Document:

Exhibit 10.2

 

EXECUTION VERSION

 

GUARANTY AGREEMENT

 

This Guaranty Agreement (this “Guaranty”) is made as of March 31, 2015 by Atlantic Power Corporation, a corporation continued under the laws of the Province of British Columbia, Canada (“Guarantor”), in favor of TerraForm AP Acquisition Holdings, LLC, a Delaware limited liability company (the “Beneficiary”).  Capitalized terms used herein without definition shall have the meanings ascribed to them in the Membership Interest Purchase Agreement (defined below).

 

RECITALS

 

WHEREAS, the Beneficiary and Atlantic Power Transmission, Inc., a Delaware corporation (the “Seller”), have entered into that certain Membership Interest Purchase Agreement of even date herewith (the “Membership Interest Purchase Agreement”), pursuant to which the Beneficiary shall, subject to the terms and conditions set forth therein, acquire from the Seller one hundred percent (100%) of the issued and outstanding membership interests in TerraForm AP Holdings, LLC, a Delaware limited liability company;

 

WHEREAS, Guarantor directly owns 100% of the issued and outstanding equity interests in the Seller and will therefore receive financial and other benefits from the transactions contemplated by the Membership Interest Purchase Agreement;

 

WHEREAS, the Beneficiary has required as a condition, among others, to entering into the Membership Interest Purchase Agreement that Guarantor execute and deliver this Guaranty to the Beneficiary; and

 

WHEREAS, Guarantor has agreed to enter into this Guaranty to provide assurance for the payment obligations of the Seller in connection with the Membership Interest Purchase Agreement, and to induce the Beneficiary to enter into the Membership Interest Purchase Agreement.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.                                      Guaranty.

 

(a)                                 For value received and in consideration of the transactions contemplated by the Membership Interest Purchase Agreement, Guarantor absolutely, unconditionally and irrevocably guarantees for the benefit of the Beneficiary and its permitted successors and assigns, the full and prompt payment of all payment obligations of the Seller under the Membership Interest Purchase Agreement (collectively, the “Guaranteed Obligations”) as and when the same shall become due in accordance with the Membership Interest Purchase Agreement.  Guarantor hereby agrees that this Guaranty is an absolute guaranty of payment and is not a guaranty of collection.

 

 

(b)                                 Any and all payments by Guarantor hereunder shall be made free and clear of, and without reduction for, any and all taxes, levies, imposts, deductions, charges, withholdings, and all stamp or documentary taxes, excise taxes, ad valorem taxes and other taxes, charges or levies which arise from the payment of Guarantor hereunder.

 

(c)                                  Notwithstanding anything herein to the contrary:

 

(i)                               Guarantor shall not be required to make a payment in respect of any Guaranteed Obligation while the validity and existence of such Guaranteed Obligation is being disputed in good faith by the Seller in accordance with the relevant provisions of the Membership Interest Purchase Agreement; and

 

(ii)                            Guarantor’s liability in respect of any Guaranteed Obligation shall not exceed the liability of the Seller with respect to such Guaranteed Obligation under the Membership Interest Purchase Agreement.

 

2.                                      Obligations Absolute and Unconditional.  Guarantor hereby agrees that its obligations under this Guaranty shall be irrevocable, continuing, absolute, and unconditional, irrespective of, and the Guaranteed Obligations of Guarantor shall not be discharged or impaired or otherwise effected by, and Guarantor hereby irrevocably waives any defenses to enforcement it may have (now in the future) by reason of:

 

(a)                                 the illegality, lack of validity, enforceability, avoidance, or subordination of any of the Guaranteed Obligations or the Membership Interest Purchase Agreement;

 

(b)                                 the absence of any attempt by, or on behalf of, the Beneficiary, to collect, or to take any other action to enforce, all or any part of the Guaranteed Obligations whether from or against the Seller or any other Person;

 

(c)                                  the election of any remedy available under the Membership Interest Purchase Agreement or applicable Laws by, or on behalf of, the Beneficiary with respect to all or any part of the Guaranteed Obligations;

 

(d)                                 the waiver, consent, extension, forbearance or granting of any indulgence by, or on behalf of, the Beneficiary, with respect to any provision of the Membership Interest Purchase Agreement;

 

(e)                                  any change in the legal or beneficial ownership, or the existence or structure as a partnership or other entity, of the Seller or any other Person now or hereafter liable with respect to any of the Guaranteed Obligations (including, without limitation, any consolidation or amalgamation with, any merger with or into, or any transfer of all or substantially all the assets of the Seller or such other Person to, another Person);

 

(f)                                   the disallowance, under Section 502 of the Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”), of all or any portion of the claims against the Seller held by the Beneficiary, for payment of all or any part of the Guaranteed Obligations;

 

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(g)                                  the operation of the automatic stay under Section 362(a) of the Bankruptcy Code with respect to the Seller; or

 

(h)                                 to the fullest extent permitted by applicable Law, any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor.

 

3.                                      Enforcement; Application of Payments.  In the case of any failure by the Seller to pay any Guaranteed Obligation in accordance with the terms of the Membership Interest Purchase Agreement, Guarantor hereby agrees that, upon receipt of written notice from the Beneficiary of such failure, Guarantor will promptly make payment of such Guaranteed Obligations owing to the Beneficiary without first proceeding against the Seller or any other Person.  Any amounts received by the Beneficiary hereunder shall be applied to the Guaranteed Obligations.

 

4.                                      Waivers and Acknowledgments.

 

(a)                                 Guarantor unconditionally and irrevocably hereby waives any right to revoke this Guaranty, diligence, presentment, demand of payment, filing of claims with a court in the event of receivership or bankruptcy of the Seller or any other Person (other than Guarantor to the extent required by the Bankruptcy Code), protest or notice with respect to the Guaranteed Obligations, all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor and notices of acceptance of this Guaranty, and all other notices or demands whatsoever (and shall not require that the same be made on the Seller as a condition precedent to Guarantor’s obligations hereunder).

