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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

 

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April 8, 2014

Dear Fellow Stockholders:

Please join me and the entire Board of Directors at our 2014 Annual Meeting of Stockholders on May 15, 2014 at our headquarters in Indianapolis, Indiana. The business to be conducted at the meeting is explained in the attached Notice of Annual Meeting and Proxy Statement.

We are not complacent as a Company; we continue to improve SPG for the benefit of its stockholders. Our 2013 performance was outstanding and I thank our employees for their hard work and dedication.

We hope that after you have reviewed the Proxy Statement you will vote at the meeting in accordance with the Board's recommendations. Thank you for your continued support of our Company. Your vote is important to us and our business. You will find instructions on how to vote on page 2. I look forward to seeing you at the Annual Meeting.

Sincerely,

David Simon
Chairman of the Board and Chief Executive Officer

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MAY 15, 2014
8:30 A.M. (EDT)

Simon Property Group Headquarters
225 West Washington Street, Indianapolis, Indiana 46204

ITEMS OF BUSINESS

1.

To elect ten directors, including three directors to be elected by the voting trustees, who vote the Class B common stock,

2.

To hold the annual advisory vote to approve executive compensation,

3.

To ratify and approve the Company's Amended and Restated 1998 Stock Incentive Plan,

4.

To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2014, and

5.

To transact such other business as may properly come before the meeting.

RECORD DATE

You can vote if you are a stockholder of record on March 14, 2014 (the "Record Date").

ANNUAL REPORT

Our 2013 annual report to stockholders accompanies, but is not part of these proxy materials.

PROXY VOTING

Stockholders as of the Record Date are invited to attend the annual meeting, but if you cannot attend in person, please vote in advance of the meeting by using one of the methods described in the Proxy Statement.

By order of the Board of Directors,

James M. Barkley
Secretary

April 8, 2014

   

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PLEASE VOTE

It is very important that you vote to play a part in the future of your Company. NYSE rules provide that if your shares are held through a broker, bank or other nominee, they cannot vote on your behalf on non-discretionary matters, without your instruction.

PROPOSALS WHICH REQUIRE YOUR VOTE

 

PLEASE VISIT OUR ANNUAL MEETING WEBSITE:  annualmeeting.simon.com

•

Review and download easy to read versions of our Proxy Statement and Annual Report.

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Sign up for future electronic delivery to reduce the impact on the environment.

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PROXY SUMMARY

This proxy summary highlights information which may be contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Page references are supplied to help you find further information in this Proxy Statement.

ELIGIBILITY TO VOTE (page 60)

You can vote if you were a stockholder of record at the close of business on March 14, 2014.

HOW TO CAST YOUR VOTE (page 2)

You can vote by any of the following methods:

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Internet: www.proxyvote.com until 11:59 P.M. EDT on May 14, 2014

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Telephone: 1-800-690-6903 until 11:59 P.M. EDT on May 14, 2014; or

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Mail: Completing, signing and returning your proxy or voting instruction card.

GOVERNANCE OF THE COMPANY (page 6)

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We pride ourselves on continuing to observe and implement best practices in our corporate governance.

BOARD NOMINEES (page 10)

 

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EXECUTIVE COMPENSATION (page 32)

COMPENSATION DISCLOSURE AND ANALYSIS (page 21)

•

The Committee actively engaged with our stockholders beginning in 2012 and continuing through 2013 regarding our NEO and CEO compensation programs and carefully considered that input as we reviewed and implemented design changes to our executive compensation programs. Our Compensation Committee engaged with stockholders owning more than 58% of our outstanding common shares in face-to-face discussions, conference calls and/or written communications during the following time frames:

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Between the publication of our 2013 Proxy Statement and the 2013 Annual Meeting,

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Between the 2013 Annual Meeting and the end of 2013, and

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Early in 2014, prior to the publication of this 2014 Proxy Statement.

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We modified Mr. Simon's 2011 CEO Retention Agreement to include performance conditions, in addition to the previously-included service-based requirements.

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We added a "double trigger" vesting requirement to Mr. Simon's 2011 CEO Retention Agreement which requires both a change in control of the Company and a termination based on a material change in the CEO's employment circumstance before any acceleration of the 2011 CEO Retention Agreement.

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Our Compensation Committee took the following actions with respect to our executive compensation programs:

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We reduced Mr. Simon's 2013-2015 LTIP opportunity,

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We reduced or held flat the performance based LTIP opportunities for the 2013-2015 award cycle for all of our other Named Executive Officers, or "NEOs",

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We decreased the Annual Cash Incentive compensation amounts for our CEO in 2013 and all but one of our other NEOs,

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The 2014 Annual Cash Incentive compensation program opportunities for our CEO and other NEOs are the same as 2013 and are reduced from 2012,

•

We reduced Mr. Simon's 2014-2016 LTIP opportunity and the LTIP opportunities for the other NEOs were held generally flat, except for one NEO, and

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We made no increase to 2014 base salaries for any of our NEOs, including our CEO.

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During 2013, we also provided additional disclosure related to the processes we follow in determining the performance based awards made under our Annual Cash Incentive compensation program.

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2011-2013 EXECUTIVE TOTAL DIRECT COMPENSATION MIX (page 25)

We have significantly increased the percentage of performance based compensation for our CEO and other NEOs as shown in our charts below. We increased the alignment of executive compensation with stockholders' interests by focusing on increasing long-term stockholder value.

SAY ON PAY (page 19)

We are asking our stockholders to approve on an advisory basis our executive compensation for 2013.

RATIFICATION AND APPROVAL OF THE AMENDED AND RESTATED 1998 STOCK INCENTIVE
PLAN (page 47)

RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (page 57)

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PROXY STATEMENT

This Proxy Statement and accompanying proxy are being provided to stockholders on or about April 10, 2014 in connection with the solicitation by the Board of Directors of Simon Property Group, Inc. ("Simon", "SPG", "we", "us", "our" or the "Company") of proxies to be voted at the 2014 Annual Meeting of Stockholders on May 15, 2014.

CORPORATE GOVERNANCE OF THE COMPANY

BOARD LEADERSHIP STRUCTURE

We recently revised our Governance Principles to strengthen the Lead Independent Director role and our Independent Directors appointed a new Lead Independent Director to succeed our long-standing Lead Independent Director.

The Lead Independent Director presides over the regularly conducted executive sessions of the Independent Directors, sets Board agendas and facilitates interactions between the Independent Directors and the senior management team.

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In March of 2014 Larry C. Glasscock was appointed by our Independent Directors to serve as our Lead Independent Director. David Simon has served since 2007 as the Chairman of the Board of Directors and Chief Executive Officer. The Board of Directors continues to believe that having David Simon fill these two leadership roles is an appropriate and efficient leadership structure. Together with our Lead Independent Director, the combination of the Chairman and Chief Executive Officer roles facilitates clear leadership, responsibility and accountability, effective decision-making and a cohesive corporate strategy.

•

7 of our 10 Directors are independent under the rules set forth in the NYSE listed company rules.

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All of the members of the Audit Committee, Governance and Nominating Committee, and Compensation Committee are Independent Directors.

SUMMARY OF BOARD EXPERIENCE

THE BOARD OF DIRECTORS BELIEVES THAT ITS MEMBERS SHOULD:

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In addition, the Board of Directors has determined that the Board as a whole should strive to have the right mix of characteristics and skills necessary to effectively perform its oversight responsibilities. The Board believes that directors with one or more of the following skills can assist in meeting this goal:

BOARD'S ROLE IN OVERSIGHT OF RISK MANAGEMENT

While risk management is primarily the responsibility of our management, the Board of Directors provides overall risk oversight focusing on the most significant risks we face. We have implemented a Company-wide enterprise risk management process to identify and assess the major risks we face and develop strategies for controlling, mitigating and monitoring risk. As part of this process, we gather information throughout our Company to identify and prioritize these major risks. The identified risks and risk mitigation strategies are validated with management and discussed with the Audit Committee on an ongoing basis.

The Audit Committee reviews our risk management programs and reports on these items to the full Board. Our Vice President of Audit Services is responsible for supervising the enterprise risk management process and in that role reports directly to the Audit Committee. Other members of senior management who have responsibility for designing and implementing various aspects of our risk management process also regularly meet with the Audit Committee. The Audit Committee discusses our identified financial and operational risks with our Chief Executive Officer and Chief Financial Officer and receives reports from other members of senior management with regard to our identified risks.

The Compensation Committee is responsible for overseeing any risks relating to our compensation policies and practices. Specifically, the Compensation Committee oversees the design of incentive compensation arrangements of our executive officers to implement our pay-for-performance philosophy without encouraging or rewarding excessive risk taking by our executive officers.

Our management regularly conducts additional reviews of risks, as needed, or as requested by the Board or Audit Committee.

DIRECTOR INDEPENDENCE

The Board has adopted standards to assist it in making determinations of director independence. These standards incorporate, and are consistent with, the definition of "independent" contained in the New York Stock Exchange listing rules. These standards are included in our Governance Principles, which are available at governanceprinciples.simon.com. The Board has amended and restated the Governance Principles to strengthen the role of the Lead Independent Director (see page 14 for more information). The Board has affirmatively determined that each of the persons nominated for election as directors by the holders of voting shares meets these standards and is independent.

David Simon, Richard Sokolov and Herbert Simon are our employees and are not considered Independent Directors.

POLICIES ON CORPORATE GOVERNANCE

Good corporate governance is important to ensure that the Company is managed for the long-term benefit of its stockholders and to enhance the creation of long-term stockholder value. Each year, the Board or one of its committees reviews our Governance Principles, the written charters for each of the Board's standing committees at committeecomposition.simon.com and our Code of Business Conduct and Ethics at codeofconduct.simon.com. The current version of each of these documents is available by clicking on any of the previous links or by visiting www.simon.com, in the Investors/Corporate Governance section at investors.simon.com, or by requesting a copy in print without charge upon written request to our Secretary at 225 West Washington Street, Indianapolis, Indiana 46204.

We will also either disclose on Form 8-K and/or post on our Internet website any substantive amendment to, or waiver from, a provision of the Code of Business Conduct and Ethics that applies to any of our directors or executive officers.

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MAJORITY VOTE STANDARD FOR ELECTION OF DIRECTORS

Our By-Laws provide for a majority voting standard for the election of directors. This means that any director who, in an uncontested election, receives a greater number of "against" votes than "for" votes must promptly tender his or her resignation to the Board of Directors, subject to its acceptance. The Governance and Nominating Committee will promptly consider the tendered resignation and recommend to the Board whether to accept or reject it. Both the Governance and Nominating Committee and the Board may consider any factors they deem appropriate and relevant to their actions.

