Document:

Exhibit 10.6

 

CTC MEDIA, INC.

 

Amended And Restated Stock Option Agreement

 

THIS
AMENDED AND RESTATED STOCK OPTION AGREEMENT (this “Agreement”)
made as of August 24, 2009, is entered into between CTC Media, Inc.,
a Delaware corporation (the “Company”), and
Anton Kudryashov (“Optionee”), and
amends and restates in its entirety the Stock Option Agreement, dated as of November 7,
2008 (the “Prior Agreement”), between the
Company and the Optionee.

 

Preliminary
Statements:

 

A.                                    The Company has
entered into the Prior Agreement and this Agreement because it desires to
retain the services of Optionee by providing him with this incentive to
contribute to the financial success of the Company and its subsidiaries.

 

B.                                    The Company and
the Optionee desire to amend and restate in its entirety the Prior Agreement as
set forth herein.

 

C.                                    The Company and
the Optionee desire, among other things, to amend (i) the Exercise Price
applicable to all Option Shares that may be acquired hereunder, as set forth
herein (the “Exercise Price Amendment”), and (ii) the
schedule pursuant to which the A Option Shares shall become exercisable, as set
forth in Section 4(a) below (the “Vesting
Schedule Amendment”).  The
parties acknowledge and agree that such Exercise Price Amendment is subject to
the approval of the stockholders of the Company, which approval the Company
will seek at the Company’s 2010 annual meeting of stockholders.  In the event that the stockholders of the
Company do not approve such Exercise Price Amendment, (1) the “A Exercise
Price” and “B/C Exercise Price” set forth in the Prior Agreement and (2) the
schedule pursuant to which the A Option Shares shall become exercisable as set
forth in Section 4(a) of the Prior Agreement, will continue to apply.

 

D.                                    All capitalized
terms in this Agreement shall have the meaning assigned to them in the attached
Appendix.

 

NOW, THEREFORE, it is hereby agreed as
follows:

 

1.    Grant of Option.  The Company hereby confirms the grant to
Optionee, pursuant to the Prior Agreement and as of the Grant Date, an option
(the “Option”) to purchase up to 3,042,482
shares of Common Stock (the “Option Shares”).  The first 1,521,241 Option Shares shall be
hereinafter referred to as the “A Option Shares”,
the next 760,621 Option Shares shall be hereinafter referred to as the “B Option Shares” and the remaining 760,620 Option
Shares shall be hereinafter referred to as the “C Option
Shares”.

 

Of
the 760,621 B Option Shares, 253,541 B Option Shares shall be referred to as
the “B-1 Option Shares”, 253,540 B Option
Shares shall be referred to as the “B-2 Option Shares”
and 253,540 B Option Shares shall be referred to as the “B-3 Option
Shares”.

 

1

 

Of
the 760,620 C Option Shares, 253,540 C Option Shares shall be referred to as
the “C-1 Option Shares”,  253,540
C Option Shares shall be referred to as the “C-2 Option
Shares” and 253,540 C Option Shares shall be referred to as the “C-3 Option Shares”.

 

Subject
to the terms and conditions set out in this Agreement, the Option shall be
exercisable at the Exercise Price.

 

2.    Option Term.  The Option shall have a term of ten (10) years
measured from the Grant Date and, except as provided in Paragraph 5(e), shall
accordingly expire at the close of business on the Expiration Date, unless
sooner terminated in accordance with Paragraph 5 or 6.

 

3.    Limited Transferability.   During Optionee’s lifetime, the Option shall
be exercisable only by Optionee (or his permitted transferee, including a
trustee of a trust set forth below) and shall not be assignable or transferable
other than by will or by the laws of descent and distribution following
Optionee’s death; provided, however, that Optionee may transfer the Option to a
trustee of a trust solely for his benefit and/or the benefit of his immediate
family members so long as such transfer does not result in the Company
incurring any additional stock-based compensation expense under US generally
accepted accounting principles.  For this purpose, “immediate family
members” shall include Optionee’s spouse, children, parents and/or
parents-in-law.

 

2

 

4.    Conditions to, and Dates of, Exercise.

 

(a)                                 A Option Shares.  The Option shall become exercisable for the A
Option Shares in accordance with the following schedule:

 

	
  Date:

  	
   

  	
  Aggregate number of A Option Shares for

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after August 4, 2009

  	
   

  	
  507,081

  	
   

  
	
  On or after September 30, 2009

  	
   

  	
  591,594

  	
   

  
	
  On or after December 31, 2009

  	
   

  	
  676,108

  	
   

  
	
  On or after March 31, 2010

  	
   

  	
  760,621

  	
   

  
	
  On or after June 30, 2010

  	
   

  	
  845,134

  	
   

  
	
  On or after September 30, 2010

  	
   

  	
  929,648

  	
   

  
	
  On or after December 31, 2010

  	
   

  	
  1,014,161

  	
   

  
	
  On or after March 31, 2011

  	
   

  	
  1,098,674

  	
   

  
	
  On or after June 30, 2011

  	
   

  	
  1,183,188

  	
   

  
	
  On or after September 30, 2011

  	
   

  	
  1,267,701

  	
   

  
	
  On or after December 31, 2011

  	
   

  	
  1,352,214

  	
   

  
	
  On or after March 31, 2012

  	
   

  	
  1,436,728

  	
   

  
	
  On or after June 30, 2012

  	
   

  	
  1,521,241

  	
   

  

 

(b)                                 B-1 Option Shares.  (i) Except as set forth in Paragraphs
4(b)(ii) and 4(b)(iii) below, the Option shall only become
exercisable with respect to the B-1 Option Shares if the Revenue Objective for
2009 is achieved.  Subject to the
achievement of such Revenue Objective, the Option shall become exercisable for
the B-1 Option Shares in accordance with the following schedule:

 

3

 

	
  Date:

  	
   

  	
  Aggregate number of B-1 Option Shares for

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2009

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2011

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2012

  	
   

  	
  253,541

  	
   

  

 

(ii)                                  Notwithstanding
the fact that the Revenue Objective for 2009 is not achieved, if the Cumulative
Revenue Objective for 2010 is achieved, the Option shall become exercisable for
the B-1 Option Shares in accordance with the following schedule:

 

	
  Date:

  	
   

  	
  Aggregate number of B-1 Option Shares for

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2010

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2012

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2013

  	
   

  	
  253,541

  	
   

  

 

(iii)                               Notwithstanding
the fact that neither the Revenue Objective for 2009 nor the Cumulative Revenue
Objective for 2010 is achieved, if the Cumulative Revenue Objective for 2011 is
achieved, the Option shall become exercisable for the B-1 Option Shares in
accordance with the following schedule:

 

	
  Date:

  	
   

  	
  Aggregate number of B-1 Option Shares for

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2011

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2013

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2014

  	
   

  	
  253,541

  	
   

  

 

(c)                                  B-2 Option Shares. (i) Except
as set forth in Paragraphs 4(c)(ii) and 4(c)(iii) below, the Option
shall only become exercisable with respect to the B-2 Option Shares if the
Revenue Objective for 2010 is achieved. 
Subject to the achievement of such Revenue Objective, the Option shall
become exercisable for the B-2 Option Shares in accordance with the following
schedule:

 

	
  Date:

  	
   

  	
  Aggregate number of B-2 Option Shares for

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2010

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2012

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2013

  	
   

  	
  253,540

  	
   

  

 

4

 

(ii)                                  Notwithstanding
the fact that the Revenue Objective for 2010 is not achieved, if the Cumulative
Revenue Objective for 2010 is achieved, the Option shall become exercisable for
the B-2 Option Shares in accordance with the following schedule:

 

	
  Date:

  	
   

  	
  Aggregate number of B-2 Option Shares for

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2010

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2012

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2013

  	
   

  	
  253,540

  	
   

  

 

(iii)                               Notwithstanding
the fact that neither the Revenue Objective for 2010 nor the Cumulative Revenue
Objective for 2010 is achieved, if the Cumulative Revenue Objective for 2011 is
achieved, the Option shall become exercisable for the B-2 Option Shares in
accordance with the following schedule:

 

	
  Date:

  	
   

  	
  Aggregate number of B-2 Option Shares for

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2011

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2013

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2014

  	
   

  	
  253,540

  	
   

  

 

(d)                                 B-3 Option Shares. The Option
shall only become exercisable with respect to the B-3 Option Shares if the
Revenue Objective for 2011 is achieved and/or the Cumulative Revenue Objective
for 2011 is achieved.  Subject to the
achievement of such Objective(s), the Option shall become exercisable for the
B-3 Option Shares in accordance with the following schedule:

 

	
  Date:

  	
   

  	
  Aggregate number of B-3 Option Shares for

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2011

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2013

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2014

  	
   

  	
  253,540

  	
   

  

 

(e)                                  C-1 Option Shares.  (i) Except as set forth in Paragraphs
4(e)(ii) and 4(e)(iii) below, the Option shall only become
exercisable with respect to the C-1 Option Shares if both the Cost Objective
for 2009 and the Reorganization Objective for 2009 are achieved.  Subject to the achievement of such Objectives,
the Option shall become exercisable for the C-1 Option Shares in accordance
with the following schedule:

 

5

 

	
  Date:

  	
   

  	
  Aggregate number of C-1 Option Shares for

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2009

  	
   

  	
  105,642

  	
   

  
	
  On of after June 30, 2010

  	
   

  	
  126,770

  	
   

  
	
  On or after September 30, 2010

  	
   

  	
  147,898

  	
   

  
	
  On or after December 31, 2010

  	
   

  	
  169,026

  	
   

  
	
  On or after March 31, 2011

  	
   

  	
  190,155

  	
   

  
	
  On of after June 30, 2011

  	
   

  	
  211,283

  	
   

  
	
  On or after September 30, 2011

  	
   

  	
  232,412

  	
   

  
	
  On or after December 31, 2011

  	
   

  	
  253,540

  	
   

  

 

(ii)                                  Notwithstanding
the fact that the Cost Objective for 2009 is not achieved, if each of the
Reorganization Objectives for 2009 and 2010 and the Cost Objective for 2010 is
achieved, the Option shall become exercisable for the C-1 Option Shares in
accordance with the following schedule:

 

	
  Date:

  	
   

  	
  Aggregate number of C-1 Option Shares for

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2010

  	
   

  	
  190,155

  	
   

  
	
  On of after June 30, 2011

  	
   

  	
  211,283

  	
   

  
	
  On or after September 30, 2011

  	
   

  	
  232,412

  	
   

  
	
  On or after December 31, 2011

  	
   

  	
  253,540

  	
   

  

 

(iii)                               Notwithstanding
the fact that neither the Cost Objective for 2009 nor the Cost Objective for
2010 is achieved, if each of the Reorganization Objectives for 2009, 2010 and
2011 and the Cost Objective for 2011 is achieved, the Option shall become
exercisable for all of the C-1 Option Shares on the Determination Date for
2011.

 

(f)                                   C-2 Option Shares. (i) Except
as set forth in Paragraph 4(f)(ii) below, the Option shall only become
exercisable with respect to the C-2 Option Shares if both the Cost Objective
for 2010 and the Reorganization Objective for 2010 are achieved.  Subject to the achievement of such Objectives,
the Option shall become exercisable for the C-2 Option Shares in accordance
with the following schedule:

 

	
  Date:

  	
   

  	
  Aggregate number of C-2 Option Shares for

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2010

  	
   

  	
  190,155

  	
   

  
	
  On of after June 30, 2011

  	
   

  	
  211,283

  	
   

  
	
  On or after September 30, 2011

  	
   

  	
  232,412

  	
   

  
	
  On or after December 31, 2011

  	
   

  	
  253,540

  	
   

  

 

6

 

(ii)                                  Notwithstanding
the fact that the Cost Objective for 2010 is not achieved, if each of the
Reorganization Objectives for 2009 and 2010 and the Cost Objective for 2011 is
achieved, the Option shall become exercisable for all of the C-2 Option Shares
on the Determination Date for 2011.

 

(g)                                  C-3 Option Shares. The Option
shall only become exercisable with respect to the C-3 Option Shares if both the
Cost Objective for 2011 and the Reorganization Objective for 2011 are
achieved.  Subject to the achievement of
such Objectives, the Option shall become exercisable for all of the C-3 Option
Shares on the Determination Date for 2011.

 

Whether
or not any Objective is achieved shall be determined in good faith by the Board
or a committee thereof in its sole discretion.

 

5.    Cessation of Service.  The option term specified in Paragraph 2
shall terminate (and the Option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:

 

(a)                                 Should Optionee
cease to remain in Service for any reason (other than death or Disability)
while the Option is outstanding, then Optionee shall have a period of ninety
(90) days (commencing with the date of such cessation of Service) during which
to exercise the Option, but in no event shall the Option be exercisable at any
time after the Expiration Date.

 

(b)                                 Should Optionee
die while the Option is outstanding, then the personal representative of
Optionee’s estate or the person or persons to whom the Option is transferred
pursuant to Optionee’s will or in accordance with the laws of inheritance shall
have the right to exercise the Option. 
Such right shall lapse, and the Option shall cease to be outstanding,
upon the earlier of (i) the expiration of the twelve (12) month period measured
from the date of Optionee’s death or (ii) the Expiration Date.

 

(c)                                  Should Optionee
cease Service by reason of Disability while the Option is outstanding, then
Optionee shall have a period of twelve (12) months (commencing with the date of
such cessation of Service) during which to exercise the Option.  In no event shall the Option be exercisable
at any time after the Expiration Date.

