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Exhibit 10.5
SIMON PROPERTY GROUP, L.P.
1998 STOCK INCENTIVE PLAN
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TABLE OF CONTENTS
ARTICLE 1
GENERAL ............................................................... 1
1.1 Purpose .................................................. 1
1.2 Administration ........................................... 1
1.3 Persons Eligible for Awards .............................. 2
1.4 Types of Awards Under Plan ............................... 2
1.5 Shares Available for Awards .............................. 3
1.6 Definitions of Certain Terms ............................. 3
1.7 Agreements Evidencing Awards ............................. 4
ARTICLE 2
STOCK OPTIONS AND
STOCK APPRECIATION RIGHTS ............................................. 5
2.1 Grants of Stock Options .................................. 5
2.2 Grant of Reload Options .................................. 6
2.3 Grant of Stock Appreciation Rights ....................... 6
2.4 Exercise of Related Stock Appreciation
Right Reduces Shares Subject to Option ................... 7
2.5 Exercisability of Options and Stock Appreciation Rights .. 7
2.6 Payment of Option Price .................................. 9
2.7 Termination of Service ................................... 11
2.8 Special ISO Requirements ................................. 12
ARTICLE 3
AWARDS OTHER THAN STOCK OPTIONS AND
STOCK APPRECIATION RIGHTS ............................................. 13
3.1 Restricted Stock Awards .................................. 13
3.2 Common Stock Awards ...................................... 14
3.3 Performance Units ........................................ 14
ARTICLE 4
OPTION GRANTS TO ELIGIBLE DIRECTORS ................................... 15
4.1 Grants to Eligible Directors ............................. 15
4.2 Amounts of Grants ........................................ 15
4.3 Terms of Options ......................................... 15
4.4 Transfer of Options ...................................... 16
4.5 Change of Control ........................................ 16
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ARTICLE 5
MISCELLANEOUS ......................................................... 16
5.1 Amendment of the Plan; Modification of Awards ............ 16
5.2 Limitation on Exercise ................................... 17
5.3 Restrictions ............................................. 17
5.4 Nontransferability ....................................... 18
5.5 Withholding Taxes ........................................ 18
5.6 Adjustments Upon Changes in Capitalization ............... 18
5.7 Right of Discharge Reserved .............................. 19
5.8 No Rights as a Stockholder ............................... 19
5.9 Nature of Payments ....................................... 19
5.10 Non-Uniform Determinations ............................... 20
5.11 Other Payments or Awards ................................. 20
5.12 Reorganization ........................................... 20
5.13 Section Headings ......................................... 21
5.14 Effective Date and Term of Plan .......................... 21
5.15 Governing Law ............................................ 21
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SIMON PROPERTY GROUP, L.P.
1998 STOCK INCENTIVE PLAN
ARTICLE 1
GENERAL
1.1 Purpose.
The purpose of this 1998 Stock Incentive Plan (the "Plan") is to
provide for certain key personnel (as defined in Section 1.3) of Simon Property
Group, L.P. (the "Partnership") and certain of its Affiliates (as defined in
Section 1.6) an equity-based incentive to maintain and enhance the performance
and profitability of the Partnership and Simon Property Group, Inc. (the
"Company"). It is intended that awards granted under this Plan may provide
performance-based compensation within the meaning of section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), to the extent
applicable.
1.2 Administration.
(a) The Plan shall be administered by a committee (the "Committee")
appointed by the Partnership, by action of its General Partner(s), which
Committee shall consist of two or more directors of the Company. A
majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is
present or acts approved in writing by all members of the Committee
without a meeting, shall be acts of the Committee. The members of the
Committee shall be appointed by and may be changed at any time and from
time to time in the discretion of, the Partnership, by action of its
General Partner(s).
(b)The Committee shall have the authority (i) to exercise all of the
powers granted to it under the Plan, (ii) to construe, interpret and
implement the Plan and any Plan agreements executed pursuant to the Plan,
(iii) to prescribe, amend and rescind rules relating to the Plan, (iv) to
make any determination necessary or advisable in administering the Plan,
and (v) to correct any defect, supply any omission and reconcile any
inconsistency in the Plan.
(c) The determination of the Committee on all matters relating to
the Plan or any Plan agreement shall be conclusive.
(d) No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any award
hereunder.
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(e) Notwithstanding anything to the contrary contained herein: (i)
until the Partnership shall appoint the members of the Committee, the Plan
shall be administered by the General Partner(s), and (ii) the General
Partner(s) may, in their sole discretion, at any time and from time to
time, resolve to administer the Plan. In either of the foregoing events,
the term Committee as used herein shall be deemed to mean the General
Partner(s).
1.3 Persons Eligible for Awards.
Awards under Articles 2 and 3 of the Plan may be made to such
officers, employee-directors, Eligible Directors, executive, managerial,
professional or other employees, advisors and consultants ("key personnel") of
the Partnership or its Affiliates, other than Melvin Simon and Herbert Simon, as
the Committee shall from time to time in its sole discretion select. Eligible
Directors shall also receive awards as provided in Article 4 of the Plan.
1.4 Types of Awards Under Plan.
(a) Awards may be made under the Plan in the form of (i) stock
options ("options"), (ii) stock appreciation rights related to an option
("related stock appreciation rights"), (iii) stock appreciation rights not
related to any option ("unrelated stock appreciation rights"), (iv)
restricted stock awards and (v) performance units, all as more fully set
forth in Articles 2, 3 and 4.
(b) Options granted under the Plan may be either (i) "nonqualified"
stock options subject to the provisions of section 83 of the Code or (ii)
options intended to qualify for incentive stock option treatment described
in Code section 422.
