Exhibit 10.1

 

WASHINGTON PRIME GROUP

SERIES 2014B LTIP UNIT AWARD AGREEMENT

 

This Series 2014B LTIP Unit Award Agreement (“ Agreement ”) made as of August 25, 2014 (the “ Award Date ”) among Washington Prime Group Inc., an Indiana corporation (the “ Company ”), its subsidiary, Washington Prime Group, L.P., an Indiana limited partnership and the entity through which the Company conducts substantially all of its operations (the “ Partnership ”), and                                  as the participant (the “ Participant ”).

 

Recitals

 

A.                                     The Participant is an officer of the Company or one of its Affiliates and provides services to the Partnership.

 

B.                                     This Agreement evidences an award (the “Award”) of the number of LTIP Units specified in Section 3 of this Agreement, that have been designated as the Series 2014B LTIP Units pursuant to the Partnership Agreement and the Certificate of Designation of Series 2014B LTIP Units of the Partnership (the “ Certificate of Designation ”), as approved by the Compensation Committee (the “ Committee ”) of the Board of Directors of the Company (the “ Board ”).

 

NOW, THEREFORE , the Company, the Partnership and the Participant 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/or the Certificate of Designation, on the one hand, and the Plan and/or the Partnership Agreement, on the other hand, the terms of this Agreement and/or the Certificate of Designation (as applicable) shall prevail.

 

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

 

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

 

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

 

“ Award Date ” has the meaning set forth in the Recitals.

 

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

 

“ Capital Account” has the meaning set forth in the Partnership Agreement.

 

“ Certificate of Designation ” has the meaning set forth in the Recitals.

 

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

 

 

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

 

“ Covenant Period ” has the meaning set forth in Section 8(b) .

 

“ Employment Agreement ” means the Participant’s employment agreement with the Company, dated June 3, 2014.

 

“ Employment Period ” has the meaning set forth in the Employment Agreement.

 

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

 

“ Good Reason ” has the meaning set forth in the Employment Agreement.

 

“ Incentive Clawback ” has the meaning set forth in Section 9(a) .

 

“ LTIP Units ” means the Series 2014B LTIP Units that have been designated as such pursuant to the Partnership Agreement and the Certificate of Designation.

 

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

 

“ Participant Covenants ” has the meaning set forth in Section 8(g) .

 

“ Partnership ” means the Partnership’s 2014 Stock Incentive Plan, as further amended, restated or supplemented from time to time hereafter.

 

“ Partnership Agreement ” means the Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of May 28, 2014, as amended, restated and supplemented from time to time hereafter.

 

“ 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).

 

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

 

“ Release ” has the meaning set forth in the Employment Agreement.

 

“ Release Deadline ” has the meaning set forth in the Employment Agreement.

 

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

 

“ Termination of Employment ” means the termination of the Employment Period under the Employment Agreement.

 

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

 

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“ Unvested LTIP Units ” means the number of LTIP Units issued on the Award Date that have not become Vested LTIP Units.

 

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

 

“ Vesting Restriction ” has the meaning set forth in Section 9(e) .

 

3.                                       Award .

 

(a)                                  On the Award Date the Participant is granted                LTIP Units which are Unvested LTIP Units subject to forfeiture as provided in this Section 3 .  The Unvested LTIP Units shall be forfeited unless within ten (10) business days from the Award Date the Participant executes and delivers 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.

 

(b)                                  Except as otherwise provided in Section 4, the Unvested LTIP Units shall become Vested LTIP Units in the following amounts and on the following dates, provided that the Participant has not incurred a Termination of Employment prior to the applicable date:

 

(i)                                      twenty-five percent (25%) of the LTIP Units shall become Vested LTIP Units on the first anniversary of the Award Date;

 

(ii)                                   twenty-five percent (25%) of the LTIP Units shall become Vested LTIP Units on the second anniversary of the Award Date;

 

(iii)                                twenty-five percent (25%) of the LTIP Units shall become Vested LTIP Units on the third anniversary of the Award Date; and

 

(iv)                               twenty-five percent (25%) of the LTIP Units shall become Vested LTIP Units on the fourth anniversary of the Award Date.

 

(c)                                   Upon Termination of Employment prior to the fourth anniversary of the Award Date, any Unvested LTIP Units that have not become Vested LTIP Units pursuant to Section 3(b)  or Section 4 shall, without payment of any consideration by the Partnership or the Company, automatically and without notice be forfeited and be and become null and void, and neither the Participant nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such Unvested LTIP Units.

 

(d)                                  Upon the Participant’s breach of any of the covenants or agreements contained in Section 8 hereof, all Unvested LTIP Units and all Vested LTIP Units shall, without payment of any consideration by the Partnership or the Company, automatically and without notice be forfeited and become null and void, and neither the Participant nor

 

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any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such Unvested LTIP Units or Vested LTIP Units.

 

4.                                       Termination of Participant’s Employment .  In the event of the Participant’s Termination of Employment (A) by the Company other than for Cause or (B) as a result of the Participant’s resignation for Good Reason, in each case, in accordance with the terms of the Employment Agreement (and only if the Participant delivers, and does not revoke, an executed Release not later than the Release Deadline), all remaining Unvested LTIP Units upon such Termination of Employment shall become Vested LTIP Units on the day following the Release Deadline.

