Document:

Exhibit
10.2

 

FORM OF STOCK UNIT AWARD AGREEMENT

 

THE MACERICH COMPANY

 

STOCK UNIT AWARD AGREEMENT
2003 EQUITY INCENTIVE PLAN

 

	
  Participant Name:

  	
   

  	
   

  
	
  Soc. Sec. No.:

  	
   

  	
   

  
	
  No. Stock Units:

  	
   

  	
  (1)

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
  [ 33 1/3% of the Stock
  Units (as defined below) on each anniversary of the Award Date, beginning
  [first anniversary] and ending [third anniversary].  ]

  
	
   

  	
   

  	
   

  
	
  Award Date:

  	
   

  	
                        ,
  20    

  

 

 

THIS AGREEMENT is
among THE
MACERICH COMPANY, a Maryland corporation (the “Corporation”), THE MACERICH
PARTNERSHIP L.P., a Delaware limited partnership (the “Operating
Partnership”), and the employee named above (the “Participant”), and is
delivered under The Macerich Company 2003 Equity Incentive Plan, which includes
any applicable programs under the Plan (the “Plan”).

 

W
I  T  N
E  S  S
E  T  H

 

WHEREAS, pursuant
to the Plan, the Corporation has granted to the Participant with reference to
services rendered and to be rendered to the Company, effective as of the Award
Date, a stock unit award (the “Stock Unit Award” or “Award”), upon the terms
and conditions set forth herein and in the Plan.

 

NOW THEREFORE, in
consideration of services rendered and to be rendered by the Participant and
the mutual promises made herein and the mutual benefits to be derived therefrom,
the parties agree as follows:

 

1.                                      Defined
Terms.  Capitalized terms used
herein and not otherwise defined herein shall have the meaning assigned to such
terms in the Plan.

 

2.                                      Grant.  Subject to the terms of this Agreement and
the Plan, the Corporation grants to the Participant a Stock Unit Award with
respect to an aggregate number of Stock Units (the “Stock Units”) set forth
above.  The consideration for the shares
issuable with respect to the Stock Units on the terms set forth in this
Agreement includes services and the rights hereunder in an amount not less than
the minimum lawful consideration under Maryland law.

 

(1) Subject to adjustment
under Section 6.2 of the Plan and the terms of this Agreement.

 

1

 

3.                                      Vesting.  The Award shall vest and become
nonforfeitable (subject to Section 6.4 of the Plan), with respect to the
portion of the total number of Stock Units comprising the Award (subject to
adjustment under Section 6.2 of the Plan) on each of the anniversaries of
the Award Date until the Award is fully vested, as reflected in the Vesting
Schedule above, subject to earlier termination or acceleration as provided
herein or in the Plan.

 

4.                                      Continuance
of Employment Required. 
Except as otherwise provided in Sections 8(c) or 9 or pursuant to the
Plan, the Vesting Schedule requires continued service through each
applicable vesting date as a condition to the vesting of the applicable
installment and rights and benefits under this Agreement.  Partial service, even if substantial, during
any vesting period will not entitle the Participant to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or
following a termination of employment or service as herein provided in
Section 8 below or under the Plan.

 

5.                                      Dividend
and Voting Rights.

 

(a)                                  Limitations
on Rights Associated with Units. 
The Participant shall have no rights as a stockholder of the Company, no
dividend rights (except as expressly provided in Section 5(b) with respect
to Dividend Equivalent Rights) and no voting rights, with respect to the Stock
Units and any shares of Common Stock underlying or issuable in respect of such
Stock Units until such shares of Common Stock are actually issued to and held
of record by the Participant.  No
adjustments will be made for dividends or other rights of a holder for which
the record date is prior to the date of issuance of the stock certificate.

 

(b)                                  Dividend
Equivalent Rights Distributions. 
As of any applicable dividend or distribution payment date, the
Participant shall receive a cash payment on the dividend payment date in an
amount equal to the amount of the Dividend Equivalent Rights multiplied by the
number of Units in the Account as of the applicable dividend record date.

 

6.                                      Restrictions
on Transfer.  Prior to the time
they vest, neither the Stock Units comprising the Award nor any other rights of
the Participant under this Agreement or the Plan may be transferred, except as
expressly provided in Section 1.8 and 4.1 of the Plan.  No other exceptions have been authorized by
the Committee.

 

7.                                      Timing
and Manner of Distribution with Respect to Stock Units. Any Stock Unit
credited to a Participant’s Stock Unit Account will be distributed in shares of
Common Stock as it vests.  The
Participant or other person entitled under the Plan to receive the shares shall
deliver to the Company any representations or other documents or assurances
required pursuant to Section 6.4 of the Plan.  Pursuant to Section 1.7 of the Plan, fractional share
interests shall be disregarded, but may be accumulated.  The Committee, however, may determine that
cash, securities or other property will be paid or transferred in lieu of
fractional share interests.

