each
case to the extent that the Committee determines that such cancellation,
payment, deferral or substitution would not cause the transaction to become
ineligible for pooling; and only in each case to the minimum extent reasonably
necessary to cause the transaction to become eligible for pooling.

     SECTION 14. AMENDMENTS AND TERMINATION. The Board may amend, alter or
discontinue the Plan, but no amendment, alteration, or discontinuation shall be
made that would impair the rights of a Participant under an Award theretofore
granted without the Participant's consent except as required to comply with
securities, tax or other laws.

     The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall adversely affect the
rights of any Participant without the Participant's consent, except as provided
in subsection 9(b) or subsection 12(c) or except as required to comply with
securities, tax or other laws. The Committee may also substitute new Awards for
Awards previously granted to Participants, including previously-granted Options
having higher Option prices.

     SECTION 15. GENERAL PROVISIONS.

     (a)  The term of each Award shall be for such period of months or years
from the date of its grant as may be determined by the Committee; provided that
in no event shall the term of any Option or any SAR exceed a period of 10 years
from the date of its grant.

     (b)  No Employee or Participant shall have any claim to be granted any
Award under the Plan and there is no obligation for uniformity of treatment of
Employees or Participants under the Plan.

     (c)  The prospective recipient of any Award under the Plan shall not, with
respect to such Award, be deemed to have become a Participant, or to have any
rights with respect to such Award, until and unless the Committee shall have
executed an Award Agreement evidencing the Award and delivered a fully executed
copy thereof to the Participant.

     (d)  Nothing contained in the Plan or in any Award Agreement shall confer
upon any Participant any right with respect to continuance of employment by the
Company or its Affiliates, nor interfere in any way with the right of the
Company or its Affiliates to terminate the Participant's employment or change
the Participant's compensation at any time.

     (e)  All certificates for Shares delivered under the Plan pursuant to any
Award shall be subject to such stock-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Shares are then listed, and any applicable Federal or state securities
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.

                                       15
<PAGE>

     (f)  Receipt of an Option or other Award shall not entitle any Participant
(or Permitted Transferee) to any rights as a shareholder of the Company unless
and until such Option has been exercised or such other Award shall have been
paid and the Shares purchased or paid thereunder shall have been issued;
provided, however, that:

          (i) Subject to the provisions of this Plan and any Award Agreement,
     the recipient of an Award (including any deferred Award) may, if so
     determined by the Committee, be entitled to receive, currently or on a
     deferred basis, dividends with respect to the number of Shares covered by
     the Award or interest on the amount of an Award not denominated in Shares
     as determined by the Committee, in its sole discretion, and the Committee
     may provide that such amounts (if any) shall be deemed to have been
     reinvested in additional Shares or otherwise reinvested; and

          (ii) The recipient of a Restricted Stock Award shall be entitled to
     all rights of a shareholder of the Company upon issuance of such Restricted
     Stock pursuant to Section 8(b) except to the extent otherwise provided in
     the restrictions or other provisions of the Award Agreement pursuant to
     which such Restricted Stock Award is made.

     (g)  Except as otherwise required in any applicable Award Agreement or by
the terms of the Plan, recipients of Awards under the Plan shall not be required
to make any payment or provide consideration other than the rendering of
services.

     (h)  In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, spin-off or other change in
corporate structure affecting the Shares, such adjustment shall be made in the
aggregate number and class of Shares which may be delivered under the Plan, in
the number, class and option price of Shares subject to outstanding Options
granted under the Plan, and in the value of, or number or class of Shares
subject to, Awards granted under the Plan as may be determined to be appropriate
by the Committee, in its sole discretion, provided that the number of Shares
subject to any Award shall always be a whole number. The grant of Awards shall
not affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge or to consolidate or to dissolve, liquidate, or sell or
transfer all or any part of its business or assets.