 

5.                                       Partnership Agreement .  The Participant shall have no rights with respect to this Agreement (and the Award evidenced hereby) unless the Participant shall have accepted this Agreement prior to the close of business on the date described in Section 3(a)  by (a) signing and delivering to the Partnership a copy of this Agreement and (b) unless the Participant 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 A ).  Upon acceptance of this Agreement by the Participant, the Partnership Agreement shall be amended to reflect the issuance to the Participant of the LTIP Units so accepted.  Thereupon, the Participant shall have all the rights of a Limited Partner of the Partnership with respect to the number of Unvested LTIP Units, as set forth in the Certificate of Designation and the Partnership Agreement, subject, however, to the restrictions and conditions specified herein.  Unvested LTIP Units constitute and shall be treated for all purposes as the property of the Participant, subject to the terms of this Agreement, the Certificate of Designation and the Partnership Agreement.

 

6.                                       Distributions .

 

(a)                                  The holder of Unvested LTIP Units and Vested LTIP Units, until and unless forfeited pursuant to Section 3 , shall be entitled to receive distributions at the time and to the extent provided for in the Certificate of Designation and the Partnership Agreement.

 

(b)                                  All distributions paid with respect to Unvested LTIP Units and Vested 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 Unvested LTIP Units, Vested LTIP Units or 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 Unvested LTIP Units and Vested LTIP Units may be Transferred to the Participant’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 that subsequent transfers shall be prohibited

 

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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 Participant 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 change in record ownership of any Unvested 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 Participant, 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 Participant, means the Participant’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 Participant’s household (other than a tenant of the Participant), a trust in which one or more of these Persons (or the Participant) own more than fifty percent (50%) of the beneficial interests, and a partnership or limited liability company in which one or more of these Persons (or the Participant) own more than fifty percent (50%) of the voting interests.

 

8.                                       Restrictive Covenants .

 

(a)                                  Confidential Information .  During the Employment Period and thereafter, the Participant shall keep secret and retain in the strictest confidence, and shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, including without limitation, any data, information, ideas, knowledge and papers pertaining to the customers, prospective customers, prospective products or business methods of the Company, including without limitation the business methods, plans and procedures of the Company, that shall have been obtained by the Participant during the Participant’s employment by the Company or any of its affiliated companies and that shall not be or become public knowledge (other than by acts by the Participant or representatives of the Participant in violation of this Agreement).  After the Participant’s Termination of Employment, the Participant shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process after reasonable advance written notice to the Company, use communicate or divulge any such information, knowledge or data, directly or indirectly, to anyone other than the Company and those designated by it.  Nothing contained in this Agreement shall prohibit the Participant from disclosing or using information (i) which is now known by or hereafter becomes available to the general public through non-confidential sources; (ii) which became known to the Participant from a source other than the Company, or any of its subsidiaries or affiliates, other than as a result of a breach (known or which should

 

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have been known to the Participant) by such source of an obligation of confidentiality owed by it to the Company, or any of its subsidiaries or affiliates (but not if such information was known by the Participant at such time of disclosure or use to be confidential); (iii) in connection with the proper performance of the Participant’s duties under the Employment Agreement or hereunder, or (iv) which is otherwise legally required (but only if the Participant gives reasonable advance notice to the Company of such disclosure obligation to the extent legally permitted, and cooperates with the Company (at the Company’s expense), if requested, in resisting such disclosure).

 

(b)                                  Non-Competition . During the period commencing on the Award Date and ending on the one-year anniversary of the Participant’s Termination of Employment (the “ Covenant Period ”), the Participant shall not engage in, have an interest in (other than through a mutual fund), or otherwise be employed by or associate with (whether as an owner, operator, partner, member, manager, employee, officer, director, consultant, advisor, lender, representative, or otherwise), or permit the Participant’s name to be used in connection with the activities of, any business or organization engaged in the ownership, development, management, leasing, expansion or acquisition of retail property (the “ Business ”) that, (i) if such business or organization is a public company, has a market capitalization of greater than $1 billion or, (ii) if such business or organization is a private company, has assets which may be reasonably valued at more than $1 billion, in (x) in North America or (y) any country outside of North America in which the Company or any of its affiliates is engaged in the Business, or has indicated an intent to do so or interest in doing so as evidenced by a written plan or proposal prepared by or presented to senior management of the Company prior to the Participant’s Termination of Employment; other than for or on behalf of, or at the request of, the Company or any affiliate; provided, that passive ownership of less than two percent (2%) of the outstanding stock of any publicly traded corporation shall not be deemed to be a violation of this Section 8(b)  solely by reason thereof.

 

(c)                                   Non-Solicitation .  During the Covenant Period, the Participant shall not, directly or indirectly, (i) induce or attempt to induce any employee of the Company to leave the employ of the Company or in any way interfere with the relationship between the Company, on the one hand, and any employee thereof, on the other hand, or (ii) hire any person who was an employee of the Company until six (6) months after such individual’s employment relationship with the Company has been terminated; provided, that solicitations incidental to general advertising or other general solicitations in the ordinary course not specifically targeted at such persons and employment of any person not otherwise solicited in violation hereof shall not be considered a violation of this Section 8(c) ; provided, further, that the Participant shall not be in violation of this Section 8(c)  solely by providing a reference for a former employee of the Company.  During the Covenant Period, the Participant shall not, directly or indirectly, induce or attempt to induce any customer, supplier, licensee or other business relation of the Company to cease doing business with the Company, or in any way interfere with the relationship between any such customer, supplier, licensee or business relation, on the one hand, and the Company, on the other hand.