 

(b)                                 The Beneficiary is hereby authorized, without notice or demand and without affecting the liability of Guarantor hereunder, from time to time, (i) to renew, extend, accelerate or otherwise change the time for payment of, or other terms relating to, all or any part of the Guaranteed Obligations, or to otherwise modify, amend or change the terms of the Membership Interest Purchase Agreement (including the addition or substitution of any Person now or hereafter liable with respect to any Guaranteed Obligation); (ii) to accept partial payments on all or any part of the Guaranteed Obligations; (iii) to take and hold security or collateral for the payment of all or any part of the Guaranteed Obligations, this Guaranty, or any other guaranties of all or any part of the Guaranteed Obligations; (iv) to exchange, enforce, waive and release any such security or collateral; (v) to apply such security or collateral and direct the order or manner of sale thereof as in its discretion it may determine; and (vi) to settle, release, exchange, enforce, waive, compromise or collect or otherwise liquidate all or any part of the Guaranteed Obligations or any other guaranty of all or any part of the Guaranteed Obligations, and any security or collateral for the Guaranteed Obligations or for any such guaranty, irrespective of the effect on the contribution or subrogation rights of Guarantor.  Any of the foregoing may be done in any manner, without affecting or impairing the obligations of Guarantor hereunder.

 

5.                                      Reinstatement.  Guarantor further agrees that, to the extent that the Seller makes a payment or payments of Guaranteed Obligations to the Beneficiary, which payment or payments of Guaranteed Obligations, or any part thereof are subsequently rescinded, 

 

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invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to the Seller, or its trustee, receiver or any other party, including, without limitation, Guarantor under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, the part of the Guaranteed Obligations which has been paid, reduced or satisfied by such amount shall be reinstated and continued in full force and effect as of the time immediately preceding such initial payment, reduction or satisfaction.

 

6.                                      Subrogation.  Guarantor will not exercise any rights that it may acquire by way of subrogation under this Guaranty, by any payment made hereunder or otherwise, until all of the Guaranteed Obligations shall have been paid in full.  If any amount shall be paid to Guarantor on account of such subrogation rights at any time when all of the Guaranteed Obligations shall not have been paid in full, such amount shall be held in trust for the benefit of the Beneficiary and shall forthwith be paid to the Beneficiary to be credited and applied to such Guaranteed Obligations in accordance with the terms of the Membership Interest Purchase Agreement.  If (i) Guarantor shall make payment to the Beneficiary of all or any part of the Guaranteed Obligations and (ii) all of the Guaranteed Obligations shall be paid in full, the Beneficiary will, at Guarantor’s request and expense, execute and deliver, or will cause to be executed and delivered, to Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to Guarantor of an interest in the Guaranteed Obligations resulting from such payment by Guarantor.

 

7.                                      Enforcement; Amendments; Waivers.  No delay on the part of the Beneficiary in the exercise of any right or remedy arising under this Guaranty, the Membership Interest Purchase Agreement or otherwise with respect to all or any part of the Guaranteed Obligations shall operate as a waiver thereof, and no single or partial exercise by the Beneficiary of any such right or remedy shall preclude any further exercise thereof.  No modification or waiver of any of the provisions of this Guaranty shall be binding upon the Beneficiary or Guarantor, except as expressly set forth in a writing duly signed and delivered by the Beneficiary and Guarantor.  Failure by the Beneficiary at any time or times hereafter to require strict performance by the Seller of all or any part of the Guaranteed Obligations or any other Person of any of the provisions, warranties, terms and conditions contained in the Membership Interest Purchase Agreement shall not waive, affect or diminish any right of the Beneficiary at any time or times hereafter to demand strict performance thereof and such right shall not be deemed to have been waived by any act or knowledge of the Beneficiary (or its agents, officers or employees), unless such waiver is contained in an instrument in writing from the Beneficiary directed and delivered to the Seller or Guarantor, as applicable, specifying such waiver, and is signed by the Beneficiary.  No waiver of any default in the Guaranteed Obligations by the Beneficiary shall operate as a waiver of any other default of the Guaranteed Obligations or the same default of the Guaranteed Obligations on a future occasion.

 

8.                                      Effectiveness; Termination.  This Guaranty shall become effective against Guarantor upon its execution by Guarantor and shall continue in full force and effect and may not be terminated or otherwise revoked until (and, notwithstanding anything contrary continued herein, Guarantor shall be automatically released and this Guaranty shall be automatically terminated without further act of Guarantor or the Beneficiary upon) the earliest to occur of (i) payment in full of the Guaranteed Obligations, subject to automatic reinstatement if any 

 

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payment by the Seller in respect of the Guaranteed Obligations is rescinded or returned, (ii) the date on which all indemnification obligations of the Seller have been terminated pursuant to the terms of the Membership Interest Purchase Agreement, (iii) the date of termination of the Membership Interest Purchase Agreement if terminated pursuant to Section 10.1 thereof, (iv) the date of termination of this Guaranty in writing by and among Guarantor and the Beneficiary, and (v) the date that is five (5) years after the Closing Date.

 

9.                                      Successors and Assigns.  This Guaranty shall be binding upon Guarantor and upon the successors and permitted assigns of Guarantor and shall inure to the benefit of the Beneficiary and its respective successors and permitted assigns under and in accordance with the terms of the Membership Interest Purchase Agreement.

 

10.                               Consent to Assignment; Exceptions.  Guarantor may not assign its rights or delegate its obligations under this Guaranty, in whole or in part, without the prior written consent of the Beneficiary, and any purported assignment or delegation absent such consent is void, except for an assignment and delegation of all of Guarantor’s rights and obligations hereunder in whatever form Guarantor determines may be appropriate to a partnership, corporation, trust or other organization in whatever form that succeeds to all or substantially all of Guarantor’s assets and business and that assumes such obligations by contract, operation of law or otherwise.  Upon any such delegation and assumption of obligations, Guarantor shall be relieved of and fully discharged from all obligations hereunder, whether such obligations arose before or after such delegation and assumption.

 

11.                               Governing Law. This Guaranty shall be governed by and construed in accordance with the Laws of the State of New York, without regard to any conflict of laws provisions thereof that would result in the application of the Law of another Jurisdiction.