The Board will act on the tendered resignation, taking into account the Governance and Nominating Committee's recommendation. The affected director cannot participate in any part of the process. We will publicly disclose the Board's decision by a press release, a filing with the Securities and Exchange Commission or other broadly disseminated means of communication within 90 days after the vote is certified.

In a contested election (in which the number of nominees exceeds the number of directors to be elected), the standard for election of directors will be a plurality of the votes cast by the holders of shares entitled to vote on the election of directors, provided a quorum is present.

NOMINATIONS FOR DIRECTORS

The Governance and Nominating Committee will consider director nominees recommended by stockholders in accordance with the requirements of our By-Laws. A stockholder who wishes to recommend a director candidate should send such recommendation to our Secretary at 225 West Washington Street, Indianapolis, Indiana 46204, who will forward it to the Governance and Nominating Committee. Any such recommendation should include a description of the candidate's qualifications for Board service, the candidate's written consent to be considered for nomination and to serve if nominated and elected, and addresses and telephone numbers for contacting the stockholder and the candidate for more information. A stockholder, who wishes to nominate an individual as a director candidate at the annual meeting of stockholders, rather than recommend the individual to the Governance and Nominating Committee as a nominee, shall comply with the requirements described above and in addition must comply with the advance notice requirements for stockholder nominations set forth in our By-Laws.

Our Governance Principles provide that all candidates for election as members of the Board should possess high personal and professional ethics, integrity and values and be committed to representing the long-term interests of our stockholders and otherwise fulfilling the responsibilities of directors as described in our Governance Principles. Our Governance Principles further provide that our directors should not serve on more than four boards of public companies, including our Board, unless the Board or Governance and Nominating Committee determines that serving on more than four public company boards does not impair the ability of the director to serve as an effective member of our Board. In recommending candidates to the Board for election as directors, the Governance and Nominating Committee will consider the foregoing minimum qualifications as well as each candidate's credentials, keeping in mind our desire, as stated in our Governance Principles, to have a Board representing diverse experiences and backgrounds, as well as expertise in or knowledge of specific areas that are relevant to our business activities.

COMMUNICATIONS WITH THE BOARD

The Board has implemented a process by which our stockholders and other interested parties may communicate with one or more members of our Board, its committees or the Independent Directors as a group in a writing addressed to Simon Property Group, Inc., Board of Directors, c/o Secretary, 225 West Washington Street, Indianapolis, Indiana 46204. The Board has instructed our Secretary to promptly forward all such communications to the specified addressees thereof.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, requires our directors, executive officers and beneficial owners of more than 10% of our capital stock to file reports of ownership and changes of ownership with the Securities and Exchange Commission and the New York Stock Exchange. Based on our records and other information, we believe that during the year ended December 31, 2013 all applicable Section 16(a) filing requirements were met.

TRANSACTIONS WITH RELATED PERSONS POLICY

On an annual basis, each director and executive officer is obligated to complete a director and officer questionnaire which requires disclosure of any transactions with us in which the director or executive officer, or any member of his or her immediate family, has an interest. Pursuant to our Code of Business Conduct and Ethics at codeofconduct.simon.com, which is also available in the Corporate Governance section at investors.simon.com, the Audit Committee must review and approve all related person transactions

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in which any executive officer, director, director nominee or more than 5% stockholder of the Company, or any of their immediate family members, has a direct or indirect material interest. Pursuant to the charter of the Audit Committee, which is available in the Corporate Governance section at investors.simon.com, the Audit Committee may not approve a related person transaction unless (1) it is in or not inconsistent with our best interests and (2) where applicable, the terms of such transaction are at least as favorable to us as could be obtained from an unrelated third party. Our Charter requires that at least a majority of our directors be neither our employees nor members or affiliates of the Simons. Our Charter further requires that transactions involving us in our capacity as general partner of the Operating Partnership, in which any of the Simons has an interest must, in addition to any other vote that may be required, be approved in advance by a majority of such "Independent Directors." We currently have seven Independent Directors serving on the Board.

Our General Counsel is charged with reviewing any conflict of interest involving any other employee.

TRANSACTIONS WITH THE SIMONS

We have managed since 1993 two shopping centers which are owned by entities in which David Simon and Herbert Simon have ownership interests that were not contributed to our majority owned subsidiary, Simon Property Group, L.P., or the "Operating Partnership", pursuant to management agreements that provide for our receipt of a management fee and reimbursement of our direct and indirect costs. In addition, in 2013 we assisted Melvin Simon & Associates, Inc., or MSA, and certain of its affiliates with placement of the property and casualty insurance programs required for certain retail and other commercial buildings and improvements owned by MSA or its affiliates. In 2013, we received $4,509,668 in fees and reimbursements from MSA and its affiliates for rendering management and insurance-related services to MSA and its affiliates. These agreements have been reviewed and approved by the Audit Committee.

We reimbursed David Simon $1,150,036 for the business use of his personal aircraft. In addition, we reimbursed MSA $171,550 for maintenance, pilot and other support services that MSA provided with respect to our use of David Simon's personal aircraft. Our reimbursement for use of David Simon's personal aircraft is based upon a below market hourly cost of operating the aircraft and the verified number of hours of our business use, plus reimbursement for certain out-of-pocket expenses. These reimbursements were reviewed and approved by the Audit Committee.

We provide MSA with office space and legal, human resource administration, property specific financing and other support services and MSA paid us $600,000 for these services in 2013, which is net of our reimbursement for Herbert Simon for costs incurred to operate his personal aircraft when used for business purposes. The payments and reimbursements were reviewed and approved by the Audit Committee.

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PROPOSAL 1:      Election of Directors

The Board of Directors currently consists of ten members. Based on the recommendation of the Governance and Nominating Committee, the Board has nominated the following seven persons listed as "Nominees for Director to be Elected by Holders of Voting Shares." All of the nominees are current directors.

The voting trustees who vote the Class B common shares have nominated the three persons listed below as "Nominees for Director to be Elected by the Voting Trustees Who Vote the Class B Common Stock". All of the nominees are currently Class B directors.

Our employment agreement with Richard Sokolov contemplates that he will be elected to the Board of Directors, and the voting trustees who vote the Class B common shares have agreed to elect Richard Sokolov to the Board. The voting trustees have an agreement requiring that each of them vote for each other as Class B director nominees.

We expect each nominee for election as a director will be able to serve if elected. If any nominee is not able to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees.

The names, principal occupations and certain other information about the nominees for director, as well as key experiences, qualifications, attributes and skills that led the Governance and Nominating Committee to conclude that such person is currently qualified to serve as a director, are set forth on the following pages.

NOMINEES FOR DIRECTORS TO BE ELECTED BY HOLDERS OF VOTING SHARES

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE FOLLOWING INDEPENDENT DIRECTOR NOMINEES:

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NOMINEES FOR DIRECTOR TO BE ELECTED BY THE VOTING TRUSTEES WHO VOTE THE CLASS B COMMON STOCK

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MEETINGS AND COMMITTEES OF THE BOARD

ALL OF OUR DIRECTORS ATTENDED 100% OF BOARD AND COMMITTEE MEETINGS

MEETINGS AND ATTENDANCE

Our business, property and affairs are managed under the direction of our Board of Directors. Members of our Board of Directors are kept informed of our business through discussions with our Chairman and Chief Executive Officer, other executive officers and our Lead Independent Director, by reviewing materials provided to them, by visiting our offices and properties, and by participating in meetings of the Board and its committees. Directors are also expected to use reasonable efforts to attend the annual meeting of stockholders.

•

All directors attended the 2013 annual meeting. During 2013, the Board of Directors met six times. The Board conducts many of its oversight responsibilities through its Audit Committee, Compensation Committee, and Governance and Nominating Committee.

•

During 2013, our directors participated in 100% of the aggregate number of meetings of the Board and the committees on which they serve.

EXECUTIVE SESSIONS OF INDEPENDENT DIRECTORS

The Independent Directors meet in executive session without management present in connection with each regularly scheduled Board meeting. During 2013, the Independent Directors held four executive sessions. The Lead Independent Director presides over these executive sessions.

The name of the current Lead Independent Director is posted in the Corporate Governance Section at investors.simon.com. The Board's Lead Independent Director is appointed by the Independent Board members and the effectiveness of the Lead Independent Director shall be discussed in the Proxy Statement provided to stockholders in connection with each annual meeting.

In March, 2014, we amended and restated our Governance Principles to strengthen the role of the Lead Independent Director. The Lead Independent Director performs the duties specified in these Governance Principles and such other duties as are assigned from time to time by the Independent Directors of the Board.

Under these Governance Principles, the Lead Independent Director is empowered to:

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preside at all meetings of the Board at which the Chairman is not present, including executive sessions of the Independent Directors;

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serve as a liaison between the Chairman and the Independent Directors;

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approve information sent to the Board;

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approve meeting agendas for the Board;

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approve meeting schedules to assure there is sufficient time for discussion of all agenda items;

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call meetings of the Independent Directors;

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if requested by major stockholders, ensures that he or she is available for consultation and direct communication; and

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retain outside advisors and consultants to report directly to the Board on Board-wide matters.

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COMMITTEE FUNCTION AND MEMBERSHIP

THE AUDIT COMMITTEE

THE COMPENSATION COMMITTEE

THE GOVERNANCE AND NOMINATING COMMITTEE

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DIRECTOR COMPENSATION

COMPENSATION OF INDEPENDENT DIRECTORS

The Board of Directors believes that competitive compensation arrangements are necessary to attract and retain qualified Independent Directors. The key components of our current Independent Director compensation program are an annual cash retainer, cash fees for meeting attendance, annual restricted stock grants and additional compensation to committee chairs and the Lead Independent Director.

During 2013, we paid each Independent Director an annual cash retainer of $70,000 and restricted stock award with a grant date value of $82,500. We also paid each Independent Director a fee of $2,000 for attending each Board meeting and $1,500 for attending each committee meeting.

Independent Directors who serve as chairpersons of standing committees receive an additional annual cash fee of $10,000 and a restricted stock award with a grant date value of $10,000 (in the case of the Audit and Compensation Committees) or $7,500 and a restricted stock award with a grant date value of $7,500 (in the case of the Governance and Nominating Committee). In addition, the Lead Independent Director receives an annual cash fee of $12,500 and a restricted stock award with a grant date value of $12,500.