 

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(d)                                  Non-Disparagement . The Participant agrees not to make any public disparaging, negative, or defamatory comments about the Company including the Company’s business, its directors, officers, employees, parents, subsidiaries, partners, affiliates, operating divisions, representatives or agents, or any of them, whether written, oral, or electronic.  In particular, the Participant agrees to make no public statements including, but not limited to, press releases, statements to journalists, employees, prospective employers, interviews, editorials, commentaries, speeches or conversations, that disparage or may disparage the Company’s business, are critical of the Company or its business, or would cast the Company or its business in a negative light.  In addition to the confidentiality requirements set forth in this Agreement and those imposed by law, the Participant further agrees not to provide any third party, directly or indirectly, with any documents, papers, recordings, e-mail, internet postings, or other written or recorded communications referring or relating the Company’s business, that would support, directly or indirectly, any disparaging, negative or defamatory statement, whether written or oral.  This Section 8(d)  shall not be violated by making any truthful statement to the extent (y) reasonably necessary in connection with any litigation, arbitration, or mediation or (z) required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction to order the person to disclose or make accessible such information.

 

(e)                                   Prior Notice Required .  The Participant hereby agrees that, prior to accepting employment with any other person or entity during the Covenant Period, the Participant will provide such prospective employer with written notice of the provisions of this Agreement, with a copy of such notice delivered simultaneously to the Company.

 

(f)                                    Return Of Company Property/Passwords .  The Participant hereby expressly covenants and agrees that following termination of the Participant’s employment with the Company for any reason or at any time upon the Company’s request, the Participant will promptly return to the Company all property of the Company in the Participant’s possession or control (whether maintained at his office, home or elsewhere), including, without limitation, all Company passwords, credit cards, keys, beepers, laptop computers, cell phones and all copies of all management studies, business or strategic plans, budgets, notebooks and other printed, typed or written materials, documents, diaries, calendars and data of or relating to the Company or its personnel or affairs.  Notwithstanding the foregoing, the Participant shall be permitted to retain the Participant’s rolodex (or similar list of personal contacts), compensation-related data, information needed for tax purposes and other personal items.

 

(g)                                   Participant Covenants Generally .

 

(i)                                      The Participant’s covenants as set forth in this Section 8 are from time to time referred to herein as the “ Participant Covenants .” If any of the Participant Covenants is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such Participant Covenant shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining Participant Covenants shall not be affected thereby; provided, however, that if any of the Participant Covenants is finally held to be invalid, illegal or unenforceable because it exceeds the

 

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maximum scope determined to be acceptable to permit such provision to be enforceable, such Participant Covenant will be deemed to be modified to the minimum extent necessary to modify such scope in order to make such provision enforceable hereunder.

 

(ii)                                   The Participant understands that the foregoing restrictions may limit the Participant’s ability to earn a livelihood in a business similar to the business of the Company and its controlled affiliates, but the Participant nevertheless believes that the Participant has received and will receive sufficient consideration and other benefits as an employee of the Company and as otherwise provided hereunder to clearly justify such restrictions which, in any event (given the Participant’s education, skills and ability), the Participant does not believe would prevent the Participant from otherwise earning a living.  The Participant has carefully considered the nature and extent of the restrictions placed upon the Participant by this Section 8 , and hereby acknowledges and agrees that the same are reasonable in time and territory and do not confer a benefit upon the Company disproportionate to the detriment of the Participant.

 

(h)                                  Enforcement .  Because the Participant’s services are unique and because the Participant has access to confidential information, the parties hereto agree that money damages would be an inadequate remedy for any breach of this Section 8 .  Therefore, in the event of a breach or threatened breach of this Section 8 , the Company or its respective successors or assigns may, in addition to other rights and remedies existing in their favor at law, in equity or pursuant to this Agreement, apply to any court of competent jurisdiction for specific performance and/or injunctive relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security) or require the Participant to account for and pay over to the Company all compensation, profits, moneys, accruals or other benefits derived from or received as a result of any transactions constituting a breach of the covenants contained herein, if and when final judgment of a court of competent jurisdiction is so entered against the Participant.

 

(i)                                      Interpretation .  For purposes of this Section 8 , references to “ the Company ” shall mean the Company as hereinbefore defined and any of its controlled affiliated companies.

 

9.                                       Miscellaneous .

 

(a)                                  Amendments; Recoupment .  Subject to the terms of the Plan, the Committee may unilaterally amend the terms of this Award theretofore granted, but no such amendment shall, without the Participant’s written consent, materially impair the rights of the Participant with respect to the Award, except such an amendment made to cause the Plan or this Award to comply with applicable law, Applicable Exchange listing standards or accounting rules.  Notwithstanding the foregoing, Participant acknowledges that The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that the Company develop and implement a policy to recover from executive officers excess incentive based compensation paid which is based on erroneous data and for which the Company is required to prepare an accounting restatement (the “ Incentive Clawback ”).  At such time as the applicable regulations are finalized with respect to the Incentive Clawback, either through rules and regulations adopted by the Securities and Exchange

 

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Commission or the Applicable Exchange, Participant agrees, at the Company’s request, to promptly execute any amendment or modification to this Agreement to reflect any Incentive Clawback policy applicable to the LTIP Units adopted by the Company or the Committee to comply with such rules and regulations.  This grant shall in no way affect the Participant’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)                                  Incorporation of Plan and Certificate of Designation; Committee Determinations .  The provisions of the Plan and the Certificate of Designation are hereby incorporated by reference as if set forth herein.  The Committee will make the determinations and certifications required by this Award as promptly as reasonably practicable following the occurrence of the event or events necessitating such determinations or certifications.