 

12.                               Certain Consents and Waivers.

 

(a)                                 Jurisdiction and Venue.  Each of Guarantor and the Beneficiary hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of any state or federal court in the Borough of Manhattan, New York, New York, in any action or proceeding arising out of or relating to this Guaranty.  Each of Guarantor and the Beneficiary waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other party with respect thereto.  Each of Guarantor and the Beneficiary agrees that service of summons and complaint or any other process that might be served in any action or proceeding may be made on such party by sending or delivering a copy of the process to the party to be served at the address of the party and in the manner provided for the giving of notices in Section 13.  Nothing in this Section 12, however, shall affect the right of any party to serve legal process in any other manner permitted by Law.  Each of Guarantor and the Beneficiary agrees that a final, non-appealable judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by Law.

 

(b)                                 Waiver of Jury Trial.  EACH OF GUARANTOR AND THE BENEFICIARY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY 

 

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RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

13.                               Notices.  All notices and other communications required or desired to be served, given or delivered hereunder shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered United States mail or sent by telecopier or other electronic means as follows:

 

(i)                                     if to Guarantor, to:

 

Atlantic Power Corporation 
 One Federal Street, 30th Floor

Boston, MA 02110

Facsimile No.: 617-977-2410

Attention:  Jeffrey S. Levy, Senior Vice President,

Legal

Email: jlevy@atlanticpower.com

 

with a copy (which shall not constitute notice) to:

 

Morgan, Lewis & Bockius LLP

One Federal Street

Boston, MA 02110

Facsimile No.: 617-341-7701

Attention: Mitchell D. Carroll

Email: mcarroll@morganlewis.com

 

with a copy (which shall not constitute notice) to:

 

Morgan, Lewis & Bockius LLP

101 Park Avenue

New York, NY 10178-0060

Facsimile No.: 212-309-6001

Attention: Lisa M. Campisi

Email: lcampisi@morganlewis.com

 

(ii)                                  if to the Beneficiary, to:

 

TerraForm Power

7550 Wisconsin Ave, 9th Floor

Bethesda, MD 20814

Facsimile No.: 240-762-7900

Attention: Legal Department, Anne Marie DeMent

E-mail address: ADeMent@terraform.com

 

with a copy (which shall not constitute notice) to:

 

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Chadbourne & Parke LLP

1200 New Hampshire Ave NW

Washington, DC 20026

Facsimile No.: 202-974-6774

Attention: Keith Martin

E-mail Address: kmartin@chadbourne.com

 

or, as to each party, at such other address as designated by such party in a written notice to the other party.  Notice given by personal delivery, mail or overnight courier pursuant to this Section 13 shall be effective upon physical receipt.  Notice given by facsimile or electronic means pursuant to this Section 13 shall be effective as of (i) the date of confirmed delivery if delivered before 5:00 p.m. Eastern Time on any Business Day or (ii) the next succeeding Business Day if confirmed delivery is after 5:00 p.m. Eastern Time on any Business Day or during any non-Business Day; provided, in each case, such transmission is promptly confirmed by either personal delivery, mail or overnight courier.

 

14.                                    Severability.  Wherever possible, each provision of this Guaranty shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Guaranty shall be prohibited by or invalid under such Law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Guaranty.

 

15.                                    Merger.  This Guaranty represents the final agreement of Guarantor and the Beneficiary with respect to the matters contained herein and may not be contradicted by evidence of prior or contemporaneous agreements, or subsequent oral agreements, by and among Guarantor and the Beneficiary.

 

16.                                    Execution in Counterparts.  This Guaranty may be executed by the parties hereto in multiple counterparts and shall be effective as of the date set forth above when each party shall have executed and delivered a counterpart hereof, whether or not the same counterpart is executed and delivered by each party.  When so executed and delivered, each such counterpart shall be deemed an original, and all such counterparts shall be deemed one and the same document.  Transmission of images of signed signature pages by facsimile, e-mail or other electronic means shall have the same effect as the delivery of manually signed documents in person.

 

[Signature pages follow.]

 

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IN WITNESS WHEREOF, this Guaranty has been duly executed as of the date and year first set forth above.

 

	
 
    	
GUARANTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ATLANTIC   POWER CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Terrence Ronan
    
	
 
    	
 
    	
 
    	
Name:   Terrence Ronan
    
	
 
    	
 
    	
 
    	
Title:   Chief Financial Officer
    

 

[Signature Page to Atlantic Power Corporation Guaranty]

 

 

	
 
    	
ACCEPTED   AND AGREED TO BY THE BENEFICIARY:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TERRAFORM   AP ACQUISITION HOLDINGS, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Carlos Domenech
    
	
 
    	
Name:
    	
Carlos   Domenech
    
	
 
    	
Title:
    	
President   & CEO
    
	
 
    	
 
    

 

[Signature Page to Atlantic Power Corporation Guaranty]Exhibit 10.3

 

 

FORM OF SIMON PROPERTY GROUP
 SERIES 2015 LTIP UNIT AWARD AGREEMENT

 

 

 

This Series 2015 LTIP Unit Award Agreement (“Agreement”) made as of the date set forth below, among Simon Property Group, Inc., a Delaware corporation (the “Company”), its subsidiary, Simon Property Group, L.P., a Delaware limited partnership and the entity through which the Company conducts substantially all of its operations (the “Partnership”), and the person identified below as the grantee (the “Grantee”).

 

 

 

Recitals

 

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

 

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

 

 

 

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

 

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

 

2.         Definitions.  Capitalized terms used herein without definitions shall have the meanings given to those terms in the Plan.  In addition, as used herein:

 

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“Absolute TSR Goal” means the goal for TSR on an absolute basis as set forth on Exhibit A; provided however, such goal shall be modified as provided in Section 4(d) in connection with a Change of Control.

 

“Annualized TSR Percentage” means the annualized equivalent of the TSR Percentage.

 

“Award Date” means the date that the Award LTIP Units were granted as set forth on Schedule A.