DIRECTOR OWNERSHIP GUIDELINES

We have a stringent stock retention policy that further aligns our Board of Directors' interests with our stockholders. Each of our Independent Directors is required to own not less than 3,000 shares of our common stock or units of the Operating Partnership within two years after he or she is initially elected to the Board and not less than 5,000 shares of our common stock within three years from such date. At current market prices, these guidelines equate to 6 times and 11 times of our annual cash retainer, respectively.

In addition, our Independent Directors are required to hold vested restricted stock awards, together with all dividends paid on such awards, in the director account of our deferred compensation plan until the director retires, dies or becomes disabled, or otherwise no longer serves as a director.

Any director who is prohibited by law or by applicable regulation of his or her employer from having an ownership interest in our securities will be exempt from this requirement until the restriction is lifted, at which time he or she will have the following two-year and three-year periods to comply with the ownership guidelines. Stock options and unvested shares of restricted stock do not count toward these goals. As of March 14, 2014, all of our Independent Directors were in compliance with the ownership guidelines.

2013 INDEPENDENT DIRECTOR COMPENSATION

The following table sets forth information regarding the compensation we paid to our Independent Directors for 2013:

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OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY BY DIRECTORS AND EXECUTIVE OFFICERS

As of March 14, 2014, the director nominees and executive officers identified below:

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Owned beneficially the indicated number and percentage of common shares and Class B common stock treated as a single class; and

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Owned beneficially the indicated number and percentage of units which are exchangeable for common shares on a one-for-one basis or cash, as determined by the Company. The number of units includes earned and fully vested performance based LTIP units which are convertible at the option of the holder into units on a one-for-one basis.

Unless otherwise indicated in the footnotes to the table, shares or units are owned directly and the indicated person has sole voting and investment power.

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OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information concerning each person (including any group) known to us to beneficially own more than five percent (5%) of any class of our voting securities as of March 14, 2014. Unless otherwise indicated in the footnotes, shares are owned directly and the indicated person has sole voting and investment power.

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PROPOSAL 2:      Advisory Vote to Approve Executive Compensation

In accordance with SEC rules, our stockholders are being asked to approve, on an advisory or non-binding basis, the compensation of our NEOs as disclosed in this Proxy Statement.

In 2013, the 2011 CEO Retention Agreement was modified to include performance based thresholds comprised of Funds from Operations (FFO) performance targets and to include a "double trigger" change in control vesting provision.

The 2013 annual base salaries for our CEO and all of our NEOs did not increase from the amounts that were approved in 2012. In addition, Annual Cash Incentive Compensation earned in 2013 was reduced from 2012 for our CEO and for all of our NEOs, with the exception of one NEO. Also, the grant date fair value of the LTIP units awarded to our CEO in 2013 was reduced.

Our compensation programs are designed to facilitate long-term stockholder value creation. Our focus on pay-for-performance and on corporate governance ensures alignment with the interests of stockholders.

Our alignment with stockholder interests is demonstrated in the shift over the last three years to include a higher percentage of performance based compensation in the pay mix for our NEOs. The percentage of our CEO's non-cash performance based compensation increased from 50% in 2011 to 74% in 2013.

Similarly, the percentage of non-cash performance based compensation for our other NEOs increased from 58% to 73% over the same 3-year period.

We are asking for stockholder approval of the compensation of our NEOs as disclosed in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the policies and practices described in this Proxy Statement.

We will evaluate whether any actions are necessary to address significant concerns as a result of this advisory vote. We currently conduct annual advisory votes on executive compensation, and we expect to conduct the next advisory vote at our 2015 Annual Meeting of Stockholders.

The Board of Directors Unanimously Recommends that Stockholders Vote FOR the approval of our Executive Compensation.

COMPENSATION COMMITTEE REPORT

In 2013, we continued our active engagement with stockholders, building upon the direct Committee outreach that began in 2012. Our Committee engaged stockholders owning more than 58% of our outstanding common shares in face-to-face discussions, conference calls and/or written communications.

The Committee and our CEO took action in 2013 to modify the 2011 CEO Retention Agreement, and took the following additional actions:

(1)

include performance based thresholds comprised of Funds from Operations (FFO) performance,

(2)

include a "double trigger" change in control vesting provision, and

(3)

increase the transparency around the processes we use to determine the Annual Cash Incentive compensation for our Executive Officers.

The Committee has also recently amended the Simon Property Group, L.P. 1998 Stock Incentive Plan to limit the number of shares of common stock of the Company that may be subject to all types of awards made to any participant during a calendar year at, in the aggregate, 600,000 for 2014 and 500,000 thereafter (minus the number of shares subject to any other award made to such participant during such year). The recent amendments also set the aggregate number of shares of the Company's common stock available for awards under the 1998 Stock Incentive Plan at 16,300,000 and provide that awards of performance units must be based on the attainment of specified performance goals over a performance cycle (and, consequently, delete a requirement that performance units based solely on completion of a period of service must have a minimum period of service of thirty-six (36) months).

The Committee believes that appropriate actions were taken in 2013 to address stockholder interests and to ensure a strong alignment between our stockholders, our performance, and our executive compensation program.

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Additional details about our performance, the executive compensation program design, and changes made during 2013 are discussed in the "COMPENSATION DISCUSSION AND ANALYSIS" section below.

CHANGES TO CHIEF EXECUTIVE OFFICER COMPENSATION

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The Committee and our CEO modified the 2011 CEO Retention Agreement to require the attainment of Company-based FFO performance goals, in addition to Mr. Simon's continued employment, as conditions to earning of the award as further discussed on page 28.

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Our CEO's annual base salary in 2013 did not increase from his 2012 annual base salary.

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Our CEO's 2013 Annual Cash Incentive compensation was reduced from the amount of his 2012 Annual Cash Incentive Compensation.

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We reduced the amount of 2013-2015 LTIP units to our CEO. In addition, the amount of the 2014-2016 LTIP units to our CEO was reduced.

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The Committee and our CEO also added a "double trigger" change in control vesting requirement to the 2011 CEO Retention Agreement.

CHANGES TO NAMED EXECUTIVE OFFICERS' COMPENSATION

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Our NEOs' annual base salaries in 2013 did not increase from their 2012 annual base salaries.

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Our NEOs' 2013 Annual Cash Incentive compensation was reduced from the amount of their 2012 Annual Cash Incentive Compensation, for all but one of our NEOs.

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We formally incorporated a performance based annual FFO per share goal into the Annual Cash Incentive Compensation program. No executive officer will be eligible to receive a payout from our Annual Cash Incentive Compensation program unless the Company achieves certain pre-determined annual FFO per share goals.

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We provided additional transparency by disclosing the methodology we use to determine individual awards paid under our Annual Cash Incentive program.

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We reduced or held flat the grant date fair value of the LTIP units awarded to all but one of our NEOs in 2013.

The Committee held eight meetings during 2013. The meetings were designed, among other things, to facilitate and encourage free and frank discussion among Committee members, executive management, our compensation consultant and other Company personnel involved in executive compensation matters.

The Committee reviewed and discussed with management the COMPENSATION DISCUSSION AND ANALYSIS section included in this Proxy Statement. Based on its review and these discussions with management, the Committee recommended to the Board of Directors that it be incorporated by reference into the Company's annual report on Form 10-K for the fiscal year ended December 31, 2013, and included in the Proxy Statement for the 2014 Annual Meeting of Stockholders. The Committee remains committed to ongoing engagement and dialogue with our stockholders in the future.

The Compensation Committee:

Reuben S. Leibowitz, Chairman
Melvyn E. Bergstein
Allan Hubbard
Daniel C. Smith, Ph.D.

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COMPENSATION DISCUSSION AND ANALYSIS

EXECUTIVE SUMMARY

The Company performed well in 2013, producing excellent operational and financial results. A summary of our key milestones:

•

We reached new highs in 2013 for consolidated revenue and Funds From Operations, or FFO: Consolidated revenue increased 5.9% to $5.17 billion; Net income was $1.316 billion; and FFO increased to $3.206 billion, or $8.85 per diluted share, a year over year increase of 10.9%.

•

We increased our operating margin by 60 basis points and continue to operate at the highest net operating income (NOI) margin among our regional mall peers.

•

We also were very active in the capital markets: we were upgraded by both Standard and Poor's and by Moody's, we successfully issued our first Euro-denominated bonds, and we closed or locked rates on 30 secured debt transactions with a weighted average interest rate of 3.31%.

The Company has had outstanding total stockholder return, or "TSR", performance over the past 3, 5 and 10 year periods. In fact, we have outperformed the S&P 500 12 times in the last 14 years. Our use of absolute and relative TSR performance metrics over a three-year performance period is a significant way to incent the performance of our executives and is reflected in the design of our Long-Term Incentive Plan. Our TSR in 2013 was relatively flat and the Compensation Committee considered this in connection with the 2013 Annual Incentive Compensation awards made to our NEOs, including our CEO.

At our 2013 Annual Meeting, stockholders approved our advisory vote on executive compensation ("Say on Pay"). Over the remainder of 2013 and in early 2014, the Compensation Committee continued its rigorous stockholder outreach by engaging with stockholders owning more than 58% of our outstanding common shares in face-to-face discussions, conference calls and/or written communications.

The input received during this engagement was taken into consideration by our Compensation Committee in discussing the modifications made to our programs in 2013. The Compensation Committee believes that appropriate actions were taken in 2013 to address stockholder interests and to ensure a strong alignment between our stockholders and our executive compensation programs. The Compensation Committee is confident that our executive compensation program is appropriately designed to incent strong performance over the longer term.

FEEDBACK FROM STOCKHOLDER OUTREACH

We believe that our ongoing stockholder outreach process strengthens our compensation program, as well as our understanding of our stockholders' concerns and the issues on which they are focused. Between the publication of our 2013 Proxy and the publication of this 2014 Proxy, our Compensation Committee Chairman had face-to-face discussions, teleconferences, and/or written correspondence with stockholders owning more than 58% of our outstanding common shares. The Compensation Committee received input from our stockholders and diligently and carefully considered the input before implementing design changes and increasing the transparency in our executive compensation programs during 2013. As stated in our Proxy last year, we intend to continue to make this outreach a priority to ensure continued alignment between our programs and our stockholders' interests.

We continue to receive positive feedback regarding our executive compensation programs. The Compensation Committee has seriously considered the opinions expressed by advisory firms and stockholders and has included that feedback in to its decision making processes. The Compensation Committee believes that the addition of performance goals in the 2011 CEO Retention Agreement and the rigorous performance goals set in our other long term incentive programs appropriately align our executives' pay with the interests of our stockholders and that our executive compensation program is designed in the best interests of the Company and our stockholders.