 

(d)                                 During the
limited period of post-Service exercisability, the Option may not be exercised
in the aggregate for more than the number of Option Shares for which the Option
is, at the time of Optionee’s cessation of Service, exercisable pursuant to the
exercise schedule specified in Paragraph 4 or the special acceleration
provisions of Paragraph 6.  Upon the
expiration of such limited exercise period or (if earlier) upon the Expiration
Date, the Option shall terminate and cease to be outstanding for any vested
Option Shares for which the Option has not been exercised.  To the extent Optionee is not vested in the
Option Shares at the time of Optionee’s cessation of Service, the Option shall
immediately terminate and cease to be outstanding with respect to those shares.

 

(e)                                  If the Optionee
is precluded from exercising the Option solely by virtue of any law (including
applicable securities law) or pursuant to any blackout or insider 

 

7

 

trading
policy, then notwithstanding anything in this Agreement to the contrary, the
Option shall remain exercisable for thirty (30) days following the date the
Option first becomes exercisable after such preclusion lapses.  During the limited period of post-Service
exercisability provided for in the immediately preceding sentence, the Option
may not be exercised in the aggregate for more than the number of Option Shares
for which the Option is, at the time of Optionee’s cessation of Service,
exercisable pursuant to the exercise schedule specified in Paragraph 4 or the
special acceleration provisions of Paragraph 6.

 

6.    Acceleration of Option.

 

(a)                                 In the event of
any Corporate Transaction where the successor corporation in such transaction
(or the parent thereof) does not assume the Option or replace the Option with a
cash incentive program which provides Optionee with an economic benefit substantially
similar to the Option, the exercisability of the Option shall, to the extent
the Option is not otherwise fully exercisable, automatically accelerate in full
so that the Option shall, immediately prior to the effective date of such
Corporate Transaction, become fully exercisable for all the Option Shares and
may be exercised for any or all of those Option Shares as fully-vested shares
of Common Stock.

 

(b)                                 Without limiting
the generality of Section 6(a) above, in the event of (i) any
Corporate Transaction where neither MTG or Alfa is party to the merger or the
asset sale or (ii) a Change in Control where a party other than MTG or
Alfa achieves control of a majority of the voting power of the Company’s then
outstanding capital stock through direct and/or indirect beneficial ownership,
the exercisability of the Option shall, to the extent the Option is not
otherwise fully exercisable, automatically accelerate so that the Option shall,
immediately prior to the effective date of such Corporate Transaction or upon
the Change in Control, become exercisable for (i) all the A Option Shares
and (ii) those of the B and/or C Option Shares for which the
applicable Objectives have been achieved as of the effective date of such
Corporate Transaction or Change in Control but which have not yet become
exercisable because of the vesting schedules applicable to such B and/or C
Option Shares, and, in each case, may be exercised for any or all of such
Option Shares as fully-vested shares of Common Stock.

 

(c)                                  In connection
with any Corporate Transaction where the exercisability of the Option
automatically accelerates, the Option shall be exercised to the extent then
exercisable prior to or in connection with the closing of such Corporate
Transaction and, to the extent that the Option is not so exercised, it shall
terminate and cease to be outstanding immediately following the closing of such
Corporate Transaction.  Without limiting
the generality of Section 5, a Change in Control that is not also a
Corporate Transaction shall not effect the term of the Option.

 

(d)                                 This Agreement
shall not in any way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.

 

7.    Adjustment in Option Shares.  In the event of (i) an extraordinary
dividend, other distribution, stock split, stock dividend, recapitalization,
reverse stock split, reorganization, 

 

8

 

merger, split-up, split-off, combination of
shares, exchange of shares or similar corporate transaction or event whereby
the Common Stock is affected, or (ii) any unusual or nonrecurring events
affecting the Company, its affiliates or the financial statements of such
entities, or changes in applicable rules, rulings, regulations or other
requirements of any governmental body or securities exchange or quotation
system, such that in either case an adjustment is necessary or appropriate in
order to prevent dilution or enlargement of the benefits hereunder, the Board
shall make such appropriate adjustments to (i) the total number and/or
class of securities subject to the Option and (ii) the Exercise Price.

 

8.    Shareholder Rights.  The holder of the Option shall not have any
shareholder rights with respect to the Option Shares until such person shall
have exercised the Option, paid the Exercise Price, and become a holder of
record of the purchased shares.

 

9.    Manner of Exercising Option.

 

(a)                                 In order to
exercise the Option  with respect
to all or any part of the Option Shares for which the Option is at the time
exercisable, Optionee (or any other person or persons exercising the Option)
shall provide written notice of Optionee’s election to exercise all or a
portion of the Option and shall take the following additional actions:

 

(i)                                     Pay the aggregate
Exercise Price for the purchased shares in one or more of the following forms:

 

(A)                               cash or check
made payable to the Company; or

 

(B)                               by a “net
exercise” method whereby the Company withholds from the delivery of the shares
of Common Stock for which the Option is exercised that number of shares of
Common Stock having a Fair Market Value equal to the aggregate exercise price for
the shares of Common Stock for which the Option is exercised; or

 

(C)                               in shares of
Common Stock held by Optionee (or any other person or persons exercising the
Option) for the requisite period necessary to avoid a charge to the Company’s
earnings for financial reporting purposes and valued at Fair Market Value on
the Exercise Date; or

 

(D)                               If the Common
Stock is at the time traded on Nasdaq or any Stock Exchange at the time the
Option is exercised, then the Exercise Price may also be paid through a special
sale and remittance procedure pursuant to which Optionee (or any other person
or persons exercising the Option) shall concurrently provide irrevocable
written instructions (a) to a Company-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the Company, out of the
sale proceeds available on the settlement date, sufficient funds to cover the
aggregate Exercise Price for the purchased shares plus all applicable national
and local income and employment taxes required to be withheld by the Company by
reason of such exercise and (b) to the Company to deliver the certificates
for the purchased shares directly to such 

 

9

 

brokerage firm in order to complete the sale.

 

Except to the extent the sale and remittance procedure
is utilized in connection with the Option exercise, payment of the Exercise
Price must accompany the notice delivered to the Company in connection with the
option exercise.

 

(ii)                                  Furnish to the
Company appropriate documentation that the person or persons exercising the
Option (if other than Optionee) have the right to exercise the Option.

 

(iii)                               Make appropriate arrangements
with the Company for the satisfaction of all applicable national and local
income and employment tax withholding requirements applicable to the Option
exercise.

 

(b)                                 As soon as
practical after the Exercise Date, the Company shall issue to or on behalf of
Optionee (or any other person or persons exercising the Option) a certificate
for the purchased Option Shares, with the appropriate legends (if any) affixed
thereto.

 

(c)                                  In no event may
the Option be exercised for any fractional shares.

 

10.    Non-Competition and Non-Solicitation; Proprietary
Information.  Notwithstanding
any provision of this Agreement to the contrary, Optionee shall not be
permitted to exercise the Option if he is in breach of Section 7 (Non-Competition and Non-Solicitation) or Section 8
(Proprietary Information) of his
employment agreement with the Company dated as of November 7, 2008 (as
such agreement may be amended from time to time).

 

11.    Representation. The Company
represents that it has properly reserved the number of shares subject to the
grant hereunder and has all corporate authority to make the grant. The shares
subject to the awards described herein shall be registered on a Form S-8
or other appropriate registration statement under the Securities Act of 1933,
as amended.

 

12.    Changes in Accounting Policies; Reporting
Methodologies.   In the
event that the Company changes its accounting policies and/or there is a change
in the method in which the size of the Russian television advertising market is
calculated and/or reported, in each case, so as to impact the manner in which
any of the Objectives are determined, Optionee and the Board or a committee
thereof shall in good faith negotiate appropriate amendments to the manner in
which the Objectives are determined to take into account such changes so that
there is no dilution or enlargement to Optionee of the benefits of the Option.

 

13.    Successors and Assigns.   Except to the extent otherwise provided in Paragraphs 3
and 6, the provisions of this Agreement shall inure to the benefit of, and be
binding upon, the Company and its successors and assigns and Optionee, Optionee’s
assigns and the legal representatives, heirs and legatees of Optionee’s estate.

 

14.    Notices.  Any notice required to be given or delivered
to the Company under the terms of this Agreement shall be in writing and
addressed to the Company at its principal 

 

10

 

corporate offices.  Any notice required to be given or delivered
to Optionee shall be in writing and addressed to Optionee at the address
indicated below Optionee’s signature line. 
All notices shall be deemed effective (i) upon personal delivery, (ii) five
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid or (iii) two business days after being sent via
reputable international overnight courier.

 

15.    Non-Statutory Option.  Optionee acknowledges that the Option is not
intended to satisfy the requirements of Section 422 of the US Internal
Revenue Code of 1986, as amended.

 

16.    Governing Law.  The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
Delaware without resort to that State’s conflict-of-laws rules.

 

17.    Arbitration.   Any dispute concerning, arising out of or
relating to this Agreement shall be submitted to binding arbitration before the
London Court of International Arbitration (the “LCIA”) and the arbitration shall be conducted pursuant to the
LCIA Rules.  The number of arbitrators
shall be three (the “Arbitrators”).  One Arbitrator shall be selected by the Company,
one shall be selected by Optionee and the third (who shall serve as Chair of
the arbitral tribunal) shall be selected by the other two Arbitrators.  In the event that either the Company or
Optionee shall fail to select its or his Arbitrator within thirty days after
the matter is submitted for arbitration, then, upon request of the other, such
Arbitrator shall be appointed by the LCIA. 
In the event the two Arbitrators selected by the Company and Optionee
fail to select the third Arbitrator within 15 calendar days of the appointment
of the second Arbitrator, then, upon request of either of them, such third
Arbitrator shall be appointed by the LCIA. 
The arbitration shall be conducted in accordance with the following
additional provisions:

 

(i)                                     The parties shall
commence the arbitration by jointly filing a written submission with the LCIA.

 

(ii)                                  The seat of
arbitration shall be London, England; the language to be used in the arbitral
proceedings shall be English; and the governing law shall be the substantive
internal laws of the State of Delaware.

 

(iii)                               Not later than 30
calendar days after the conclusion of the arbitration hearing, the Arbitrators
shall prepare and distribute to the parties a writing setting forth the
arbitral decision (which shall be by majority vote) and the Arbitrators’
reasons therefor.  Any award rendered by
the Arbitrators shall be final, conclusive and binding upon the parties, not
subject to appeal, and judgment thereon may be entered and enforced in any
court of competent jurisdiction, provided that the Arbitrators shall have no
power or authority to grant injunctive relief, specific performance or other
equitable relief.

 

(iv)                              The Arbitrators
shall have no power or authority, to (x) modify or disregard any provision
of this Agreement, including the provisions of this 

 

11

 

Section 17,
or (y) address or resolve any issue outside the scope of this arbitration
provision that is not submitted by the parties.

 

(v)                                 The parties shall
not be entitled to discovery, and the Arbitrators shall have no power to order
discovery of documents, oral testimony or other materials.

 

(vi)                              In connection
with any arbitration proceeding pursuant to this Agreement, each party shall
bear its or his own costs and expenses.

 

18.                               Entire Agreement; Amendment.  This Agreement is intended to be the sole
agreement of the parties hereto as it relates to this subject matter and does
hereby supersede all other agreements of the parties relating to the subject
matter hereof, including, without limitation, the Prior Agreement.  Notwithstanding the foregoing, the parties
acknowledge and agree that the Exercise Price Amendment is subject to the
approval of the stockholders of the Company, as described in the Preliminary Statements,
and that the Vesting Schedule Amendment is subject to the approval of the
Exercise Price Amendment by the stockholders of the Company.  In the event that the stockholders of the
Company do not approve the Exercise Price Amendment at the Company’s 2010
annual meeting of stockholders, (a) the “A Exercise Price” and “B/C
Exercise Price” set forth in the Prior Agreement and (b) the schedule
pursuant to which the A Option Shares shall become exercisable as set forth in Section 4(a) of
the Prior Agreement, will continue to apply.

 

19.                               Captions.  The captions of the sections of this
Agreement are for convenience of reference only and in no way define, limit or
affect the scope or substance of any section of this Agreement.

 

20.                               Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

12

 

IN
WITNESS WHEREOF, the parties hereto have caused the Option to be executed as of
the date set forth in the preamble.

 

 

	
   

  	
  CTC
  MEDIA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Boris
  Podolsky

  
	
   

  	
   

  	
  Boris
  Podolsky

  
	
   

  	
   

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Optionee:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Anton
  Kudryashov

  
	
   

  	
  Anton
  Kudryashov

  
	
   

  	
   

  
	
   

  	
  Address:

  

 

13

 

APPENDIX

 

The
following definitions shall be in effect under the Agreement:

 

A.                                    Adjusted
Revenues shall mean, with respect to any fiscal year of the
Company, Revenues for such fiscal year as adjusted to include the total
operating revenues for any acquisition for which the Company began
consolidating the results of operations of the acquired business with the
Company’s results of operations during such fiscal year on a pro forma annualized basis as if the acquired business had
been owned by the Company for the entirety of such fiscal year.

 

B.                                    Agreement shall mean this
Stock Option Agreement.

 

C.                                    AKAR shall mean the
Association of Communication Agencies of Russia or its any successor
organization thereto.

 

D.                                    Alfa shall mean ABH
Holdings Corporation together with its affiliates (as such term is defined in
the Exchange Act).