 

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

 

“Baseline Value” means $182.11, the per share closing price of the Common Stock reported by The New York Stock Exchange for the last trading date preceding January 1, 2015.  For purposes of the REIT Index and S&P Index measures used in determining the attainment of each of the respective Relative TSR Goals, the baseline value for each shall also be the ending value of the applicable index as of the last day of the year prior to the Effective Date.

 

“Cause” shall have the meaning specified in the Grantee’s Employment Agreement or, in the case the Grantee is not employed pursuant to an employment agreement or is party to an Employment Agreement that does not define the term, “Cause” shall mean any of the following acts by the Grantee: (i) embezzlement or misappropriation of corporate funds, (ii) any acts resulting in a conviction for, or plea of guilty or nolo contendere to, a charge of commission of a felony, (iii) misconduct resulting in injury to the Company or any affiliate, (iv) activities harmful to the reputation of the Company or any affiliate, (v) a material violation of Company or affiliate operating guidelines or policies, (vi) willful refusal to perform, or substantial disregard of, the duties properly assigned to the Grantee, or (vi) a violation of any contractual, statutory or common law duty of loyalty to the Company or any affiliate.

 

“Change of Control” means:

 

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

 

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

 

(iii)       The consummation of a reorganization, merger or consolidation in which the Company and/or the Partnership is a party, or of the sale or other disposition of all or substantially all of the assets of the Company and/or the Partnership (any such reorganization, merger, consolidation or sale or other disposition of assets being referred to as a “Business Combination”), in each case unless, following such Business Combination, (A) more than sixty percent (60%) of the combined voting power of the then outstanding voting securities of the surviving or acquiring corporation resulting from the Business Combination entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Company’s outstanding voting securities immediately prior to such Business Combination in substantially the same proportions as their beneficial ownership, immediately prior to such Business Combination, of the Company’s outstanding voting securities, (B) no person (excluding the Company, the Simons, any employee benefit plan or related trust of the Company or such surviving or acquiring corporation resulting from the Business Combination and any person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, twenty-five percent (25%) or more of the Company’s outstanding voting securities) beneficially owns, directly or indirectly, twenty-five percent (25%) or more of the combined voting power of the then outstanding voting securities of the surviving or acquiring corporation resulting from the Business Combination entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of the surviving or acquiring corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement providing for such Business Combination; or

 

(iv)       Approval by the stockholders of a complete liquidation or dissolution of the Company and/or the Partnership.

 

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

 

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

 

“Continuous Service” means the continuous service to the Company or any subsidiary or affiliate, without interruption or termination, in any capacity of employment. Continuous Service shall not be considered interrupted in the case of:  (i) any approved leave of absence; (ii) transfers among the Company and any subsidiary or affiliate in any capacity of employment; or (iii) any change in status as long as the individual remains in the service of the Company and any subsidiary or affiliate in any capacity of employment. An approved leave of absence shall include sick leave (including, due to any mental or physical disability whether or not such condition rises to the level of a Disability), military leave, or any other authorized personal leave.  For purposes of determining Continuous Service, service with the Company includes service, following a Change of Control, with a surviving or successor entity (or its parent entity) that agrees to continue, assume or replace this Award, as contemplated by Section 4(d)(ii)(B).

 

“Designation” means the Certificate of Designation of Series 2015 LTIP Units of the Partnership approved by the Company as the general partner of the Partnership.

 

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

 

“Earned LTIP Units” means those Award LTIP Units that have been determined by the Committee to have been earned on the Valuation Date based on the extent to which the Absolute TSR Goal and the Relative TSR Goals have been achieved as set forth in Section 3(c) or have otherwise been earned under Section 4.

 

“Effective Date” means the close of business on January 1, 2015.

 

“Employment Agreement” means, as of a particular date, any employment or similar service agreement then in effect between the Grantee, on the one hand, and the Company or one of its Subsidiaries, on the other hand, as amended or supplemented through such date.

 

“Ending Common Stock Price” means, as of a particular date, the average of the closing prices of the Common Stock reported by The New York Stock Exchange for the twenty (20) consecutive trading days ending on (and including) such date; provided, however, that if such date is the date upon which a Change of Control occurs, the Ending Common Stock Price as of such date shall be equal to the fair value, as determined by the Committee, of the total consideration paid or payable in the transaction resulting in the Change of Control for one share of Common Stock.  For purposes of determining whether the Absolute TSR Goals and the Relative TSR Goals have been attained, an average of the closing measurements published for the twenty (20) consecutive trading days ending on (and including) Valuation Date shall be used for determining the ending REIT Index and S&P Index measures.

 

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

 

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

 

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“Good Reason” shall have the meaning specified in the Grantee’s Employment Agreement, or, if the Grantee is not employed pursuant to an employment agreement or is party to an Employment Agreement that does not define the term, “Good Reason” shall mean any of the following events that occurs without the Grantee’s prior consent:

 

(i)         the Grantee experiences a material diminution in title, employment duties, authority or responsibilities as compared to the title, duties, authority and responsibilities as in effect during the 90-day period immediately preceding the Change of Control;

 

(ii)        the Grantee experiences a material diminution in compensation and benefits as compared to the compensation and benefits as in effect during the 90-day period immediately preceding the Change of Control, other than (A) a reduction in compensation which is applied to all employees of the Company or affiliate in the same dollar amount or percentage, or (B) a reduction or modification of any employee benefit program covering substantially all of the employees of the Company or affiliate, which reduction or modification generally applies to all employees covered under such program; or

 

(iii)       the Grantee is required to be based at any office or location that is in excess of 50 miles from the principal location of the Grantee’s work during the 90-day period immediately preceding the Change of Control.

 

Before a resignation will constitute a resignation for Good Reason, the Grantee must give the Company or applicable affiliate a notice of resignation within 30 calendar days of the occurrence of the event alleged to constitute Good Reason.  The notice must set forth in reasonable detail the specific reason for the resignation and the facts and circumstances claimed to provide a basis for concluding that such resignation is for Good Reason.  Failure to provide such notice within such 30-day period shall be conclusive proof that the Grantee does not have Good Reason to terminate employment.  In addition, Good Reason shall exist only if the Company or applicable affiliate fails to remedy the event or events constituting Good Reason within 30 calendar days after receipt of the notice of resignation.