     (i)  The Company is authorized to withhold from any Award granted or
payment due under the Plan or any other amount owing from the Company to the
Participant (whether or not for payment of compensation) the amount of
withholding taxes due with respect to an Award or payment hereunder and to take
such other action as may be necessary in the opinion of the Company to satisfy
all obligations for the payment of such taxes. The Company shall also be
authorized to accept the delivery of shares by a Participant in payment for the
withholding of federal, state and local taxes up to the Participant's marginal
tax rates.

     (j)  The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the laws
of the State of Delaware.

     (k)  If any provision of this Plan is or becomes or is deemed invalid,
illegal or unenforceable in any jurisdiction, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision shall
be construed or deemed amended to

                                       16
<PAGE>

conform to applicable laws or if it cannot be construed or deemed amended
without, in the determination of the Committee, materially altering the intent
of the Plan, it shall be stricken and the remainder of the Plan shall remain in
full force and effect.

     (l)  All obligations of the Company under the Plan shall be binding on any
successor to the Company.

     (m)  The adoption of this Plan shall not amend or terminate the Company's
previously adopted stock option plans (the "Prior Plans") or any outstanding
option or other award thereunder; and the aggregate number of Shares available
under Section 4 shall not be increased or reduced by Shares available under the
Prior Plans as of the Effective Date.

     SECTION 16. TERM OF PLAN. No Award shall be granted pursuant to the Plan
after 10 years from the Effective Date, but any Award theretofore granted may
extend beyond that date.

                                       17<PAGE>
                                                                     Exhibit 4.1

               CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

                                       OF

              8.95% CUMULATIVE REDEEMABLE PREFERRED STOCK, SERIES G

                                       OF

                         GENERAL GROWTH PROPERTIES, INC.

            PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW OF

                              THE STATE OF DELAWARE

         General Growth Properties, Inc., a Delaware corporation (the
"Company"), hereby certifies that pursuant to the authority contained in Article
IV of its Second Amended and Restated Certificate of Incorporation, as amended
(the "Certificate of Incorporation"), and in accordance with Section 151 of the
General Corporation Law of the State of Delaware (the "DGCL"), its Board of
Directors (the "Board"), on April 9, 2002, adopted the following resolution
creating a series of its preferred stock, par value $100 per share, liquidation
preference $1,000 per share, designated as the "8.95% Cumulative Redeemable
Preferred Stock, Series G";

         WHEREAS, the Board of Directors of the Company is authorized, within
the limitations and restrictions stated in its Certificate of Incorporation, to
provide for the issuance of preferred stock in series and to establish the
number of shares to be included in such series and to fix the designation,
powers, preferences and rights of the shares of such series and the
qualifications, limitations and restrictions thereof; and

         WHEREAS, it is the desire of the Board of Directors, pursuant to its
authority as aforesaid, to authorize and fix the terms of the preferred stock to
be designated the "8.95% Cumulative Redeemable Preferred Stock, Series G" and
the number of shares constituting such preferred stock.

         NOW, THEREFORE, BE IT RESOLVED, that there is hereby authorized the
8.95% Cumulative Redeemable Preferred Stock, Series G on the terms and with the
provisions herein set forth.

I.       Certain Definitions

         As used herein, the following terms shall have the following meanings
(with terms defined in the singular having comparable meanings when used in the
plural and vice versa), unless the context otherwise requires:

         "Act" shall mean the Securities Act of 1933, as amended.
<PAGE>
         "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York, New
York are not required to be open.

         "Capital Stock" shall mean Common Stock or Preferred Stock. The term
"Capital Stock" shall not include convertible debt securities.

         "Common Stock" shall mean the common stock, par value $.10 per share,
of the Company.

         "Company" shall mean General Growth Properties, Inc., a Delaware
corporation.

         "Dividend Period" shall mean quarterly dividend periods commencing on
(and including) the fifteenth day of each January, April, July and October of
each year and ending on (and including) the day preceding the first day of the
next succeeding Dividend Period.