 

8.                                      Effect
of Termination of Employment.

 

(a)                                  Forfeiture
after Certain Events.  Except as
provided in Sections 8(c) and 9 hereof, the Participant’s Stock Units shall be
extinguished to the extent such Stock Units have not become vested upon the
date the Participant is no longer employed by the Company for any reason,
whether with or without cause, voluntarily or involuntarily.  If an entity

 

2

 

ceases to be a Subsidiary, such action shall be deemed to be a
termination of employment of all employees of that entity, but the Committee,
in its sole and absolute discretion, may make provision in such circumstances
for accelerated vesting of some or all of the remaining Stock Units held by
such employees, effective immediately prior to such event.

 

(b)                                  Termination
of Stock Units.  If any Stock
Units are extinguished hereunder, such unvested, extinguished Stock Units,
without payment of any consideration by the Company, shall automatically
terminate and the related Stock Unit Account shall be cancelled, without any
other action by the Participant, or the Participant’s Beneficiary or Personal
Representative, as the case may be.

 

(c)                                  Qualified
Termination Upon or Following Change in Control Event.  If the Participant upon or not later than 12
months following a Change in Control Event has a Qualified Termination (as
defined in Section 7.1(gg) of the Plan) or terminates his or her
employment for Good Reason, then any portion of the Award that has not
previously vested shall thereupon vest, subject to the provisions of Sections
6.2(a), 6.2(e), 6.4 and 6.5 of the Plan and Sections 11 and 12 of this
Agreement; provided, however, that in no event shall restrictions on the Stock
Units lapse or the Stock Units vest earlier than six months after the date
hereof.  As used in this Agreement, the
term “Good Reason” means a termination of employment by the Participant for any
one or more of the following reasons, to the extent not remedied by the Company
within a reasonable period of time after receipt by the Company of written
notice from the Participant specifying in reasonable detail such occurrence,
without the Participant’s written consent thereto: (1)  an adverse
and significant change in the Participant’s position, duties, responsibilities
or status with the Company;  (2)  a
change in the Participant’s principal office location to a location farther
away from the Participant’s home which is more than 30 miles from the
Participant’s principal office; 
(3)  the taking of any action by the Company to eliminate
benefit plans without providing substitutes therefor, to materially reduce
benefits thereunder or to substantially diminish the aggregate value of the
incentive awards or other fringe benefits; provided that if neither a surviving
entity nor its parent following a Change in Control Event is a publicly-held
company, the failure to provide stock-based benefits shall not be deemed Good
Reason if benefits of comparable value using recognized valuation methodology
are substituted therefor; and provided further that a reduction or elimination
in the aggregate of not more than 10% in aggregate benefits in connection with
across the board reductions or modifications affecting persons similarly
situated of comparable rank in the Company or a combined organization shall not
constitute Good Reason; 
(4)  any reduction in the Participant’s Base Salary; or
(5)  any material breach by the Company of any written employment or
management continuity agreement with the Participant.  For purposes of the definition of “Good Reason,” the term “Base
Salary” means the annual base rate of compensation payable as salary to the
Participant by the Company as of the Participant’s date of termination, before
deductions or voluntary deferrals authorized by the Participant or required by
law to be withheld from the Participant by the Company, and salary excludes all
other extra pay such as overtime, pensions, severance payments, bonuses, stock
incentives, living or other allowances, and other benefits and perquisites.

 

9.                                      Effect
of Total Disability, Death or Retirement.  If the Participant incurs a Total Disability or dies while
employed by the Company, then any portion of his or her Award that has not
previously vested shall thereupon vest, subject to the provisions of Sections 6.4
and 6.5 of the Plan.  If the
Participant’s employment with the Company terminates as a result

 

3

 

of his or her Retirement, the Committee may, on a case-by-case basis
and in its sole discretion, provide for partial or complete vesting prior to
Retirement of that portion of his or her Award that has not previously vested.