 

“LTIP Units” means the Series 2015 LTIP Units issued pursuant to the Designation.

 

“Partial Service/Performance Factor” means a factor carried out to the sixth decimal to be used in calculating the Earned LTIP Units pursuant to Section 4(b) in the event of a Qualified Termination, or pursuant to Section 4(d) in the event of a Change of Control prior to the Valuation Date, determined by dividing the number of calendar days that have elapsed since the Effective Date to and including the date of the Grantee’s Qualified Termination or a Change of Control, whichever is applicable, by 1,095.

 

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

 

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

 

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

 

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

 

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

 

“REIT Index” means the MSCI REIT Total Return Index or any successor index.

 

“Relative TSR Goals” means the goals set for TSR on a relative basis as compared to the REIT Index and the S&P Index as set forth on Exhibit A.

 

“S&P Index” means the Standard & Poors 500 Total Return Index (Symbol: SPXT) of large capitalization U.S. stocks or any successor index.

 

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

 

“Total Stockholder Return” or “TSR” means, with respect to a share of Common Stock as of a particular date of determination, the sum of: (A) the difference, positive or negative, between the Ending Common Stock Price as of such date and the Baseline Value, plus (B) the total per-share dividends and other distributions (excluding distributions described in Section 6) with respect to the Common Stock declared between the Effective Date and such date of determination and assuming contemporaneous reinvestment in Common Stock of all such dividends and distributions, using as a re-investment price, the closing price per share of the Common Stock as of the most recent ex-dividend date so long as the “ex-dividend” date with respect thereto falls prior to such date of determination.

 

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

 

“TSR Percentage” means the TSR achieved with respect to a share of Common Stock from the Effective Date to the Valuation Date determined by following quotient: (A) the TSR divided by (B) the Baseline Value.

 

“Valuation Date” means December 31, 2017.

 

“Vested LTIP Units” means those Earned LTIP Units that have fully vested in accordance with the time-based vesting conditions of Section 3(d) or have vested on an accelerated basis under Section 4.

 

3.         Award.

 

(a)        The Grantee is granted as of the Award Date, the number of Award LTIP Units set forth on Schedule A which are subject to forfeiture provided in this Section 3 and Section 4.  It is a condition to the effectiveness of this Award that the Grantee execute and deliver within ten (10) business days from the Award Date a fully executed copy of this Agreement and such other documents that the Company and/or the Partnership reasonably request in order to comply with all applicable legal requirements, including, without limitation, federal and state securities laws, and the Grantee pays the Per Unit Purchase Price for each such Award LTIP Unit issued.

 

-6-

 

(b)        The Award LTIP Units are subject to forfeiture during a maximum of a five-year period based on a combination of (i) the extent to which the Absolute TSR Goal and the Relative TSR Goals are achieved and (ii) the passage of five years or a shorter period in certain circumstances as provided herein in Section 4.  Award LTIP Units may become Earned LTIP Units and Earned LTIP Units may become Vested LTIP Units in the amounts and upon the conditions set forth in this Section 3 and in Section 4, provided that, except as otherwise expressly set forth in this Agreement with respect to a Qualified Termination or Change of Control, or as determined by the Committee, in its sole discretion, as provided in Section 4(f), the Continuous Service of the Grantee continues through and on each applicable vesting date.

 

(c)        As soon as practicable following the Valuation Date, but as of the Valuation Date, the Committee will determine:

 

(i)         the extent to which the Absolute TSR Goal has been achieved;

 

(ii)        the extent to which the Relative TSR Goals have been achieved;

 

(iii)       using the payout matrix on Exhibit A, the number of Earned LTIP Units to which the Grantee is entitled; and

 

(iv)       the calculation of the Partial Service/Performance Factor, if applicable to the Grantee.

 

If the number of Earned LTIP Units is smaller than the number of Award LTIP Units, then the Grantee, as of the Valuation Date, shall forfeit a number of Award LTIP Units equal to the difference without payment of any consideration by the Partnership other than as provided in the last sentence of Section 5; thereafter the term LTIP Units will refer only to the Earned LTIP Units and neither the Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in the Award LTIP Units that were so forfeited.

 

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

 

(i)         fifty percent (50%) of the Earned LTIP Units shall become Vested LTIP Units on January 1, 2019; and

 

(ii)        fifty percent (50%) of the Earned LTIP Units shall become Vested LTIP Units on January 1, 2020.

 

(e)        Except as otherwise provided under Section 4, upon termination of Continuous Service before the applicable vesting date, any Earned LTIP Units that have not become Vested LTIP Units pursuant to Section 3(d) shall, without payment of any consideration to the Grantee other than as provided in the last sentence of Section 5, automatically and without notice be forfeited and be and become null and void, and

 

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neither the Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such Earned LTIP Units.

 

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

 

(a)        If the Grantee’s Continuous Service terminates prior to the final scheduled vesting date in Section 3(d), the provisions of Sections 4(b) through Section 4(f) shall govern the treatment of the Grantee’s Award LTIP Units exclusively, unless the Grantee’s Employment Agreement contains provisions that expressly refer to this Section 4(a) and provides that those provisions of the Employment Agreement shall instead govern the treatment of the Grantee’s LTIP Units. In the event an entity of which the Grantee is an employee ceases to be a subsidiary or affiliate of the Company, such action shall be deemed to be a termination of employment of the Grantee for purposes of this Agreement, unless the Grantee promptly thereafter becomes an employee of the Company or any of its affiliates, provided that, the Committee or the Board, in its sole and absolute discretion, may make provision in such circumstances for lapse of forfeiture restrictions and/or accelerated vesting of some or all of the Grantee’s Award LTIP Units and Earned LTIP Units that have not previously been forfeited, effective immediately prior to such event. If a Change of Control occurs, Section 4(d) shall govern the treatment of the Grantee’s Award LTIP Units exclusively, notwithstanding the provisions of the Plan.