 

E.                                     A
Option Share shall have the meaning set forth in Section 1.

 

F.                                      Baseline
Operating Expenses shall mean:

 

(a)                                 in the case of 2009, the
Operating Expenses for 2008 (as adjusted to include Operating Expenses for any
acquisition for which the Company began consolidating the results of operations
of the acquired business with the Company’s results of operations during 2008
on a pro forma annualized basis as if the
acquired business had been owned by the Company for all of 2008) multiplied by
1.135 (or, in the event that the Consumer Price Inflation Index as published by
the Ministry of Statistics for the Russian Federation (the “official annual
inflation rate”) for 2009 is less than 12% or greater
than 15%, multiplied by a number equal to 1.0 plus such actual annual inflation
rate) (the “2009 Baseline Operating Expenses”);

 

(b)                                 in the case of 2010, the 2009
Baseline Operating Expenses multiplied by 1.135 (or, in the event that that the
official annual inflation rate for the Russian Federation for 2010 is
less than 12% or greater than 15%, multiplied by a number equal to 1.0 plus
such actual annual inflation rate) (the “2010 Baseline Operating Expenses”)

 

(c)                                  in the case of 2011, the 2010
Baseline Operating Expenses, multiplied by 1.135 (or, in the event that that
the official annual inflation rate for the Russian Federation for 2011 is
less than 12% or greater than 15%, multiplied by a number equal to 1.0 plus
such actual annual inflation rate).”

 

G.                                    B
Option Share shall have the meaning set forth in Section 1.

 

H.                                   B-1 Option Share shall have the
meaning set forth in Section 1.

 

A-1

 

I.                                        B-2
Option Share shall have the meaning set forth in Section 1.

 

J.                                        B-3
Option Share shall have the meaning set forth in Section 1.

 

K.                                   Board shall mean the
Company’s Board of Directors.

 

L.                                     Change
in Control shall mean any party either alone or with its
affiliates (as such term is defined in the Exchange Act) achieving control of a
majority of the voting power of the Company’s then outstanding capital stock
through direct and/or indirect beneficial ownership.

 

M.                                 Common Stock shall mean the
Company’s common stock.

 

N.                                    C
Option Share shall have the meaning set forth in Section 1.

 

O.                                    C-1
Option Share shall have the meaning set forth in Section 1.

 

P.                                      C-2
Option Share shall have the meaning set forth in Section 1.

 

Q.                                    C-3
Option Share shall have the meaning set forth in Section 1.

 

R.                                    Corporate
Transaction shall mean either of the following
shareholder-approved transactions to which the Company is a party:

 

(i)                                     a merger or consolidation in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities are transferred to a
person or persons different from the persons holding those securities
immediately prior to such transaction, or

 

(ii)                                  the sale,
transfer or other disposition of all or substantially all of the Company’s
assets in complete liquidation or dissolution of the Company.

 

S.                                      Company shall mean CTC
Media, Inc., a Delaware corporation.

 

T.                                     Cost
Objective  shall mean, with respect to any of 2009, 2010 and
2011, that Operating Expenses were lower than the applicable Baseline Operating
Expenses by 2.5%, 4.5% and 6.0%, respectively, for 2009, 2010 and 2011.

 

A-2

 

U.                                    Cumulative
Revenue Objective shall mean, with respect to 2010, that the
percentage compounded annual growth rate by which 2010 Revenues exceeded 2008
Adjusted Revenues is at least five percentage points greater than the
percentage compounded annual growth rate by which the Russian Television
Advertising Market Size increased from 2008 to 2010, and, with respect to 2011,
that the percentage compounded annual growth rate by which 2011 Revenues
exceeded 2008 Adjusted Revenues is at least five percentage points greater than
the percentage compounded annual growth rate by which the Russian Television
Advertising Market Size increased from 2008 to 2011; by way of example if the
Russian Television Advertising Market Size grew by 10% from 2008 to 2009 and by
a further 10% from 2009 to 2010, Revenues for 2010 would need to be at least
32.25% more than Adjusted Revenues for 2008 for the Cumulative Revenue
Objective for 2010 to be met (or, on average, 15% growth year-on-year).

 

V.                                    Determination
Date shall mean the date on which the Board or a committee
thereof determines in good faith whether any Objective for the immediately
preceding fiscal year has been achieved, which date shall be no later than 30
calendar days following the date on which the Company files its annual report
on Form 10-K with the US Securities and Exchange Commission for such year
but in no event later than 100 calendar days after the end of such fiscal year;
provided, that with respect to any Revenue Objective or Cumulative
Revenue Objective, such date shall be no later than the later of (x) such
date and (x) 30 calendar days following the date on which AKAR publicly
announces the Russian Television Advertising Market Size for such year.

 

W.                                 Disability shall mean the
inability of Optionee to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment and shall be
determined by the Board or a committee thereof on the basis of such medical
evidence as the Board or such committee deems warranted under the
circumstances.

 

X.                                    Employee shall mean an
individual who is in the employ of the Company (or any Parent or Subsidiary),
subject to the control and direction of the employer entity as to both the work
to be performed and the manner and method of performance.

 

Y.                                    Exchange
Act shall mean the US Securities Exchange Act of 1934, as amended.

 

Z.                                     Exercise
Date shall mean the date on which the Option shall have
been exercised in accordance with Paragraph 9 of the Agreement.

 

AA.                           Exercise
Price
shall mean US$13.60 per Option Share, which was the official Nasdaq closing
price per share of Common Stock on August 11, 2009, as reported by
Nasdaq.  Notwithstanding the foregoing, “Exercise
Price” shall mean the A Exercise Price or the B/C Exercise Price (as set forth
in the Prior Agreement), as the case may be, in the event that the Exercise
Price Amendment is not approved by the Company’s stockholders as set forth in Section 18
above.

 

BB.                           Exercise Price Amendment shall have the
meaning set forth in paragraph C of the Preliminary Statements.

 

CC.                           Expiration Date shall mean August 4,
2018.

 

A-3

 

DD.                           Fair Market Value per share of
Common Stock on any relevant date shall be determined in accordance with the
following provisions:

 

(i)                                     If the Common Stock is at the
time traded on Nasdaq, then the Fair Market Value shall be the official close
price per share of Common Stock on the date in question, as the price is
reported by Nasdaq.  If there is no close
price for the Common Stock on the date in question, then the Fair Market Value
shall be the close price on the last preceding date for which such quotation
exists.

 

(ii)                                  If the Common
Stock is at the time listed on any Stock Exchange, then the Fair Market Value
shall be the closing price per share of Common Stock on the date in question on
the Stock Exchange determined by the Board to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange.  If there
is no closing price for the Common Stock on the date in question, then the Fair
Market Value shall be the closing price on the last preceding date for which
such quotation exists.

 

(iii)                               If the Common
Stock is at the time neither listed on any Stock Exchange nor traded on Nasdaq,
then the Fair Market Value shall be determined in good faith by the Board.

 

EE.                             Grant Date shall mean November 7,
2008.

 

FF.                               MTG shall mean
Modern Times Group MTG AB together with its affiliates (as such term is defined
in the Exchange Act).

 

GG.                           Nasdaq shall mean the
Nasdaq Stock Market, any market thereof or any successor system, as applicable.

 

HH.                         Objective shall mean any
or all of the Revenue Objective, the Cumulative Revenue Objective, the Cost
Objective and/or the Reorganization Objective.

 

II.                                   Operating
Expenses  shall mean the Company’s total consolidated operating
expenses other than:

 

(i)                                     (a)  depreciation and
amortization, (b)  amortization of programming rights, and (c)  amortization
of sublicensing rights (currently categorized as direct operating expenses and
selling, general and administrative expenses, as adjusted for acquisitions that
are consolidated for only a portion of any year), each denominated in Russian
rubles;

 

(ii)                                  stock-based compensation
expense; and

 

(iii)                               any expense exempted from this
definition of “Operating Expenses” by the Board’s compensation committee.

 

Operating expenses that are generated in a
currency other than Russian rubles shall be translated into Russian rubles
using the same weighted average exchange rate methodology used by the Company
to translate its financial statements into US dollars.  In the event of any changes in accounting 

 

A-4

 

principles or the classification of expenses, the
results for a fiscal year shall be adjusted so that such results will be
comparable with the results for the prior fiscal year.

 

JJ.                                   Option Shares shall mean,
collectively, the A Option Shares, B Option Shares and C Option Shares and
individually, any of them.

 

KK.                         Optionee shall mean Anton
Kudryashov.

 

LL.                             Parent shall mean any
corporation (other than the Company) in an unbroken chain of corporations
ending with the Company, provided each corporation in the unbroken chain (other
than the Company) owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.

 

MM.                     Prior Agreement shall mean the
Stock Option Agreement, dated as of November 7, 2009, between the Company
and the Optionee.

 

NN.                           Reorganization Objective shall mean, with
respect to 2009, 2010 and 2011, achieving in such year those organizational
objectives that the Board establishes for such year based upon its review and
consideration of the recommendations set out in the study by Booz Allen
Hamilton commissioned by the Company in 2008; which organizational objectives
for any year shall be provided to Optionee no later than December 20th of the immediately preceding year.

 

OO.                           Revenue Objective shall mean, with
respect to any of 2009, 2010 and 2011, that Revenues for such year exceeded
Adjusted Revenues for the immediately preceding year by at least five
percentage points more than the Russian Television Advertising Market Size for
such year exceeded the Russian Television Advertising Market Size for the
immediately preceding year; by way of example if the Russian Television
Advertising Market Size for 2009 was 15% more than the Russian Television
Advertising Market Size for 2008, Revenues for 2009 would need to be at least
20% more than Adjusted Revenues for 2008 for the Revenue Objective to be met.

 

PP.                               Revenues shall mean, with
respect to any fiscal year of the Company, the consolidated total operating
revenues of the Company for such year expressed in Russian rubles less
total operating revenues attributable to any acquisition by the Company for
which the Company began consolidating the results of operations of the acquired
business with the Company’s results of operations during such fiscal year, each
denominated in Russian rubles; provided that revenues that
are generated in a currency other than Russian rubles shall be translated into
Russian rubles using the same weighted average exchange rate methodology used
by the Company to translate its financial statements into US dollars.

 

QQ.                           Russian Television Advertising
Market Size shall mean, with respect to any year, the monetary
size of the Russian television advertising market for such year as reported by
AKAR.

 

A-5

 

RR.                           Service shall mean the
Optionee’s performance of services for the Company (or any Parent or Subsidiary)
in the capacity of an Employee, a non-employee member of the board of directors
or an independent consultant.

 

SS.                               Stock Exchange shall mean the
American Stock Exchange, the New York Stock Exchange or the London Stock
Exchange.

 

TT.                             Subsidiary shall mean any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

 

UU.                           Vesting Schedule Amendment shall have the
meaning set forth in paragraph C of the Preliminary Statements.

 

A-6Exhibit
10.1

 

Merrill Lynch Non-Qualified Deferred Compensation Plan

 

Article 1 -
Introduction

 

1.1.         Purpose of
Plan

 

The Employer has adopted the Plan set forth
herein to provide a means by which certain employees may elect to defer receipt of designated percentages
or amounts of their Compensation and to provide a means for certain other
deferrals of Compensation.

 

1.2.         Status of Plan

 

The Plan is intended to be “a plan that is
unfunded and is maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees” within the meaning of sections 201(2), 301(a)(3) and 401(a)(1) of
ERISA, and shall be interpreted and administered to the extent possible in a
manner consistent with that intent. The Plan was originally adopted effective January
1, 1995, and has not been amended or materially modified (other than as
otherwise permitted under regulations issued by the Secretary of the Treasury) after
October 3, 2004. By action of its sole general partner, the Employer froze the
Plan with respect to the vested benefits of Plan participants earned on or
before December 31, 2004 in such manner as ensured that the frozen Plan shall
not be subject to section 409A of the Code. The Plan has not been amended (or
otherwise materially modified in any manner that would subject the Plan to Code
Section 409A) with respect to those Plan benefits accrued or earned by
participants and vested as of December 31, 2004 and including actual or deemed
interest accumulations or increases in the present value of the December 31, 2004
vested accrued benefits (the “Frozen Benefits”). Any attempted amendment or
purported material modification with respect to such Frozen Benefits shall be
null and void and of no force or effect. The Frozen Benefits shall be governed
by the terms of this Plan as it existed as of December 31, 2004. The Plan is
intended to permit the deferral of compensation on and after January 1, 2005 (or
with respect to amounts deferred before January 1, 2005 but not vested as of
that date) in accordance with section 409A of the Code and all provisions of
this Plan shall be interpreted and applied in a manner consistent with section
409A of the Code. Any provision that would conflict with such requirements
shall not be valid or enforceable.

 

Article 2 -
Definitions

 

Wherever used herein, the following terms
have the meanings set forth below, unless a different meaning is clearly
required by the context:

 

2.1.                            Account means, for each
Participant, the account established for his or her benefit under Section  5.1.

 

2.2.                            Adoption
Agreement means The Merrill Lynch Non-Qualified Deferred
Compensation Plan Adoption Agreement, which shall be incorporated herein, signed
by the Employer to establish the Plan and containing all the options selected
by the Employer, as the same may be amended from time to time.

 

2.3.                            Change of
Control has the meaning set forth in the
Stock Plan. It is the Employer’s responsibility to determine whether a Change
of Control has occurred and to advise the Plan Administrator (or its delegate) accordingly.

 

2.4.                            Code means the
Internal Revenue Code of 1986, as amended from time to time. Reference to  any section or
subsection of the Code includes reference to any comparable or succeeding provisions
of any legislation that amends, supplements or replaces such section or
subsection. In addition, reference to any section or subsection of the Code
includes a reference to regulations,

 

 

notices,
rulings and other official Internal Revenue Service guidance issued in
connection with such section or subsection.

 

2.5.                            Compensation  means the compensation, otherwise
subject to a deferral election hereunder and as  defined
by the Employer in the Adoption Agreement.

 

2.6.                            Effective Date means the date chosen in
the Adoption Agreement as of which the Plan first  becomes
effective.

 

2.7.                            Election Form means the participation election form as approved and prescribed by the
Plan  Administrator.