 

10.                               Adjustments
Upon Specified Events.  Upon the
occurrence of certain events relating to the Corporation’s stock contemplated
by Section 6.2 of the Plan, the Committee shall make adjustments as it
deems appropriate in the number and kind of securities or other consideration
that may become payable with respect to the Award.  If any adjustment shall be made under Section 6.2 of the
Plan or a Change in Control Event shall occur and the Stock Unit Award is not
fully vested upon such Event or prior thereto, the amount payable in respect of
the Stock Unit Award may be made payable in the securities or other
consideration (the “Restricted Property”) payable in respect of the Common
Stock.  Such Restricted Property shall
become payable at such times and in such proportion as the Stock Unit Award
vests.  Notwithstanding the foregoing,
to the extent that the Restricted Property includes any cash, the commitment
hereunder shall become an unsecured promise to pay an amount equal to such cash
(with earnings attributable thereto as if such amount had been invested,
pursuant to policies established by the Committee, in interest bearing, FDIC
insured (subject to applicable insurance limits) deposits of a depository
institution selected by the Committee) at such times and in such proportions as
the Stock Unit Award vests. 
Notwithstanding the foregoing, the Stock Unit Award and any Common Stock
payable in respect of the Stock Unit Award shall continue to be subject to such
proportionate and equitable adjustments (if any) under Section 6.2 of the
Plan consistent with the effect of such event on stockholders generally, as the
Committee determines to be necessary or appropriate, in the number, kind and/or
character of shares of Common Stock or other securities, property and/or rights
payable in respect of Stock Units and Stock Unit Accounts credited under the
Plan.  All rights of the Participant hereunder
are subject to those adjustments.

 

11.                               Possible
Early Termination of Award.  As
permitted by Section 6.2(b) of the Plan, and without limiting the
authority of the Committee under other provisions of Section 6.2 of the
Plan or Section 8 of this Agreement, the Committee retains the right to terminate
the Award, to the extent it has not vested, upon a dissolution of the
Corporation or a reorganization event or transaction which the Corporation does
not survive (or does not survive as a public company in respect of its
outstanding common stock).  This
Section 11 is not intended to prevent future vesting of the Award if it
(or a substituted award) remains outstanding following a Change in Control
Event.

 

4

 

12.                               Limitations
on Acceleration and Reduction in Benefits in Event of Tax Limitations.

 

(a)                                  Limitation
on Acceleration. 
Notwithstanding anything contained herein or in the Plan or any other
agreement to the contrary, in no event shall the vesting of any Stock Unit be
accelerated pursuant to Section 6.3 of the Plan or Section 8(c)
hereof to the extent that the Company would be denied a federal income tax
deduction for such vesting or the distribution of shares of Common Stock in
respect of the Award because of Section 280G of the Code and, in such
circumstances, the Stock Units not subject to acceleration will continue to
vest in accordance with and subject to the other provisions hereof.

 

(b)                                  Reduction
in Benefits.  If the Participant
would be entitled to benefits, payments or coverage hereunder and under any
other plan, program or agreement which would constitute “parachute payments,”
then notwithstanding any other provision hereof or of any other existing
agreement to the contrary, the Participant may by written notice to the
Secretary of the Corporation designate the order in which such “parachute
payments” shall be reduced or modified so that the Company is not denied
federal income tax deductions for any “parachute payments” because of
Section 280G of the Code.

 

(c)                                  Determination
of Limitations.  The term
“parachute payments” shall have the meaning set forth in and be determined in
accordance with Section 280G of the Code and regulations issued
thereunder.  All determinations required
by this Section 12, including without limitation the determination of
whether any benefit, payment or coverage would constitute a parachute payment,
the calculation of the value of any parachute payment and the determination of
the extent to which any parachute payment would be nondeductible for federal
income tax purposes because of Section 280G of the Code, shall be made by
an independent accounting firm (other than the Corporation’s outside auditing
firm) having nationally recognized expertise in such matters selected by the
Committee.  Any such determination by such
accounting firm shall be binding on the Corporation, its Subsidiaries and the
Participant.

 

13.                               Tax
Withholding.  Upon payment of
Dividend Equivalent Rights and/or the distribution of shares of Common Stock in
respect of a Participant’s Stock Unit Account, the entity within the Company
last employing the Participant shall have the right at its option to (a)
require the Participant (or the Participant’s Personal Representative or
Beneficiary, as the case may be) to pay or provide for payment in cash of the
amount of any taxes which the Company may be required to withhold with respect
to such payment or distribution or (b) deduct from any amount or property
payable to the Participant the amount of any taxes which the Company may be
required to withhold with respect to such payment or distribution.  In any case where a tax is required to be
withheld in connection with the delivery of shares of Common Stock under this
Agreement, the Committee may permit the Participant to elect, pursuant to such
rules and subject to such conditions as the Committee may establish, to have
the Company reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of shares valued at their then Fair Market
Value, to satisfy such withholding obligation.

 

14.                               Notices.  Any notice to be given under the terms of
this Agreement shall be in writing and addressed to the Corporation at its
principal office located at 401 Wilshire Boulevard, Suite 700, Santa Monica,
California 90401, to the attention of the Corporate

 

5

 

Secretary and to the Participant at the address given beneath the
Participant’s signature hereto, or at such other address as either party may
hereafter designate in writing to the other.