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We received stockholder input and provide the following responses outlined below:

STOCKHOLDER/GOVERNANCE FRIENDLY ASPECTS OF THE CURRENT PROGRAM

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HOW PAY ALIGNS WITH PERFORMANCE

SUMMARY OF 2013 COMPANY PERFORMANCE

2013 was an outstanding year from a performance perspective. Some of the key accomplishments that the Compensation Committee considered in setting compensation levels included:

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2013 FFO of $8.85 per diluted share, well above our original guidance for 2013 of $8.40 to $8.50 per share;

•

Increased net operating margin by 60 basis points;

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Completion of a number of significant capital market transactions;

•

Continued international expansion; and

•

We continue to have strong absolute and relative TSR performance over the long term. SPG has outperformed the RMS and S&P 500 in 12 of the last 14 years, and has delivered a compounded annual return to stockholders of 16% since its December 1993 IPO and for a total return of 1,915%. The Company has had outstanding total stockholder return, or "TSR", performance over the past 3, 5 and 10 year periods. Our use of absolute and relative TSR performance metrics over a three-year performance period is a significant way to incent the performance of our executives and is reflected in the design of our Long-Term Incentive Plan.

GROWTH IN FFO PER SHARE

The following "Growth in FFO per Share" chart demonstrates our absolute performance over the past three years as measured by FFO, providing a clear indication of our continued ability to deliver growth which we believe places us in the best position to create stockholder value over the long term. Our TSR in 2013 was relatively flat and the Compensation Committee considered this in connection with the 2013 Annual Incentive Compensation awards made to our NEOs, including our CEO.

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SPG'S TOTAL STOCKHOLDER RETURNS HAVE OUTPERFORMED FOR THE PAST 3, 5 AND 10 YEAR PERIODS

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(1) RMS is the MSCI U.S. REIT Index.

The TSR graph above shows that our relative performance in total stockholder return has been compelling over the past three, five and ten year periods. It compares the compound annual return on our common stock (SPG) versus two key benchmarks, the S&P 500 Index and the MSCI U.S. REIT Index (RMS).

ALIGNMENT OF PAY WITH PERFORMANCE

Based on our continued strong performance, the Compensation Committee made compensation decisions for 2013 in line with our pay-for-performance philosophy:

•

Base salaries were unchanged from the 2012 levels in order to rely more heavily on the performance-oriented components of our compensation program.

•

Annual Cash Incentive Compensation was awarded at reduced levels from 2012. Mr. Simon's 2013 Annual Cash Incentive compensation was reduced and paid out at 75% of his 2012 payment. In total, Annual Cash Incentive Compensation for the remaining NEOs paid out at 88% of 2012 levels.

•

Our Long-Term Incentive Plan (LTIP) for 2011-2013 was earned at 100% of units granted as a direct result of our 3 year (2011-2013) TSR performance. Our absolute TSR over the three-year period was 67%, and we outperformed both the MSCI US REIT Index (30.68% increase) and the S&P 500 Index (53.29% increase), over the same three-year period, by 36 percentage points and 13 percentage points, respectively. The results of our 2011-2013 LTIP are the basis for the increase in the amounts of 2013 TDC.

Our philosophy of pay for performance has been consistent over time. Our executive compensation program is designed to ensure pay outcomes align with our operating, financial and market performance in both good and challenging times. Although we do not target a specific mix of pay, we deliver the majority of our compensation in the form of variable pay (annual and long-term incentives) to emphasize our commitment to rewarding excellent performance or penalizing poor performance. In 2013, performance based components comprised 92% of our CEO's pay (TDC) and 89% of our other NEOs' pay (TDC).

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EXECUTIVE TOTAL DIRECT COMPENSATION MIX

A significant majority of our NEO compensation is "at-risk" based on performance. For 2013, 92% of our CEO's total direct compensation and 89% of our other NEO Total Direct Compensation (TDC) was variable and performance based. Since 2011, we increased our CEO's non-cash performance based compensation from 50% of TDC to 74% of TDC. We also increased the non-cash performance based compensation for our other NEOs from 58% to 73% over the same 3-year period.

Annual Cash Incentive Compensation is paid subject to achievement of our annual financial and operating goals and on an assessment of the executives' performance against individual and company performance goals.

•

Our CEO's 2013 Annual Cash Incentive compensation was reduced from the amount of his 2012 Annual Cash Incentive Compensation.

•

Our NEOs' 2013 Annual Cash Incentive compensation was reduced from the amount of their 2012 Annual Cash Incentive Compensation, with the exception of one of our NEOs.

For more information, see page 28.

PERFORMANCE BASED LTIPS

Our LTIPs (other than under the 2011 CEO Retention Agreement) are earned based on three-year TSR performance on both an absolute basis and relative to the S&P 500 Index and to the MSCI U.S. REIT Index. LTIPs have a two-year post-performance service vesting requirement. For more information see page 29.

SUBSTANTIAL INCREASE IN PERFORMANCE BASED PAY FROM 2011-2013

Based on the pay outcomes relative to performance and the Compensation Committee's assessment of the overall design of our compensation programs, including the recent changes we have made to our compensation practices, the Compensation Committee believes that our executive officers' pay is well-aligned with our stockholders' interests.

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OBJECTIVES OF OUR EXECUTIVE COMPENSATION PROGRAM

Our executive compensation program is designed to accomplish the following objectives:

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Retain a group of highly-experienced executives who have worked together as a team for a long period of time and who make major contributions to our success.

•

Attract other highly qualified executives to strengthen that team.

•

Motivate executives to contribute to the achievement of corporate and business unit goals as well as individual goals.

•

Emphasize equity-based incentives with long-term performance measurement periods and vesting conditions.

•

Align interests of executives with stockholders by linking payouts to performance measures that promote the creation of long-term stockholder value.

WHAT WE PAY AND WHY: PRINCIPAL ELEMENTS OF COMPENSATION

To accomplish our compensation objectives, we designed an executive compensation program with three major elements—Base Salary, Annual Cash Incentive Compensation and Performance Based Long-Term Incentive Program.

The Compensation Committee monitors the effectiveness of our compensation program on an ongoing basis. For these plans to be effective, we believe it is necessary for our compensation to be competitive with other real estate companies and also with other large public and private enterprises with which we compete for executive talent. The Compensation Committee will continue to study and implement improvements to our compensation practices.

ROLE OF MANAGEMENT IN COMPENSATION DECISIONS

Our Chief Executive Officer provides recommendations to the Compensation Committee on the compensation of each of the other executive officers. The Chief Executive Officer develops recommendations using third-party data, assessments of executives' personal performance and achievement of the Company's strategic and tactical plans, and input from our human resources department on various factors (e.g., compensation history, tenure, responsibilities, market data for competitive positions and retention concerns). The Compensation Committee considers our Chief Executive Officer's recommendations together with the input of our independent compensation consultant; however, all final compensation decisions affecting executive officer pay are made by the Compensation Committee itself. Additionally, all aspects of the Chief Executive Officer's compensation and resulting compensation decisions are determined by the Compensation Committee.

COMPANY PEER GROUP AND COMPENSATION ASSESSMENT

In December 2012, the Compensation Committee adopted an industry peer group to use as another source of data to consider in assessing and determining pay levels for our executive officers. Developing a relevant peer group is challenging for the Company because there are no retail REITs of comparable size, complexity and breadth. Non-retail REITs are not always as directly comparable to us because of the different underlying business fundamentals. Therefore, we do not intend to explicitly target pay opportunities

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or actual pay to a specific positioning against these companies; rather, this peer group is intended to provide the Compensation Committee, stockholders and proxy advisory firms with insight into overall market pay levels, market trends, "best" governance practices, and overall industry performance. We confirmed the use of this peer group by considering the methodology used by Institutional Shareholder Services, or "ISS."

The peer group is comprised of the 16 largest companies in the Real Estate industry by Market Capitalization with some restrictions to maintain a balanced mix. Specifically, the group includes:

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The six largest (by market capitalization) retail REIT companies;

•

The six largest (by market capitalization) non-retail REITs (excluding all retail REITs); and

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The four largest companies from the broader Real Estate Industry.

The Compensation Committee will continue to review our peer group annually in future years. The table below shows market capitalization and revenues for each of our peer group companies for 2013. Simon's market capitalization at the end of 2013 was $47.3 billion and assets were $33.3 billion.

COMPENSATION IN 2013

The Compensation Committee made decisions impacting the compensation paid to our NEOs as reported in the 2013 Summary Compensation Table. These include: base salaries, Annual Cash Incentive compensation for 2013 performance, and long-term equity incentive opportunities in the form of performance based LTIP unit awards.

In addition to making changes to the 2011 CEO Retention Agreement in 2013, the Compensation Committee kept annual base salaries unchanged from 2012 to 2013 and decreased Annual Incentive Compensation payments for all but one of the NEOs for 2013. The Compensation Committee formalized the process for determining performance based payouts under the Annual Cash Incentive compensation program as described under the "NEO Annual Cash Incentive Compensation" section.

The 2013-2015 performance based LTIP units awarded in 2013 have a three-year performance measurement period and are then subject to a two-year vesting requirement. Because of the multiple-year performance timeframe, the Compensation Committee does not consider these awards as 2013 compensation, but rather views them as "at-risk" compensation subject to conditions that must be met in order for the executive to realize any value from the awards. However, the rules of the Securities and Exchange Commission require us to include all LTIP units awarded in 2013 as 2013 compensation in the Summary Compensation Table.

In making decisions in 2013, the Compensation Committee took into account each NEO's individual performance goals and objectives for our annual cash incentive compensation program and its assessment of the executives' contributions to the

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performance of the Company. In particular, the Compensation Committee considered the Company's performance and achievements as discussed above under the "Executive Summary" section of the COMPENSATION DISCUSSION AND ANALYSIS.

CEO COMPENSATION CHANGES IN 2013

The Compensation Committee Approved and David Simon Agreed to Modifications to the 2011 CEO Retention Agreement to Include Performance Goals

•

The Compensation Committee, together with Mr. David Simon, our CEO, took steps during 2013 to modify the 2011 CEO Retention Agreement to require the attainment of Company-based performance goals, in addition to Mr. Simon's continued employment, as conditions to vesting of the award. The performance criteria in the modified award are designed to incent Mr. Simon to continue and improve upon the Company's outstanding performance achieved under his leadership, and in the interest of aligning the modified award with the Company's pay-for-performance philosophy, which has been instrumental in the creation of exceptional long-term stockholder value. Generally, to earn 100% of the award, the Company must achieve certain Funds From Operations (FFO) performance goals as summarized in the chart below.