(c) All options when granted are intended to be nonqualified stock
options, unless the applicable Plan agreement explicitly states that the
option is intended to be an incentive stock option. If an option is
intended to be an incentive stock option, and if for any reason such
option (or any portion thereof) shall not qualify as an incentive stock
option, then, to the extent of such nonqualification, such option (or
portion) shall be regarded as a nonqualified stock option appropriately
granted under the Plan provided that such option (or portion) otherwise
meets the Plan's requirements relating to nonqualified stock options.
(d) In the event the Company or an Affiliate consummates a
transaction described in Code section 424(a), persons who become key
personnel or directors on account of such transaction may be granted
options in substitution or as a replacement for options granted by the
former employer. The Committee, in its sole discretion and consistent with
Code section 424(a), shall determine the exercise price of the substitute
options.
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1.5 Shares Available for Awards.
(a) Subject to Section 5.6 (relating to adjustments upon changes in
capitalization), the aggregate number of shares of Common Stock (as
defined in Section 1.6) which may be delivered under the Plan pursuant to
awards hereunder shall not exceed 10,000,000 shares. The number of
unrestricted shares acquired pursuant to the exercise of any related stock
appreciation right pursuant to the Plan shall be deemed to be equal to the
number of shares surrendered, or as to which the grantee's right to
purchase, acquire or receive is surrendered, in connection with such
exercise, and, to the extent that any payment to a grantee upon exercise
of any stock appreciation right is made in the form of restricted shares,
the portion of the shares surrendered, or as to which such grantee's right
to purchase, acquire or receive is surrendered, which is related to
payment in the form of restricted shares shall not be deemed to be
unrestricted shares acquired pursuant to the Plan until such restricted
shares become unrestricted. Upon unconditional vesting of the right of any
grantee to payment pursuant to any performance unit in cash or any other
form (other than restricted or unrestricted shares), a number of
unrestricted shares, equal to the portion of the shares subject to such
performance unit to which such payment relates, shall be deemed to be
delivered pursuant to the Plan in connection therewith. The number of
shares delivered in full or partial payment of any option exercise price
under the Plan shall be deducted from the number of shares delivered to
the grantee pursuant to such option for purposes of determining the number
of unrestricted shares delivered pursuant to the Plan. Without limiting
the generality of the foregoing, shares of Common Stock covered by awards
granted under the Plan which expire or terminate for any reason (other
than an option or part thereof which is canceled by the Committee and for
which cash is paid in respect thereof pursuant to Section 2.5(f)) shall
again become available for award under the Plan.
(b) Shares of Common Stock that shall be subject to issuance
pursuant to the Plan shall be authorized and unissued or treasury shares
of Common Stock.
(c) Without limiting the generality of the foregoing, the Committee
may, with the grantee's consent, cancel any award under the Plan and issue
a new award in substitution therefor upon such terms as the Committee may
in its sole discretion determine, provided that the substituted award
shall satisfy all applicable Plan requirements as of the date such new
award is made.
1.6 Definitions of Certain Terms.
(a) The term "Affiliate" as used herein means any person or entity
which, at the time of reference, directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common
control with, the
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Partnership, as determined by the Committee in its sole discretion;
provided, however, that the Company and Affiliates of the Company shall be
considered Affiliates of the Partnership.
(b) The term "Common Stock" as used herein means the shares of
common stock, par value $0.0001 per share, of Simon Property Group, Inc.,
as constituted on the effective date of the Plan, all rights which trade
with or are paired with such shares of common stock, including beneficial
interests in one or more trusts which own all of the common stock of SPG
Realty Consultants, Inc., and any other shares into which such common
stock shall thereafter be changed by reason of a recapitalization, merger,
consolidation, split-up, combination, exchange of shares or the like.
(c) The term "Eligible Director" means a director of the Company who
is not an employee of the Partnership or any of its Affiliates.
(d) Except as otherwise determined by the Committee in its sole
discretion, the "fair market value" as of any date and in respect of any
share of Common Stock shall be the mean between the high and low sales
prices of a share of Common Stock as reported on the New York Stock
Exchange if shares of Common Stock are then trading upon such exchange, or
if not, then such average on such other stock exchange on which shares of
the Common Stock are principally trading, on such date. In no event shall
the fair market value of any share be less than its par value.
(e) The term "Performance Cycle" means the period of time
established by the Committee within which Performance Goals are required
to be attained or satisfied.
(f) The term "Performance Goals" means the performance goals
established by the Committee with respect to the Company, the Partnership
or any Affiliates, in the Committee's sole discretion, in writing, based
on any one or any combination of the following business criteria: (a)
earnings per share; (b) return on equity; (c) return on assets; (d) market
value per share; (e) funds from operations; (f) return to stockholders
(including dividends); (g) revenues; (h) market share; (i) cash flow; and
(j) cost reduction goals. Awards shall be delivered only after it is
certified, in writing, by the Committee that the Performance Goals as
established by the Committee have been attained or otherwise satisfied
within the Performance Cycle.
1.7 Agreements Evidencing Awards
(a) Options, stock appreciation rights and restricted stock awards
granted under the Plan shall be evidenced by written agreements. Other
awards
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granted under the Plan shall be evidenced by written agreements to the
extent the Committee may in its sole discretion deem necessary or
desirable. Any such written agreements shall (i) contain such provisions
not inconsistent with the terms of the Plan as the Committee may in its
sole discretion deem necessary or desirable and (ii) be referred to herein
as "Plan Agreements."
(b) Each Plan agreement shall set forth the number of shares of
Common Stock subject to the award granted thereby.