 

(c)                                   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 LTIP Units will be determined by the Committee in light of all applicable circumstances, including vesting, capital account allocations and/or balances under the Partnership Agreement, and the exchange ratio in effect between 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 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 Participant acknowledges that the Participant will have no right to approve or disapprove such determination by the Company or the Committee.

 

(d)                                  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.

 

(e)                                   Compliance With Law .  The Partnership and the Participant 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 (such violation, a “ Vesting Restriction ”); provided, that, any such delayed vesting shall occur as soon as practicable following the lapse of such Vesting Restriction, as determined by the Committee in its sole discretion.  If the lapse of the Vesting Restriction with respect to such LTIP Units is no longer practicable (as determined by the Committee in its sole discretion) then the Company or the Partnership shall pay to the Participant, within 30 days following the later of (x) the applicable vesting date of such LTIP Units pursuant to this Agreement or (y) the date upon which the Committee determines that the lapse of the Vesting Restriction with respect to such LTIP Units is no longer practicable (subject, in each case, to any delay required by Section 9(r) ), a cash lump sum in an amount equal to the Participant’s Capital Account balance with respect to

 

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such LTIP Units as of the time of such payment; provided that, no such payment shall be made if such payment would result in violation of any applicable law.

 

(f)                                    Participant Representations; Registration .

 

(i)                                      The Participant hereby represents and warrants that (A) the Participant understands that the Participant is responsible for consulting the Participant’s 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 Participant is or by reason of this Award may become subject, to the Participant’s particular situation; (B) the Participant 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 Participant 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 Participant 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 Participant has been furnished with, and has reviewed and understands, information relating to this Award; (F) the Participant has been afforded the opportunity to obtain such additional information as he deemed necessary before accepting this Award; and (G) the Participant 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 Participant hereby acknowledges that:  (A) there is no public market for LTIP Units or 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 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 Units set forth in the Partnership Agreement and in this Agreement, the Participant 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 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 Participant 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 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.

 

(g)                                   Section 83(b) Election .  The Participant hereby agrees to make an election to include the Unvested LTIP Units in gross income in the year in which the Unvested LTIP Units are issued pursuant to Section 83(b) of the Code substantially in the form attached as Exhibit B and to supply the necessary information in accordance with the

 

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regulations promulgated thereunder.  The Participant agrees to file such election (or to permit the Partnership to file such election on the Participant’s behalf) within thirty (30) days after the Award Date with the IRS Service Center where the Participant 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 Participant’s U.S. federal income tax return for the taxable year in which the Unvested LTIP Units are issued to the Participant.  So long as the Participant holds any LTIP Units, the Participant 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.

 

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

 

(i)                                      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.

 

(j)                                     Governing Law .  This Agreement is made under, and will be construed in accordance with, the laws of the State of Indiana, without giving effect to the principles of conflict of laws of such state.  Venue for a dispute in respect of this Agreement shall be the federal courts located in Washington, D.C.

 

(k)                                  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 Participant 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 Participant’s employment at any time.

 

(l)                                      Notices .  Any notice to be given to the Company shall be addressed to the Secretary of the Company at Washington Prime Group Inc., 7315 Wisconsin Avenue, 5 th  Floor, Bethesda, Maryland 20814 and any notice to be given to the Participant shall be addressed to the Participant at the Participant’s address as it appears on the employment records of the Company, or at such other address as the Company or the Participant may hereafter designate in writing to the other.

 

(m)                              Withholding and Taxes .  No later than the date as of which an amount first becomes includible in the gross income of the Participant for income tax purposes or subject to the Federal Insurance Contributions Act withholding with respect to this Award (if any), the Participant will pay to the Company or, if appropriate, any of its

 

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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 Units are withheld (or returned), the number of LTIP Units or 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 Participant.

 

(n)                                  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.

 

(o)                                  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.

 

(p)                                  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 Participant, on the other hand, by will or the laws of descent and distribution, and subject to Section 7 , this Agreement shall not otherwise be assignable or otherwise subject to hypothecation by the Participant.

 

(q)                                  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 may result in excise tax or penalties under Section 409A of the Code, shall be amended, with the reasonable cooperation of the Participant and the Company and the Partnership, to the extent necessary to exempt it from, or to avoid excise tax or penalties under, Section 409A of the Code.

 

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

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the        day of August, 2014.

 

 

	WASHINGTON PRIME GROUP INC.,
	an Indiana corporation
	By:
		Name:
		Title:
	WASHINGTON PRIME GROUP, L.P.,
	an Indiana limited partnership
	By:  Washington Prime Group Inc.,
	an Indiana corporation, its general partner
	By:
		Name:
		Title:
	GRANTEE
	By:
		Name: [                        ]

 

 

EXHIBIT A

 

FORM OF LIMITED PARTNER SIGNATURE PAGE

 

The Participant, desiring to become one of the within named Limited Partners of Washington Prime Group, L.P., hereby accepts all of the terms and conditions of and becomes a party to, the Amended and Restated Agreement of Limited Partnership, dated as of May 28, 2014, of Washington Prime Group, L.P. as amended through this date (the “ Partnership Agreement ”).  The Participant 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:

 

 

EXHIBIT B

 

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:			(the “ Taxpayer ”)
Address:

 

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

 

2.                                       Description of property with respect to which the election is being made:                 Series 2014B LTIP Units (“ LTIP Units ”) in Washington Prime Group, L.P. (the “ Partnership ”).