 

15.                               Plan.  The Award and all rights of the Participant
with respect thereto are subject to, and the Participant agrees to be bound by,
all of the terms and conditions of the provisions of the Plan, incorporated
herein by reference, to the extent such provisions are applicable to Awards
granted to Eligible Persons.  The
Participant acknowledges receipt of a copy of the Plan which is made a part
hereof by this reference, and agrees to be bound by the terms thereof.  Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the Plan that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any
rights in the Participant unless such rights are otherwise in the sole
discretion of the Committee specifically so conferred by appropriate action of
the Committee under the Plan after the date hereof.

 

16.                               No Service Commitment by Company.  Nothing contained in this Agreement or the
Plan constitutes an employment or service commitment by the Company, affects the
Participant’s status as an employee at will who is subject to termination
without cause, confers upon the Participant any right to remain employed by the
Company, interferes in any way with the right of the Company at any time to
terminate such employment, or affects the right of the Company to increase or
decrease the Participant’s other compensation or benefits.  Nothing in this Section, however, is
intended to adversely affect any independent contractual right of the
Participant without his or her consent thereto.  Employment for any period of time (including a substantial period
of time) after the Award Date will not entitle the Participant to any
proportionate vesting or avoid or mitigate a termination of rights and benefits
upon or following a termination of employment as provided in Section 3 or
8 above if the express conditions to vesting set forth in such Sections have
not been satisfied.

 

17.                               Limitation
on Participant’s Rights.  Participation
in this Plan  confers no  rights or interests other than as herein
provided.  This Agreement creates only a
contractual obligation on the part of the Company as to amounts payable and
shall not be construed as creating a trust. 
Neither the Plan nor any underlying program, in and of itself, has any
assets.  The Participant shall have only
the rights of a general unsecured creditor of the Company (or applicable
Subsidiary) with respect to amounts credited and benefits payable in cash, if
any, on Stock Unit Account(s), and rights no greater than the right to receive
the Common Stock (or equivalent value) as a general unsecured creditor with
respect to Stock Units, as and when payable thereunder.

 

[  18.                     Other
Agreements.  If any provision of
this Agreement is inconsistent with any provision of the Management Continuity
Agreement dated as of March 15, 2002 between the Corporation and
Participant and as it may be amended from time-to-time (the “MCA”), the
provisions of the MCA shall control.  ]  [  This
provision is to be included only in agreements with Participants subject to the
MCA.  ]

 

6

 

IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date first above
written.  By the Participant’s execution
of this Agreement, the Participant agrees to the terms and conditions of this
Agreement and of the Plan.

 

THE MACERICH COMPANY

(a Maryland corporation)

 

 

	
  By

  	
   

  	
   

  
	
   

  	
  Richard A. Bayer

  
	
   

  	
  Executive Vice
  President, General Counsel & Secretary

  

 

 

	
  THE MACERICH PARTNERSHIP, L.P.

  (a Delaware limited partnership)

  
	
   

  
	
  By:

  	
  The Macerich Company

  (its general partner)

  
	
   

  
	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Richard A. Bayer

  	
   

  
	
   

  	
   

  	
  Executive Vice
  President, General Counsel & Secretary

  
	
   

  
	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Print
  Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (City,
  State, Zip Code)

  	
   

  
						

 

7

 

CONSENT OF SPOUSE

 

In
consideration of the execution of the foregoing Stock Unit Award Agreement by
The Macerich Company and The Macerich Partnership L.P., I,
                        ,
the spouse of the Participant therein named, do hereby join with my spouse in
executing the foregoing Stock Unit Award Agreement and do hereby agree to be
bound by all of the terms and provisions thereof and of the Plan.

 

	
  Dated: 
                         ,
         .

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature of Spouse

  

 

8Exhibit
10.3

 

FORM OF
EMPLOYEE STOCK OPTION AGREEMENT

 

THE
MACERICH COMPANY 

EMPLOYEE STOCK OPTION AGREEMENT

2003 EQUITY INCENTIVE PLAN

 

	
  Optionee:

  	
   

  	
   

  
	
  Award
  Date:

  	
   

  	
   

  
	
  Exercise
  Price per Share(1):

  	
   

  	
   

  
	
  Number
  of Shares(1):

  	
   

  	
   

  
	
  Expiration
  Date(2):

  	
   

  	
   

  
	
  NQSO
  or ISO(1):

  	
   

  	
   

  
	
  Vesting
  Schedule(1),(2):

  	
   

  	
  [33 1/3% of the shares
  on each anniversary of the Award Date, beginning [first anniversary] and
  ending [third anniversary]

  

 

 THIS AGREEMENT is among THE MACERICH COMPANY, a Maryland
corporation (the “Corporation”), THE MACERICH
PARTNERSHIP, L.P., a Delaware limited partnership (the “Operating
Partnership”), and is granted pursuant to and subject to The Macerich Company
2003 Equity Incentive Plan (the “Plan”). 
Capitalized terms used herein and not otherwise defined herein shall
have the meaning assigned by the Plan.