 

2.8.                            Elective Deferral means the portion of
Compensation that is deferred by a Participant under  Section
4.1.

 

2.9.                            Eligible
Employee means, on the Effective
Date or on any entry date thereafter, each  employee  of the Employer who the Employer determines satisfies the criteria
established in the Adoption Agreement.

 

2.10.                     Employer means the Employer
referred to in the Adoption Agreement, any successor to all or a major portion
of the Employer’s assets or business that assumes the obligations of the
Employer, and each other entity that is affiliated with the Employer, which adopts
the Plan with the consent of the Employer, provided that the Employer that
signs the Adoption Agreement shall have the sole power to amend this Plan and
shall be the Plan Administrator if no other person or entity is so serving at
any time.

 

2.11.                     ERISA means the Employee
Retirement Security Act of 1974, as amended from time to time. Reference to any
section or subsection of ERISA includes reference to any comparable or
succeeding provisions of any legislation that amends, supplements or replaces
such section or subsection.

 

2.12.                     Incentive Deferral means a
discretionary additional deferral made by the Employer as described in Section 4.3.

 

2.13.                     Insolvent means either (i) the
Employer is unable to pay its debts as they become due, or (ii) the Employer is
subject to a pending proceeding as a debtor under the United States Bankruptcy
Code.

 

2.14.                     Matching Deferral means a deferral
for the benefit of a Participant as described in Section 4.2.

 

2.15.                     Participant means any individual who
participates in the Plan in accordance with Article 3.

 

2.16.                     Plan means the Employer’s plan
in the form of the Merrill Lynch Non-Qualified Deferred Compensation Plan and
the Adoption Agreement and all amendments
thereto.

 

2.17.                     Plan
Administrator  means the person, persons or entity designated by the Employer in the
Adoption Agreement to administer the Plan and to serve as the agent for Employer with respect to the Trust as
contemplated by the agreement establishing the Trust. If no such person or
entity is so serving at any time, the Employer shall be the Plan Administrator.

 

2.18.                     Plan Year means the calendar year.

 

2.19.                     Retirement Age means the Retirement Age
chosen in the Adoption Agreement.

 

2

 

2.20.                     Stock Plan means the Simon Property
Group, L.P. 1998 Stock Incentive Plan, as the same has been or may be modified
or supplemented from time-to-time, or any successor thereto.

 

2.21.                     Total and Permanent Disability  means that the Participant (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (ii) is, by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a period of not
less than 3 months under an accident and health plan covering employees of the
Participant’s Employer. The permanence and degree of any Total and Permanent
Disability shall be supported by medical evidence satisfactory to the Plan
Administrator. The Plan Administrator may rely on a determination of disability
made by the Social Security Administration for the purposes of determining
whether a Participant has a Total and Permanent Disability.

 

2.22.                     Trust  means the Trust established by the Employer that identifies the Plan as a
plan with respect to which assets are to be held by the Trustee.

 

2.23.       Trustee
means the Trustee or Trustees under the Trust.

 

2.24.                     Year of Service  means the computation period and service requirement provided for in Section
6.2 and as elected in the Adoption Agreement.

 

Article 3 -
Participation

 

3.1.                            Commencement
of Participation

 

Any individual who
elects to defer part of his or her Compensation in accordance with Section 4.1
shall become a Participant in the Plan as of the date such deferrals commence. Any
individual who is not already a Participant and whose Account is credited with
an Incentive Deferral shall become a Participant as of the date such amount is
credited.

 

3.2.                            Continued
Participation

 

Except as otherwise
provided herein, a Participant in the Plan shall continue to be a Participant
so long as any amount remains credited to his or her Account, subject to the
following:

 

(a)             The
Employer may determine, before the beginning of a Plan Year that, effective
after the end of the current Plan Year, a Participant will not be eligible (i) to
elect to defer part of his or her Compensation in accordance with Section 4.1, (ii)
for the credits for Matching Deferrals in accordance with Section 4.2, or (iii)
for Incentive Deferrals in accordance with Section 4.3.

 

(b)             Elective
Deferral elections under Section 4.1 shall be terminated (subject to a
Participant’s subsequent timely deferral election under Section 4.1) in
accordance with the rules in Section 7.5 for unforeseen financial emergency
withdrawals

 

(c)             Elective
Deferral elections under Section 4.1 shall be
terminated if the Participant elects to receive a hardship distribution under a
tax-qualified cash or deferred arrangement subject to section 401(k) of the
Code maintained by the Employer. In such case, any later Elective Deferral election under Section 4.1 of this Plan cannot be
earlier than the first day of any Plan Year after the expiration of the
suspension of deferrals under the section 401(k) plan.

 

Article 4 - Elective, Matching and Incentive
Deferrals

 

4.1.                            Elective
Deferrals

 

Elective Deferral
elections shall be made on such Election Forms provided by the Plan
Administrator and in accordance with the following provisions:

 

3

 

(a)           General Rule on Timing of Elective
Deferral Elections. Except as otherwise
provided in this
Section 4.1 or otherwise in this Plan, an Eligible Employee may elect to defer
a percentage or dollar amount of Compensation to be earned in a Plan Year by
making an irrevocable election to do so before January 1st of that Plan Year.

 

(b)           Initial Elective Deferral Election
Upon Effective Date of Plan. If
an Eligible Employee is not otherwise eligible to participate in another
individual account non-qualified deferred compensation plan, and the individual
is an Eligible Employee on the Effective Date, the Eligible Employee may
irrevocably elect to defer a percentage or dollar amount of Compensation to be
earned by the Eligible Employee in the same Plan Year as long as the election
is made within 30 days following the Effective Date and applies only to
Compensation earned after the election is made. Thereafter, the timing of
future Elective Deferral elections is governed by Section 4.1(a).

 

(c)           Initial Elective Deferral Election
Upon an Individual’s First Becoming Eligible After the Plan’s Effective Date.
If an Eligible Employee is not otherwise
eligible to participate in another individual account non-qualified deferred
compensation plan, and the individual first becomes eligible for this Plan
after the Effective Date, the Eligible Employee may irrevocably elect to defer
a percentage or dollar amount of Compensation to be earned by the Eligible
Employee in the same Plan Year as long as the election is made within 30 days
following the date the individual first becomes an Eligible Employee and
applies only to Compensation earned after the election is made. Thereafter, the
timing of future Elective Deferral elections is governed by Section 4.1(a).

 

(d)           Special Rule for Final Payroll in
a Plan Year. If an Employer’s normal
payroll practice is such that the last payroll beginning in a Plan Year covers
services performed at the end of that Plan Year and
into the beginning of the next Plan Year, then any
Elective Deferral elections under this Plan for a Plan Year will irrevocably apply to all
payroll periods beginning in that Plan Year.

 

(e)           Crediting Elective Deferral
Elections. Elective Deferrals shall
be credited to the Participant’s Account as soon as practicable after the date
the amounts would otherwise have been paid to the Participant in the absence of
an Elective Deferral election.

 

If an Employer elects to allow for the
deferral of Performance-Based Compensation (as defined in Appendix A) by making
the election in Section 4 of the Adoption Agreement, the rules set forth in
Appendix A with respect to deferrals of Performance-Based Compensation shall
apply. The Plan Administrator may adopt such additional administrative
requirements regarding the form and timing of Elective Deferral elections as
long as those requirements are consistent with the preceding provisions of this
Section 4.1 and the Code.

 

4.2.                            Matching Deferrals

 

For each eligible
Participant in the Plan, as of the end of each payroll period, calendar month, calendar
quarter, or calendar year as determined by the Employer and specified in the
Adoption Agreement (the “Determination Period”), the Employer may, in its sole
and absolute discretion, add a Matching Deferral amount calculated at the end of the Determination Period, equal to the product
of: (i) the rate of the Matching Deferral amount, if any, specified by the
Employer in the Adoption Agreement, and (ii) the amount of the Elective
Deferral credited to the Account of the Participant for that Determination
Period pursuant to Section 4.1. The Employer may contribute an amount equal to
such Matching Deferral amount to the
Trust as soon as practicable thereafter. The Matching Deferral amount will be
credited to the Account of the Participant as soon as practicable after the
Determination Period.

 

4.3.                            Incentive Deferrals

 

In addition to any
amounts which may be credited to the Account of a Participant pursuant to Section
4.1 for any year, the Employer may, in its sole and absolute discretion, at any
time and from time to time

 

4

 

determine to credit
the Account of a Participant with an amount
determined by the Employer in its sole and absolute discretion. Such amount
shall be authorized for such purpose or purposes as the Employer may deem
appropriate and, except for determining the form and timing of distribution of
such amounts, shall be subject to such terms and conditions as the Employer may
determine in its sole and absolute discretion. In all events, any such terms
and conditions that the Employer may determine must be established in writing
and comply with the terms of this Plan and the requirements of section 409A of
the Code. For example, the Employer may credit an amount to the Account of a
Participant and condition the credit of that amount and any adjustment of that
amount upon the Participant remaining employed by the Employer for an
additional specified period of time. The terms and conditions specified by the
Employer shall be set forth in writing and reflected in an attachment to the
Adoption Agreement. All Incentive Deferrals credited to a Participant’s Account
for a Plan Year will be distributed according to the Participant’s election in
effect for Elective Deferrals credited to the Participant’s Account for the same Plan Year. If there is no such
election in effect, then all Incentive Deferrals credited to a Participant’s
Account for a Plan Year will be distributed in a single sum payment upon the
earlier of the date specified in Section 7.3 (Separation from Service) or Section
7.4 (Death).

 

Article 5 -
Accounts

 

5.1.         Accounts

 

The Plan
Administrator shall establish an Account for each participant reflecting
Elective Deferrals, Matching Deferrals (if any) and Incentive Deferrals (if any)
credited for the Participant’s benefit together with any adjustments for income,
gain or loss and any payments from the Account, The Plan Administrator may
cause the Trustee to maintain and invest separate asset accounts corresponding
to each Participant’s Account. The Plan Administrator shall establish
sub-accounts for each Participant who has more than one election in effect
under Section 7.1 and such other sub-accounts as are necessary for the proper
administration of the Plan. The Plan  Administrator
shall provide the Participant with a statement of his or her Account reflecting
the income, gains and losses (realized and unrealized), amounts of deferrals, and
distributions of such Account since the prior statement.

 

5.2.         Deemed Investments

 

Subject to the
elections made by the Employer in the Adoption Agreement, for purposes of
measuring the value of the benefit that may be payable to or with respect to a
Participant under the Plan, such value may be determined taking into account
Participant-directed deemed investment elections made in accordance with the
terms and conditions of this Section 5.2.

 

(a)          For
purposes of measuring the amounts to be credited (or debited) to a Participant’s
Account, a Participant or the Participant’s investment advisor may select, from
the investment options or other investment media selected by the Plan
Administrator and approved by the Employer, the investments in which all or
part of his or her Account shall be deemed to be invested. In no event shall
any Participant be entitled to have any such investments made other than on a
deemed basis. The Accounts maintained pursuant to this Plan are for bookkeeping
purposes only, and neither the Employer nor the Trustee is under any obligation
to invest any amounts credited to such
Accounts.

 

(b)         The
Participant or the Participant’s investment
advisor shall make an investment designation (on
the Election Form used to elect to defer Compensation under Section 4.1 or in
such other manner as specified by the Plan Administrator or the Employer) which shall remain effective until another valid
direction has been made by Participant or the Participant’s investment advisor.
The Participant or the Participant’s investment advisor may amend the
Participant’s investment designation at such times and in such manner as prescribed by the Plan Administrator. A timely change
to the Participant’s investment designation shall become effective as soon as
administratively practicable in accordance with procedures established by

 

5

 

the
Plan Administrator. The investment options or investment media deemed to be
made available to the Participant, and any limitation on the maximum or minimum
percentages of the Participant’s Account that may be deemed to be invested in
any particular option or investment, shall be the same as from time to time
communicated to the Participant by the Plan Administrator.

 

(c)          The
Participant’s appointment of an investment advisor to act on his or her behalf
under subsection (a) shall not be effective until the Participant notifies the
Employer of such appointment in a manner acceptable to the Employer. The
removal of any Participant’s investment advisor shall not be effective until
the participant notifies the Employer of the removal in a manner acceptable to
the Employer.

 

(d)         The
Trustee shall invest assets of the Trust in accordance with the terms and
provisions of the trust agreement that establishes and governs the Trust.

 

5.3.         Hypothetical Accounts

 

The Accounts (and
any sub-accounts) established under this Plan for Participants and their
Beneficiaries shall be hypothetical in nature and shall be maintained for
bookkeeping purposes only. Neither the Plan nor any of the Accounts (sub-accounts
or any accounts established under this Plan) shall be required to hold any
actual funds or assets.

 

Article 6 -
Vesting

 

6.1.         Vested Benefit

 

The term “Vested”
shall mean the Participant’s non-forfeitable interest in the benefit described
under the Plan which may be payable to or with respect to the Participant in
accordance with and subject to the terms of the Plan. Except as otherwise
specifically provided in the Plan and subject to earlier vesting in accordance
with Sections 6.3, 6.4 and 6.5 of the Plan, the amounts credited to the Account
(or any sub-accounts) of each Participant shall be Vested as follows:

 

(a)          the
amounts credited to the Account of each Participant attributable to Elective
Deferrals, as adjusted based upon the measuring investments, shall be one
hundred percent (100%) Vested at all times subject, in all cases, to any vesting
requirements set forth in, or established under, the Stock Plan for any
Elective Deferrals consisting of awards under the Stock Plan;

 

(b)         the
amounts credited to the Account of each Participant attributable to Matching
Deferrals, as adjusted based upon the measuring investments, shall be Vested in
accordance with the schedule selected by the Employer in the Adoption Agreement;
and

 

(c)          the
amounts credited to the Account of each Participant attributable to Incentive
Deferrals, as adjusted based upon the measuring investments, shall be Vested in
accordance with the schedule selected by the Employer in the Adoption
Agreement.