(c) Each Plan agreement with respect to the granting of a related
stock appreciation right shall set forth the number of shares of Common
Stock subject to the related option which shall also be subject to the
related stock appreciation right granted thereby.
(d) Each Plan agreement with respect to the granting of an option
shall set forth the amount (the "option exercise price") payable by the
grantee in connection with the exercise of the option evidenced thereby.
The option exercise price per share shall not be less than the fair market
value of a share of Common Stock on the date the option is granted.
(e) Each Plan agreement with respect to a stock appreciation right
shall set forth the amount (the "appreciation base") over which
appreciation will be measured upon exercise of the stock appreciation
right evidenced thereby. The appreciation base per share of Common Stock
subject to a stock appreciation right shall not be less than (i) in the
case of an unrelated stock appreciation right, the fair market value of a
share of Common Stock on the date the stock appreciation right is granted,
or (ii) in the case of a related stock appreciation right, the option
exercise price per share of Common Stock subject to the related option.
ARTICLE 2
STOCK OPTIONS AND
STOCK APPRECIATION RIGHTS
2.1 Grants of Stock Options.
The Committee may grant options to purchase shares of Common Stock
in such amounts and subject to such terms and conditions as the Committee shall
from time to time in its sole discretion determine, subject to the terms of the
Plan; provided, however, that the maximum number of shares subject to all awards
granted to any Plan participant pursuant to the Plan shall not exceed 600,000
in any calendar year.
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2.2 Grant of Reload Options.
The Committee may, subject to Sections 1.5 and 2.1, grant a Reload
Option to any grantee holding an unexercised option. For purposes of the Plan. a
"Reload Option" shall mean an option to purchase a number of shares of Common
Stock granted in connection with the exercise of the grantee's option (the
"Exercised Options") upon the payment of the option exercise price for such
Exercised Option with shares of Common Stock that have a fair market value equal
to not less than 100% of the option exercise price for such Exercised Option.
The Reload Option with respect to an Exercised Option shall be for a number of
shares of Common Stock equal to the number of shares of Common Stock tendered to
exercise the Exercised Option plus, if so provided by the Committee, the number
of shares of Common Stock, if any, retained by the Partnership in connection
with the exercise of the Exercised Option to satisfy any federal, state, or
local tax withholding requirements. Reload options shall be subject to the
following terms and conditions:
(i) the grant date for each Reload Option shall be the date of
exercise of the Exercised Option to which it relates;
(ii) the Reload Option may be exercised at any time during the
unexpired term of the original Exercised Option to which it relates
(subject to earlier termination thereof as provided in the Plan and
in the applicable Plan agreement); and
(iii) the terms of the Reload Option shall be the same as the
terms of the Exercised Option to which it relates, except that (1)
the option exercise price shall be the fair market value of the
Common Stock on the grant date of the Reload Option and (2) no
Reload Option may be exercised within one year from the date on
which such Reload Option was granted.
2.3 Grant of Stock Appreciation Rights.
(a) Related Stock Appreciation Rights. The Committee may grant a
related stock appreciation right in connection with all or any part of an
option granted under the Plan, either at the time the related option is
granted or any time thereafter prior to the exercise, termination or
cancellation of such option, and subject to such terms and conditions as
the Committee shall from time to time in its sole discretion determine,
subject to the terms of the Plan. The grantee of a related stock
appreciation right shall, subject to the terms of the Plan and the
applicable Plan agreement, have the right to surrender to the Partnership
for cancellation all or a portion of the related option granted under the
Plan, but only to the extent that such option is then exercisable, and to
be paid therefor an amount equal to the excess (if any) of(i) the
aggregate fair market value of the shares of Common Stock subject to such
option or portion thereof (determined as
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of the date of exercise of such stock appreciation right), over (ii) the
aggregate appreciation base (determined pursuant to Section 1.7(e)) of the
shares of Common Stock subject to such stock appreciation right or portion
thereof.
(b) Unrelated Stock Appreciation Rights. The Committee may grant an
unrelated stock appreciation right in such amount and subject to such
terms and conditions, as the Committee shall from time to time in its sole
discretion determine, subject to the terms of the Plan. The grantee of an
unrelated stock appreciation right shall, subject to the terms of the Plan
and the applicable Plan agreement, have the right to surrender to the
Partnership for cancellation all or a portion of such stock appreciation
right, but only to the extent that such stock appreciation right is then
exercisable, and to be paid therefor an amount equal to the excess (if
any) of (i) the aggregate fair market value of the shares of Common Stock
subject to such stock appreciation right or portion thereof (determined as
of the date of exercise of such stock appreciation right), over (ii) the
aggregate appreciation base (determined pursuant to Section 1.7(e)) of the
shares of Common Stock subject to such stock appreciation right or portion
thereof.
(c) Payment. Unless the Plan agreement provides otherwise, payment
due to the grantee upon exercise of a stock appreciation right shall be
made in cash and/or in Common Stock (valued at the fair market value
thereof as of the date of exercise) as determined by the Committee in its
sole discretion.
2.4 Exercise of Related Stock Appreciation Right Reduces Shares
Subject to Option.
Upon any exercise of a related stock appreciation right or any
portion thereof, the number of shares of Common Stock subject to the related
option shall be reduced by the number of shares of Common Stock in respect of
which such stock appreciation right shall have been exercised.
2.5 Exercisability of Options and Stock Appreciation Rights.
Subject to the other provisions of the Plan:
(a) Exercisability Determined by Plan Agreement. Each Plan agreement
shall set forth the period during which and the conditions subject to
which the option or stock appreciation right evidenced thereby shall be
exercisable, as determined by the Committee in its sole discretion.