•

The Compensation Committee and the CEO also added "double trigger" vesting provisions to the 2011 CEO Retention Agreement.

As stated above, the Compensation Committee and our CEO modified the 2011 CEO Retention Agreement in 2013. The performance criteria now applicable to the modified award are summarized in the table below:

•

Summary of 2011 CEO Retention Agreement Performance Conditions

2013 NEO BASE SALARIES

During 2013, we maintained 2012 base salary levels for all of our NEOs to emphasize variable incentive pay. The Compensation Committee periodically reviews base salaries for the executive officers and makes adjustments to reflect market conditions, changes in responsibilities and merit increases.

2013 NEO ANNUAL CASH INCENTIVE COMPENSATION

The Compensation Committee rewards executives with Annual Cash Incentive Compensation for achieving the Company's financial and operating plan as well as an assessment of each individual executive officer's contributions to those achievements. Payouts under our Annual Cash Incentive Compensation program are the result of both the Company and the individuals reaching established performance targets. The Compensation Committee does not use a traditional "pool" concept for awarding annual cash incentives.

The Compensation Committee follows a 2-step process to determine what awards will be paid under the Annual Cash Incentive Compensation program each year:

1.

The Company must deliver certain FFO performance during the year before any payments may be made under the plan. If threshold performance is not achieved, no payments are made. For 2013, threshold FFO performance of $8.40 per share was achieved, so the Compensation Committee moved to step two in this process.

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2.

Each individual's performance is assessed by Management and the Compensation Committee against predetermined objectives approved by the Compensation Committee early in the year. The assessment delivers a total score for each individual. Each individual's total score then determines the portion of their target Annual Incentive Compensation that has been earned.

A summary of the Executive Officers' 2013 performance objectives along with their 2013 Annual Cash Incentive Compensation payments may be found in the table below. Generally, the Compensation Committee approved lower Annual Cash Incentive Compensation.

We typically pay Annual Cash Incentive Compensation to executive officers in February or March of the following year so the Compensation Committee has sufficient time to assess our financial performance and the executives' contributions for the preceding year.

Pursuant to David Simon's employment agreement, his target Annual Cash Incentive Compensation will be not less than 200% of his base salary. However, the Compensation Committee will determine his actual Annual Incentive Compensation, which may be more or less than target, based on his and the Company's performance.

NEO PERFORMANCE BASED LTIP PROGRAMS

The Compensation Committee believes that as the responsibilities of our executives increase, the proportion of their total compensation that is at risk and dependent on our performance should also increase. The 1998 LTIP plan authorizes a variety of awards, including stock options, restricted stock and LTIP units which represent interests in the Operating Partnership and are subject to performance conditions and/or time-based vesting requirements. Since 2010, the Compensation Committee has awarded performance based LTIP units to the NEOs. These awards require achievement of objective performance measures over three years and vest equally in two annual installments, subject to the executive maintaining employment with the Company.

LTIP units are a type of limited partnership interest issued by the Operating Partnership. Under the performance based LTIP program, LTIP units can be earned, in whole or in part, if our total stockholder return, or TSR (representing the difference between a baseline value and valuation date based on price appreciation of our common stock plus cumulative dividends we pay on our common stock without reinvestment or compounding), exceeds the relative and absolute performance targets set by the Compensation Committee for the relevant performance period.

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The Compensation Committee believes the performance based LTIP design reflects our pay-for-performance philosophy and high expectations:

•

Performance requirements are rigorous, promoting long-term creation of stockholder value. For example, performance that only matches the MSCI U.S. REIT Index (RMS) or the S&P 500 will pay out at 33% of target and performance that lags the indices by more than 1% or 2%, respectively, will not result in any LTIPs being earned.

•

The Compensation Committee is responsible for setting performance targets each year, and expects to continue to establish challenging targets that require excellent long-term TSR performance in order to earn long-term incentive amounts.

•

The performance based LTIP award has a performance measurement period that measures our results over three years and requires an additional two years of pro-rata service for earned awards, ensuring longer term alignment of grants with stockholders' interests. Earned LTIP units will vest on January 1 of the second and third years following the end of the performance period, with 50% vesting each year if the participant is still a Company employee through those dates.

The number of performance based LTIP units earned is determined by the Compensation Committee at the end of the performance period using payout matrices (with linear interpolation between the specified payout percentages).

LTIP PAYOUT MATRICES

The LTIP units are designed to qualify as "profits interests" in the Operating Partnership for federal income tax purposes. During the performance period, holders of LTIP units will be allocated taxable profits and losses equal to one-tenth of the amounts allocated to a unit and will receive distributions equal to one-tenth of the amount of regular quarterly distributions paid on a unit, but will not receive any special distributions. As a general matter, the profits interest characteristics of the LTIP units mean that initially they will not be economically equivalent in value at the time of award to the economic value of a unit. The value of the LTIP units can increase over time until the value of the LTIP units is equivalent to the value of the units on a one-for-one basis.

After the end of the performance period, holders of earned LTIP units, both vested and unvested, will be entitled to receive distributions in an amount per LTIP unit equal to the distributions, both regular and special, payable on a unit. Vested LTIP units are exchangeable for shares of the Company's common stock on a one-for-one basis, or cash as selected by the Company.

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THE COMPENSATION COMMITTEE DETERMINED PERFORMANCE ACHIEVEMENT OF 2011-2013 PERFORMANCE BASED LTIP AWARDS

The Compensation Committee instructed our independent registered public accounting firm, Ernst & Young LLP, to perform certain agreed upon procedures to corroborate the extent to which the performance measures set for the three-year Series 2011 LTIP program had been achieved. In February 2014, the Compensation Committee used that analysis to determine that target performance during the three-year performance period ending December 31, 2013 warranted a 100% payout as shown in the table below.

The LTIP units earned during the 2011-2013 Performance Period are shown in the table below and will vest in equal portions on January 1, 2015 and January 1, 2016. The recipient must maintain continuous service through each vesting date, except for termination of service resulting from death or disability or, in the Compensation Committee's sole discretion, upon retirement. In addition, all of our NEOs (including our CEO) are subject to certain stock retention requirements.

The Compensation Committee determined the Achievement of the Performance Conditions for the 2011-2013 Performance Based LTIP awards in the following amounts for our Named Executive Officers, subject to further vesting requirements:

LTIP PROGRAM WITH PERFORMANCE CYCLES IN PROGRESS

As of March 2014, there are currently the following performance based LTIP Award programs that have performance cycles in progress:

•

2012-2014 Performance Based LTIP;

•

2013-2015 Performance Based LTIP; and

•

2014-2016 Performance Based LTIP.

Each of these three performance based LTIP programs begins on January 1 of the first year in the three year performance cycle and ends on December 31 of the last year in the cycle. The terms of these plans are the same as those outlined above for the 2011-2013 Performance Based LTIP, with units earned based on our relative and absolute TSR performance. The number of Target LTIP units is the maximum number that can be earned during the performance period. The number of LTIP units earned will depend on our actual TSR for the performance period measured against the applicable performance measures; the number of earned LTIP units may be less (but not more) than the number of LTIP units listed above. Earned LTIP units are subject to a 2 year vesting period requirement following the end of each applicable 3 year performance cycle.

Pursuant to David Simon's employment agreement, during the term of the agreement, he will continue to participate in annual LTIP programs on the same terms as other senior executives. His original employment agreement stipulated that the grant date fair value of his annual award would be not less than $12.0 million. However, in 2013, acting on feedback from our stockholders, we modified his employment agreement to provide that Mr. Simon's annual performance based LTIPs will be proportionally reduced when the Company's LTIP awards to NEOs made in a calendar year are less than $35.0 million. As noted in the chart on page 33, Mr. Simon's 2013-2015 and 2014-2016 target awards were reduced because, in each instance, the total amount of LTIP units granted to NEOs was less than $35.0 million.

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TOTAL DIRECT COMPENSATION TABLE

The following table presents the total direct compensation⁽¹⁾ ("TDC") of the NEOs for 2013, 2012 and 2011. It includes amounts for salaries, bonuses and incentive compensation and not all of the items required by the rules of the Securities and Exchange Commission to be reported in the Summary Compensation Table. It presents performance based incentive compensation awards in the year to which the performance relates or, in the case of multi-year awards, to the year in which the performance period ends.

TOTAL DIRECT COMPENSATION⁽¹⁾ EARNED IN PRIOR THREE FISCAL YEARS

The Total Direct Compensation Table excludes the grant date fair value of David Simon's 2011 CEO Retention Agreement. The Compensation Committee believes that Total Direct Compensation more accurately reflects its compensation decisions.

(1)

Total direct compensation consists of (a) the actual base salary paid for the indicated year, (b) the Annual Cash Incentive compensation earned for the indicated year that was paid in the following year, (c) restricted stock awards based on performance for the indicated year at their grant date fair value, (d) the LTIP units earned over multiple years, reflected in the year in which the performance period ends, at their grant date fair value.

(2)

Annual Cash Incentive compensation earned for the indicated year was paid in the following year.

(3)

The amounts are the Accounting Standards Codification Topic 718, or ASC 718, grant date fair value of the restricted stock awards that were issued in the following year. For 2011, represents the grant date value of $115.59 per share for a restricted stock award made to Mr. Contis in the amount of 25,000 shares on May 4, 2011 as a condition of his employment and which vest over a four-year period. For 2012, represents the value of a restricted stock award made to Mr. Contis on March 5, 2012 and which vests over a three-year period.

(4)

The amounts shown are the grant date fair values of the LTIP units earned in the two-year 2010 LTIP program (for 2011), for the three-year 2010 LTIP (for 2012) and for the three-year 2011 LTIP (for 2013), net of the purchase price of $0.25 per unit. The amounts reflect the earning of 100% for each of the two-year 2010 LTIP, the three-year 2010 program, and the three-year 2011 LTIP program. Once earned, the LTIP units will vest over a two year performance period.