 

(b)        In the event of termination of the Grantee’s Continuous Service before the Valuation Date by Grantee’s death or Disability (each a “Qualified Termination”), the Grantee will not forfeit the Award LTIP Units upon such termination, but the following provisions of this Section 4(b) shall modify the treatment of the Award LTIP Units:

 

(i)         the calculations provided in Section 3(c) shall be performed as of the Valuation Date as if the Qualified Termination had not occurred;

 

(ii)        the number of Earned LTIP Units calculated pursuant to Section 3(c) shall be multiplied by the Partial Service/Performance Factor (with the resulting number being rounded to the nearest whole LTIP Unit or, in the case of 0.5 of a unit, up to the next whole unit), and such adjusted number of LTIP Units shall be deemed the Grantee’s Earned LTIP Units for all purposes under this Agreement; and

 

(iii)       the Grantee’s Earned LTIP Units as adjusted pursuant to Section 4(b)(ii) shall, as of the Valuation Date, become Vested LTIP Units and shall no longer be subject to forfeiture pursuant to Section 3(e).

 

(c)        In the event of Qualified Termination after the Valuation Date, all Earned LTIP Units that have not previously been forfeited pursuant to the calculations set forth in Section 3(c) shall, as of the date of such Qualified Termination, become Vested LTIP Units and no longer be subject to forfeiture pursuant to Section 3(e); provided that, notwithstanding that no Continuous Service requirement pursuant to Section 3(d) will

 

-8-

 

apply to the Grantee after the effective date of a Qualified Termination after the Valuation Date, the Grantee will not have the right to Transfer (as defined in Section 7) except by reason of the Grantee’s death or request conversion of his or her Vested LTIP Units under the Designation until such dates as of which his or her Earned LTIP Units would have become Vested LTIP Units pursuant to Section 3(d) absent a Qualified Termination.

 

(d)       If a Change of Control occurs prior to the final scheduled vesting date specified in Section 3(d), the provisions of this Section 4(d) shall apply:

 

(i)         If the Change of Control occurs prior to the Valuation Date, the calculation of the number of Earned LTIP Units as provided in Section 3(c) shall be performed as of the date of the Change of Control; provided however, the “Performance” percentages in the payout matrix in Exhibit A relating to the Absolute TSR Goal shall be reduced for purposes of this calculation by multiplying each such percentage by the Partial Service/Performance Factor (with the resulting percentage being rounded to the nearest tenth of a whole percentage point or, in the case of 0.05 of a whole percentage point, up to the next tenth of a whole percentage point).  The number of LTIP Units resulting from the calculation described in this paragraph shall be deemed the Grantee’s Earned LTIP Units for all purposes under this Agreement, and the balance of any Award LTIP Units shall be forfeited as of the date of the Change of Control without payment of any consideration to Grantee other than as provided in the last sentence of Section 5.

 

(ii)        If, within 24 months after a Change of Control (A) described in clauses (i) or (ii) of the definition of Change of Control or (B) described in clause (iii) of the definition of Change of Control in connection with which the surviving or successor entity (or its parent entity) agrees to continue, assume or replace this Award, the Grantee’s Continuous Service terminates as the result of either an involuntary termination for reasons other than Cause or a resignation for Good Reason, then to the extent the Grantee’s Earned LTIP Units have not already become Vested LTIP Units, such Earned LTIP Units shall become Vested LTIP Units as of the termination of Continuous Service and shall no longer be subject to forfeiture pursuant to Section 3(e).

 

(iii)       If this Award is not continued, assumed or replaced in connection with a Change of Control described in clause (iii) of the definition of Change of Control as contemplated by Section 4(d)(ii)(B), then to the extent the Grantee’s Earned LTIP Units have not already become Vested LTIP Units, such Earned LTIP Units shall become Vested LTIP Units as of the date of the Change of Control and shall no longer be subject to forfeiture pursuant to Section 3(e).  Unless the Committee provides otherwise in connection with a Change of Control described in clause (iv) of the definition of Change of Control, the Grantee’s Earned LTIP Units (as calculated pursuant to Section 4(d)(i) if the Change of Control occurs before the Valuation Date) shall, to the extent they have not already become Vested LTIP Units, become Vested LTIP Units immediately prior

 

-9-

 

to the consummation of the liquidation, dissolution or sale of assets and shall no longer be subject to forfeiture pursuant to Section 3(e).

 

(iv)       For purposes of this Section 4(d), this Award will be considered assumed or replaced if, in connection with the Change of Control transaction, either (A) the contractual obligations represented by this Award are expressly assumed by the surviving or successor entity (or its parent entity) with appropriate adjustments to the number and type of securities subject to this Award that preserves the economic or financial value of this Award existing at the time the Change of Control occurs, or (B) the Grantee has received a comparable LTIP Unit award that preserves the economic or financial value of this Award existing at the time of the Change of Control transaction and is subject to substantially similar terms and conditions as this Award.

 

(v)        Unless and until the Earned LTIP Units become Vested LTIP Units pursuant to Section 4(d)(ii) or Section 4(d)(iii), the Earned LTIP Units shall vest in accordance with Section 3(d).

 

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

 

(f)        Unless the Grantee’s Employee Agreement provides otherwise, in the event of a termination of the Grantee’s Continuous Service other than a Qualified Termination or a termination described in Section 4(d)(ii), all Award LTIP Units and Earned LTIP Units that have not theretofore become Vested LTIP Units shall, without payment of any consideration by the Partnership other than as provided in the last sentence of Section 5, automatically and without notice terminate, be forfeited and be and become null and void, and neither the Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such Award LTIP Units or Earned LTIP Units, provided, however, in the event the termination of Grantee’s employment is due to Grantee’s retirement after age 55, the Committee may determine, in its sole discretion, that all or any portion of the Award LTIP Units or the Earned LTIP Units shall become Vested LTIP Units, together with the terms and conditions upon which any such Award LTIP Units or Earned LTIP Units shall become Vested LTIP Units.