(b) Default Provisions. Unless the applicable Plan agreement
otherwise specifies:
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(i) no option or stock appreciation right shall be exercisable
prior to the first anniversary of the date of grant;
(ii) each option or stock appreciation right granted under the
Plan shall become cumulatively exercisable with respect to 40% of
the shares of Common Stock subject thereto, rounded down to the next
lower full share, on the first anniversary of the date of grant, and
with respect to an additional 30% of shares of Common Stock subject
thereto, rounded down to the next lower full share, on the second
anniversary of the date of the grant;
(iii) each option or stock appreciation right shall become
100% exercisable on the third anniversary of the date of grant;
(iv) except as provided in Section 2.7 each option or stock
appreciation right shall remain 100% exercisable through the day
prior to the tenth anniversary of the date of grant, after which
such option or stock appreciation right shall terminate and cease to
be exercisable; and
(v) no option or stock appreciation right shall be exercisable
to the extent that such exercise will cause the Partnership or
Affiliate to pay any amount that would be nondeductible by the
Partnership or such Affiliate by reason of Code section 162(m).
(c) Exercise of Related Stock Appreciation Right. Unless the
applicable Plan agreement otherwise provides, a related stock
appreciation right shall be exercisable at any time during the period that
the related option may be exercised.
(d) Partial Exercise Permitted. Unless the applicable Plan agreement
otherwise provides, an option or stock appreciation right granted under
the Plan may be exercised from time to time as to all or part of the full
number of shares as to which such option or stock appreciation right
shall then be exercisable. No option shall be exercised with respect to
less than 50 shares of Common Stock unless the option is being exercised
with respect to the full number of shares issuable hereunder.
(e) Notice of Exercise; Exercise Date.
(i) An option or stock appreciation right shall be exercisable
by the filing of a written notice of exercise with the Partnership,
on such form and in such manner as the Committee
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shall in its sole discretion prescribe, and by payment in accordance
with Section 2.6.
(ii) Unless the applicable Plan agreement otherwise provides
or the Committee in its sole discretion otherwise determines, the
date of exercise of an unrelated stock appreciation right shall be
the date the Partnership receives such written notice of exercise.
(iii) For purposes of the Plan, the "option exercise date"
shall be deemed to be the sixth business day immediately following
the date written notice of exercise is received by the Partnership.
(f) Cashout of Options. If and to the extent that the
applicable Plan agreement so provides: At any time after receipt of
written notice of exercise of an option and prior to the "option exercise
date" (as defined in Section 2.5(e)), the Committee in its sole discretion
may by written notice to the grantee, cancel the option or any part
thereof if the Committee in its sole discretion determines that tax, legal
or contractual restrictions or brokerage or other market considerations
would make the acquisition of Common Stock, or the grantee's sale of
Common Stock to the public markets illegal, impracticable or inadvisable.
If the Committee cancels such option or any part thereof, the Partnership
shall pay to the grantee, as soon as practicable thereafter, an amount
equal in cash to the excess of (i) the aggregate fair market value of the
shares of Common Stock subject to the option or part thereof canceled
(determined as of the option exercise date), over (ii) the aggregate
option exercise price of the shares of Common Stock subject to the option
or part thereof canceled.
2.6 Payment of Option Price.
(a) Tender Due Upon Notice of Exercise. Unless the applicable Plan
agreement otherwise provides or the Committee in its sole discretion
otherwise determines, (i) any written notice of exercise of an option
shall be accompanied by payment of the full purchase price for the shares
being purchased, and (ii) the grantee shall have no right to receive
shares of Common Stock with respect to an option exercise prior to the
option exercise date.
(b) Manner of Payment. Payment of the option exercise price shall be
made in any combination of the following:
(i) by certified or official bank check payable to the Company
(or the equivalent thereof acceptable to the Committee);
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(ii) with the consent of the Committee in its sole discretion,
by personal check (subject to collection), which may in the
Committee's sole discretion be deemed conditional;
(iii) if and to the extent provided in the applicable Plan
agreement, by delivery of previously acquired shares of Common Stock
owned by the grantee for at least six months (or such other period
as the Committee may prescribe) having a fair market value
(determined as of the option exercise date) equal to the portion of
the option exercise price being paid thereby, provided that the
Committee may require the grantee to furnish an opinion of counsel
acceptable to the Committee to the effect that such delivery would
not result in the grantee incurring any liability under Section
16(b) of the Act and does not require any Consent (as defined in
Section 5.3);
(iv) with the consent of the committee in its sole discretion,
by the promissory note and agreement of the grantee providing for
payment with interest on the unpaid balance accruing at a rate not
less than that needed to avoid the imputation of income under Code
section 7872 and upon such terms and conditions (including the
security, if any, therefor) as the Committee may determine in its
sole discretion; or
(v) by any other means which the Committee, in its sole
discretion, determines to be consistent with the purposes of the
Plan.
(c) Cashless Exercise. Payment in accordance with clause (i) of
Section 2.6(b) may be deemed to be satisfied, if and to the extent
provided in the applicable Plan agreement, by delivery to the Company of
an assignment of a sufficient amount of the proceeds from the sale of
Common Stack acquired upon exercise to pay for all of the Common Stock
acquired upon exercise and an authorization to the broker or selling agent
to pay that amount to the Company, which sale shall be made at the
grantee's direction at the time of exercise, provided that the Committee
may require the grantee to furnish an opinion of counsel acceptable to the
Committee to the effect that such delivery would not result in the grantee
incurring any liability under Section 16(b) of the Act and does not
require any Consent (as defined in Section 5.3).