 

3.                                       The date on which the LTIP Units were issued is                           , 2014.  The taxable year to which this election relates is calendar year 2014.

 

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 issuance (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 per LTIP Unit.

 

6.                                       The amount paid by the Taxpayer for the LTIP Units was $0 per LTIP Unit.

 

7.                                       A copy of this statement has been furnished to the Partnership and Washington Prime Group Inc.

 

	Dated:
	Name:

 

Exhibit 10.2

 

CERTIFICATE OF DESIGNATION
OF
SERIES 2014B LTIP UNITS
OF
WASHINGTON PRIME GROUP, L.P.

 

WHEREAS, Washington Prime Group, L.P. (the “ Partnership ”), is authorized to issue LTIP Units to executives of Washington Prime Group Inc., the General Partner of the Partnership (the “ General Partner ”), pursuant to Section 9.3(a) of the Amended and Restated Limited Partnership Agreement of the Partnership, dated as of May 28, 2014, as amended, restated and supplemented from time to time hereafter (the “ Partnership Agreement ”).

 

WHEREAS, the General Partner has determined that it is in the best interests of the Partnership to designate a series of LTIP Units that are subject to the provisions of this Designation and the related Award Agreement (as defined below); and

 

WHEREAS, Sections 7.3(a) and 9.3(d) of the Partnership Agreement authorize the General Partner, without the approval of the Limited Partners, to set forth in an LTIP Unit Designation (as defined in the Partnership Agreement) any performance conditions and the economic rights, including distribution, redemption and conversion rights of each class or series of LTIP Units.

 

NOW, THEREFORE, the General Partner hereby designates the powers, preferences, economic rights and performance conditions of the Series 2014B LTIP Units.

 

ARTICLE I
Definitions

 

1.1                                Definitions Applicable to LTIP Units .  Except as otherwise expressly provided herein, each capitalized term shall have the meaning ascribed to it in the Partnership Agreement.  In addition, as used herein:

 

“ Adjustment Events ” has the meaning provided in Section 2.2 hereof.

 

“ Award Agreement ” means the Series 2014B LTIP Unit Award Agreement approved by the Compensation Committee of the Board of Directors of the General Partner and entered into with the LTIP Unitholder specified therein.

 

“ Award Date ” means August 25, 2014.

 

“ Conversion Date ” has the meaning provided in Section 4.3 hereof.

 

“ Conversion Notice ” has the meaning provided in Section 4.3 hereof.

 

“ Economic Capital Account Balance ” means, with respect to an LTIP Unitholder, (i) the LTIP Unitholder’s Capital Account balance, plus the amount of the LTIP Unitholder’s share of any Partner Minimum Gain or Partnership Minimum Gain, in either case to the extent

 

 

attributable to the LTIP Unitholder’s ownership of LTIP Units, divided by (ii) the number of LTIP Units held by the LTIP Unitholder.

 

“ Full Conversion Date ” means with respect to an LTIP Unitholder, the date on which the Economic Capital Account Balance of the LTIP Unitholder’s LTIP Units first equals or exceeds the Target Balance.

 

“ General Partner ” has the meaning provided in the Recitals.

 

“ Liquidating Gain ” means one hundred percent (100%) of the Profits of the Partnership realized from a transaction or series of transactions that constitute a sale of substantially all of the assets of the Partnership and one hundred percent (100%) of the Profits realized from a restatement of the Partnership’s Capital Accounts in accordance with Treas. Reg. §1.704-1(b)(2)(iv)(f).

 

“ LTIP Units ” means the Series 2014B LTIP Units created by this Designation.

 

“ LTIP Unitholder ” means a person who holds LTIP Units and his or her permitted transferee(s).

 

“ Other LTIP Units ” means “LTIP Units” (as defined in the Partnership Agreement) other than the Series 2014B LTIP Units designated hereby.

 

“ Partnership ” has the meaning provided in the Recitals.

 

“ Partnership Agreement ” has the meaning provided in the Recitals.

 

“ Partnership Unit Economic Balance ” shall mean (i) the Capital Account balance of the General Partner plus the amount of the General Partner’s share of any Partner Minimum Gain or Partnership Minimum Gain, in each case to the extent attributable to the General Partner’s Partnership Units divided by (ii) the number of the General Partner’s Partnership Units.

 

“ Partnership Units ” or “ Units ” has the meaning set forth in the Partnership Agreement.

 

“ Special Distributions ” means distributions designated as a capital gain dividend within the meaning of Section 875(b)(3)(C) of the Code and any other distribution that the General Partner determines is not made in the ordinary course.

 

“ Target Balance ” means (i) $19.23, which is equal to the Partnership Unit Economic Balance as of the Award Date as determined after Capital Accounts have been adjusted in accordance with Treas. Reg. §1.704-1(b)(2)(iv)(f), reduced by (ii) the amount of Special Distributions per Partnership Unit attributable to the sale of assets subsequent to the Award Date, to the extent that such Special Distributions are not made with respect to the LTIP Units.