 

If the Corporation has designated the Option as an ISO
above, the Corporation intends that the Option will be treated as an Incentive
Stock Option within the meaning of Section 422 of the Code (an “ISO”) to
the maximum extent permissible under all of the ISO rules and
restrictions.  Any shares acquired upon
exercise of the Option without compliance with all applicable ISO rules will be
treated as acquired upon exercise of a Nonqualified Stock Option (a
“NQSO”).  If the Corporation has
designated the Option as a NQSO above, the Company intends that the Option will
be treated in its entirety as a NQSO and not as an ISO.

 

WHEREAS, pursuant
to the Plan, the Corporation has granted to the Optionee with reference to services
rendered and to be rendered to the Company, effective as of the Award Date, an
Option upon the terms and conditions set forth herein and in the Plan.

 

NOW THEREFORE, in
consideration of services rendered and to be rendered prior to exercise by the
Optionee and the mutual promises made herein and the mutual benefits to be
derived therefrom, the parties agree as follows:

 

(1) Subject to adjustment
under Section 6.2 of the Plan.

 

(2) Subject to early
termination if the Optionee’s employment terminates or in certain other
circumstances.  See Sections 4 through 9
of this Agreement and Sections 1.6, 2.6, 6.2, 6.3 and 6.4 of the Plan for
exceptions and additional details regarding possible adjustments, acceleration
of vesting and/or early termination of the Option.

 

 

1.               Exercisability of Option.  The Option shall vest and become exercisable
during its term in percentage installments of the aggregate number of shares of
Common Stock of the Corporation in accordance with the Vesting Schedule as
set forth above and with and subject to the applicable provisions of the Plan
and this Agreement.  The Option may be
exercised only to the extent the Option is exercisable and vested, and, subject
to Section 1.8 of the Plan, during the Optionee’s lifetime, only by the
Optionee.  In no event may the Optionee
exercise the Option after the Expiration Date as provided above.

 

(a)          Cumulative Exercisability.  To the extent the Optionee does not at the
time of a particular exercise purchase all the shares that the Optionee may
then exercise, the Optionee has the right cumulatively thereafter to purchase
any of such shares not so purchased until the Option terminates or expires.

 

(b)         No Fractional Shares; Minimum
Exercise.  Fractional
share interests shall be disregarded, but may be cumulated.  No fewer than 100 shares may be purchased at
any one time, unless the number purchased is the total number at the time
exercisable under the Option.

 

2.               Exercise of Option.  To the extent vested and exercisable, the
Option may be exercised by the delivery to the Corporation of a written
exercise notice stating the number of shares to be purchased pursuant to the
Option accompanied by payment of the aggregate Exercise Price of the shares to
be purchased and the payment or provision for any applicable employment or
other taxes or withholding for taxes thereon. 
Subject to Section 6.4 of the Plan, the Option shall be deemed to
be exercised upon receipt and approval by the Corporation of such written
exercise notice accompanied by the aggregate Exercise Price and any other
payments so required, as permitted pursuant to Section 3.

 

3.               Method of Payment of Option. Payment of
the aggregate Exercise Price shall be by any of the following, or a combination
thereof, at the election of the Optionee:

 

(a)          in cash or by electronic
funds transfer, or by check payable to the order of the Corporation, in the
full amount of the purchase price of the shares and the amount (if any)
required to satisfy any applicable withholding taxes; or

 

(b)         by delivering a properly
executed exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Corporation the amount of sales proceeds necessary to
pay the aggregate Exercise Price, subject to compliance with applicable law and
cashless exercise procedures approved by the Corporation; or

 

(c)          by delivery of shares of
Common Stock that have been held by the Optionee for at least six months, in
accordance with Section 2.2(b) of the Plan, subject to compliance with
applicable law.

 

2

 

Other payment methods may be permitted only if
expressly authorized by the Committee with respect to the Option or all options
under and consistent with the terms of the Plan.