         "GGPLP L.L.C." shall mean GGPLP L.L.C., a Delaware limited liability
company.

         "NYSE" shall mean the New York Stock Exchange.

         "Ownership Limitations" shall mean the restrictions on transferability
and ownership described in Article IV of the Certificate of Incorporation,
specifically, that ownership of more than 7.5% of the value of the outstanding
shares of Capital Stock of the Company, including the Series G Preferred Stock,
is restricted.

         "Redemption Date" shall mean any date fixed for redemption of the
shares of Series G Preferred Stock by the Company.

         "Preferred Stock" shall mean the preferred stock, $100 par value per
share, of the Company.

         "Series A Preferred Stock" shall mean the 7.25% Preferred Income Equity
Redeemable Stock, Series A of the Company.

         "Series B Preferred Stock" shall mean the 8.95% Cumulative Redeemable
Preferred Stock, Series B.

         "Series B Preferred Units" shall mean the 8.95% Series B Cumulative
Redeemable Preferred Units of membership interest in GGPLP L.L.C.

         "Series G Preferred Stock" shall mean the 8.95% Cumulative Redeemable
Preferred Stock, Series G.

         "Transfer Agent" shall mean ChaseMellon Shareholder Services, L.L.C.,
the principal corporate trust office of which currently is located at 150 North
Wacker Drive, Suite 2120, Chicago, Illinois 60606, or such other agent or agents
of the Company as may be designated by the Board or its designee as the transfer
agent for the Series G Preferred Stock.

                                       2
<PAGE>
II.      Designation and Number of Shares

         A series of preferred stock, designated the "8.95% Cumulative
Redeemable Preferred Stock, Series G" (the "Series G Preferred Stock"), is
hereby established. The par value of the Series G Preferred Stock is $100 per
share, which is not a change in the par value per share of the Preferred Stock
as set forth in the Certificate of Incorporation. The liquidation preference per
share of the Series G Preferred Stock is $1,000. The authorized number of shares
of Series G Preferred Stock is 75,000. The Series G Preferred Stock shall not
have any relative, participating, optional or other special rights and powers
other than as set forth herein.

III.     Rank

         The Series G Preferred Stock, with respect to payment of dividends and
amounts upon voluntary or involuntary liquidation, dissolution or winding-up of
the Company, shall be deemed to rank:

         (a) senior to all classes or series of Common Stock and to all Capital
Stock of the Company other than each series of Preferred Stock referred to in
Section III(b) or (c);

         (b) on a parity with the Series A Preferred Stock, Series B Preferred
Stock, and each other series of Preferred Stock issued by the Company which
provides by its express terms that it ranks on parity with the Series G
Preferred Stock with respect to payment of dividends or amounts upon
liquidation, dissolution or winding-up of the Company; and

         (c) junior to any class or series of Capital Stock that is issued by
the Company in accordance with Section IV(a).

IV.      Voting

         (a) So long as any shares of Series G Preferred Stock remain
outstanding, the Company shall not, without the affirmative vote or consent of
the holders of at least fifty-one percent (51%) of the shares of Series G
Preferred Stock outstanding at the time, given in person or by proxy, either in
writing or at a meeting (such series voting separately as a class), (i)
authorize or create, or increase the authorized or issued amount of, any class
or series of shares of Capital Stock ranking senior to the Series G Preferred
Stock with respect to the payment of dividends or the distribution of assets
upon voluntary or involuntary liquidation, dissolution or winding-up of the
Company or reclassify any Common Stock into Capital Stock ranking senior to or
on parity with the Series G Preferred Stock with respect to the payment of
dividends or the distribution of assets upon voluntary or involuntary
liquidation, dissolution or winding-up of the Company, (ii) issue additional
shares of Series G Preferred Stock (other than those issued in exchange for
Series B Preferred Units pursuant to the operating agreement of GGPLP L.L.C.) or
(iii) amend, alter or repeal the provisions of the Certificate of Incorporation
or this Certificate of