 

“ Unvested LTIP Units ” means the number of LTIP Units issued on the Award Date that have not become the Vested LTIP Units.

 

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“ Vested LTIP Units ” means Unvested LTIP Units that have satisfied the vesting requirements of the Award Agreement.

 

1.2                                Definitions Applicable to Other LTIP Units .  In determining the rights of an LTIP Unitholder vis-à-vis the holders of Other LTIP Units, the foregoing definitions shall apply to the Other LTIP Units except as expressly provided otherwise in a Certificate of Designation applicable to such Other LTIP Units.

 

ARTICLE II
Economic Terms and Voting Rights

 

2.1                                Designation and Issuance .  The General Partner hereby designates a series of LTIP Units entitled the Series 2014B LTIP Units.  The number of Series 2014B LTIP Units that may be issued pursuant to this Designation is 130,000.  The Unvested LTIP Units shall be treated as having been issued on the Award Date, and an LTIP Unitholder of Unvested LTIP Units shall be deemed admitted as a Limited Partner of the Partnership on the Award Date.

 

2.2                                Unit Equivalence .  Except as otherwise provided in this Designation, the Partnership shall maintain, at all times, a one-to-one correspondence between the LTIP Units and Partnership Units, for conversion, distribution and other purposes, including without limitation by complying with the following procedures.  If an Adjustment Event (as defined below) occurs, then the General Partner shall make a corresponding adjustment to the LTIP Units to maintain a one-to-one conversion and economic equivalence ratio between the LTIP Units and the Partnership Units.  The following shall be “ Adjustment Events ”:  (A) the Partnership makes a distribution of Partnership Units or other equity interests in the Partnership to the extent that an LTIP Unitholder did not participate in such distribution, (B) the Partnership subdivides the outstanding Partnership Units into a greater number of units or combines the outstanding Partnership Units into a smaller number of units, or (C) the Partnership issues any Partnership Units or other equity interests in the Partnership in exchange for its outstanding Partnership Units by way of a reclassification or recapitalization of its Partnership Units.  If more than one Adjustment Event occurs, the adjustment to the LTIP Units need be made only once using a single formula that takes into account each and every Adjustment Event as if all Adjustment Events occurred simultaneously.  For the avoidance of doubt, the following shall not be Adjustment Events:  (x) the issuance of Partnership Units from the Partnership’s sale of securities or in a financing, reorganization, acquisition or other business transaction, (y) the issuance of Partnership Units or Other LTIP Units pursuant to any employee benefit or compensation plan or distribution reinvestment plan, or (z) the issuance of any Partnership Units to the General Partner in respect of a capital contribution to the Partnership of proceeds from the sale of securities by the General Partner.  If the Partnership takes an action affecting the Partnership Units or the LTIP Units other than actions specifically described above as constituting Adjustment Events and, in the opinion of the General Partner, such action would require an adjustment to the LTIP Units to maintain the one-to-one correspondence described above, the General Partner shall have the right to make such adjustment to the LTIP Units, to the extent permitted by law, in such manner and at such time as the General Partner, in its sole discretion, may determine to be appropriate under the circumstances.  If an adjustment is made to the LTIP Units as hereby provided, the Partnership shall promptly file in the books and records of the Partnership a certificate setting forth such adjustment and a brief statement of facts

 

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requiring such adjustment, which certificate shall be conclusive evidence of the correctness of such adjustment absent manifest error.  Promptly after filing such certificate, the Partnership shall deliver a notice to each LTIP Unitholder setting forth the adjustment to such LTIP Unitholder’s LTIP Units and the effective date of such adjustment.

 

2.3                                Distributions of Net Operating Cash Flow and Special Distributions .  The LTIP Units will be entitled to the same rights to receive distributions as Partnership Units under the Partnership Agreement at the time that such distributions are made with respect to Partnership Units under the Partnership Agreement; provided, however, that until the Economic Capital Account Balance of the LTIP Units is equal to the Target Balance, the LTIP Units shall be entitled to Special Distributions attributable to the sale of an asset of the Partnership only to the extent that the Partnership determines that such asset has appreciated in value subsequent to the Award Date.  Distributions with respect to an LTIP Unit issued during a fiscal quarter shall be prorated as provided in Section 6.2(c)(ii) of the Partnership Agreement.

 

2.4                                Liquidating Distributions .  In the event of the dissolution, liquidation and winding up of the Partnership, distributions to the LTIP Unitholder shall be made in accordance with Section 8.2(d) of the Partnership Agreement.

 

2.5                                Forfeiture .  Any Unvested LTIP Units that are forfeited pursuant to the terms of the Award Agreement shall immediately be null and void and shall cease to be outstanding or to have any rights except as otherwise provided in the Award Agreement.

 

2.6                                Voting Rights .  Unvested LTIP Units shall not be entitled to vote on any matter submitted to the Limited Partners for their approval unless and until such units constitute Vested LTIP Units.  Vested LTIP Units will be entitled to be voted on an equal basis with the Partnership Units.