 

5.         Payments by Award Recipients. The Grantee shall have no rights with respect to this Agreement (and the Award evidenced hereby) unless he or she shall have accepted this Agreement prior to the close of business on the date described in Section 3(a) by (a) making a contribution to the capital of the Partnership by certified or bank check, wire transfer or other instrument acceptable to the Committee (as defined in the Plan), of $0.25 (the “Per Unit Purchase Price”), multiplied by the number of Award LTIP Units, (b) signing and delivering to

 

-10-

 

the Partnership a copy of this Agreement and (c) unless the Grantee is already a Limited Partner (as defined in the Partnership Agreement), signing, as a Limited Partner, and delivering to the Partnership a counterpart signature page to the Partnership Agreement (attached as Exhibit B). The Per Unit Purchase Price paid by the Grantee shall be deemed a contribution to the capital of the Partnership upon the terms and conditions set forth herein and in the Partnership Agreement. Upon acceptance of this Agreement by the Grantee, the Partnership Agreement shall be amended to reflect the issuance to the Grantee of the LTIP Units so accepted. Thereupon, the Grantee shall have all the rights of a Limited Partner of the Partnership with respect to the number of Award LTIP Units, as set forth in the Designation and the Partnership Agreement, subject, however, to the restrictions and conditions specified herein. Award LTIP Units constitute and shall be treated for all purposes as the property of the Grantee, subject to the terms of this Agreement and the Partnership Agreement. In the event of the forfeiture of the Grantee’s Award LTIP Units pursuant to this Agreement, the Partnership will pay the Grantee an amount equal to the number of Award LTIP Units so forfeited multiplied by the lesser of the Per Unit Purchase Price or the fair market value of an Award LTIP Unit on the date of forfeiture as determined by the Committee.

 

6.         Distributions.

 

(a)        The holders of Award LTIP Units, Earned LTIP Units and Vested LTIP Units (until and unless forfeited pursuant to Section 3(e) or Section 4(g)), shall be entitled to receive the distributions to the extent provided for in the Designation and the Partnership Agreement.

 

(b)        All distributions paid with respect to LTIP Units shall be fully vested and non-forfeitable when paid.

 

7.         Restrictions on Transfer.

 

(a)        Except as otherwise permitted by the Committee in its sole discretion, none of the Award LTIP Units, Earned LTIP Units, Vested LTIP Units or Partnership Units into which Vested LTIP Units have been converted shall be sold, assigned, transferred, pledged, hypothecated, given away or in any other manner disposed or encumbered, whether voluntarily or by operation of law (each such action a “Transfer”); provided that Earned LTIP Units and Vested LTIP Units may be Transferred to the Grantee’s Family Members (as defined below) by gift, bequest or domestic relations order; and provided further that the transferee agrees in writing with the Company and the Partnership to be bound by all the terms and conditions of this Agreement and the Partnership Agreement and that subsequent transfers shall be prohibited except those in accordance with this Section 7.  Additionally, all such Transfers must be in compliance with all applicable securities laws (including, without limitation, the Securities Act) and the applicable terms and conditions of the Partnership Agreement. In connection with any such Transfer, the Partnership may require the Grantee to provide an opinion of counsel, satisfactory to the Partnership that such Transfer is in compliance with all federal and state securities laws (including, without limitation, the Securities Act).  Any attempted Transfer not in accordance with the terms and conditions of this Section 7 shall be null and void, and neither the Partnership nor the Company shall reflect on its records any

 

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change in record ownership of any Earned LTIP Units or Vested LTIP Units as a result of any such Transfer, shall otherwise refuse to recognize any such Transfer and shall not in any way give effect to any such Transfer.  Except as provided in this Section 7, this Agreement is personal to the Grantee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.

 

(b)        For purposes of this Agreement, “Family Member” of a Grantee, means the Grantee’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Grantee’s household (other than a tenant of the Grantee), a trust in which one or more of these persons (or the Grantee) own more than 50 percent of the beneficial interests, and a partnership or limited liability company in which one or more of these persons (or the Grantee) own more than 50 percent of the voting interests.

 

8.         Miscellaneous.

 

(a)      Amendments. This Agreement may be amended or modified only with the consent of the Company and the Partnership acting through the Committee; provided that any such amendment or modification which materially adversely affects the rights of the Grantee hereunder must be consented to by the Grantee to be effective as against him or her. Notwithstanding the foregoing, this Agreement may be amended in writing signed only by the Company and the Partnership to correct any errors or ambiguities in this Agreement and/or to make such changes that do not materially adversely affect the Grantee’s rights hereunder. This grant shall in no way affect the Grantee’s participation or benefits under any other plan or benefit program maintained or provided by the Company or the Partnership or any of their subsidiaries or affiliates.

 

(b)      Clawback.  The Company has adopted an “Executive Compensation Clawback Policy” (“Clawback Policy”) applicable to all performance-based compensation paid or to be paid to the executive officers of the Company.  Grantee hereby agrees that the series of Award LTIP Units which are awarded under terms of this Agreement and which may become Earned LTIP Units and Vested LTIP Units hereunder are and shall remain subject to the Clawback Policy, as the same may be hereafter amended, modified or supplemented with the approval of the Committee.  Further, Grantee agrees that should the Committee determine that any Earned LTIP Units or Vested LTIP Units hereunder must be forfeited by the Grantee pursuant to the Clawback Policy, Grantee shall tender repayment or forfeiture of the Earned LTIP Units or Vested LTIP Units, as the case may be, to the Company in amounts as may be determined from time-to-time by the Committee, all in accordance with the Clawback Policy.

 

(c)        Incorporation of Plan and Designation; Committee Determinations. The provisions of the Plan and the Designation are hereby incorporated by reference as if set forth herein. The Committee will make the determinations and certifications required by

 

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this Award as promptly as reasonably practicable following the occurrence of the event or events necessitating such determinations or certifications. In the event of a Change of Control, the Committee will make such determinations within a period of time that enables the Company to make any payments due hereunder not later than the date of consummation of the Change of Control.