(d) Issuance of Shares. As soon as practicable after receipt of full
payment, the Company shall, subject to the provisions of Section 5.3,
deliver to the grantee one or more certificates for the shares of Common
Stock so purchased, which certificates may bear such legends as the
Company may deem appropriate
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concerning restrictions on the disposition of the shares in accordance
with applicable securities laws, rules and regulations or otherwise.
2.7 Termination of Service.
For purposes of the Plan, "termination of service" means, in the
case of an employee, the termination of the employment relationship between the
employee and the Partnership and all Affiliates; and in the case of an
individual who is not an employee, the termination of the service relationship
between the individual and the Partnership and all Affiliates. Subject to the
other provisions of the Plan and unless the applicable Plan agreement otherwise
provides:
(a) General Rule. All options and stock appreciation rights granted
to a grantee shall terminate upon his termination of service for any
reason (including death) except to the extent post-service exercise of the
vested portion of an option or stock appreciation right is permitted in
accordance with this Section 2.7. The "vested portion" of any option or
stock appreciation right shall mean the portion thereof which is
exercisable immediately prior to the grantee's termination of service for
any reason.
(b) Improper Activity. All options and stock appreciation rights
granted to a grantee shall terminate and expire on the day of the
grantee's termination of service for cause, whether or not the grantee is
a party to a written service contract. For purposes of this Section 2.7, a
grantee's service shall be deemed to be terminated for "cause" if he is
discharged (i) on account of fraud, embezzlement or other unlawful or
tortious conduct, whether or not involving or against the Partnership or
any Affiliate, (ii) for violation of a policy of the Partnership or any
Affiliate, (iii) for serious and willful acts of misconduct detrimental to
the business or reputation of the Partnership or any Affiliate or (iv)for
"cause" or any like term as defined in any written contract with the
grantee.
(c) Regular Termination; Leaves of Absence. If the grantee's service
terminates for reasons other than as provided in subsection (b) or (d) of
this Section 2.7, the portion of options and stock appreciation rights
granted to such grantee which were exercisable immediately prior to such
termination of service may be exercised until the earlier of (i) 30 days
after his termination of service or (ii) the date on which such options
and stock appreciation rights terminate or expire in accordance with the
provisions of the Plan (other than this Section 2.7) and the Plan
agreement; provided, that the Committee may in its sole discretion
determine such other period for exercise in the case of an individual
whose service terminates solely because the employer ceases to be an
Affiliate or the grantee transfers employment with the Partnership's
consent to a purchaser of a business disposed of by the Partnership. The
Committee may in its sole discretion
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determine (i) whether any leave of absence (including short-term or
long-term disability or medical leave) shall constitute a termination of
service for purposes of the Plan, and (ii) the impact, if any, of any such
leave on outstanding awards under the Plan.
(d) Death; Disability; Retirement. If a grantee's service terminates
by reason of death, disability, or retirement at or after age 65, the
portion of options and stock appreciation rights granted to such grantee
which were exercisable immediately prior to such termination of service
may be exercised until the earlier of (i) one year after his termination
of service in the case of death or disability or three years after his
termination of service by reason of retirement, or (ii) the date on which
such options and stock appreciation rights terminate or expire in
accordance with the Plan agreement. For purposes of this Section 2.7, the
term "disability" shall mean, with respect to any grantee, a "permanent
and total disability" as defined in section 22(e)C3) of the Code.
2.8 Special ISO Requirements.
In order for a grantee to receive special tax treatment with respect
to stock acquired under an option intended to be an incentive stock option, the
grantee of such option must be, at all times during the period beginning on the
date of grant and ending on the day three months before the date of exercise of
such option, an employee of the Company or any of the Company's parent or
subsidiary corporations (within the meaning of Code section 424), or of a
corporation or a parent or subsidiary corporation of such corporation issuing or
assuming a stock option in a transaction to which Code section 424(a) applies.
The aggregate fair market value, determined as of the date an option is granted,
of the Common Stock for which any grantee may be awarded incentive stock options
which are first exercisable by the grantee during any calendar year under the
Plan (and any other stock option plan to be taken into account under Code
section 422(d)) shall not exceed $100,000. If an option granted under the Plan
is intended to be an incentive stock option, and if the grantee, at the time of
grant, owns stock possessing 10% or more of the total combined voting power of
all classes of stock of the grantee's employer corporation or of its parent or
subsidiary corporation, then (i) the option exercise price per share shall in no
event be less than 110% of the fair market value of the Common Stock on the date
of such grant and (ii) such option shall not be exercisable after the expiration
of five years after the date such option is granted.
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ARTICLE 3
AWARDS OTHER THAN STOCK OPTIONS AND
STOCK APPRECIATION RIGHTS
3.1 Restricted Stock Awards.
(a) Grant of Awards. The Committee may grant restricted stock
awards, alone or in tandem with other awards, under the Plan in such
amounts and subject to such terms and conditions as the Committee shall
from time to time in its sole discretion determine. The vesting of a
restricted stock award granted under the Plan may be conditioned upon the
completion of a specified period of service with the Partnership or any
Affiliate, upon the attainment of specified Performance Goals within
specified Performance Cycles, and/or upon such other criteria as the
Committee may determine in its sole discretion.
(b) Payment. Each Plan agreement with respect to a restricted stock
award shall set forth the amount (if any) to be paid by the grantee with
respect to such award. If a grantee makes any payment for a restricted
stock award which does not vest, appropriate payment may be made to the
grantee following the forfeiture of such award on such terms and
conditions as the Committee may determine.