 

ARTICLE III
Tax Provisions

 

3.1                                Special Allocations of Profits . Liquidating Gain shall be allocated as follows:  (a) first, to the holders of Preferred Units as provided in the Partnership Agreement, (b) second, if applicable, to the holders of Partnership Units as provided in the Partnership Agreement until the Partnership Unit Economic Balance is equal to the Target Balance and (c) third, to (i) each LTIP Unitholder until each such holder’s Economic Capital Account Balance is equal to the Target Balance and (ii) the holders of Other LTIP Units until their economic capital account balances are equal to their target balances.  If an allocation of Liquidating Gain is not sufficient to achieve the objectives of the foregoing sentence in full, Liquidating Gain, after giving effect to clauses (a) and (b) in such sentence, shall be allocated first, to each LTIP Unitholder with respect to his or her Vested LTIP Units and to the holders of vested Other LTIP Units and, second, to each LTIP Unitholder with respect to his or her Unvested LTIP Units and to the holders of non-vested Other LTIP Units, in each case, in proportion to the amounts necessary for such units to achieve the objectives of the foregoing sentence; provided, that the holders of Other LTIP Units shall not receive an allocation of Liquidating Gain that they are not entitled to receive under the applicable certificate of designation.  A certificate of designation for Other LTIP Units may provide for a different allocation among such Other LTIP Units, but such different allocation

 

4

 

shall not affect the amount allocated to the LTIP Units vis-à-vis the Other LTIP Units.  Notwithstanding the foregoing, Liquidating Gain shall not be allocated to the LTIP Units to the extent such allocation would cause the LTIP Units to fail to qualify as a “profits interest” when granted.  Once the Economic Capital Account Balance has been increased to the Target Balance, no further allocations shall be made pursuant to this Section 3.1.  Thereafter, LTIP Units shall be treated as Partnership Units with respect to the allocation of Profits and Losses pursuant to Section 3.2 hereof.

 

If any Unvested LTIP Units to which gain has been previously allocated under this Section are forfeited, the Capital Account associated with the forfeited Unvested LTIP Units will be reallocated to the remaining LTIP Units at the time of forfeiture to the extent necessary to cause the Economic Capital Account Balance of such remaining LTIP Units to equal the Target Balance.  To the extent any gain is not reallocated in accordance with the foregoing sentence, such gain shall be forfeited.

 

3.2                                Allocations with Respect to LTIP Units .  LTIP Units shall be treated as Partnership Units with respect to the allocation of Profits and Losses; provided, that Profits from the sale of assets shall be allocated to each LTIP Unitholder as provided in Section 3.1 hereof until such LTIP Unitholder’s Economic Capital Account Balance has been increased to the Target Balance.

 

3.3                                Safe Harbor Election .  To the extent provided for in Regulations, revenue rulings, revenue procedures and/or other IRS guidance issued after the date of this Designation, the Partnership is hereby authorized to, and at the direction of the General Partner shall, elect a safe harbor under which the fair market value of any LTIP Units issued after the effective date of such Regulations (or other guidance) will be treated as equal to the liquidation value of such LTIP Units ( i.e. , a value equal to the total amount that would be distributed with respect to such interests if the Partnership sold all of its assets for the fair market value immediately after the issuance of such LTIP Units, satisfied its liabilities (excluding any non-recourse liabilities to the extent the balance of such liabilities exceed the fair market value of the assets that secure them) and distributed the net proceeds to each LTIP Unitholder under the terms of this Agreement).  In the event that the Partnership makes a safe harbor election as described in the preceding sentence, each LTIP Unitholder hereby agrees to comply with all safe harbor requirements with respect to transfers of such LTIP Units while the safe harbor election remains effective.  In addition, upon a forfeiture of any LTIP Units by any LTIP Unitholder, gross items of income, gain, loss or deduction shall be allocated to such LTIP Unitholder if and to the extent required by final Regulations promulgated after the effective date of this Designation to ensure that allocations made with respect to all Unvested LTIP Units are recognized under Code Section 704(b).

 

ARTICLE IV
Conversion

 

4.1                                Conversion Right .  On and after the Full Conversion Date, each LTIP Unitholder shall have the right to convert Vested LTIP Units to Partnership Units on a one-to-one basis by giving notice to the Partnership as provided in Section 4.3 hereof.  Prior to the Full Conversion

 

5

 

Date, the conversion of Vested LTIP Units shall be subject to the limitation set forth in Section 4.2 hereof.

 

4.2                                Limitation on Conversion Rights Until the Full Conversion Date .  The maximum number of Vested LTIP Units that may be converted prior to the Full Conversion Date is equal to the product of (a) the result obtained by dividing (1) the Economic Capital Account Balance of an LTIP Unitholder’s Vested LTIP Units by (2) the Target Balance of such LTIP Unitholder’s Vested LTIP Units, in each case determined as of the effective date of the conversion and (b) the number of Vested LTIP Units.  Immediately after each conversion of Vested LTIP Units, the aggregate Economic Capital Account Balance of the remaining Vested LTIP Units shall be equal to (a) the aggregate Economic Capital Account Balance of all of the LTIP Unitholder’s Vested LTIP Units immediately prior to conversion, minus (b) the aggregate Economic Capital Account Balance immediately prior to conversion of the number of the LTIP Unitholder’s Vested LTIP Units that were converted.