 

6.2.         Vesting Service

 

For purposes of applying the vesting schedule in the Adoption Agreement, unless
otherwise provided in the Adoption Agreement, a Participant shall be considered to have completed a Year of Service for each complete year of full-time service with the Employer or an Affiliate, measured from the
Participant’s first date of such employment
unless the Employer also maintains a section 401(k) plan that is qualified under section 401(a) of the Code
in which the Participant participates, in which case the rules governing
vesting service under that plan shall also be controlling under this Plan.

 

In calculating
Years of Service for vesting purposes with respect to Simon Property Group
Common Stock allocated to a Participant as an Incentive Deferral, Years of
Service shall include the period of time after the Participant’s “Approved
Retirement” as though that period of time is full-time service with the
Employer. A Participant’s “Approved Retirement” means retirement from the
Employer on or after a

 

6

 

date as of which
the Participant has attained the age of 59 1/2 years while employed by Employer
or the date as of which either the Participant has attained the age of 55 years
plus 10 years of continuous employment (in full and partial years) with
Employer, as long as the Participant has executed a form of non-compete
agreement as prescribed by the Employer and is in full compliance with such
non-compete agreement.

 

6.3.         Change or
Control

 

Notwithstanding any
provision in the Plan to the contrary, all amounts credited to the Account (and
any sub-accounts) of each Participant attributable to Matching Deferrals and
any Incentive Deferrals, as adjusted based upon the measuring investments, shall
be one hundred percent (100%) Vested, as that term is defined in Section 6.1 of
the Plan, immediately upon a Change of Control.

 

6.4.         Death or
Disability

 

Notwithstanding any
provision in the Plan to the contrary, all amounts credited to the Account (and
any sub-accounts) of each Participant attributable to Matching Deferrals and
any Incentive Deferrals, as adjusted based upon the measuring investments, shall
be one hundred percent (100%) Vested, as that term is defined in Section 6.1 of
the Plan, immediately upon the termination of the Participant’s employment by
reason of the Participant’s death or Total and Permanent Disability.

 

6.5.         Insolvency

 

Notwithstanding any
provision in the Plan to the contrary, all amounts credited to the Account (and
any sub-accounts) of each Participant attributable to Matching Deferrals and
any Incentive Deferrals, as adjusted based upon the measuring investments, shall
be one hundred percent (100%) Vested, as that term is defined in Section 6.1 of
the Plan, immediately upon the Employer becoming Insolvent, in which event the
Participant shall have the same rights and interest in such amounts so credited
to his or her Account (and any sub-accounts) as a general unsecured creditor of
the Employer.

 

Article 7 -
Payments

 

7.1.         Election as to Time and Form of Payment
– Scheduled In-Service Payments

 

With respect to
deferrals made for each Plan Year, a Participant may elect (on the Election Form
used to elect to defer Compensation under Section 4.1 of the Plan) a specified
date at which the amounts credited to the Account of the Participant
attributable to Elective Deferrals and Matching Deferrals (as adjusted based
upon the measuring investments) will be payable to the Participant. Alternatively,
a Participant may elect to have his Account paid as of the earlier of the date
specified in the preceding sentence or the date he separates from services. The
Participant may elect separate distribution schedules for each Plan Year’s
deferral amounts and for Elective Deferrals separately from Matching Deferrals.
Distributions of any Incentive Deferrals credited to a Participant’s Account
for any Plan Year shall be paid in the same time and manner as any Elective
Deferrals credited to the Participant’s Account for the same Plan Year. If
there is no such election in effect, then all Incentive Deferrals credited to a
Participant’s Account for a Plan Year will be distributed in a single sum
payment upon the earlier of the date specified in Section 7.3 (Separation from
Service) or Section 7.4 (Death). The Participant shall also elect on such
Election Form the form of the benefit payable to the Participant which shall
include:

 

(a)          a
single lump-sum payment; or

 

(b)         annual
installment payments over a period elected by the Participant not to exceed
fifteen (15) annual installment payments, with each annual installment payment
determined by multiplying the balance of the amount payable to the Participant
with respect to the Account (and any sub-accounts) determined as of the date of
distribution, by a fraction with one (1) as the numerator and the number of
annual installment payments remaining to be paid as the denominator.

 

7

 

Each such
distribution election will be effective for the Plan Year for which it is made
and each succeeding Plan Year for which any amounts are deferred hereunder for
the Participant, unless an effective election is made by the Participant to
change the time or form of distribution for deferrals for a future year or a
change is made to the time or form of distribution for amounts already deferred in
accordance with Section 7.2.

 

Except as provided
in Sections 7.3, 7.4 and 7.5, payment of amounts credited to the Account of the
Participant shall be made in accordance with the elections made by the
Participant under this Section 7.1 (or
any modified elections made by the Participant
under Section 7.2). In addition, if a Participant has not made an election for
a scheduled in-service payment in accordance with this Section 7.1, all amounts
under this Plan shall be paid only in accordance with Sections 7.3, 7.4 and
7.5.

 

7.2.         Modification of Election as
to Time and Form of Payment for In-Service Payments

 

A Participant may
elect, in writing, to modify his or her prior election under Section 7.1 as to
time or form of payment, provided, however, that any such modification election
must comply with the following requirements:

 

(a)           such
election may not take effect until at least 12 months after the date on which
the election is made; and

 

(b)           the
payment with respect to an amended election must be deferred for a period of
not less than 5 years from the date such payment would otherwise have been paid
(or, in the case of installment payments, no more than 5 years from the date
the first amount was scheduled to be paid); and

 

(c)           any election related to a payment
otherwise made at a specified time may not be made less than 12 months prior to
the date the payment is otherwise to be paid (or, in the case of installment
payments, 12 months prior to the date the first amount was scheduled to be
paid).

 

For purposes of
this Plan, distributions that are to be made in the form of installments shall
be treated as a single payment (and not a series of separate payments). Therefore,
the five-year deferral rule is measured from the commencement of installment
payments; each installment payment is not separately deferred for a five-year
period.

 

7.3.         Separation from Service

 

To the extent
elected by a Participant on the Participant’s Election Form completed in
accordance with Section 7.1 and Section 7.2, upon the Participant’s separation
from service for any reason other than death, the Vested portion of the
Participant’s Account (including any portion Vested pursuant to Section 6.4 as
a consequence of the Participant’s Total and Permanent Disability) shall be
paid to the Participant in the form elected by the Participant as soon as
practicable (but no later than 30 days) following the date of such separation
from service. Solely for purposes of this Plan, a Participant shall be deemed
to have separated from service upon his Total and Permanent Disability. The form
of distribution of such Vested amounts elected by the Participant is determined
as to the Participant’s deferrals for each Plan Year (on a class year basis) as
follows: with respect to deferral amounts
credited to a Participant’s Account for
any Plan Year, such amounts shall be paid under
this Section 7.3 in the form of a single sum payment unless otherwise elected
by the Participant on the Participant’s Election Form completed prior to the
Plan Year of the applicable deferral amount (or within the 30-day period
referred to in Section 4.1(b) or (c)). Once the form of payment on account of a
Participant’s separation from service is determined
for a Plan Year, it may not be changed thereafter. Notwithstanding the
foregoing, as long as the Employer’s stock is publicly traded on an established
securities market, any distribution to any “specified employee” (as determined by the Plan Administrator in accordance with section 409A
of the Code) on account of a separation from service shall be made as soon as
practicable (but no later than 30 days) after the date that is six months after
the date of separation from service (or, if earlier, the date of the
Participant’s death in accordance with Section 7.4). In the event the preceding
sentence applies to a Participant, any

 

8

 

distribution which
would otherwise be paid to the Participant within the first six months
following the separation from service shall be accumulated and paid to the
Participant in a lump sum as of the first day of the seventh month following
the separation from service. All subsequent distributions shall be paid in the
manner specified.

 

Any deferral
amounts not otherwise Vested upon a Participant’s separation from service shall
be immediately forfeited thereafter.

 

For purposes of
determining whether and when a Participant has incurred a separation from
service, the Plan Administrator shall apply the default rule under section 409A
of the Code pursuant to which the employment relationship will be deemed to
have ended at the date the Participant and his Employer reasonably anticipate
that the level of bona fide services the Participant will perform for the
Employer and any Related Company after such
date (whether as an employee or independent contractor, but not as a director) will
permanently decrease to a level that is no more than 20% of the average level
of bona fide services the Participant performed over the immediately preceding
36-month period. The term “Related Company” means any corporation, trade or
business during any period in which it is, along with the Employer, a member of
a controlled group of corporations or a controlled group of trades or
businesses (as described in sections 414(b) and (c), respectively, of the
Code).

 

7.4.         Death

 

If a Participant
dies prior to the complete distribution of his or her Account, the Vested
balance of the Account shall be paid as soon as practicable to the Participant’s
designated beneficiary or beneficiaries, in the form of a single lump sum payment payable
as soon as practicable after the Participant’s death. Any designation of
beneficiary shall be made by the Participant on an Election Form filed with the
Plan Administrator and may be changed by the Participant at any time by filing
another Election Form containing the revised instructions. If no beneficiary is
properly designated or no designated beneficiary survives the Participant, payment
shall be made to the Participant’s surviving spouse, or, if none, to his or her
issue per stirpes, in a single payment. If no spouse or issue
survives the Participant, payment shall be made in a single lump sum to the
Participant’s estate.

 

7.5.         Unforeseeable Emergency

 

If a Participant
experiences an “Unforeseeable
Emergency,” as that term is defined in this Section 7.5, and the Employer has
made this Section 7.5 applicable by so electing in the Adoption Agreement, the
Participant may make a request to the Plan Administrator, by submitting a form
or otherwise evidencing such request by a telephonic or an electronic method
acceptable to the Plan Administrator, to receive a distribution of all or a
portion of the Vested (as that term is defined in Section 6.1 of the Plan) amounts
allocated to the Account of the Participant in accordance with the provisions
and requirements of this Section 7.5.

 

(a)          The
amount distributed with respect to an emergency shall not exceed the lesser of:
(i) the Vested amounts allocated to the Account of the Participant calculated
as if the Participant were receiving a distribution based upon a separation
from service, or (ii) the amount necessary to satisfy such emergency plus an
amount necessary to pay taxes reasonably anticipated as a result of the distribution.

 

(b)         The
amount distributed with respect to an emergency shall be determined after
taking into account the extent to which such hardship is or may be relieved
through reimbursement or compensation by insurance or otherwise or by
liquidation of the assets of the Participant (to the extent the liquidation of
such assets would not itself cause severe
financial hardship).

 

(c)          If
the Plan Administrator, in its sole discretion, approves the request for such a
distribution, the Elective Deferrals of the
Participant under Section 4.1 will immediately terminate (if and to the extent
necessary to alleviate the hardship), and the distribution under this Section 7.5
shall be made in the form of a lump sum payment
as soon as practicable after the approval by

 

9

 

the
Plan Administrator. If Elective Deferrals are terminated under this Section 7.5,
the Participant may not again elect to defer compensation under Section 4.1
until the enrollment period for the Plan Year that begins at least twelve (12) months
after such hardship distribution.

 

(d)         For
purposes of this Section 7.5, an Unforeseeable Emergency means a severe
financial hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant, the Participant’s beneficiary, or of a
dependent (as defined in section 152 of the Code without regard to section 152(b)(1),
(b)(2), and (d)(1)(B)) of the Participant; loss of the
Participant’s property due to casualty, (including the need to rebuild a home
following damage to a home not otherwise covered by insurance, for example, not
as a result of a natural disaster); or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the
Participant’s control. For example, the imminent foreclosure of or eviction
from the Participant’s primary residence may constitute an Unforeseeable Emergency.
In addition, the need to pay for medical expenses, including non-refundable
deductibles, as well as for the costs of prescription drug medication, may
constitute an Unforeseeable Emergency. Finally, the need to pay for the funeral
expenses of a spouse,
a beneficiary, or a dependent (as defined in
section 152 of the Code, without regard to section 152(b)(1), (b)(2), and (d)(1)(B))
may also constitute an unforeseeable emergency. However, except as specifically
provided above, distributions under this Section 7.5 shall not be allowed for
purposes of sending a child to college or the Participant’s desire to purchase
a home or other residence.

 

(e)          In all events, the circumstances that will constitute a severe financial
hardship will depend on the facts of each case (as determined in a manner
consistent with the requirements of section 409A of the Code) and be based on
information supplied by the Participant.

 

7.6.         Forfeiture of Non-Vested Amounts

 

To the extent that
any amounts credited to a Participant’s Account are not Vested at the time such
amounts are otherwise payable under Section 7.3, such amounts shall be
immediately forfeited and such forfeitures shall be used to offset any future
Employer contributions to the Trust.

 

7.7.         Taxes

 

All federal, state
or local taxes that the Plan Administrator determines are required to be
withheld from any payments made pursuant to this Article 7 shall be withheld.

 

7.8.         Special Election Rule

 

Subject to the
terms and conditions of the Plan and notwithstanding anything in the Plan to
the contrary, each individual who is a Participant in the Plan prior to January
1, 2009 and who is permitted by the Employer to make an election under Section 7.3,
may elect the time at which payment of his Plan benefit will commence by filing
a written election with the Plan Administrator, no later than December 31, 2008,
in a form and manner
and subject to such limitations as the Plan
Administrator in its sole discretion may establish, subject to the following:

 

(a)                             an election pursuant to this Section 7.8 shall be available only to the
extent that payment would not otherwise commence in the year in which the
election is made; and

 

(b)                            such election shall not be effective if it would cause payment to
commence in the year in which the election is made that would not otherwise
commence in such year.