(5)

Mr. Contis became an employee of the Company on May 2, 2011. He received a restricted stock award of 25,000 shares upon his hire as a condition of his employment. The value shown was determined by multiplying the share amount times $115.59, the closing price of our stock on May 4, 2011, the date the award was approved by the Compensation Committee. The 2012 restricted stock award was based on 2012 EBITDA performance for the regional malls platform as well as 2012 absolute TSR and 2012 relative TSR. This award resulted in a grant of 4,963 shares of common stock on April 1, 2013, using a share price of $158.76 which was determined by taking the average price of our common stock closing price for the ten consecutive trading day period prior to, but not including, April 1, 2013.For 2013, Mr. Contis received no restricted stock but, because he participated in the 2011-2013 LTIP program, he earned 20,136 LTIP units valued at $1,494,943, calculated as described above in footnote 4.

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COMPENSATION DECISIONS FOR 2014

In February 2014, the Compensation Committee made decisions related to our NEOs' base salaries and long-term incentive opportunities. At this meeting, the Compensation Committee also approved explicit funding goals under our Annual Cash Incentive Compensation program.

2014 BASE SALARIES

The Compensation Committee has determined that base salaries for all NEOs will be unchanged for 2014.

2014 ANNUAL CASH INCENTIVE COMPENSATION PROGRAM

As described earlier in this COMPENSATION DISCUSSION AND ANALYSIS, the Compensation Committee rewards executives with Annual Cash Incentive Compensation for achieving the Company's financial and operating plan and providing an assessment of each individual executive officer's contributions to those achievements. Payouts under our Annual Cash Incentive Compensation program are the result of both the Company and the individuals reaching established performance targets. The Compensation Committee does not use a traditional "pool" concept for awarding Annual Cash Incentive Compensation. The Compensation Committee follows a 2-step process to determine what awards will be paid under the Annual Cash incentive compensation Program each year:

1.

The Company must deliver certain FFO performance during the year before any payments may be made under the plan. If threshold performance is not achieved, no payments are made. If threshold performance is achieved, the Compensation Committee will determine that the participant is eligible to be assessed for Annual Cash Incentive Compensation payments.

2.

Each individual's performance is assessed by Management and the Compensation Committee against predetermined objectives approved by the Compensation Committee early in the year. The assessment delivers a total score for each individual. Each individual's total score then determines the portion of their target Annual Cash Incentive Compensation that has been earned

The specific 2014 FFO goals were approved early in 2014 and will be disclosed in our 2015 Proxy Statement.

2014-2016 PERFORMANCE BASED LTIP AWARDS

Mr. Simon's 2014-2016 Performance Based LTIP Opportunity Has Been Reduced From the 2013-2015 Opportunity

As discussed above in the "Performance Cycles in Progress" section, the Compensation Committee approved performance based LTIP awards for the 2014-2016 performance cycle for our NEOs as follows:

Similar to our 2013-2015 performance based LTIP plan, the number of LTIP units earned under the 2014-2016 LTIP program will depend on our actual TSR performance for the three-year performance period measured against the applicable performance measures.

OTHER ELEMENTS OF COMPENSATION

Retirement and Health and Welfare Benefits. We have never had a traditional or defined benefit pension plan. We maintain a 401(k) retirement plan in which all salaried employees can participate on the same terms. During 2013, our basic contribution to the 401(k) retirement plan was equal to 1.0% of the participant's base salary and Annual Cash Incentive Compensation and vests 20% after the completion of two years and an additional 20% after each additional year of service until fully vested after six years. We match 100% of the first 3% of the participant's contribution and 50% of the next 2% of the participant's contribution. Our matching contributions are vested when made. Our basic and matching contributions are subject to applicable IRS limits and regulations. The limit for Company contributions for any participant in 2013 was $12,750. The contributions we made to the 401(k) accounts of the

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NEOs are shown in the All Other Compensation column of the Summary Compensation Table on page 37. Executive officers also participate in health and welfare benefit plans on the same terms as other salaried employees.

No Gross-Up for Excess Parachute Payments. David Simon and Mr. Sokolov have employment agreements; no other NEOs currently have employment agreements. There are no arrangements requiring us to gross-up compensation to cover taxes owed by the executives, including excise taxes payable by the executive in connection with a change in control.

If David Simon would become subject to the excise tax on certain "excess parachute payments" pursuant to Section 4999 of the Internal Revenue Code, his employment agreement provides that payments which would be subject to the excise tax will be reduced if he retains a greater after-tax amount after such reduction; otherwise, no reduction will be made. The employment agreement does not contain a gross-up for this excise tax.

Deferred Compensation Plan. We maintain a nonqualified deferred compensation plan that permits senior executives, key employees and directors to defer all or part of their compensation, including awards under the 1998 plan. There is an account for the executives and employees and a separate account for the non-employee directors. Although we have the discretion to contribute a matching amount or make additional incentive contributions, we have never done either. As a result, the amounts disclosed in the Nonqualified Deferred Compensation in 2013 Table on page 40 consist entirely of compensation earned by, but not yet paid to, the executives and any earnings on such deferred compensation. A participant's deferrals are fully vested, except for restricted stock awards that still have vesting requirements. Upon death or disability of the participant or our insolvency or a change in control affecting us, a participant becomes 100% vested in his account.

No Stock Option Grants. The Compensation Committee has not granted any stock options to executives or other employees since 2001. Historically, we have generally made equity-based incentive awards in the first calendar quarter after financial results for the preceding year have been announced.

OTHER POLICIES

EQUITY AWARD GRANT PRACTICES

As we did in 2012, we generally make equity-based incentive awards at the same time in the first quarter after financial results for the preceding year. However, during 2011, we made our equity-based incentive awards in July to coincide with the timing of Mr. Simon's retention agreement.

EXECUTIVE EQUITY OWNERSHIP GUIDELINES

We believe the financial interests of our executives should be aligned with the long-term interests of our stockholders. In addition to long-term incentives, our Board of Directors has established equity ownership guidelines for key executives, including the NEOs.

The current ownership guidelines require the executives to maintain ownership of our stock or any class of our equity securities or units of the Operating Partnership having a value expressed as a multiple of their base salary for as long as they remain our employees. Our guidelines for 2013 for the Chief Executive Officer and other executive officers are as follows:

In addition, these executives are required to retain ownership of a sufficient number of shares received in the form of restricted share awards representing at least 50% of the after-tax value of their awards or 25% of the pre-tax value of such awards. These shares are to be retained by the executive until he or she retires, dies, becomes disabled or is no longer our employee.

Ownership of any class of our equity securities or units of the Operating Partnership counts toward fulfillment of these guidelines, including securities held directly, securities held indirectly by or for the benefit of immediate family members, shares of restricted stock that have been earned, even if not vested, and shares held following the exercise of stock options. Unexercised stock options do not count toward these goals. Each of our NEOs currently meets or exceeds these guidelines.

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CLAWBACKS OF INCENTIVE COMPENSATION

In 2013, the Compensation Committee approved a new clawback policy that applies to all of our current and former NEOs in the event of any material restatement of the Company's financial statement beginning in 2012 whether or not fraud or misconduct is involved. The clawback policy applies to cash amounts received through annual or long-term incentive plans, where payouts were based upon the restated financial results.

In addition, David Simon's employment agreement and the 2011, 2012 and 2013 LTIP program award agreements provide that in the event of a financial restatement, the Company may recoup the employee's Annual Cash Incentive Compensation and other equity and non-equity compensation tied to the achievement of earnings targets if the compensation would not have been earned as a result of the financial restatement. These provisions will be superseded by any broader recoupment policy that the Company adopts pursuant to expected regulations that are mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Future awards under the 1998 Plan will also include provisions expressly acknowledging the applicability of any such recoupment policy to the award.

HEDGING POLICY AND PLEDGING RESTRICTIONS

Our insider trading policy prohibits employees from hedging the ownership of Company securities. In addition, we do not permit our executive officers to pledge shares.

SECTION 162(m)

Substantially all of the services rendered by our executive officers were performed on behalf of the Operating Partnership. The Internal Revenue Service has issued a series of private letter rulings which indicate that compensation paid by an operating partnership to executive officers of a REIT that serves as its general partner is not subject to limitation under Section 162(m) to the extent such compensation is attributable to services rendered to the operating partnership. Although we have not obtained a ruling on this issue, we believe the positions taken in the rulings would apply to our operating partnership as well. Accordingly, we believe that the compensation we paid to our executive officers for 2013 will not be limited by Section 162(m). We reserve the right to approve and pay non-deductible compensation.

If we hereafter determine that Section 162(m) is applicable, then this could result in an increase to our income subject to federal income tax and could require us to increase distributions to our stockholders in order for us to maintain our qualification as a REIT.

ASSESSMENT OF COMPENSATION-RELATED RISKS

Our senior management team conducts an ongoing assessment of the risks related to our compensation policies and practices. This team reviews and discusses the various design features and characteristics of our Company-wide compensation policies and programs. The team also considers the elements of our compensation program for our senior executives including the performance measures used for the Annual Cash Incentive Compensation program and our long term incentive programs. Senior management obtains and evaluates data from a REIT peer group reflecting a comparison of compensation practices and pay levels for comparable positions within that group to assess the competitiveness of our compensation levels.

The Compensation Committee is responsible for overseeing the risks relating to compensation policies and practices affecting senior management on an ongoing basis. In performing this responsibility, the Compensation Committee utilized the services of a consultant to obtain advice and assistance in the design and implementation of incentive compensation programs for our executives. The consultant does no work for management, unless requested by the Chairman of the Compensation Committee. In reviewing whether our compensation policies and practices encourage excessive risk-taking, the Compensation Committee also considers senior management's assessment described above. We believe the following factors reduce the likelihood that our compensation policies and practices would encourage excessive risk-taking:

•

Our policies and programs are generally intended to encourage retention of our executives so that they can focus on achieving long-term objectives.

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Our overall compensation is maintained at levels that are competitive with the market.

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Our compensation mix is designed in large part to reward long-term performance and is balanced among (i) fixed cash components, (ii) incentives that reward improvements in total Company performance and business unit performance, (iii) components measured by individual performance, and (iv) performance based incentive opportunities that may be realized in the future.

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Our Annual Cash Incentive Compensation is weighted based on the achievement of several different financial and operational performance measures; the Compensation Committee has ultimate oversight in determining the Annual Cash Incentive Compensation allocation, thereby mitigating the risk that any one measure can dominate the payouts based on any formula.

•

Our LTIP programs use both absolute and relative TSR performance measures over three-year performance periods and additional two-year vesting requirements.

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Awards under David Simon's 2011 CEO Retention Agreement are subject to performance conditions that begin on January 1, 2015, at the earliest. The awards will be earned if performance measures are achieved.

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All NEO equity-based awards are subject to multi-year performance requirements, as well as post-earning vesting requirements.