 

4.3                                Exercise of Conversion Right .  In order to exercise the right to convert a Vested LTIP Unit, an LTIP Unitholder shall give notice (a “ Conversion Notice ”) in the form attached hereto as Exhibit A to the General Partner not less than sixty (60) days prior to the date specified in the Conversion Notice as the effective date of the conversion (the “ Conversion Date ”).  The conversion shall be effective as of 12:01 a.m. on the Conversion Date without any action on the part of the holder or the Partnership.  An LTIP Unitholder may give a Conversion Notice with respect to Unvested LTIP Units, provided that such Unvested LTIP Units become Vested LTIP Units on or prior to the Conversion Date.

 

4.4                                Exchange for Shares .  An LTIP Unitholder may also exercise his or her right to exchange the Partnership Units to be received pursuant to the Conversion Notice to Shares or cash, as selected by the General Partner, in accordance with Article XI of the Partnership Agreement; provided, however, such right shall be subject to the terms and conditions of Article II of the Partnership Agreement and may not be effective until six (6) months from the date the Vested LTIP Units that were converted into Partnership Units became fully vested.

 

4.5                                Forced Conversion .  In addition, the General Partner may, upon not less than ten (10) days’ written notice to an LTIP Unitholder, require any LTIP Unitholder of Vested LTIP Units to convert them into Units subject to the limitation set forth in Section 4.2 hereof, and only if, at the time the General Partner acts, there is a one-to-one conversion right between the LTIP Units and Partnership Units for conversion, distribution and all other purposes.  The conversion shall be effective as of 12:01 a.m. on the date specified in the notice from the General Partner.

 

4.6                                Notices .  Notices pursuant to this Article shall be given in the same manner as notices given pursuant to the Partnership Agreement.

 

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6

 

EXHIBIT A

 

Conversion Notice

 

The undersigned hereby gives notice pursuant to Section 4.3 of the Certificate of Designation of Series 2014B LTIP Units of Washington Prime Group, L.P. (the “ Designation ”) that he/she elects to convert                              Vested LTIP Units (as defined in the Designation) into an equivalent number of Partnership Units (as defined in the Amended and Restated Limited Partnership Agreement of Washington Prime Group, L.P. (the “ Partnership Agreement ”)).  The conversion is to be effective on                             , 20      .

 

IN WITNESS WHEREOF, this Conversion Notice is given this          day of                             , 20      , to Washington Prime Group Inc. in accordance with Section 12.2 of the Partnership Agreement.

 

 

Exhibit 10.3

 

TERMS AND CONDITIONS OF THE GRANT OF SPECIAL PERFORMANCE LTIP UNITS

 

(A) Subject to the LTIP Executive’s continuous employment hereunder through each grant date, the LTIP Executive shall be granted LTIP Units under the Plan in respect of each performance period (each, a “ Special Performance Period” ) consisting of the period from May 28, 2014 (the effective date of the consummation of the distribution of the shares of the Corporation to the shareholders of Simon Property Group, Inc.) (the “ Effective Date” ) through (i) December 31, 2015 (the “First Special PP”), (ii) December 31, 2016 (the “Second Special PP”) and (iii) December 31, 2017 (the ‘‘ Third Special PP” ) (collectively, the “Special Performance LTIP Units”). Capitalized terms not otherwise defined herein shall be ascribed the meaning set forth in those certain resolutions adopted and approved by the Committee pursuant to the Unanimous Written Consent of the Compensation Committee of the Board of Directors of Washington Prime Group Inc., dated August            , 2014.

 

(B)  Each LTIP Executive may be granted up to the number of Special Performance LTIP Units in respect of each Special Performance period as set forth next to such LTIP Executive’s name on Schedule 1 attached hereto.

 

(C)  The number Special Performance LTIP Units granted in respect of each Special Performance Period shall be based on the Corporation’s achievement of the absolute and relative (versus the MSCI REIT Index) total shareholder return (‘‘TSR”) goals set forth on Schedule 2 attached hereto, with 40% of the Special Performance LTIP Units available for grant with respect to each Special Performance Period granted based on achievement of absolute TSR goals, and 60% of the Special Performance LTIP Units available for grant with respect to each Special Performance Period granted based on achievement of relative TSR goals, in each case, as set forth on Schedule 2 attached hereto.

 

(D)   Subject to paragraphs (A) through (C) above, Special Performance LTIP Units granted in respect of each Special Performance Period shall be granted promptly (and in any event within 15 days) following the end of the applicable Special Performance Period.

 

(E)  Distributions will be paid on Special Performance LTIP Units from and after the date of grant in accordance with, and subject to, the terms and conditions of the Plan and the applicable award agreement; provided that, there shall be no reduction to such distributions compared to distributions paid in respect of common units of the Partnership generally except as provided in the certificate of designation designating the applicable series of Special Performance LTIP Units with respect to distributions designated as a capital gain dividend within the meaning of Section 875(b)(3)(C) of the Internal Revenue Code of 1986, as amended, and any other distributions that the General Partner of the Partnership determines are not made in the ordinary course.

 

(F) Except as the Committee may otherwise provide in an applicable award agreement, Special Performance LTIP Units granted in respect of the First Special PP and the Second Special PP will become vested on the third (3rd) anniversary of the Effective Date if the LTIP Executive is continually employed hereunder through such date.

 

 

(G) Except as the Committee may otherwise provide in an applicable award agreement, Special Performance LTIP Units granted in respect of the Third Special PP will be immediately vested upon grant if the LTIP Executive is continually employed hereunder through the grant date.