                                       3
<PAGE>
Designations, whether by merger, consolidation or otherwise (an "Event"), so as
to negate the provisions of clause (i) or (ii) of this paragraph or materially
and adversely affect any special right, preference, privilege or voting power of
the holders of Series G Preferred Stock; provided, however, (A) with respect to
the occurrence of any of the Events set forth in clause (iii) of this paragraph,
so long as shares of Series G Preferred Stock remain outstanding with the terms
thereof materially unchanged, taking into account that, upon the occurrence of
an Event, the Company may not be the surviving entity, the occurrence of any
such Event shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of the Series G Preferred
Stock and (B) any increase in the amount of the authorized Preferred Stock or
any series of the Preferred Stock or the creation or issuance of any other
series of Preferred Stock, in each case ranking on a parity with or junior to
the Series G Preferred Stock with respect to payment of dividends and the
distribution of assets upon voluntary or involuntary liquidation, dissolution or
winding-up of the Company, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.

         (b) Notwithstanding anything to the contrary contained herein, the
foregoing voting provisions shall not apply if, at or prior to the time when the
act with respect to which such vote would otherwise be required shall be
effected, all outstanding Series G Preferred Stock shall have been redeemed or
called for redemption upon proper notice and sufficient funds shall have been
deposited in trust to effect such redemption.

         (c) For purposes of the foregoing provisions of this Section IV, each
share of Series G Preferred Stock shall have one (1) vote per share. Except as
otherwise required by applicable law or as set forth herein, the shares of
Series G Preferred Stock shall not have any relative, participating, optional or
other voting rights and powers or the right to receive notice of meetings and
the consent of the holders thereof shall not be required for the taking of any
corporate action.

V.       Dividends.

         (a) The holders of shares of the Series G Preferred Stock shall be
entitled to receive, when, as and if declared by the Board, out of assets
legally available for the payment of dividends and subject to the right to
payment of holders of Capital Stock ranking senior to or on parity with the
Series G Preferred Stock as to payment of dividends and amounts upon
liquidation, dissolution or winding-up of the Company, quarterly cumulative cash
dividends in an amount per share of Series G Preferred Stock equal to 8.95% of
the $1,000 liquidation preference thereof per annum (or $22.375 per quarter).
Dividends on the shares of the Series G Preferred Stock are cumulative and shall
accrue from and after the date of issuance thereof (the "Series G Initial
Issuance Date"), whether or not in any Dividend Period or Periods there shall be
funds of the Company legally available for the payment of such dividends.
Dividends on the shares of the Series G Preferred Stock shall be payable in
arrears quarterly when, as and if declared by the Board, on the fifteenth day of
each January, April, July and October or, if not a Business Day, the next
succeeding Business Day, beginning on the first such date following the Initial
Series G Issuance Date (each, a "Dividend Payment Date"). Each such dividend
shall be payable in arrears to holders of record of shares of the Series G
Preferred Stock, as such holders

                                       4
<PAGE>
appear in the stock records of the Company at the close of business on the
applicable record date, which shall be the first day of the calendar month in
which the applicable Dividend Payment Date falls or such other date designated
by the Board for the payment of dividends that is not more than 30 nor less than
10 days prior to such Dividend Payment Date (each, a "Dividend Record Date").
Accrued and unpaid dividends for any past Dividend Periods may be declared and
paid at any time, without reference to any Dividend Payment Date, to holders of
record on such date, not exceeding 45 days preceding the payment date thereof,
as may be fixed by the Board.

         (b) The amount of dividends payable per share of Series G Preferred
Stock for each full Dividend Period shall equal the quotient of 8.95% of the
$1,000 liquidation preference thereof divided by four (or $22.375). The amount
of dividends payable for the initial Dividend Period, or any other period
shorter or longer than a full Dividend Period, on the Series G Preferred Stock,
shall be prorated and computed on the basis of twelve 30-day months and a
360-day year. Holders of shares of Series G Preferred Stock shall not be
entitled to any dividends, whether payable in cash, property or stock, in excess
of cumulative dividends, as provided in this Section V, on the Series G
Preferred Stock. Any dividend payment made on the Series G Preferred Stock shall
first be credited against the earliest accumulated but unpaid dividend due with
respect to such shares which remains payable. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series G Preferred Stock that may be in arrears.

