Form of Simon Property Group Series 2021 LTIP Unit Award Agreement
SIMON PROPERTY GROUP
SERIES 2021 LTIP UNIT AWARD AGREEMENT
This Series 2021 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”).
NOW, THEREFORE, the Company, the Partnership and the Grantee agree as follows:
“Absolute TSR Goal” means the goal set for TSR as set forth on Exhibit A.
“Award LTIP Units” means the number of LTIP Units granted by this Agreement, the number of which granted is set forth on Schedule A.
“Baseline Value” means $85.28, the per share closing price of the Common Stock reported by The New York Stock Exchange for the last trading date preceding January 1, 2021.
“CAGR” means compound annual growth rate.
“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.
“Certificate of Designation” means the Certificate of Designation of Series 2021 LTIP Units of the Partnership approved by the Company as the general partner of the Partnership.
“Change of Control” means:
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;
“Code” means the Internal Revenue Code of 1986, as amended.
“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)(iv)(B).
“Disability” means, with respect to the Grantee, a “permanent and total disability” as defined in Section 22(e)(3) of the Code.
“Earned LTIP” means those Award LTIP Units that have been determined by the Committee, in its sole and absolute discretion, to have been earned on the Valuation Date based on the extent to which one or more of the FFO Goal, the Absolute TSR Goal and the Objective Criteria Goals have been achieved as set forth in Section 3(c) or have otherwise been earned under Section 4.
“Effective Date” means January 1, 2021.
“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, in its sole and absolute discretion, of the total consideration paid or payable in the transaction resulting in the Change of Control for one share of Common Stock.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Family Member” has the meaning set forth in Section 7.
“FFO” shall mean funds from operations per share and shall be determined by using the consolidated FFO per share disclosed by the Company in its earnings releases and filings with the SEC during the Performance Period, as the case may be. FFO shall be increased or decreased to give effect to any of the following: any (i) extraordinary, unusual or nonrecurring item, as described in Accounting Standards Codification Topic 225-20 (or any successor pronouncement thereto) including without limitation a spin-off, or as a result of dispositions not made in the ordinary course, (ii) litigation or claim judgments or settlements; (iii) changes in tax laws, accounting principles, or other laws or regulatory rules affecting reported results (iv) other specific unusual or nonrecurring events, or objectively determinable category thereof; (v) nonrecurring charges; and (vi) a change in the Company’s fiscal year. Each such adjustment, if any, shall be made by the Committee, in its sole and absolute discretion, in order to prevent the undue dilution of the Grantee’s rights with respect to the Award, as modified herein.
“FFO Goal” means the goal for FFO as set forth on Exhibit A.
“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 and the date of termination occurs within 90 calendar days following the occurrence of the event alleged to constitute Good Reason.
“Grant Date” means the date that the Award LTIP Units were granted as set forth on Schedule A.
“Linear Interpolation” means straight line linear interpolation.
“LTIP Units” means the Series 2021 LTIP Units issued pursuant to the Certificate of Designation.
“Objective Criteria Goals” means the Objective Criteria Goals set forth on Exhibit A.
“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.
“Performance Period” means the period commencing on the Effective Date and ending on the Valuation Date.
“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).
“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).
“Scheduled Vesting Date” means January 1, 2025.
“SEC” means the United States Securities and Exchange Commission.
“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, 2023.
“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.
If the number of Earned LTIP Units is smaller than the number of Award LTIP Units on the Valuation Date, 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 have any further rights or interests in the Award LTIP Units that were so forfeited.
liquidation, dissolution or sale of assets and shall no longer be subject to forfeiture pursuant to Section 3(e).
counterpart original 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 Certificate of 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, in its sole and absolute discretion.
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.
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.
questions of representatives of the Partnership and the Company, or persons acting on their behalf, concerning this Award.
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.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the 1st day of March, 2021.
SIMON PROPERTY GROUP, INC., a Delaware corporation
Chief Administrative Officer
SIMON PROPERTY GROUP, L.P., a Delaware limited partnership
Simon Property Group, Inc., a Delaware corporation, its general partner
Chief Administrative Officer
The Committee, in its sole and absolute discretion, will determine the number of Award LTIP Units that become Earned LTIP Units by determining the extent to which the FFO Goal, the Absolute TSR Goal and the Objective Criteria Goals have been achieved as set forth in the following payout matrices:
FFO per share Performance Period CAGR
Corresponding FFO per share values
Number of Award LTIP Units that become Earned LTIP Units1
Below Threshold 0%
Absolute TSR Goal
Number of Award LTIP
1 Linear Interpolation shall be used to calculate the number of Earned LTIP Units if the actual CAGR is between the reference points.
2 Linear Interpolation shall be used to calculate the number of Earned LTIP Units if the actual CAGR is between the reference points.
Below Threshold 0%
Objective Criteria Goals
Number of Strategic Objectives Met
Number of Award LTIP
9 of 9 Objectives Met
7 of 9 Objectives Met
6 of 9 Objectives Met
Below Threshold 0%
Fewer than 6 Objectives Met
3 Linear Interpolation shall be used to calculate the number of Earned LTIP Units if the number of objectives met is between the reference points.
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:
Address of Limited Partner:
SCHEDULE A TO SERIES 2021 LTIP UNIT AWARD AGREEMENT
Grant Date:March 1, 2021
Name of Grantee:[GRANTEE]
NUMBER OF AWARD LTIP UNITS:[_______]