 

(d)       Status of LTIP Units; Plan Matters. This Award constitutes an incentive compensation award under the Plan. The LTIP Units are equity interests in the Partnership. The number of shares of Common Stock reserved for issuance under the Plan underlying outstanding Award LTIP Units will be determined by the Committee in light of all applicable circumstances, including calculations made or to be made under Section 3, vesting, capital account allocations and/or balances under the Partnership Agreement, and the exchange ratio in effect between Partnership Units and shares of Common Stock. The Company will have the right, at its option, as set forth in the Partnership Agreement, to issue shares of Common Stock in exchange for Partnership Units in accordance with the Partnership Agreement, subject to certain limitations set forth in the Partnership Agreement, and such shares of Common Stock, if issued, will be issued under the Plan. The Grantee acknowledges that the Grantee will have no right to approve or disapprove such determination by the Company.

 

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

 

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

 

(g)        Grantee Representations; Registration.

 

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

 

-13-

 

been afforded the opportunity to obtain such additional information as he or she deemed necessary before accepting this Award; and (G) the Grantee has had an opportunity to ask questions of representatives of the Partnership and the Company, or persons acting on their behalf, concerning this Award.

 

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

 

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

 

(i)         Tax Consequences.  The Grantee acknowledges that (i) neither the Company nor the Partnership has made any representations or given any advice with respect to the tax consequences of acquiring, holding, selling or converting LTIP Units or making any tax election (including the election pursuant to Section 83(b) of the Code)

 

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with respect to the LTIP Units and (ii) the Grantee is relying upon the advice of his or her own tax advisor in determining such tax consequences.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

[Remainder of page left intentionally blank]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the ___ day of ________, 2015.

 

	
 
    	
SIMON PROPERTY   GROUP, INC., a Delaware 
    
	
 
    	
corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
John Rulli
    
	
 
    	
Title:
    	
Executive Vice   President
    
	
 
    	
 
    	
and Chief   Administrative Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SIMON PROPERTY GROUP,   L.P., a Delaware 
    
	
 
    	
limited partnership
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Simon Property   Group, Inc., a
    
	
 
    	
 
    	
 
    	
Delaware corporation,   its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
John Rulli
    
	
 
    	
Title:
    	
Executive Vice   President
    
	
 
    	
 
    	
and Chief   Administrative Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GRANTEE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name: [NAME]
    
					

 

- 17 -

 

EXHIBIT A

 

PAYOUT MATRIX

 

The Committee will determine the number of Award LTIP Units that become Earned LTIP Units by determining the extent to which the Absolute TSR Goal and the Relative TSR Goals have been achieved as set forth in the following payout matrix.

 

 

	
 
    	
 
    	
 
    	
 
    	
Relative   TSR (TSR %-ile Rank)2

 
    	
 
    
	
 

Absolute TSR1

 
    	
 
    	
 

vs.   MSCI REIT Index

 
    	
 
    	
 

vs.   S&P 500 Index

 
    	
 
    
	
 

Weighted 20%

 
    	
 
    	
 

Weighted   60%

 
    	
 
    	
 

Weighted   20%

 
    	
 
    
	
Performance
    	
 
    	
Payout   %
   of Target3
    	
 
    	
Performance
    	
 
    	
Payout %
   of Target3
    	
 
    	
Performance
    	
 
    	
Payout %
   of Target3
    	
 
    
	
<=20%
    	
 
    	
0.0%
    	
 
    	
Index -1%
    	
 
    	
0.0%
    	
 
    	
Index -2%
    	
 
    	
0.0%
    	
 
    
	
24%
    	
 
    	
33.3%
    	
 
    	
= Index
    	
 
    	
33.3%
    	
 
    	
= Index
    	
 
    	
33.3%
    	
 
    
	
27%
    	
 
    	
50.0%
    	
 
    	
Index +1%
    	
 
    	
50.0%
    	
 
    	
Index +2%
    	
 
    	
100.0%
    	
 
    
	
30%
    	
 
    	
66.7%
    	
 
    	
Index +2%
    	
 
    	
66.7%
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
33%
    	
 
    	
83.3%
    	
 
    	
Index +3%
    	
 
    	
100.0%
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
>=36%
    	
 
    	
100.0%
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

1   Percentage of total shareholder return over performance period commencing on the Effective Date, subject to modification in the event of a Change of Control.

2   Percentage of relative performance over performance period commencing on the Effective Date

3   Linear interpolation between payout percentages

 

- 18 -

 

EXHIBIT B

FORM OF LIMITED PARTNER SIGNATURE PAGE

 

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

 

	
 
    	
Signature Line for   Limited Partner:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    
	
 
    	
Date:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address of Limited   Partner:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
				

 

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EXHIBIT C

 

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

 

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

 

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

 

Name: [NAME] (the “Taxpayer”)

 

Address:_______________________________________________________

 

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

 

2.                 Description of property with respect to which the election is being made:  Series 2015 LTIP Units (“LTIP Units”) in Simon Property Group, L.P. (the “Partnership”).

 

3.                 The date on which the LTIP Units were issued is February 26, 2015.  The taxable year to which this election relates is calendar year 2015.

 

4.            Nature of restrictions to which the LTIP Units are subject:

 

(a)                 With limited exceptions, until the LTIP Units vest, the Taxpayer may not transfer in any manner any portion of the LTIP Units without the consent of the Partnership.

 

(b)                The Taxpayer’s LTIP Units are subject to forfeiture until they vest in accordance with the provisions in the applicable Award Agreement and Certificate of Designation for the LTIP Units.

 

5.            The fair market value at time of issue (determined without regard to any restrictions other than restrictions which by their terms will never lapse) of the LTIP Units with respect to which this election is being made was $0.25 per LTIP Unit.

 

6.    The amount paid by the Taxpayer for the LTIP Units was $0.25 per LTIP Unit.

 

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

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name: [NAME]
    

 

- 20 -

 

SCHEDULE A TO SERIES 2015 LTIP UNIT AWARD AGREEMENT

 

 

	
Award Date:
    	
February 26, 2015
    
	
 
    	
 
    
	
Name of Grantee:
    	
[NAME]
    
	
 
    	
 
    
	
Number of Award LTIP   Units:
    	
[UNITS]
    

 

- 21 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}]]