 

10

 

Article 8 - Plan Administrator

 

8.1.         Plan Administration and
Interpretation

 

The Plan Administrator shall oversee the
administration of the Plan. The Plan Administrator shall have complete control
and authority to determine the rights and benefits and all claims, demands and
actions arising out of the provisions of the Plan of any Participant, beneficiary,
deceased Participant, or other person having or claiming to have any interest
under the Plan. The Plan Administrator shall have complete discretion to interpret
the Plan and to decide all matters under the Plan. Such interpretation and
decision shall be final, conclusive and binding on all Participants and any
person claiming under or through any Participant, in the absence of clear and
convincing evidence that the Plan Administrator acted arbitrarily and
capriciously. Any individual(s) serving as Plan Administrator who is a
Participant will not vote or act on any matter relating solely to himself or
herself. When making a determination or calculation, the Plan Administrator
shall be entitled to rely on information furnished by a Participant, a
beneficiary, the Employer or the Trustee. The Plan Administrator shall have the
responsibility for complying with any reporting and disclosure requirements of ERISA.

 

8.2.         Powers, Duties,
Rules and Procedures

 

The Plan Administrator shall have such powers and
duties, may adopt such rules and tables, may act in accordance with such
procedures, may appoint such officers or agents, may delegate such powers and
duties, may receive such reimbursements and compensation, and shall follow such
claims and appeal procedures with respect to the Plan as it may establish.

 

8.3.         Information

 

In order to enable the Plan Administrator to perform
its functions, the Employer shall supply full and timely information to the
Plan Administrator on all matters relating to the compensation of Participants,
their employment, retirement, death, separation from service, and such
pertinent facts as the Plan Administrator may require.

 

8.4.         Indemnification
of Plan Administrator

 

The Employer agrees to indemnify and to defend to
the fullest extent permitted by law any officer(s) or employee(s) who
serve as Plan Administrator (including any such individual who formerly served
as Plan Administrator) against all liabilities, damages, costs and expenses (including
attorneys’ fees and amounts paid in settlement of any claims approved by the
Employer) occasioned by any act or omission to act in connection with the Plan,
if such act or omission is in good faith.

 

8.5.         Operation
of Plan and Claims Procedures

 

The Employer shall be responsible for the general operation
and administration of the Plan and for carrying out the provisions thereof. The
Employer shall be responsible for the expenses incurred in the administration
of the Plan. The Employer shall also be responsible for determining eligibility
for payments and the amounts payable pursuant to the Plan. The Employer shall
be entitled to rely conclusively upon all tables, valuations, certificates, opinions
and reports furnished by any actuary, accountant, controller, counsel or other
person employed or engaged by the Employer with respect to the Plan. The procedures
for filing claims for payments under the Plan are described below. For claims
procedures purposes, the “Claims Manager” shall be the Employer.

 

(a)   It is the intent of the Employer that benefits payable under the Plan
shall be payable without the Participant having to complete or submit any
claims forms. However, a Participant who believes he or she is entitled to a
payment under the Plan may submit a claim for payments in writing to the
Employer. Any claim for payments under the Plan must be made by the Participant
or his or her beneficiary in writing and state the claimant’s name and the
nature of benefits payable under the Plan on a form acceptable to the Employer.
If for any reason a claim for payments under the Plan is denied by the Employer,
the Claims Manager shall

 

11

 

deliver to the claimant a written explanation
setting forth the specific reasons for the denial, specific references to the
pertinent provisions of the Plan on which the denial is based, a description of
any additional material or information necessary for the claimant to perfect
the claim and an explanation of why such material or information is necessary, and
information on the procedures to be followed by the claimant in obtaining a
review of his or her claim, all written in a manner calculated to be understood
by the claimant. For this purpose:

 

(i)    the claimant’s claim shall be deemed to be filed when presented orally or
in writing to the Claims Manager;

 

(ii)   the Claims Manager’s explanation shall be in writing delivered to the
claimant within ninety (90) days of the date the claim is filed.

 

(b)   The claimant shall have sixty (60) days following his or her receipt of
the denial of the claim to file with the Claims Manager a written request for
review of the denial. For such review, the claimant or the claimant’s
representative may review pertinent documents and submit written issues and
comments.

 

(c)   The Claims Manager shall decide the issue on review and furnish the
claimant with a copy within sixty (60) days of receipt of the claimant’s
request for review of the claimant’s claim. The decision on review shall be in
writing and shall include specific reasons for the decision, written in a manner calculated to
be understood by the claimant, as well as specific references to the pertinent
provisions in the Plan on which the decision is based. If a copy of the
decision is not so furnished to the claimant within such sixty (60) days, the
claim shall be deemed denied on review. In no event may a claimant commence
legal action for benefits the claimant believes are due the claimant until the
claimant has exhausted all of the remedies and procedures afforded the claimant
by this Section 8.5.

 

(d)   Any review of an appeal of a determination with respect to the
Participant’s Total and Permanent Disability must meet the following standards:
the review does not afford deference to the initial adverse determination; the
review is conducted by an appropriate person who is neither the party who made
the initial adverse benefit determination that is the subject of the appeal nor
a subordinate of such party; the review provides for the appropriate person to
consult with health care professionals with appropriate training and experience
in the field of medicine involved in the medical judgment in deciding the
appeal of an adverse benefit determination that is based in whole or in part on
a medical judgment; and the review provides for the identification of the
medical or vocational experts whose advice was obtained in connection with the
claimant’s adverse benefit determination, without regard to whether the advice
was relied upon in making the determination. Furthermore, the ninety (90) day
period described in these procedures shall be reduced to forty-five (45) days
in the case of a claim of the Participant’s Total and Permanent Disability. The
forty-five (45) day period may be extended by thirty (30) days if the Claims Manager
determines the extension is necessary due to circumstances outside the control
of the Plan, and the claimant is notified prior to the end of the forty-five (45)
day period. If prior to the end of the thirty (30) day extension period, the
Claims Manager determines that additional time is necessary, the period may be
extended for a second thirty (30) day period, provided the claimant is notified
prior to the end of the first thirty (30) day
extension period and such notice specifies the
circumstances requiring the extension and the date as of which the Plan expects
to render a decision. The sixty (60) day period described in these procedures
shall be reduced
to forty-five (45) days with respect to
the appeal of the denial of the Participant’s claim of Total and Permanent
Disability. The forty-five (45) day
period may be extended by an additional forty-five (45) days if the Claims
Manager determines the extension is necessary to circumstances outside the
control of the Plan, and the claimant is notified prior to the end of the
initial forty-five (45) day period.

 

12

 

(e)   No
inquiry or question shall be deemed to be a claim or a request for a review of
a denied claim unless made in accordance with the claims procedure. The Claims
Manager may require that any claim for benefits and any request for a review of
a denied claim be filed on forms to be furnished by the Claims Manager upon request.
The Claims Manager may, in its discretion, hold one or more hearings on a claim
or a request for a review of a denied claim. Claimants may be represented by a
lawyer or other representative at their own expense, but the Claims Manager
reserves the right to require the claimant to furnish written authorization. A
claimant’s representative shall be entitled to copies of all notices given to the
claimant.

 

(f)    To
be considered timely under the Plan’s claim and review procedure, a claim must
be filed with the Employer within one (1) year after the claimant knew or
reasonably should have known of the principal facts upon which the claim is
based.

 

(g)   The exhaustion of the claim and review procedure is mandatory for
resolving every claim and dispute arising under this Plan. As to such claims
and disputes:

 

(i)    no claimant shall be permitted to commence any legal action to recover
Plan benefits or to enforce or clarify rights under the Plan under section 502
or section 510 of ERISA or under
any other provision of law, whether or not statutory, until the claim and
review procedure set forth herein have been exhausted in their entirety; and

 

(ii)   in any such legal action all explicit and all implicit determinations by
the Employer (including, but not limited to, determinations as to whether the
claim, or a request for a review of a denied claim, was timely filed) shall be
afforded the maximum deference permitted by law.

 

(h)   No legal action to recover Plan benefits or to enforce or clarify rights
under the Plan under section 502 or section 510 of ERISA or under any other
provision of law, whether or not statutory, may be brought by any claimant on
any matter pertaining to this Plan unless the legal action is commenced in the
proper forum before the earlier of:

 

(i)    thirty (30) months after the claimant knew or reasonably should have
known of the principal facts on which the claim is based, or

 

(ii)   six (6) months after the claimant has exhausted the claim and review
procedure.

 

(i)    Knowledge
of all facts that a Participant knew or reasonably should have known shall be
imputed to every claimant who is or claims to be a beneficiary of the
Participant or otherwise claims to derive an entitlement by reference to the
Participant for the purpose of applying the previously specified periods.

 

Article 9 - Amendment and Termination

 

9.1.         Amendments

 

The Employer shall have the right to amend the Plan
from time to time, subject to Section 9.3, by an instrument in writing
which has been executed on the Employer’s behalf by its duly authorized officer.
Notwithstanding anything herein to the contrary, in no event shall any
amendment be made in a manner that is inconsistent
with the requirements to avoid adverse federal tax consequences
under section 409A of the Code.

 

9.2.         Termination of Plan

 

This Plan is strictly a voluntary undertaking on the
part of the Employer and shall not be deemed to
constitute a contract between the Employer and any Eligible Employee (or any other employee) or a consideration for, or an inducement or condition
of employment for, the performance of the services by any Eligible Employee (or other employee).
The Employer reserves the right to terminate the Plan at any time, subject to Section 9.3,
by an instrument in writing which has been executed on the Employers behalf

 

13

 

by its duly authorized officer. Notwithstanding
anything to the contrary in this Plan, each Participant’s Vested benefit shall
be distributed immediately in a lump sum if this Plan terminates in the
following circumstances:

 

(a)   Within thirty (30) days before or twelve (12) months after a change in
the ownership or effective control of the Employer, or in the ownership of a
substantial portion of the assets of the Employer as described in section 409A(2)(A)(v)
of the Code, provided that termination of this Plan was effected through an
irrevocable action taken by the Employer and provided further that all
distributions are made no later than twelve (12) months following such
termination of the Plan and that all the Employer’s arrangements which are
substantially similar to the Plan are terminated so all Participants and any
participants in the similar arrangements are required to receive all amounts of
compensation deferred under the terminated arrangements within twelve (12) months
of the termination of the arrangements;

 

(b)   Upon the Employer’s dissolution or with the approval of a bankruptcy
court provided that the amounts deferred under the Plan are included in each
Participant’s gross income in the latest of (i) the calendar year in which
the Plan terminates; (ii) the calendar year in which the amount is no
longer subject to a substantial risk of forfeiture; or (iii) the first
calendar year in which the distribution is administratively practical; or

 

(c)   Upon the Employer’s termination of this and all other account balance
plans (as referenced in Section 409A of the Code or the regulations
thereunder), provided that all distributions are made no earlier than twelve (12)
months and no later than twenty-four (24) months following such termination, provided
further that the termination of this Plan does not occur proximate to the
downturn in the financial health of the Employer and provided further that the
Employer does not adopt any new account balance plans for a minimum of three (3) years
following the date of such termination.

 

9.3.         Existing Rights

 

No amendment or termination of the Plan shall
adversely affect the rights of any Participant with respect to amounts that
have been credited to his or her Account prior to the date of such amendment or
termination, and each Participant’s rights after termination of the Plan shall
remain subject to the terms of the Plan prior to its termination.

 

Article 10 - Miscellaneous

 

10.1.       Unfunded and
Unsecured

 

The Plan shall at all times be considered entirely
unfunded both for tax purposes and for purposes of Title I of the ERISA, and no
provision shall at any time be required with respect to segregating assets of
the Employer for payment of any amounts under the Plan. Any funds invested
under the Plan shall continue for all purposes to be part of the general assets
of the Employer and available to the general creditors in the event the
Employer becomes Insolvent. The Employer shall promptly notify the Trustee and
the applicable Participants of such Insolvency. No Participant or any other
person shall have any interests in any particular assets of the Employer by reason of the right to receive a benefit under the Plan and to the extent
the Participant or any other person acquires a
right to receive a benefit under the Plan, such right shall be no greater than the right of any general unsecured creditor. The Plan constitutes a
mere promise by the Employer for the
payment of benefits payable under the Plan to the Participants in the future. Nothing
contained in the Plan shall constitute a guaranty by the Employer or any other
person or entity that any funds in Trust or the assets of the Employer will be
sufficient to pay any benefit under the Plan. Furthermore, no Participant shall
have any right to a benefit under the Plan except in accordance with the terms
and conditions of the Plan.

 

14

 

10.2.       Non-Assignability

 

None of the benefits, payments, proceeds or claims
of any Participant or beneficiary shall be subject to any claim of any creditor
of any Participant or beneficiary and, in particular, the same shall not be subject
to attachment or garnishment or other legal process by any creditor of such
Participant or beneficiary, nor shall any Participant or beneficiary have any
right to alienate, anticipate, commute, pledge, encumber or assign any of the
benefits or payments or proceeds that he or she may expect to receive, contingently
or otherwise, under the Plan. Notwithstanding the foregoing, payments of Vested
amounts under this Plan may be made to an individual other than the Participant
to the extent necessary to fulfill a domestic relations order (as defined in
section 414 (p)(1)(B) of the Code).

 

10.3.       Limitation of Participants’ Rights

 

Nothing contained in the Plan shall confer upon any
person a right to be employed or to continue in the employ of the Employer, or interfere in any way with the right of
the Employer to terminate the employment of a Participant in the Plan at any
time, with or without cause.