 

4.               Continuance
of Employment Required. 
The vesting schedule requires continued service through each
applicable vesting date as a condition to the vesting of the applicable
installment and rights and benefits under this Agreement.  Partial service, even if substantial, during
any vesting period will not entitle the Optionee to any proportionate vesting
or avoid or mitigate a termination of rights and benefits upon or following a
termination of employment or service as provided in Section 5 or 8 below
or under the Plan.

 

5.               Effect of Termination of Employment
on Exercise Period.  If
the Optionee’s employment by either the Corporation or any subsidiary
terminates, the Option and all other rights and benefits under this Agreement
terminate, except that the Optionee may, at any time within the applicable
period below after the Severance Date, exercise the Option to the extent the
Option was exercisable on the Severance Date and has not otherwise expired or
terminated:

 

(a)          If the Optionee’s
employment terminates for any reason other than Total Disability or death,
Retirement or for Cause, the Optionee shall have three months after the
Severance Date to exercise the Option to the extent the Option was exercisable
on the Severance Date.

 

(b)         If the Optionee’s
employment terminates as a result of Total Disability or death, the Optionee
(or the Optionee’s Personal Representative or Beneficiary, as the case may be)
shall have 12 months after the Severance Date to exercise the Option to the
extent the Option was exercisable on the Severance Date.

 

(c)          If the Optionee’s
employment terminates as a result of Retirement, the Optionee (or the
Optionee’s Personal Representative or Beneficiary, as the case may be) shall
have 12 months after the Severance Date to exercise the Option to the extent
the Option was exercisable on the Severance Date (provided that, with respect
to an ISO, after three months the Option will no longer be exercisable as an
ISO) to the extent the Option was exercisable on the Severance Date.

 

Notwithstanding the foregoing exercise periods after the Severance
Date, to the extent the Option was otherwise an ISO, the Option will qualify as
an ISO only if it is exercised within the applicable exercise periods for ISOs
and meets all other requirements of the Code for ISOs; and, in the case of a Total
Disability that is not a permanent and total disability within the meaning of
Section 22(e)(3) of the Code, only if the Option is exercised within three
months of the Severance Date.  If the
Option is not exercised within the applicable exercise periods or does not meet
such other requirements, the Option will be rendered a NQSO.  If the Optionee’s employment terminates for
Cause, the Option shall terminate as of the Severance Date.

 

3

 

6.               Qualified Termination Upon or Following Change in
Control Event.

 

If the Optionee upon or not later than 12 months
following a Change in Control Event has a Qualified Termination (as defined in
Section 7.1(gg) of the Plan) or terminates his or her employment for Good
Reason, then any portion of the Option that has not previously vested shall
thereupon vest, subject to the provisions of Sections 6.2(a), 6.2(e), 6.4 and
6.5 of the Plan and Sections 8 and 12 of this Agreement; provided, however,
that in no event shall the Option become exercisable earlier than six months
after the Award Date.  As used in this
Agreement, the term “Good Reason” means a termination of employment by the
Optionee for any one or more of the following reasons, to the extent not
remedied by the Company within a reasonable period of time after receipt by the
Company of written notice from the Optionee specifying in reasonable detail
such occurrence, without the Optionee’s written consent thereto: (1) an adverse
and significant change in the Optionee’s position, duties, responsibilities or
status with the Company;  (2) a change
in the Optionee’s principal office location to a location farther away from the
Optionee’s home which is more than 30 miles from the Optionee’s principal
office; (3) the taking of any action by the Company to eliminate benefit plans
without providing substitutes therefor, to materially reduce benefits
thereunder or to substantially diminish the aggregate value of the incentive
awards or other fringe benefits; provided that if neither a surviving entity
nor its parent following a Change in Control Event is a publicly-held company,
the failure to provide stock-based benefits shall not be deemed Good Reason if
benefits of comparable value using recognized valuation methodology are substituted
therefor; and provided further that a reduction or elimination in the aggregate
of not more than 10% in aggregate benefits in connection with across the board
reductions or modifications affecting persons similarly situated of comparable
rank in the Company or a combined organization shall not constitute Good
Reason; (4) any reduction in the Optionee’s Base Salary; or (5) any material
breach by the Company of any written employment or management continuity
agreement with the Optionee.  For
purposes of the definition of “Good Reason,” the term “Base Salary” means the
annual base rate of compensation payable as salary to the Optionee by the
Company as of the Optionee’s date of termination, before deductions or
voluntary deferrals authorized by the Optionee or required by law to be
withheld from the Optionee by the Company, and salary excludes all other extra
pay such as overtime, pensions, severance payments, bonuses, stock incentives,
living or other allowances, and other benefits and perquisites.