(c) Forfeiture Upon Termination of Service. Unless the applicable
Plan agreement otherwise provides or the Committee otherwise determines,
(i) if a grantee's service terminates for any reason (other than death)
before all of his restricted stock awards have vested, such unvested
awards shall terminate and expire upon such termination of service, and
(ii) in the event any condition to the vesting of restricted stock awards
is not satisfied within the period of time permitted therefor, such
restricted shares shall be returned to the Partnership. If a grantee's
service terminates by reason of death, any unvested portion of a
restricted stock award which has been earned as a result of the attainment
of applicable Performance Goals shall be fully vested as of the awardee's
date of death.
(d) Issuance of Shares. The Committee may provide that one or more
certificates representing restricted stock awards shall be registered in
the grantee's name and bear an appropriate legend specifying that such
shares are not transferable and are subject to the terms and conditions of
the Plan and the applicable Plan agreement, or that such certificate or
certificates shall be held in escrow by the Partnership on behalf of the
grantee until such shares vest or are forfeited, all on such terms and
conditions as the Committee may determine. Unless the applicable Plan
agreement otherwise provides, no share of restricted stock may be
assigned, transferred, otherwise encumbered or disposed of by the grantee
until such share has vested in accordance with the terms of such award.
Subject to the provisions of Section 5.4, as soon as practicable after any
restricted stock award shall vest, the Partnership shall issue or reissue
to the grantee (or to his designated beneficiary in the event of the
grantee's death) one or more
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certificates for the Common Stock represented by such restricted stock
award without such restricted legend.
(e) Grantees' Rights Regarding Restricted Stock. Unless the
applicable Plan agreement otherwise provides, (i) a grantee may vote and
receive dividends on restricted stock awarded under the Plan, and (ii) any
stock received as a dividend on, or in connection with a stock split of, a
restricted stock award shall be subject to the same restrictions as such
restricted stock.
3.2 Common Stock Awards.
The Committee may issue awards under the Plan, payable in Common
Stock, including, but not limited to awards of Common Stock equal to dividends
declared on Common Stock, alone or in tandem with other awards, in such amounts
and subject to such terms and conditions as the Committee shall from time to
time in its sole discretion determine. Such Common Stock awards under the Plan
shall relate to a specified maximum number of shares granted as, or in payment
of, a bonus, or to provide incentives or recognize special achievements or
contributions.
3.3 Performance Units.
(a) Grant of Units. The Committee may grant performance units under
the Plan to acquire shares of Common Stock in such amounts and subject to
such terms and conditions as the Committee shall from time to time in its
sole discretion determine, subject to the terms of the Plan.
(b) Performance Units. Each performance unit under the Plan shall
relate to a specified maximum number of shares, and shall be exchangeable
for all or a portion of such shares, or cash (or such other form of
consideration as may be determined by the Committee in its sole discretion
equivalent in value thereto) in up to an amount equal to the fair market
value of an equal number of unrestricted shares, at the end of a specified
Performance Cycle as may be established by the Committee. The number of
such shares which may be deliverable pursuant to such performance unit
shall be based upon the degree of attainment of Performance Goals over a
Performance Cycle as may be established by the Committee. The Committee
may provide for full or partial credit, prior to completion of such
Performance Cycle or achievement of the degree of attainment of the
Performance Goals specified in connection with such performance unit, in
the event of the participant's death, normal retirement, early retirement,
or total or permanent disability, or in such other circumstances as the
Committee may determine in its sole discretion to be fair and equitable to
the participant or in the interest of the Partnership and its Affiliates.
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ARTICLE 4
OPTION GRANTS TO ELIGIBLE DIRECTORS
4.1 Grants to Eligible Directors.
Each Eligible Director of the Company shall be granted options in
accordance with this Article 4. All options granted pursuant to this Article 4
shall constitute "non-qualified" stock options.
4.2 Amount of Grants. Each person who is hereafter elected as an
Eligible Director shall receive the following options:
(a) Initial Election. Each Eligible Director who is elected or
appointed a director of the Company and who has not previously served as a
director of Simon DeBartolo Group, Inc., or Corporate Property Investors,
Inc., shall be granted options to purchase 5,000 shares of Common Stock on
the first day of the first calendar month following the month in which
such person first becomes an Eligible Director.
(b) Reelection. As of the date of each annual meeting of the
Company's stockholders (the "Annual Meeting") held after January 1, 1999,
each Eligible Director shall be granted options to purchase 3,000 shares
of Common Stock multiplied by the member of calendar years that have
elapsed since such person was previously elected a director of the
Company, Simon DeBartolo Group, Inc., or Corporate Property Investors,
Inc. (the "Subsequent Awards"); provided, however, that if a person is
elected, appointed or otherwise becomes an Eligible Director during a
period 60 days prior to the Annual Meeting in any year, then such Eligible
Director will receive no Subsequent Awards, and provided, further, that
each Eligible Director receiving Subsequent Awards must continue to serve
as a director of the Company after such Annual Meeting.
4.3 Terms of Options.
(a) Exercise Price and Exercise Period. The exercise price of all
options granted pursuant to this Article 4 shall be equal to the fair
market value of the Common Stock on the date of grant. All options granted
pursuant to this Article 4 shall become exercisable on the first
anniversary of the date of grant or such earlier time as a Change in
Control, as hereinafter defined, of the Company and will remain
exercisable through the tenth anniversary of the date of grant (the
"Expiration Date"). Prior to the Expiration Date, options granted pursuant
to this Article 4 shall terminate 30 days after the optionee ceases to be
a member of the Board of Directors of the Company.
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(b) Payment. An optionee may pay the exercise price of any options
granted pursuant to this Article 4 (i) by certified or official bank check
payable to the Company; (ii) by delivery of previously acquired shares of
Common Stock held by such optionee for at least six months having a fair
market value equal to the purchase of the option exercise price being paid
thereby; or (iii) or any combination of the foregoing.