         (c) Notwithstanding the foregoing, dividends on the Series G Preferred
Stock shall accumulate whether or not there are funds legally available for the
payment thereof and whether or not such distributions are authorized.

         (d) Except as provided in Section V(e) herein, so long as any shares of
Series G Preferred Stock are outstanding, no dividends (other than in Common
Stock or other Capital Stock of the Company ranking junior to the Series G
Preferred Stock as to payment of dividends and amounts upon liquidation,
dissolution or winding-up of the Company) shall be declared or paid or set apart
for payment upon the Common Stock or any other class or series of Capital Stock
of the Company ranking, as to payment of dividends or amounts distributable upon
liquidation, dissolution or winding-up of the Company, on a parity with or
junior to the Series G Preferred Stock, for any period nor shall any Common
Stock or other Capital Stock of the Company ranking junior to or on a parity
with the Series G Preferred Stock as to payment of dividends or amounts upon
liquidation, dissolution or winding-up of the Company, be redeemed, purchased or
otherwise acquired for any consideration (or any monies be paid to or made
available for a sinking fund for the redemption of any such Capital Stock) by
the Company (except by conversion into or exchange for other Capital Stock of
the Company ranking junior to the Series G Preferred Stock as to payment of
dividends and amounts upon liquidation, dissolution or winding-up of the Company
or by redemptions for the purpose of maintaining the Company's qualification as
a real estate investment trust ("REIT") for U.S. federal income tax purposes)
unless full cumulative dividends have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for such
payment on the Series G Preferred Stock for all Dividend Periods ending on or
prior to the dividend payment

                                       5
<PAGE>
date for such other class or series of capital stock or the date of such
redemption, purchase or other acquisition, as the case may be.

         (e) When dividends are not paid in full (or a sum sufficient for such
full payment is not set apart for such payment) upon the Series G Preferred
Stock and any other Capital Stock ranking on a parity as to payment of dividends
with the Series G Preferred Stock, all dividends declared upon the Series G
Preferred Stock and any other Capital Stock ranking on a parity as to payment of
dividends with the Series G Preferred Stock shall be declared pro rata so that
the amount of dividends declared per share of Series G Preferred Stock and such
other Capital Stock shall in all cases bear to each other the same ratio that
accumulated dividends per share on the Series G Preferred Stock and such other
Capital Stock (which shall not include any accumulation in respect of unpaid
dividends for prior dividend periods if such Capital Stock does not have a
cumulative dividend) bear to each other.

VI.      Liquidation Preference.

         (a) In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and subject to the rights of holders of
Capital Stock ranking senior to the Series G Preferred Stock as to the
distribution of assets upon the liquidation, dissolution or winding-up of the
Company, before any payment or distribution of the assets of the Company
(whether capital or surplus) shall be made to or set apart for the holders of
Common Stock or any other Capital Stock ranking junior to the Series G Preferred
Stock as to the distribution of assets upon the liquidation, dissolution or
winding-up of the Company, the holders of shares of the Series G Preferred Stock
shall be entitled to receive out of the assets of the Company available for
distribution to stockholders remaining after payment or provisions for payment
of all debts and other liabilities of the Company a liquidation preference of
$1,000 per share, plus an amount equal to all dividends (whether or not earned
or declared) accrued and unpaid thereon to the date of final distribution to
such holders; but such holders shall not be entitled to any further payment. If,
upon any such voluntary or involuntary liquidation, dissolution or winding-up of
the Company, the assets of the Company, or proceeds thereof, distributable among
the holders of the shares of Series G Preferred Stock, are insufficient to pay
in full the preferential amount aforesaid on the shares of Series G Preferred
Stock and liquidating payments on any other shares of any class or series of
Capital Stock ranking, as to payment of amounts upon the liquidation,
dissolution or winding-up of the Company, on a parity with the Series G
Preferred Stock, then such assets, or the proceeds thereof, shall be distributed
among the holders of shares of Series G Preferred Stock and any such other
parity stock ratably in accordance with the respective amounts that would be
payable on such shares of Series G Preferred Stock and such other stock if all
amounts payable thereon were paid in full. For the purposes of this Section VI,
none of (i) a consolidation or merger of the Company with or into another
entity, (ii) a merger of another entity with or into the Company, (iii) a
statutory share exchange by the Company or (iv) a sale, lease or conveyance of
all or substantially all of the Company's assets, properties or business shall
be deemed to be a liquidation, dissolution or winding-up of the Company.