 

7.               Adjustments
Upon Specified Events. 
As provided in Section 6.2 of the Plan, upon the occurrence of
certain events relating to or affecting the Corporation’s stock contemplated by
Section 6.2 of the Plan, the Committee shall, in such manner, to such
extent (if any) and at such times as it deems appropriate and equitable in the
circumstances, make adjustments in the number, amount and type of shares (or
other securities or property) subject to the Option, the Exercise Price and the
securities deliverable upon exercise of the Option (or any combination thereof)
or provide for a cash payment or the assumption, substitution or exchange of
the Option or the shares or other securities subject to the Option, based upon
the distribution or consideration payable to stockholders generally.  All rights of the Optionee hereunder are
subject to such adjustments and other provisions of the Plan.

 

4

 

8.               Possible Early Termination of Award.  As permitted by Section 6.2(b) of the
Plan, and without limiting the authority of the Committee under other
provisions of Section 6.2 of the Plan or Section 6 of this Agreement,
the Committee retains the right to terminate the Option, to the extent it has
not vested, upon a dissolution of the Corporation or a reorganization event or
transaction in which the Corporation does not survive (or does not survive as a
public company in respect of its outstanding common stock).  This Section 8 is not intended to
prevent future vesting (including provision for future vesting) if the Option
(or a substituted award) remains outstanding following a Change in Control
Event.

 

9.               Change in
Subsidiary’s Status; Leaves of Absence.  If the Optionee is employed only by an
entity that ceases to be a subsidiary, this event is deemed for purposes of
this Agreement to be a termination of the Optionee’s employment by the Company
other than a termination for Cause, Total Disability, Retirement or death of
the Optionee.  Absence from work caused
by military service, authorized sick leave or other leave approved in writing
by the Company or the Committee shall not be considered a termination of
employment by the Company for purposes of Section 5 only if reemployment
upon the expiration of such leave is required by contract or law, or such leave
is for a period of not more than 90 days.

 

10.         Additional Provisions Applicable
to ISOs.

 

(a)          ISO Value Limit.  If the aggregate fair market value of the
shares with respect to which ISOs (whether granted under the Option or otherwise)
first become exercisable by the Participant in any calendar year exceeds
$100,000, as measured on the applicable award dates, the limitations of
Section 2.3 of the Plan shall apply and to such extent the Option will be
rendered a NQSO.

 

(b)         Notice of Sale.  The Participant agrees to notify the
Corporation of any sale or other disposition of any shares if such sale or
disposition of any shares occurs within two years after the Award Date or
within one year after the date of exercise of any Option intended as an ISO.

 

(c)          Transferability.  In accordance with Section 1.8 of the
Plan and the Code, an ISO is not transferable by the Optionee other than by
will or the laws of descent and distribution, and is exercisable during the
Optionee’s lifetime only by the Optionee.

 

(d)         Tax Withholding.  If any portion of the Option is rendered a
NQSO in accordance with the terms hereof or applicable law, the Participant
shall pay or make provision for the payment of any applicable withholding and
employment taxes upon exercise of the Option.

 

11.         Limitation on Exercise of Option.  The Optionee will not be entitled to receive
Common Stock upon exercise of the Option to the extent that it will cause the
Optionee to Beneficially or Constructively Own Equity Shares in excess of the
Ownership Limit.  If the Optionee
exercises any portion of this Option which upon

 

5

 

delivery of the Common Stock would cause the Optionee to Beneficially
or Constructively Own Equity Shares in excess of the Ownership Limit, the
Corporation has the right to deliver to the Optionee, in lieu of Common Stock,
a check or cash in the amount equal to the Fair Market Value of the Common
Stock otherwise deliverable on the date of exercise (minus any amounts withheld
pursuant to Section 6.5 of the Plan).

 

12.         Limitations on Acceleration and Reduction in Benefits
in Event of Tax Limitations.

 

(a)          Limitation on Acceleration.  Notwithstanding anything contained herein or
in the Plan or any other agreement to the contrary, in no event shall the
vesting of the Option be accelerated pursuant to Section 6.3 of the Plan
or Section 6 hereof to the extent that the Corporation would be denied a
federal income tax deduction for such vesting because of Section 280G of
the Code and, in such circumstances, the Option will continue to vest in
accordance with and subject to the other provisions hereof.

 

(b)         Reduction in Benefits.  If the Optionee would be entitled to
benefits, payments or coverage hereunder and under any other plan, program or
agreement which would constitute “parachute payments,” then notwithstanding any
other provision hereof or of any other existing agreement to the contrary, the
Optionee may by written notice to the Secretary of the Corporation designate
the order in which such “parachute payments” shall be reduced or modified so
that the Company is not denied federal income tax deductions for any “parachute
payments” because of Section 280G of the Code.