4.4 Transfer of Options.
No option granted pursuant to this Article 4 may be sold, assigned
or otherwise transferred by an Eligible Director other than by will or the laws
of descent or distribution and may be exercised during the Eligible Director's
lifetime only by such Eligible Director.
4.5 Change of Control.
In the event of a Change of Control prior to the date an option
granted under this Article 4 terminates, each option not previously vested shall
become immediately vested and exercisable in full. For this purpose, a "Change
of Control" shall mean (i) a merger or consolidation of the Company with another
corporation, whether or nor the Company is the surviving corporation, where
there is a change in the shares of stock by reason of such merger or
consolidation, (ii) an acquisition of all or substantially all of the assets of
the Company by another person, or (iii) a reorganization or liquidation of the
Company.
ARTICLE 5
MISCELLANEOUS
5.1 Amendment of the Plan; Modification of Awards.
(a) Plan Amendments. The Partnership, by action of its General
Partner(s), may, without approval of other partners in the Partnership, at
any time and from time to time suspend, discontinue or amend the Plan in
any respect whatsoever, except that no such amendment shall impair any
rights under any award theretofore made under the Plan without the consent
of the grantee of such award. Furthermore, shareholder approval of any
Plan amendment shall be obtained in such a manner and to such a degree as
is required by applicable law or regulation.
(b) Award Modifications. With the consent of the grantee and subject
to the terms and conditions of the Plan (including Section 5.1(a)), the
Committee may amend outstanding Plan agreements with such grantee,
including, without limitation, any amendment which would (i) accelerate
the time or times at which
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an award may vest or become exercisable and/or (ii) extend the scheduled
termination or expiration date of the award.
5.2 Limitation on Exercise. No option or stock appreciation right
shall be exercisable to the extent that such exercise will cause the Partnership
or any Affiliate to pay any amount which would be nondeductible by the
Partnership or such Affiliate by reason of Code section 162(m).
5.3 Restrictions.
(a) Consent Requirements. If the Committee shall at any time
determine in its sole discretion that any Consent (as hereinafter defined)
is necessary or desirable as a condition of, or in connection with, the
granting of any award under the Plan, the acquisition, issuance or
purchase of shares or other rights hereunder or the taking of any other
action hereunder (each such action being hereinafter referred to as a
"Plan Action"), then such Plan Action shall not be taken, in whole or in
part, unless and until such Consent shall have been effected or obtained
to the full satisfaction of the Committee. Without limiting the generality
of the foregoing, if (i) the Committee may make any payment under the Plan
in cash, Common Stock or both, and (ii) the Committee determines that
Consent is necessary or desirable as a condition of, or in connection
with, payment in any one or more of such forms, then the Committee shall
be entitled to determine not to make any payment whatsoever until such
Consent has been obtained.
(b) Consent Defined. The term "Consent" as used herein with respect
to any Plan Action means (i) any and all listings, registrations or
qualifications in respect thereof upon any securities exchange or other
self-regulatory organization or under any federal, state or local law,
rule or regulation, (ii) the expiration, elimination or satisfaction of
any prohibitions, restrictions or limitations under any federal, state or
local law, rule or regulation or the rules of any securities exchange or
other self-regulatory organization, (iii) any and all written agreements
and representations by the grantee with respect to the disposition of
shares, or with respect to any other matter, which the Committee shall
deem necessary or desirable to comply with the terms of any such listing,
registration or qualification or to obtain an exemption from the
requirement that any such listing, qualification or registration be made,
and (iv) any and all consents, clearances and approvals in respect of a
Plan Action by any governmental or other regulatory bodies or any parties
to any loan agreements or other contractual obligations of the Partnership
or any Affiliate.
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5.4 Nontransferability.
Except as expressly authorized by the Committee in the Plan
agreement, no award granted to any grantee under the Plan shall be assignable or
transferable by the grantee other than by will or by the laws of descent and
distribution and during the lifetime of the grantee, all rights with respect to
any option or stock appreciation right granted to the grantee under the Plan
shall be exercisable only by the grantee.
5.5 Withholding Taxes.
(a) Whenever under the Plan shares of Common Stock are to be
delivered pursuant to an award, the Committee may require as a condition
of delivery that the grantee remit an amount sufficient to satisfy all
federal, state and other governmental withholding tax requirements related
thereto. Whenever cash is to be paid under the Plan (whether upon the
exercise of stock appreciation right or otherwise), the Partnership may,
as a condition of its payment, deduct therefrom, or from any salary or
other payments due to the grantee, an amount sufficient to satisfy all
federal, state and other governmental withholding tax requirements related
thereto or to the delivery of any shares of Common Stock under the Plan.
(b) Without limiting the generality of the foregoing, (i) a grantee
may elect to satisfy all or part of the foregoing withholding requirements
by delivery of unrestricted shares of Common Stock owned by the grantee
for at least six months (or such other period as the Committee may
determine in its sole discretion) having a fair market value (determined
as of the date of such delivery by the grantee) equal to all or part of
the amount to be so withheld, provided that the Committee may require, as
a condition of accepting any such delivery, the grantee to furnish an
opinion of counsel acceptable to the Committee to the effect that such
delivery would not result in the grantee incurring any liability under
Section 16(b) of the Act; and (ii) the Committee may permit any such
delivery to be made by withholding shares of Common Stock from the shares
otherwise issuable pursuant to the award giving rise to the tax
withholding obligation (in which event the date of delivery shall be
deemed the date such award was exercised).