                                       6
<PAGE>
         (b) Written notice of such liquidation, dissolution or winding-up of
the Company, stating the payment date or dates when, and the place or places
where, the amounts distributable in such circumstances shall be payable, shall
be given by first class mail, postage pre-paid, not less than 30 nor more than
60 days prior to the payment date stated therein, to each record holder of the
Series G Preferred Stock at the respective addresses of such holders as the same
shall appear on the stock transfer records of the Company.

         (c) After payment of the full amount of liquidating distributions to
which they are entitled, the holders of Series G Preferred Stock shall have no
right or claim to any of the remaining assets of the Company.

VII.     Redemption.

         (a) General. The shares of Series G Preferred Stock are not redeemable
prior to April 17, 2007. To ensure that the Company remains a qualified REIT for
U.S. federal income tax purposes, however, the Series G Preferred Stock shall be
subject to the provisions of Article IV of the Certificate of Incorporation
pursuant to which Series G Preferred Stock owned by a stockholder (i) in excess
of the Ownership Limit or the Existing Holder Limit (as defined in Section VIII
hereof) or (ii) that would cause the Company to become "closely held" within the
meaning of Section 856(h) of the Internal Revenue Code of 1986, as amended (the
"Code") shall automatically be transferred to a Trust (as defined in Article IV
of the Certificate of Incorporation) and the Company shall have the right to
purchase such shares, as provided in Article IV of the Certificate of
Incorporation, notwithstanding the first sentence of this paragraph (a).

         (b) Cash Redemption Right. On and after April 17, 2007, the Company, at
its option, upon giving notice as provided below, may redeem the Series G
Preferred Stock, in whole or from time to time in part, at the redemption price
per share of Series G Preferred Stock of $1,000, plus, in each case, all
dividends accumulated and unpaid on such Series G Preferred Stock to the date of
such redemption (the "Redemption Right").

         (c) Limitations on Redemption.

                  (i) If fewer than all of the outstanding shares of Series G
Preferred Stock are to be redeemed pursuant to the Redemption Right, the shares
to be redeemed shall be determined pro rata or by lot. If such redemption is to
be by lot and, as a result of such redemption, (i) any holder of Series G
Preferred Stock would become a holder of a number of shares of Series G
Preferred Stock in excess of the Ownership Limit or the Existing Holder Limit or
(ii) the Company would become "closely held" within the meaning of Section
856(h) of the Code because such holder's Series G Preferred Stock were not
redeemed, or were only redeemed in part, then, except as otherwise provided in
the Certificate of Incorporation, the Company will redeem the requisite number
of shares of Series G Preferred Stock of such holder such that the holder of
such shares (i) will not hold in excess of the Ownership Limit or the Existing
Holder

                                       7
<PAGE>
Limit subsequent to such redemption or (ii) will not cause the Company to become
"closely held" within the meaning of Section 856(h) of the Code.