 

10.4.       Participants Bound

 

Any action with respect to the Plan taken by the
Plan Administrator or the Employer or the Trustee or any action authorized by
or taken at the direction of the Plan Administrator, the Employer or the
Trustee shall be conclusive upon all Participants and beneficiaries entitled to
benefits.

 

10.5.       Receipt and Release

 

Any payment to any Participant or beneficiary in
accordance with the provisions of the Plan shall, to the extent thereof, be in
full satisfaction of all claims against the Employer, the Plan Administrator
and the Trustee under the Plan, and the Plan Administrator may require such
Participant or beneficiary, as a condition precedent to such payment, to
execute a receipt and release to such effect. If any Participant or beneficiary
is determined by the Plan Administrator to be incompetent by reason of physical
or mental disability (including minority) to give a valid receipt and release, the
Plan Administrator may cause the payment or payments becoming due to such
person to be made to another person for his or her benefit without
responsibility on the part of the Plan Administrator, the Employer or the
Trustee to follow the application of such funds.

 

10.6.       Governing Law

 

The Plan shall be construed, administered, and
governed in all respects under and by the laws of the state in which the
Employer maintains its primary place of business. If any provision shall be
held by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall continue to be fully effective.

 

10.7.       Headings and Subheadings

 

Headings and subheadings in this Plan are inserted
for convenience only and are not to be considered in the construction of the
provisions hereof.

 

10.8.       Distributions Upon Income Inclusion Under Section 409A of the Code

 

Upon the inclusion of any amount into a Participant’s
income as a result of the failure of this Plan to comply with the requirements
of section 409A of the Code, to the extent such tax liability can be covered by
the amount of the Participant’s Account, a distribution shall be made as soon
as is administratively practicable following the discovery of the Plan failure.

 

15

 

Appendix A

 

Performance-Based Compensation

 

If the Employer has elected to offer the deferral of
Performance-Based Compensation by making the election in Section 4 of the
Adoption Agreement, then the following rules shall apply:

 

A.1          Definitions

 

a.     Performance-Based Compensation
means the compensation paid by the Employer as set forth in the Adoption
Agreement as Performance-Based Compensation. In all events, Performance-Based
Compensation definition must meet the following criteria:

 

(i)    the compensation must be based on services performed over a period of at
least 12 months;

 

(ii)   the payment or amount of the compensation must be contingent on the
satisfaction of pre-established organizational or individual performance
criteria (established no later than 90 days after the beginning of the Service
Period); and

 

(iii)  the compensation cannot include any amount or portion of any amount that
will be paid either regardless of performance or based on a level of
performance that is substantially certain to be met at the time the performance
criteria are established.

 

The term Performance-Based Compensation includes
payments based upon subjective performance criteria, provided that: (i) the
subjective performance criteria are bona fide and relate to the performance of
the Eligible Employee, a group of employees that includes the Eligible Employee,
or a business unit for which the Eligible Employee provides services (which may
include the entire organization); and (ii) The determination that any
subjective performance criteria have been met is not made by the Eligible
Employee or a family member of the Eligible Employee (as defined in section 267(c)(4) of
the Code applied as if the family of an individual includes the spouse of any
member of the family), or a person under the effective control of the Eligible
Employee or such a family member, and no amount of the compensation of the
person making such determination is effectively controlled in whole or in part
by the Eligible Employee or such a family member.

 

In all events, the Employer is responsible for
determining whether the actual definition of Performance-Based Compensation
used in this Plan conforms with the requirements of Code section 409 A.

 

b.     Performance-Based Compensation Elective Deferral means the portion of the Performance-Based Compensation that is deferred
by a Participant, according to this Appendix A.

 

c.     Service Period means a period of at
least 12 months with respect to which Performance-Based Compensation is
otherwise determined and payable.

 

A.2          Performance-Based Compensation Elective Deferrals

 

If this
Appendix A is applicable, Performance-Based Compensation Elective Deferral
elections shall be made on such Election Forms provided by the Plan
Administrator and in accordance with the following provisions:

 

(a)           Performance-Based Compensation Elective Deferral Elections. Provided that an Eligible Employee performs services continuously from
the later of the beginning of the Service Period or

 

16

 

the date the performance criteria for the
Performance-Based Compensation are established through the date of the election
described herein, an Eligible Employee may, by completing an Election Form and
filing it with the Plan Administrator no later than six months before the end
of the applicable Service Period irrevocably elect to defer a percentage or
dollar amount of Performance-Based Compensation otherwise payable to the
Eligible Employee. Any election to defer a percentage of Performance-Based
Compensation shall be made in whole percentage increments up to 100%, after
taking into account required tax withholding and payroll deductions for other
benefit programs. In addition, in no event may an election to defer
Performance- Based Compensation be made after the compensation has become
readily ascertainable. An
election to defer a percentage or dollar amount of Performance-Based
Compensation for any Service Period (or any election not to defer any amount of
Performance-Based Compensation for a Service Period) shall not apply for
subsequent payments of Performance-Based Compensation and a separate deferral
election shall be required for each Service Period’s payment of
Performance-Based Compensation.

 

(b)           Initial Performance-Based Compensation Elective Deferral Election Upon an
Individual’s First Becoming Eligible After the Plan’s Effective Date. If an Eligible Employee is not otherwise
eligible to participate in another individual account non-qualified deferred
compensation plan, and the individual first becomes eligible for this Plan
after the Effective Date and during a Service Period, the Eligible Employee may
irrevocably elect to defer a percentage or dollar amount of Performance-Based
Compensation to be earned by the Eligible Employee in the same Plan Year as
long as the election is made within 30 days following the date the individual
first becomes an Eligible Employee and applies only to Performance-Based
Compensation earned after the election is made. The maximum amount of
Performance-Based Compensation taken into account for this purpose shall be the
total amount of Performance-Based Compensation for such Service Period, multiplied
by the ratio of remaining days in the Service Period over the total number of
days in the Service Period (after taking into account required tax withholding
and payroll deductions for other benefit programs).

 

A.3          Accounts

 

All Performance-Based Compensation Elective
Deferrals shall be credited to the Participant’s Elective Deferral Account. For
purposes of measuring the amounts to be credited (or debited) to a Participant’s
Account attributable to Performance-Based Compensation Elective Deferrals, a
Participant or the Participant’s investment advisor may select the deemed
investment options in accordance with Article 5.

 

A.4          Vesting

 

The amounts credited to the Account of each
Participant attributable to Performance-Based Compensation Elective Deferrals, as
adjusted based upon the measuring investments, shall be subject to the vesting
requirements set forth in, or established under, the Stock Plan.

 

A.5          Payments

 

Distributions of all Performance-Based Compensation
Elective Deferrals credited to a Participant’s Account for any Plan Year shall be paid in the same time and manner as
any Elective Deferrals credited to the Participant’s Account for the same Plan
Year, in accordance with Section 7.1 and 7.2. If there is no such election
in effect, then all Performance-Based Compensation Elective Deferrals credited to a Participant’s
Account for a Plan Year will be
distributed in a single sum payment upon the earlier of the date specified in Section 7.3
(separation from service) or Section 7.4 (death).

 

17

 

A.6          Unforeseeable Emergency

 

Performance-Based Compensation Elective Deferral
elections under this Appendix A shall be terminated to the extent required by
section 401(k) of the Code, if the Participant elects to receive a
hardship distribution under a tax-qualified cash or deferred arrangement
subject to section 401(k) of the Code maintained by the Employer. If
Performance-Based Compensation Elective Deferral elections are terminated based
on the foregoing, any later Performance-Based Compensation Elective Deferral
election can be made after the expiration of the suspension of deferrals under
the section 401(k) plan and at the time otherwise required under Section A.2(a) above.
In addition, all amounts attributable to Performance-Based Compensation
Elective Deferral elections shall not be available for withdrawal under Section 7.5
(Unforeseeable Emergency) of the Plan.

 

A.7          Matching

 

Performance-Based Compensation Elective Deferrals
are eligible for Matching Deferrals under Section 4.2 of the Plan. 

 

18

 

Merrill Lynch Non-Qualified Deferred Compensation
Plan 

Adoption Agreement

 

Please complete the information requested in the
Adoption Agreement to establish the specific provisions of your plan. This
document and the Merrill Lynch Non-Qualified Deferred Compensation Plan
document govern the rights of Plan participants and should, therefore, be
disclosed to participants and retained as part of your permanent records.

 

1. Employer Information

 

	
  A.

  	
  Name of Plan:

  	
  Simon Property Group, L.P. Deferred Compensation
  Plan

  
	
   

  	
   

  	
   

  
	
  B.

  	
  Name and address of employer sponsoring the Plan:

  
	
   

  	
  (Please provide Employer’s business name)

  
	
   

  	
   

  	
  Simon Property Group, L.P.

  
	
   

  	
   

  	
  Business Name

  
	
   

  	
   

  	
  225 West Washington Street

  
	
   

  	
   

  	
  Address

  
	
   

  	
   

  	
  Indianapolis, IN 46204

  
	
   

  	
   

  	
  City

  	
  State

  	
  Zip Code

  
	
   

  	
   

  	
   

  
	
  C.

  	
  Provide Employer’s primary contact for the Plan
  and telephone and fax numbers. Also, include the Employer’s tax
  identification number.

  
	
   

  	
   

  	
  John M. Yahwak, Vice President,
  Compensation & Benefits

  
	
   

  	
   

  	
  Primary Contact

  	
  Title

  
	
   

  	
   

  	
  317-263-2207

  	
  317-263-2474

  
	
   

  	
   

  	
  Telephone Number

  	
  Fax Number

  
	
   

  	
   

  	
  EIN 35-1903854

  
	
   

  	
   

  	
  Employer Tax Identification Number (TIN)

  
							

 

	
  D.

  	
  Give the first day of the 12-month period for
  which the Employer pays taxes: 

  	
  January
  1

  	
  .

  

 

2. Plan Information

 

	
  A.

  	
  What
  is the effective date of the Plan?

  	
  Restatement
  effective January 1, 2005

  
	
   

  	
   

  	
   

  
	
  B.

  	
  Plan Year. (The Plan Year for this Plan is defined
  as the calendar year. If this is a new Plan, please complete the following
  section.)

  
				

 

The Plan’s initial Plan Year shall be the
period beginning                   ,
and ending December 31, 20  . Thereafter, the
Plan Year shall be the 12-month period ending December 31 of each calendar
year.

 

19

 

3. Eligible Employees

 

The following persons or classes of persons shall be
Participants (enter the names or positions of individuals eligible to
participate or the criteria used to identify Participants; e.g., “Those key
employees of the Employer selected by the Compensation Committee of the Board
of Directors”).

 

Those key employees of the Employer selected by the
Compensation Committee of the Board of Directors of the Managing Partner

 

 

 

4. Compensation

 

Compensation is used to determine the amount of
Elective Deferrals a Participant can elect. The Plan allows for deferrals of “Compensation.”

 

For purposes of the Plan, Compensation will be
determined before giving effect to Elective Deferrals and other salary
reduction amounts that are not included in the Participant’s gross income under
Code section 125, 401(k), 402(h) or 403(b).

 

Compensation under
the Plan is defined as (select one):

 

o    The Participant’s cash wages, salaries, and other cash amounts received
in the course of employment with the Employer or an Affiliate to the extent
that the amounts are includable in gross income, and otherwise reported on the
Eligible Employee’s Form W-2.

 

o    The
regular or base cash salary or wages payable to the individual by the Employer
or an Affiliate, excluding commissions and bonuses and any other special, unusual,
non-recurring or non-regular items of compensation.

 

Option for Performance-Based Compensation:

 

If the Employer wishes to offer the deferral of
Performance-Based Compensation, please indicate below:

 

x          Employer elects to offer the deferral of Performance-Based Compensation, in
accordance with the rules set forth in Appendix A.

 

Performance-Based Compensation is defined as:

 

Amounts earned and awarded under the Simon
Property Group, L.P. 1998 Stock Incentive Plan, as the
same has been or may be modified or
supplemented from time-to-time, or any successor thereto (the “Stock Plan”).

 

 

 

 

Note:      To qualify as “Performance-Based Compensation” under the Plan and section
409A of the Code, the compensation must satisfy
certain requirements set forth in Appendix A, which include the following:

 

Performance-Based Compensation means the compensation paid by the Employer as set forth in the Adoption
Agreement as Performance-Based
Compensation. In all events, Performance-Based Compensation definition must
meet the following criteria:

 

(i)            the compensation must be based on services performed over a period of at
least 12 months;

 

20

 

(ii)          the
payment or amount of the compensation must be contingent on the satisfaction of
pre-established organizational or individual performance criteria (established
no later than 90 days after the beginning of the Service Period); and

 

(iii)         the
compensation cannot include any amount or portion of any amount that will be
paid either regardless of performance or based on a level of performance that
is substantially certain to be met at the time the performance criteria are
established.

 

In
all events, the Employer is responsible for determining whether the actual
definition of Performance-Based Compensation used in this Plan conforms with
the requirements of Code section 409A.

 

5.     Deferrals

 

A.    Elective
Deferrals. Participants may elect
to reduce their Compensation and to have Elective Deferrals credited to their
Accounts by making an election under the Plan (which may be changed each year
as described in the Plan), but no Participant may defer more than 100% (1% to
100% (after taking into account required tax withholding and payroll deductions
for other benefit programs) in whole increments) of his or her Compensation for
a year.