 

(c)          Determination of Limitations.  The term “parachute payments” shall have the
meaning set forth in and be determined in accordance with Section 280G of
the Code and regulations issued thereunder. 
All determinations required by this Section 12, including without
limitation the determination of whether any benefit, payment or coverage would
constitute a parachute payment, the calculation of the value of any parachute
payment and the determination of the extent to which any parachute payment
would be nondeductible for federal income tax purposes because of Section 280G
of the Code, shall be made by an independent accounting firm (other than the
Corporation’s outside auditing firm) having nationally recognized expertise in
such matters selected by the Committee. 
Any such determination by such accounting firm shall be binding on the
Corporation, its Subsidiaries and the Optionee.

 

13.         Optionee not a Stockholder.  Neither the Optionee nor any other person
entitled to exercise the Option shall have any of the rights or privileges of a
stockholder of the Corporation as to any shares of Common Stock until the
issuance and delivery to him or her of a certificate evidencing the shares
registered in his or her name.  No
adjustment will be made for dividends or other rights as a stockholder as to
which the record date is prior to such date of delivery.

 

6

 

14.         No Guarantee of Continued Service .  Nothing contained in this Agreement or the
Plan constitutes an employment or service commitment by the Company, affects
the Optionee’s status as an employee at will who is subject to termination
without cause, confers upon the Optionee any right to remain employed by the
Company, interferes in any way with the right of the Company at any time to
terminate such employment, or affects the right of the Company to increase or
decrease the Optionee’s other compensation or benefits.  Nothing in this Section 14, however, is
intended to adversely affect any independent contractual right of the Optionee
without his or her consent thereto. 
Employment for any period of time (including a substantial period of
time) after the Award Date will not entitle the Optionee to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or
following a termination of employment if the express conditions to vesting
pursuant to Section 1 or 6 have not been satisfied.

 

15.         Non-Transferability of Option.  The Option and any other rights of the
Optionee under this Agreement or the Plan are nontransferable except as
provided in Section 1.8 of the Plan.

 

16.         Notices.  Any notice to be given under the terms of
this Agreement shall be in writing and addressed to the Corporation at its
principal office located at 401 Wilshire Boulevard, Suite 700, Santa Monica,
California 90401, to the attention of the Corporate Secretary and to the
Optionee at the address given beneath the Optionee’s signature hereto, or at
such other address as either party may hereafter designate in writing to the
other.

 

17.         Effect of Award Agreement.  This Agreement shall be binding upon and
inure to the benefit of any successor or successors of the Corporation, except
to the extent the Committee determines otherwise.

 

18.         Entire Agreement; Governing Law.  The Plan is incorporated herein by
reference.  [Subject to Section 20
below,] The Plan and this Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Optionee
with respect to the subject matter hereof, and may not be modified adversely to
the Optionee’s interest except by means of a writing signed by the Company and
the Optionee.  The constructive
interpretation, performance and enforcement of this Agreement and the Option
shall be governed by the internal substantive laws, but not the choice of law
rules, of the State of Maryland.

 

19.         Plan.  The Option and all rights of the Optionee
with respect thereto are subject to, and the Optionee agrees to be bound by,
all of the terms and conditions of the provisions of the Plan, incorporated
herein by reference, to the extent such provisions are applicable to Awards
granted to Eligible Persons.  The
Optionee acknowledges receipt of a copy of the Plan, which is made a part
hereof by this reference, and agrees to be bound by the terms thereof.  Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the Plan that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any
rights in the Optionee unless

 

7

 

such rights are expressly set forth herein or are otherwise in the sole
discretion of the Committee specifically so conferred by appropriate action of
the Committee under the Plan after the date hereof.

 

20.         [  Other Agreements.  If any provision of this Agreement is
inconsistent with any provision of the Management Continuity Agreement dated as
of [  March 15, 2002  ] between the Corporation and
Participant and as it may be amended from time-to-time (the “MCA”), the
provisions of the MCA shall control.  ]  [  This provision and the introductory clause of the
second sentence of Section 18 is to be included only in agreements with
Optionees subject to the MCA.  ]

 

8

 

	
  THE MACERICH COMPANY,

  	
   

  	
  AGREED AND ACKNOWLEDGED:

  
	
  a Maryland corporation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  	
  (Optionee’s Signature)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (City, State, Zip Code)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Address)

  	
   

  

 

 

CONSENT OF SPOUSE

 

 

In consideration of the execution of the foregoing
Employee Stock Option Agreement by the Corporation, I, the spouse of the
employee named above, join with my spouse in executing this Agreement and agree
to be bound by all of the terms and provisions of this Agreement and of the
Plan.

 

 

	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature of Spouse

  

 

9

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