                  (ii) Notwithstanding anything to the contrary contained
herein, unless full cumulative dividends on all outstanding shares of Series G
Preferred Stock shall have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for payment for
all Dividend Periods ending on or prior to the date of redemption or purchase,
no shares of Series G Preferred Stock shall be redeemed unless all outstanding
shares of Series G Preferred Stock are simultaneously redeemed; provided,
however, that the foregoing shall not prevent the purchase or acquisition of
Series G Preferred Stock pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding shares of Series G Preferred Stock. In
addition, unless full cumulative dividends on all outstanding shares of Series G
Preferred Stock shall have been or contemporaneously are declared and paid or
declared and a sum sufficient for payment thereof set apart for payment for all
past Dividend Periods, the Company shall not purchase or otherwise acquire
directly or indirectly any Series G Preferred Stock, or any shares of any class
or series of Capital Stock of the Company ranking, as to payment of dividends or
amounts distributable upon liquidation, dissolution or winding-up of the
Company, junior to or on a parity with the Series G Preferred Stock (except by
conversion into or exchange for Common Stock or other Capital Stock of the
Company ranking junior to or on a parity with the Series G Preferred Stock as to
payment of dividends or amounts upon liquidation, dissolution or winding-up of
the Company and except for redemptions for the purposes of maintaining the
Company's qualification as a REIT).

                  (iii) Immediately prior to any redemption of any Series G
Preferred Stock, the Company shall pay, in cash, any accumulated and unpaid
dividends with respect thereto through the Redemption Date, unless a Redemption
Date falls after a Dividend Record Date and on or prior to the corresponding
Dividend Payment Date, in which case each holder of shares of Series G Preferred
Stock at the close of business on such Dividend Record Date shall be entitled to
the dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares on or prior to such Dividend
Payment Date. Except as provided above, the Company will make no payment, or
allowance for unpaid dividends, whether or not in arrears, on Series G Preferred
Stock for which a notice of redemption has been given.

         (d) Procedures for Redemption.

                  (i) Notice of redemption pursuant to the Redemption Right
shall be mailed, not less than 20 nor more than 60 days prior to the Redemption
Date, to each holder of record of shares of Series G Preferred Stock to be
redeemed, notifying such holder of the Company's election to redeem such shares.
Such notice shall be provided by first class mail, postage prepaid, at such
holder's address as the same appears on the stock records of the Company, or by
publication in The Wall Street Journal or The New York Times, or, if neither
such newspaper is then being published, any other daily newspaper of national
circulation. If the Company elects to provide such notice by publication, it
shall also promptly mail notice of such redemption to holders of the shares of
Series G Preferred Stock to be redeemed. No failure to give such notice or any
defect thereto or in the mailing thereof, to any particular holder, shall affect
the

                                       8
<PAGE>
sufficiency of notice or the validity of the proceedings for the redemption of
any shares of Series G Preferred Stock with respect to any other holder.

                  (ii) In addition to any information required by law or by the
applicable rules of any exchange upon which the Series G Preferred Stock may be
listed or admitted to trading, such notice shall state, as appropriate: (i) the
Redemption Date, (ii) the cash redemption price per share of Series G Preferred
Stock, (iii) the number of shares of Series G Preferred Stock to be redeemed
from such holder (and, if fewer than all the shares of Series G Preferred Stock
are to be redeemed from such holder, the number of shares to be redeemed from
such holder), (iv) the place or places where certificates for shares of such
Series G Preferred Stock are to be surrendered for payment of the redemption
price in cash and (v) that dividends on the shares to be redeemed will cease to
accumulate on such Redemption Date.

                  (iii) On or after the Redemption Date, each holder of shares
of Series G Preferred Stock to be redeemed shall present and surrender the
certificates representing his Series G Preferred Stock to the Company at the
place designated in the notice of redemption and thereupon the redemption price
of such shares shall be paid to or on the order of the person whose name appears
on such certificate representing shares of Series G Preferred Stock as the owner
thereof and each surrendered certificate shall be canceled. If fewer than all
the shares represented by any such certificate representing shares of Series G
Preferred Stock are to be redeemed, a new certificate shall be issued
representing the unredeemed shares.