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Executive officers are subject to minimum stock ownership guidelines, equity award multi-year vesting requirements and limitations on trading our securities, including prohibitions on hedging our securities, under our Insider Trading Policy.

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The Compensation Committee has discretion to decrease incentive performance targets and payouts when it determines that such adjustments would be in the best interests of us and our stockholders.

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Beginning in 2011, all award agreements we entered into with executive officers contain clawback provisions permitting the Company to recoup compensation tied to the achievement of financial targets if the compensation would not have been earned based on restated financial results.

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Beginning in 2013, all LTIP unit awards contain "double trigger" change in control provisions.

Based on the foregoing, we believe that our compensation policies and programs are not reasonably likely to have a material adverse effect on us.

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SUMMARY COMPENSATION TABLE

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GRANTS OF PLAN-BASED AWARDS IN 2013

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OUTSTANDING EQUITY AWARDS AT 2013 FISCAL YEAR-END

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OPTION EXERCISES AND STOCK VESTED IN 2013

NONQUALIFIED DEFERRED COMPENSATION IN 2013

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The assets of our deferred compensation plan are held in what is commonly referred to as a "rabbi trust" arrangement. This means the assets of the plan are subject to the claims of our general creditors in the event of our insolvency. The plan assets are invested by the trustee in its sole discretion. Payments of a participant's elective deferrals are made as elected by the participant. These amounts would be paid earlier in the event of termination of employment or death of the participant, an unforeseen emergency affecting the participant as determined by the committee appointed to administer the plan or a change in control affecting us.

We have not made any contributions to the executive account of our deferred compensation plan since its inception in 1995. As a result, the contributions and aggregate balances shown in the table above are composed entirely of contributions made by the executives from their salary, bonus or restricted stock awards for prior years and earnings on those amounts. The earnings do not represent above-market or preferential rates. The executives may vote and are entitled to receive dividends on their restricted stock awards in the plan.

Deferral elections are made by eligible executives in June of each year for amounts to be earned or granted in the following year. An executive may defer all or a portion of salary, Annual Cash Incentive Compensation or awards under the 1998 plan.

The investment options available to an executive under the deferral program vary depending upon the type of compensation being deferred.

EQUITY COMPENSATION PLAN INFORMATION

The following table gives information about our common stock that may be issued upon the exercise of options, warrants and rights under our existing equity compensation plans as of December 31, 2013. As of January 18, 2013, there are no outstanding options under our existing equity compensation plans.

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ESTIMATED POST-EMPLOYMENT PAYMENTS UNDER ALTERNATIVE TERMINATION SCENARIOS

The following table sets forth the value of the benefits that would have been payable to each of the NEOs, assuming that the following events occurred on December 31, 2013. We do not disclose payments or other benefits under our 401(k) retirement plan and health and welfare plans because all salaried employees are entitled to the same benefits under those plans. Also, we do not include distributions from our deferred compensation plan because the amounts in that plan consist entirely of contributions made by the executives and earnings on those contributions. The amounts shown are only estimates of the amounts that would be payable to the executives upon termination of employment and do not reflect tax positions we may take or the accounting treatment of such payments. Actual amounts to be paid can only be determined at the time of separation.

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TERMINATION-RELATED PROVISIONS OF EMPLOYMENT AGREEMENT WITH DAVID SIMON

If David Simon is terminated by us without "Cause" or by him for "Good Reason," (each as defined in David Simon's Employment Agreement) subject to his execution of a release of claims against us, he will be paid severance in an amount equal to two times the sum of: his annual base salary and his target Annual Cash Incentive Compensation in equal installments over a two-year period.

In addition, also subject to his execution of a release of claims against us, up to one-half of the unvested LTIP units under the 2011 CEO Retention Agreement will be eligible to vest if he is terminated on or prior to June 30, 2015 and if the Termination FFO equals or exceeds a specified FFO amount. If such termination occurs after June 30, 2015 then a portion the remaining unvested LTIP units granted under the 2011 CEO Retention Agreement will become vested LTIP units if the Termination FFO equals or exceeds a specified FFO amount. For details regarding the Termination FFO, the Specified FFO and the portion that can be earned upon various terminations please see page 45 of this Proxy Statement

If David Simon is terminated due to disability or if he dies, he would be entitled to receive (A) the payments described in footnotes (2), (3), and (4) in the Estimated Post-Employment Payments Under Alternative Termination Scenarios table above, (B) pursuant to the terms of his annual performance based LTIP program award agreements, a number of LTIP units under the annual LTIP program determined at the end of the applicable performance period based on actual performance for that period and then prorated by a partial service factor based on the number of days during the performance period prior to his death or disability, (C) pursuant to the terms of his restricted stock award agreements, full vesting (in the event of death) or continued vesting over the four year schedule (in the event of disability) of his restricted shares and (D) full vesting of his 2011 CEO Retention Agreement.

If David Simon is terminated by us without "cause" or by him for "good reason" following a change in control, he would be entitled to receive (A) the payments described in (2), (3), and (4) in the Estimated Post-Employment Payments Under Alternative Termination Scenarios table above, (B) all of the unvested LTIP units under the 2011 CEO Retention Agreement fully vest (these also vest if such termination is during the six month period prior to a change in control if such change in control occur), (C) pursuant to the terms of his annual performance based LTIP unit awards, any unearned LTIP units multiplied by a partial service factor based on the number of days during the performance period to the date of the change in control, and (D) pursuant to the terms of his restricted stock award agreements, full vesting of his restricted stock. If there is a change in control, but David Simon is not terminated, he is entitled to the payments described in subsection (C), and (D) of this paragraph.

AMENDMENTS TO THE 2011 CEO RETENTION AGREEMENT

Effective as of December 31, 2013 David Simon, the Operating Partnership and the Company amended and restated the Series CEO LTIP Unit Award Agreement dated as of July 6, 2011, as amended on December 22,2011, March 29, 2013 as further amended and restated effective as of December 31, 2013 (as amended and restated, the "2011 CEO Retention Agreement").

The 2011 CEO Retention Agreement which was previously entirely service-based, will now become eligible to vest based on the attainment of Company based performance goals, in addition to a service-based vesting requirement. The 2011 CEO Retention Agreement, provides that if the relevant performance criteria are not achieved, Mr. Simon will forfeit all or a portion of such award. The performance criteria in the 2011 CEO Retention Agreement are designed to incentivize Mr. Simon to continue upon the Company's outstanding performance achieved under his leadership, and in the interest of aligning the 2011 CEO Retention

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Agreement with the Company's pay-for-performance philosophy, which has been instrumental in the creation of exceptional long-term shareholder value.

Prior to the December 31, 2013 amendment and restatement, Mr. Simon's 1,000,000 LTIP Units vested over an eight year period, with one third vesting in 2017, one third vesting in 2018 and one third vesting in 2019. Pursuant to the 2011 CEO Retention Agreement, effective December 31, 2013, 720,000 of such LTIP Units were cancelled and in respect thereof 360,000 LTIP Units were granted to David Simon on December 31, 2013 (the "A Units") and 360,000 LTIP Units were granted to David Simon on January 1, 2014 (the "B Units"). 280,000 of the LTIP Units granted on July 6, 2011 shall be cancelled on January 1, 2015 and in respect thereof 280,000 LTIP Units shall be granted on January 1, 2015 (the "C Units"). The A Units, B Units and C Units may only be earned if and to the extent the applicable performance criteria and vesting requirements are met, as set forth below.

If the Company does not achieve FFO per share of at least $8.07 for 2015, then the 360,000 Class A Units shall not be earned. If the Company achieves FFO per share of $8.07 for 2015, then 50% of such Class A Units may be earned, subject to fulfillment of additional service based vesting requirements. If the Company achieves FFO per share of $8.86 for 2015, then 100% of such Class A Units may be earned, subject to fulfillment of additional service based vesting requirements. If the Company achieves FFO per share of greater than $8.07 but less than $8.86 for 2015, then the number of Class A Units that may be earned shall be between 50% and 100% based on linear interpolation, subject to fulfillment of additional service based vesting requirements.

If the Company does not achieve FFO per share of at least $8.43 for 2016, then all 360,000 Class B Units shall not be earned. If the Company achieves FFO per share of $8.43 for 2016, then 50% of such Class B Units may be earned, subject to fulfillment of additional service based vesting requirements. If the Company achieves FFO per share of $9.40 for 2016, then 100% of such Class B Units may be earned, subject to fulfillment of additional service based vesting requirements. If the Company achieves FFO per share of greater than $8.43 but less than $9.40 for 2016, then the number of Class B Units that may be earned shall be between 50% and 100% based on linear interpolation, subject to fulfillment of additional service based vesting requirements.

If the Company does not achieve FFO per share of at least $8.62 for 2017, then all 280,000 Class C Units shall be forfeited. If the Company achieves FFO per share of $8.62 for 2017, then 50% of such Class C Units may be earned, subject to fulfillment of additional service based vesting requirements. If the Company achieves FFO per share of $9.80 for 2017, then 100% of such Class C Units may be earned, subject to fulfillment of additional service based vesting requirements. If the Company achieves FFO per share of greater than $8.62 but less than $9.80 for 2017, then the number of Class C Units that may be earned shall be between 50% and 100% based on linear interpolation, subject to fulfillment of additional service based vesting requirements.

Notwithstanding the preceding three paragraphs, (i) if all or a portion of the Class A Units are not earned in 2015, then any such unearned Class A Units may be earned in 2016 if FFO per share for calendar year 2016 is equal to or greater than $9.40 or in 2017 if FFO per share for calendar year 2017 is equal to or greater than $9.80 and (ii) if all or a portion of the Class B Units are not earned in 2016, then any such unearned Class B Units may be earned in 2017 if FFO per share for calendar year 2017 is equal to or greater than $9.80 (collectively, the "catch-up feature"), in each case, subject to fulfillment of additional service based vesting requirements.

After determining the number of A Units, B Units and C Units respectively, that are earned (after taking into account the catch-up feature), such earned A Units shall vest on January 1, 2018, such earned B Units shall vest on January 1, 2019 and such earned C Units shall vest on June 30, 2019, in each case subject to David Simon's continued employment or service with the Company through such applicable date, provided that the A Units, B Units and C Units may become vested earlier upon certain terminations of employment or service, as set forth below.

The 2011 CEO Retention Agreement contains a double trigger change in control provision which requires David Simon to be terminated by us without Cause or to resign for Good Reason, in each case during the period commencing six months prior to and ending eighteen months after the Change in control, in order for the LTIP units to vest in connection with a Change in control.