 

B.    Matching
Deferrals. If the Employer elects
to match Elective Deferrals, the Employer must specify below the Determination
Period for which the Matching Deferrals are to be contributed to the Trust, the
matching rate to be applied, and the amount of the Participant’s Elective
Deferral that will be matched. The Employer may also elect to decide each Plan
Year whether Matching Deferrals will be made and, if so, what that Plan Year’s
matching rate will be. For example, the Employer may decide to credit a
Matching Deferral of, for example, 50 cents for each dollar of a Participant’s
Elective Deferrals, but limit the match to the first 5% of Compensation
deferred by the Participant. If the Employer wishes to set a maximum dollar
amount on the amount of Elective Deferrals that will be matched, insert the
dollar amount and interval over which that amount is to be measured. For
example the Employer could provide that the Employer will not match Elective
Deferrals in excess of $1,000 per month. Matching Deferrals can be made after
each payroll period, monthly, quarterly or annually, at the Employer’s
discretion. Matching Deferrals will be subject to the vesting schedule selected
in Item 6A.

 

Select One:

 

o    No Matching Deferrals will
be credited.

 

o    The Employer will credit
to Participants’ Accounts a Matching Deferral amount as determined in this Item
5B as of the end of
            each payroll
period,            each
calendar month,
             each calendar
quarter, or            each
calendar year. The Employer will credit Matching Deferrals for each Participant
equal to       % of the first         %
of the Participant’s Compensation which is elected as an Elective Deferral, but
no Matching Deferral will be made on Elective Deferrals in excess of $            
per            (specify time
period if applicable).

 

x   The Employer will decide
from year to year whether Matching Deferrals will be made and will notify
Participants annually of the manner in which Matching Deferrals will be calculated
for the subsequent year. Absent an affirmative action by the Employer to
provide for Matching Deferrals for a particular year, no Matching Deferrals
will be made for that year.

 

C.    Incentive
Deferrals. The Employer may at any
time and from time to time determine to credit the Account of a Participant
with an amount determined by the Employer in its sole and absolute discretion
if the Employer elects to do so in this Item 5C. If an affirmative election is
made in this Item 5C, the purpose or purposes for authorizing Incentive
Deferrals to be credited to an Account of a Participant, the amount to be so
credited, the terms and conditions, if any, that may apply with respect

 

21

 

to
the crediting of such amount, and the vesting schedule that may apply with
respect to the amount so credited, shall be reflected in an attachment to this
Adoption Agreement.

 

Incentive
Deferrals will be distributed according to the election in effect for Elective
Deferrals credited in the Plan Year in which the Participant first earned the
right to the Incentive Deferrals, regardless of whether the right was subject
to any restrictions. In the absence of any such election, Incentive Deferrals
credited for a Plan Year will be paid in a single lump sum payment upon a
Participant’s separation from service (in accordance with Section 7.4) or
death (in accordance with Section 7.5).

 

The
Employer hereby elects to be able to determine to credit the Account of a
Participant with Incentive Deferrals pursuant to and in accordance with Section 4.3
of the Plan and this Item 5C:

 

x  Yes                                                    o  No

 

6.     Vesting of
Matching Deferrals and Incentive Deferrals  

 

A.    Vesting Schedule for Matching Deferrals.

 

Indicate
below how the portion of a Participant’s Account attributable to Matching
Deferrals is to vest by selecting one of the following six vesting schedules (select
one group of the three different groups ((1), (2), or (3) below) and
then select one option within group):

 

o    (1) The following three options base the vesting of Matching Deferrals
on a Participant’s Years of Service under the Plan:

 

o    100%
immediate.

 

o    100% after
         Years of Service.

 

x   20% after One Years of Service and an additional 20% for
each year thereafter.

 

o    (2) (CLASS YEAR VESTING)  The following two options base the vesting of Matching Deferrals on a
Participant’s Years of Service under the Plan performed after the Plan Year for which Matching Deferrals
are credited:

 

o    For
Matching Deferrals in a given Plan Year, 100% after           Years
of Service performed beginning after the last day of the Plan Year in which the
Matching Deferrals are credited.

 

o    For
Matching Deferrals in a given Plan Year, 20% per Year of Service performed
beginning after the last day of the Plan Year in which the Matching Deferrals
are credited.

 

o    (3) The
following option is available if the foregoing options are not suitable and you
want a more specific vesting schedule:

 

o    Other
vesting schedule for Matching Deferrals. (specify):

 

 

 

 

22

 

B.    Vesting
Schedule for Incentive Deferrals.

 

Indicate
how the portion of a Participant’s Account attributable to Incentive Deferrals
is to vest.

 

Unless
otherwise specified by the Employer at the time a Incentive Deferral is made, Incentive
Deferrals vest in accordance with the following schedule (select one
group of the three different groups ((1), (2), or (3) below) and then
select one option within group):

 

(1)   The
following three options base the vesting of Incentive Deferrals on a
participant’s Years of Service under the Plan

 

o  100% immediate.

 

o  100% after        Years
of Service.

 

x  20% after One Years of
Service and an additional 20% for each year thereafter.

 

(2)   (CLASS YEAR VESTING) The following two options base the vesting of Incentive Deferrals on a
Participant’s Years of Service under the Plan performed after the Plan Year in
which Incentive Deferrals are credited:

 

o  For Incentive Deferrals in
a given Plan Year, 100% after        Years of
Service performed beginning after the last day of the Plan Year in which the
Incentive Deferrals are credited.

 

o  For Incentive Deferrals in
a given Plan Year, 20% per Year of Service performed beginning after the last
day of the Plan Year in which the Incentive Deferrals are credited.

 

(3)   The
following option is available if the foregoing options are not suitable and you
want a more specific vesting schedule:

 

o  Other vesting schedule for
Incentive Deferrals. (specify):

 

 

 

C.    Vesting
Upon Attainment of Retirement Age.

 

In
addition to A. and B. above, indicate below whether a Participant’s Account
attributable to Matching Deferrals and/or Incentive Deferrals should become
fully Vested upon attainment of Retirement Age by checking the box below and
indicating whether it applies to Matching Deferrals, Incentive Deferrals or
both:

 

The
following option will provide for full vesting upon attainment of Retirement
Age:

 

o    100% immediate vesting
upon a Participant’s attainment of Retirement Age.

 

The
foregoing election shall apply to the portion of
a Participant’s Account attributable to (select
either or both of the following):

 

o    Matching Deferrals

 

o    Incentive Deferrals

 

D.    Vesting
Service.

 

1.     Indicate
whether you will give credit for vesting service for
time spent with a predecessor employer, and if so, specify the maximum number
of years and the type of predecessor service for which credit will be given. For
vesting purposes (select one):

 

x   Service with a predecessor employer will not be considered.

 

 

o    Service (up to a maximum
of              
years) with the following employer(s) will be considered:

 

 

 

2.     Under
the Plan, if you maintain a 401(k) plan, years of service for vesting
purposes include all years of full-time service measured from the employee’s
date of employment. If you maintain a 401(k) plan, the rules in that
plan govern the calculation of vesting service for employees covered under that
plan. If you would like to apply other rules on determining vesting
service under this Plan, please indicate below:

 

o    Service prior to an
Eligible Employee’s eligibility date under this Plan shall be disregarded.

 

o    Service prior to adoption
of this Plan shall be disregarded.

 

o    Service prior to an
Eligible Employee’s attainment of age               
shall be disregarded.

 

o    Other rules on
calculating service for vesting purposes under this Plan:

 

 

 

 

7.     Distribution
Options

 

Cashout
of Small Amounts. The Employer may elect
to add a cashout rule under which the Vested amount of a Participant’s
Account will automatically be paid as a single sum cash distribution as soon as
practicable after separation from service if such Vested amount does not exceed
some stated amount.

 

x   The Employer hereby elects
to provide for a cashout distribution upon a Participant’s separation from
service if the Vested amount in the Participant’s Account does not exceed $15,500
or the current 402(g) limit.

 

No
Installments Before Attainment of Retirement Age. The
Employer may elect to prohibit the payment of installment distributions if a
Participant’s separation from service occurs before Retirement Age.

 

o    Notwithstanding any
Participant’s form of distribution election, if the Participant separates from
service before attainment of Retirement Age, distributions hereunder upon such
separation from service shall only be made in a single sum cash payment.

 

8.     Accounts

 

If it is desired
that the Trust assets be invested in accordance with Participants’ deemed
investment elections, each Participant’s Account balance should be invested as
a separate account. Otherwise, the Account balances of all Participants may be
invested as a single fund (select one):

 

x   Account
balances are to be invested separately.

 

o    Account balances are to be
invested as a single fund.

 

9.     Investments

 

Investment Direction. The
Employer may direct the investment of Trust assets or direct the Trustee to
invest Trust assets in accordance with Participants’ deemed investment
elections (select one):

 

24

 

x   Trust assets are to be
invested in accordance with Participants’ deemed investment elections made in
accordance with the terms of the Plan, until further notice from the Employer.

 

o    Trust assets are to be
invested in accordance with the Employer’s attached investment instructions, until
further notice from the Employer.

 

10.  Retirement
Age

 

The Retirement Age
under the Plan is the normal retirement age specified in 1. below and, if elected by the Employer, the
early retirement age elected in 2. below.

 

1.     Normal
Retirement Age. A Participant’s normal retirement age shall be (select one):

 

x   attainment of age 59 1/2 while employed.

 

o    attainment of the later of
age      or the      anniversary
of participation in the Plan, while employed.

 

2.     Early
Retirement Age. A Participant’s early retirement age shall be (select one):

 

o    Attainment of age      while
employed.

 

x   Attainment of age 55 and
10 Years of Service (for vesting purposes) while employed.

 

11.  Withdrawals
on Account of Unforeseeable Emergency

 

The Employer may
permit a Participant to request to receive a distribution of all or a portion
of the Vested amounts allocated to the Account of the Participant in accordance
with the provisions and requirements of Section 7.5 of the Plan and this
Item 10 if the Employer affirmatively elects to permit such distributions in
this Item 10.

 

The Employer hereby
elects to permit withdrawals by a Participant of all or a portion of the Vested
amounts allocated to the Account of the Participant in the event of an
Unforeseeable Emergency under the terms of the Plan:

 

x  Yes                                                    o No

 

If the Employer
elects to permit distributions in the event of an Unforeseeable Emergency (as
that term is defined in Section 7.5 of the Plan), a request for such a
distribution must be made by a Participant in accordance with the requirements
of Section 7.5, if an Unforeseeable Emergency is determined to have
occurred, the amount distributed to the Participant shall not exceed the maximum amount permitted in Section 7.5,
and if an amount is so distributed, Elective Deferrals of the Participant will
immediately terminate and the Participant may not again elect to defer
compensation under Section 4.1 of the Plan until the enrollment period for
the Plan Year that begins at least twelve (12) months after such distribution.

 

12.  Administration

 

Plan
Administrator. The Plan Administrator is legally responsible for the operation of the
Plan, including:

 

·      Keeping
track of which employees are eligible to
participate in the Plan and the date each employee becomes eligible to
participate.

 

·      Maintaining
Participants’ Accounts, including all sub-accounts required for different
contribution types and payment elections, and keeping track of all elections
made by Participants under the Plan and any other relevant information.

 

·      Transmitting
important communications to the Participants, and obtaining relevant
information from Participants such as
changes in investment selections.

 

25

 

·      Filing
important reports required to be submitted to governmental agencies. 

 

The Plan
Administrator will be the person or persons identified below:

 

 

	
  John
  Rulli

  	
   

  	
  Stephen
  Sterrett

  	
   

  	
  Andrew
  Juster

  
	
  Name

  	
   

  	
  Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive
  Vice President and

  	
   

  	
  Executive
  Vice President and

  	
   

  	
  Executive
  Vice President and

  
	
  Chief
  Administrative Officer

  	
   

  	
  Chief
  Financial Officer

  	
   

  	
  Treasurer

  
	
  Title

  	
   

  	
  Title

  	
   

  	
  Title

  

 

26

 

13.  Signatures

 

After reviewing the
Adoption Agreement, enter the current date and the name of the Employer. The
signature of the Employer or the person signing for the Employer must be
witnessed. Note that the person signing for the Employer must be authorized to
do so, such as by a resolution of the Employer’s board of directors or
governing bylaws.

 

While the Merrill
Lynch Non-Qualified Deferred Compensation Plan, including this Adoption Agreement,
has been designed in a manner to permit Participants to defer federal income
tax on amounts credited to their accounts until the amounts are actually paid, neither
Merrill Lynch, Pierce, Fenner & Smith Incorporated, the sponsor of
this document, nor any of its affiliates (“Merrill Lynch”) provide any
assurances of that result in the Employer’s particular situation or assume any
responsibility in this regard. The applicable federal law in this area (in
particular, section 409A of the Code) is complex and changes from time to time
Please consult your tax advisor regarding the tax consequences of this Plan to
you and your employees. In addition, please consult your independent legal
counsel with respect to securities law issues. By signing this Adoption
Agreement, the Employer acknowledges that no representations or warranties as
to the tax consequences to the Employer and Participants of the operation of
this Plan have been made by Merrill Lynch.

 

 

Simon
Property Group Administrative Services Partnership, L.P.,

a Delaware
limited partnership

 

By:          M.S. Management Associates, Inc.,
a Delaware corporation,

its general partner

 

	
   

  	
   

  	
   

  
	
  Name
  of Employer (Print or Type)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
  WITNESS

  
	
   

  	
   

  	
  /s/ James M Barkley

  
	
  Authorized
  Signature

  	
   

  	
  Signature

  
	
  John
  Rulli

  	
   

  	
  James
  M Barkley

  
	
  /s/ John Rulli

  	
   

  	
   

  
	
  Print
  Name and Title

  	
   

  	
  Print
  Name and Title

  
	
  Executive
  Vice President and

  	
   

  	
  Secretary

  
	
  Chief
  Administrative Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
  December 31,
  2008

  	
   

  	
  Date
  December 31,
  2008

  

 

27

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