                  (iv) From and after the Redemption Date (unless the Company
fails to make available an amount in cash necessary to effect such redemption),
all dividends on the Series G Preferred Stock designated for redemption in such
notice shall cease to accumulate and all rights of the holders thereof, except
the right to receive the redemption price (including all accumulated and unpaid
dividends up to the Redemption Date), shall cease and terminate and such shares
shall not thereafter be transferred (except with the consent of the Company) on
the Company's books, all rights of the holders of shares of the Series G
Preferred Stock shall cease (except the right to receive the cash payable upon
such redemption) and such shares shall not be deemed to be outstanding for any
purpose whatsoever.

         The Company's obligation to provide cash in accordance with this
Section VII shall be deemed fulfilled if, on or before the Redemption Date, the
Company elects to deposit the cash necessary for redemption of the shares of
Series G Preferred Stock so called with a bank or trust company that has, or is
an affiliate of a bank or trust company that has, a capital and surplus of at
least $50,000,000, in trust, with irrevocable instructions that such cash be
applied to the redemption of the shares of Series G Preferred Stock so called
for redemption. No interest shall accrue for the benefit of the holders of
Series G Preferred Stock to be redeemed on any cash so set aside by the Company.
Any such cash unclaimed at the end of two years from the Redemption Date shall
revert to the general funds of the Company. If the Company elects to deposit the
cash necessary for redemption with a bank or trust company, in accordance with
this subsection (d)(iv), the redemption notice to holders of the shares of
Series G Preferred Stock to be redeemed shall (i) state the date of such
deposit, (ii) specify the office of such bank or trust company as the place of
redemption and (iii) require such holders to surrender the certificates

                                       9
<PAGE>
representing such shares at such place on or about the date fixed in such
redemption notice (which may not be later than the Redemption Date) against
payment of the redemption price (including all accumulated and unpaid dividends
to the Redemption Date).

         (e) Status of Redeemed Shares of Series G Preferred Stock. Subject to
the provisions of Section III, any shares of Series G Preferred Stock that shall
at any time have been redeemed shall, after such redemption, have the status of
authorized but unissued Preferred Stock, without designation as to series until
such shares are once more designated as part of a particular series by the
Board.

VIII.    Ownership Limitations.

         The shares of Series G Preferred Stock are subject to the restrictions
on transferability and ownership provisions described in Article IV of the
Certificate of Incorporation. The ownership limit as described in Article IV of
the Certificate of Incorporation (the "Ownership Limit") shall mean that
ownership of more than 7.5% of the value of the outstanding shares of Capital
Stock of the Company, including the Series G Preferred Stock, is restricted in
order to preserve the Company's status as a REIT for U.S. federal income tax
purposes. Subject to certain limitations described in Article IV of the
Certificate of Incorporation, the Board may modify the Ownership Limit, though
the Ownership Limit may not be increased by the Board to more than 9.8%. In
addition, Article IV of the Certificate of Incorporation limits the ownership of
"Existing Holders" (the "Existing Holder Limit") and also limits transfers that
would cause the Company to become "closely held" within the meaning of Section
856(h) of the Code. Notwithstanding anything to the contrary contained herein,
the provisions hereof shall not limit or prohibit the purchase by the Company of
shares of any class or series of Capital Stock pursuant to Article IV of the
Certificate of Incorporation.

                                       10
<PAGE>
         IN WITNESS WHEREOF, the Company has caused this Certificate of
Designations to be executed in its name and on its behalf and attested to by its
duly authorized officers on this 16th day of April, 2002.

                                          GENERAL GROWTH PROPERTIES, INC.

                                          By:    /s/ Bernard Freibaum
                                              ----------------------------------
                                                 Name:  Bernard Freibaum
                                                 Title: Executive Vice President

                                       11

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