5.6 Adjustments Upon Changes in Capitalization.
If and to the extent specified by the Committee, the number of
shares of Common Stock which may be issued pursuant to awards under the Plan,
the number of shares of Common Stock subject to awards, the option exercise
price and appreciation base of options and stock appreciation rights theretofore
granted under the Plan, and the amount payable by a grantee in respect of an
award, shall be appropriately adjusted (as the Committee may determine) for any
change in the number of issued shares of Common Stock resulting from the
subdivision or
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combination of shares of Common Stock or other capital adjustments, or the
payment of a stock dividend after the effective date of the Plan, or other
change in such shares of Common Stock effected without receipt of consideration
by the Company; provided that any awards covering fractional shares of Common
Stock resulting from any such adjustment shall be eliminated and provided
further, that each incentive stock option granted under the Plan shall not be
adjusted in a manner that causes such option to fail to continue to qualify as
an "incentive stock option" within the meaning of Code section 422. Adjustments
under this Section shall be made by the Committee, whose determination as to
what adjustments shall be made, and the extent thereof, shall be final, binding
and conclusive.
5.7 Right of Discharge Reserved.
Nothing in the Plan or in any Plan agreement shall confer upon any
person the right to continue in the service of the Partnership or any Affiliate
or affect any right which the Partnership or any Affiliate may have to terminate
the service of such person.
5.8 No Rights as a Stockholder.
No grantee or other person shall have any of the rights of a
stockholder of the Company with respect to shares subject to an award until the
issuance of a stock certificate to him for such shares. Except as otherwise
provided in Section 5.6, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and whether in
cash, securities or other property) for which the record date is prior to the
date such stock certificate is issued. In the case of a grantee of an award
which has not yet vested, the grantee shall have the rights of a stockholder of
the Company if and only to the extent provided in the applicable Plan agreement.
5.9 Nature of Payments.
(a) Any and all awards or payments hereunder shall be granted,
issued, delivered or paid, as the case may be, in consideration of
services performed for the Partnership or its Affiliates by the grantee.
(b) No such awards and payments shall be considered special
incentive payments to the grantee or, unless otherwise determined by the
Committee, be taken into account in computing the grantee's salary or
compensation for the purposes of determining any benefits under (i) any
pension, retirement, life insurance or other benefit plan of the
Partnership or any Affiliate or (ii) any agreement between the Partnership
or any Affiliate and the grantee.
(c) By accepting an award under the Plan, the grantee shall thereby
waive any claim to continued exercise or vesting of an award or to damages
or severance entitlement related to non-continuation of the award beyond
the period provided herein or in the applicable Plan agreement,
notwithstanding any contrary
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provision in any written contract with the grantee, whether any such
contract is executed before or after the grant date of the award.
5.10 Non-Uniform Determinations.
The Committee's determinations under the Plan need not be uniform
and may be made by it selectively among persons who receive, or are eligible to
receive, awards under the Plan (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Committee shall
be entitled, among other things, to make non-uniform and selective
determinations, and to enter into non-uniform and selective Plan agreements, as
to (a) the persons to receive awards under the Plan, (b) the terms and
provisions of awards under the Plan, (c) the exercise by the Committee of its
discretion in respect of the exercise of stock appreciation rights pursuant to
the terms of the Plan, and (d) the treatment of leaves of absence pursuant to
Section 2.7(c).
5.11 Other Payments or Awards.
Nothing contained in the Plan shall be deemed in any way to limit or
restrict the Partnership, any Affiliate or the Committee from making any award
or payment to any person under any other plan, arrangement or understanding,
whether now existing or hereafter in effect.
5.12 Reorganization.
(a) In the event that the Company is merged or consolidated with
another corporation and, whether or not the Company shall be the surviving
corporation, there shall be any change in the shares of Common Stock by
reason of such merger or consolidation, or in the event that all or
substantially all of the assets of the Company are acquired by another
person, or in the event of a reorganization or liquidation of the Company
(each such event being hereinafter referred to as a "Reorganization
Event") or in the event that the Board of Directors of the Company (the
"Board") shall propose that the Company enter into a Reorganization Event,
then the Committee may in its sole discretion, by written notice to a
grantee, provide that his options and stock appreciation rights will be
terminated unless exercised within 30 days (or such longer period as the
committee shall determine in its sole discretion) after the date of such
notice; provided that if the Committee takes such action the Committee
also shall accelerate the dates upon which all outstanding options and
stock appreciation rights of such grantee shall be exercisable. The
Committee also may in its sole
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discretion by written notice to a grantee provide that all or some of the
restrictions on any of his awards may lapse in the event of a
Reorganization Event upon such terms and conditions as the Committee may
determine.
(b) Whenever deemed appropriate by the Committee, the actions
referred to in Section 5.12(a) may be made conditional upon the
consummation of the applicable Reorganization Event.
5.13 Section Headings.
The section headings contained herein are for the purposes of
convenience only and are not intended to define or limit the contents of said
sections.
5.14 Effective Date and Term of Plan.
(a) The Plan shall be deemed adopted upon approval by the
stockholders of Simon DeBartolo Group, Inc. and Corporate Property
Investors, Inc., but shall not become effective until the consummation of
the transactions contemplated by the Agreement and Plan of Merger dated as
of February 18, 1998, among Simon DeBartolo Group, Inc., Corporate
Property Investors, Inc., and Corporate Realty Consultants, Inc.
(b) The Plan shall terminate 10 years after the date on which it is
adopted and no awards shall thereafter be made under the Plan.
Notwithstanding the foregoing, all awards made under the Plan prior to
such termination date shall remain in effect until such awards have been
satisfied or terminated in accordance with the terms and provisions of the
Plan and the applicable Plan agreement.
5.15 Governing Law.
THE PLAN SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
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