The 2011 CEO Retention Agreement provides that if David Simon hereafter dies or his employment or service is terminated by us due to Disability, then all unvested LTIP Units will automatically vest. If David Simon's employment or service is terminated by us without Cause or by Mr. Simon for Good Reason, then the unearned LTIP Units will not automatically vest, but will be eligible to vest as follows: (i) if such termination is on or prior to June 30, 2015, up to one-half of the unearned LTIP Units will vest, if and to the extent that the Termination FFO (defined below) per share is equal to or greater than FFO A (defined below) per share for the year of termination and will vest in full if such Termination FFO is equal to or greater that FFO B (defined below) per share, (ii) if such termination occurs after June 30, 2015 and on or prior to December 31, 2017, a portion of the remaining Unvested LTIP Units will be earned equal to the product of (A) 100% of the unearned LTIP Units that will vest if and to the extent that the Termination FFO per share is equal to or greater than FFO B per share for the year of termination and between 50% to 100% if such Termination

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FFO is equal to or greater that FFO A per share but less than FFO B per share (the exact percentage to be based on linear interpolation) multiplied by (B) a quantity equal to (1) the number of completed calendar months that David Simon completed from July 6, 2011 through the date of the such termination, divided by (2) 96 (the number of calendar months in his employment agreement term) and (iii) if such termination occurs after December 31, 2017, a portion of remaining Unvested LTIP Units shall become Vested LTIP Units with such portion equal to the product of (A) the number of Unvested LTIP Units (after taking into account the number of Unvested LTIP Units if any that shall be forfeited after calendar year 2017 to the extent the performance goals were not achieved), multiplied by (B) (1) the number of completed calendar months from July 6, 2011 through the date of the such termination, divided by (2) 96.

"Termination FFO" per share means the FFO per share for the most recent calendar quarter multiplied by four (resulting in an annualized FFO per share number). "FFO A" means for 2015, 2016 and 2017, respectively: (i) for 2015: $8.07 multiplied by a percentage equal to (A) one hundred percent minus (B) the CAGR for the five year period preceding 2015; (ii) for 2016: $8.43 multiplied by a percentage equal to (A) one hundred percent minus (B) the CAGR for the five year period preceding 2016 and (iii) for 2017: $8.62 multiplied by a percentage equal to (A) one hundred percent minus (B) the CAGR for the five year period preceding 2017. "FFO B" means for 2015, 2016 and 2017, respectively: (i) for 2015: $8.86 multiplied by a percentage equal to (A) one hundred percent minus (B) the CAGR for the five year period preceding 2015; (ii) for 2016: $9.40 multiplied by a percentage equal (A) one hundred percent minus (B) the CAGR for the five year period preceding 2016 and (iii) for 2017: $9.80 multiplied by a percentage equal (A) one hundred percent minus (B) the CAGR for the five year period preceding 2017.

Pursuant the 2011 CEO Retention Agreement, FFO shall be increased or decreased to give effect to (i) extraordinary, unusual or nonrecurring item, including without limitation a spin-off, or as a result of dispositions not made in the ordinary course, (ii) litigation or claim judgments or settlements; (iii) changes in tax laws, accounting principles, or other laws or regulatory rules affecting reported results (iv) other specific unusual or nonrecurring events, or objectively determinable category thereof; (v) nonrecurring charges; and (vi) a change in the Company's fiscal year. Each such adjustment, if any, shall be made by the Committee in order to prevent the undue dilution of Mr. Simon's rights.

Under the 2011 CEO Retention Agreement, the after-tax portion of distributions paid on Mr. Simon's unvested LTIP units are used to buy shares of the Company's common stock, which are placed in escrow. As of December 31, 2013, there were 46,439 shares in escrow. In modifying the 2011 CEO Retention Agreement, the Committee and Mr. Simon agreed that the escrowed shares (and any shares purchased with distributions in respect of the remaining 280,000 LTIP units under the 2011 CEO Retention Agreement prior to such units' cancelation on January 1, 2015) will be released to Mr. Simon on a pro rata basis based upon the satisfaction of performance-based and service-based criteria.

EMPLOYMENT AGREEMENT WITH RICHARD SOKOLOV

We have an employment agreement with Richard Sokolov which term ended January 31, 2012, subject to automatic renewal for a one-year period unless either party provides 90 day advance notice. The agreement provides for an annual base salary of $800,000, subject to annual review and adjustment by the Compensation Committee. The agreement also provides that he is eligible to receive a cash bonus of not less than 75% and not more than 150% of his base salary as determined by the Compensation Committee.

If Richard Sokolov's employment was terminated by us without "cause" or by him for "good reason," we would have to pay him an amount equal to one year's current base salary and his target bonus in twelve monthly installments. In those instances and also in the event of disability, any unvested restricted stock awards that the Compensation Committee had granted would continue to vest provided that Richard Sokolov executes a release in favor of the Company and complies with the restrictive covenants described in the following paragraph.

The agreement includes covenants which restrict Richard Sokolov while he is employed and during any period of time in which restricted stock awards continue to vest from: (1) soliciting any of our employees or inducing them to terminate their employment with us; (2) employing or offering employment to any persons employed by us in a non-administrative capacity during the previous twelve months; or (3) diverting any persons from doing business with us or inducing any persons from doing business with us or inducing anyone to cease being one of our customers or suppliers.

For purposes of Richard Sokolov's agreement, "cause" is defined as a substantial and continued failure to perform his duties (following notice and an opportunity to cure) or conviction of a felony. "Good reason" is defined as a material diminution of or material adverse change in his duties, offices or responsibilities (including removal from or failure to secure his election to, the Board of Directors); a material breach of our obligations; a failure to have the agreement assumed by any successor to our business; or a required relocation of his principal base location from Youngstown, Ohio or Indianapolis, Indiana.

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ROLE OF THE INDEPENDENT COMPENSATION CONSULTANT

The Compensation Committee has retained Semler Brossy Consulting Group, LLC ("Semler Brossy" or "Consultant") as its independent consultant in 2011. The Consultant reports directly to the Compensation Committee and performs no other work for the Company. The Compensation Committee has analyzed whether the work of Semler Brossy as a compensation consultant has raised any conflict of interest, taking into consideration the following factors:

i.

The provision of other services to the Company by Semler Brossy;

ii.

The amount of fees from the Company paid to Semler Brossy as a percentage of the firm's total revenue;

iii.

Semler Brossy's policies and procedures that are designed to prevent conflicts of interest;

iv.

Any business or personal relationship of Semler Brossy or the individual compensation advisors employed by the firm with an executive officer of the Company;

v.

Any business or personal relationship of the individual compensation advisors with any member of the Compensation Committee; and

vi.

Any stock of the Company owned by Semler Brossy or the individual compensation advisors employed by the firm.

The Compensation Committee has determined, based on its analysis of the above factors, that the work of Semler Brossy and the individual compensation advisors employed by Semler Brossy as compensation consultants to the Company has not created any conflict of interest.

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PROPOSAL 3:      Ratification and Approval of the Amended and Restated 1998 Stock Incentive Plan

THE BOARD OF DIRECTORS BELIEVES THAT STOCKHOLDERS' BEST INTERESTS ARE SERVED BY RATIFYING AND APPROVING THE CURRENT VERSION OF THE SIMON PROPERTY GROUP, L.P. AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN (THE "1998 PLAN") (AS DESCRIBED BELOW) SO THAT THE COMPANY CAN CONTINUE TO ATTRACT, INCENT AND RETAIN EMPLOYEES, DELIVER EXCEPTIONAL LONG-TERM RETURNS TO STOCKHOLDERS, CONTINUE TO ALIGN THE INTERESTS OF PARTICIPANTS IN THE 1998 PLAN WITH THOSE OF STOCKHOLDERS AND AVOID THE ADDITIONAL COST, EXPENSE AND DISTRACTION OF FURTHER LITIGATION. PARTICIPATION IN THE 1998 PLAN CONSTITUTES A SUBSTANTIAL PART OF THE COMPENSATION OF MANY OF OUR EMPLOYEES, MEMBERS OF OUR SENIOR MANAGEMENT AND ELIGIBLE DIRECTORS, AND THE BOARD OF DIRECTORS BELIEVES THAT SUCH COMPENSATION, WHICH HELPS TO ALIGN THE RECIPIENTS' INTERESTS WITH THOSE OF THE COMPANY AND ITS STOCKHOLDERS, HAS CONTRIBUTED TO AND WILL CONTRIBUTE TO THE COMPANY'S STRONG PERFORMANCE. THE BOARD OF DIRECTORS THEREFORE UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THIS PROPOSAL.

SUMMARY OF THE PROPOSAL

The Board of Directors (the "Board") unanimously recommends that stockholders ratify and approve the current version of the 1998 Plan, as set forth in this proxy statement (the "Current Plan"). The Current Plan incorporates certain amendments approved by a vote of the Company's stockholders in May 2012 and certain amendments that the Compensation Committee (the "Committee") of the Board approved and recommended to the Board for approval, and that the Board approved, in February and April 2014.

We are seeking stockholder ratification and approval of the Current Plan, as discussed below, because the amendments approved by stockholder vote in May 2012 have been challenged in a pending derivative lawsuit commenced by a stockholder who claims that the May 2012 vote was invalid due to allegedly inaccurate or misleading disclosures made to stockholders in our 2012 Proxy Statement. In a telephonic conference with counsel for the parties on March 28, 2014, in which the court presiding over the derivative lawsuit ruled on certain motions (described below), the court expressed a belief that the alleged misrepresentations and omissions on which this disclosure claim is based are of a type that could be cured with a ratifying vote of stockholders. The court did not, however, issue a ruling or provide any assurance that a ratifying vote would be found to cure the alleged misrepresentations and omissions. If the Current Plan is ratified and approved, we intend to seek dismissal of this derivative lawsuit. Dismissal of the suit would permit the Company to focus on continuing to increase long-term stockholder value without the cost, expense and distraction associated with further litigation of this claim.

In addition to other features discussed below, the Current Plan includes the following amendments to the 1998 Plan approved by the Board in February and April 2014:

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Reduction of the Aggregate Number of Shares Reserved Below the Number Voted Upon in May 2012.  Setting the aggregate number of shares of the Company's common stock available for awards under the 1998 Plan at 16,300,000, such that immediately thereafter there will remain approximately 3,931,178 shares available to be awarded. This aggregate number of shares available for awards is 1,000,000 shares lower than the aggregate number of shares that was approved by a vote of the Company's stockholders in May 2012 (which vote is being challenged in the derivative litigation), but is higher than the aggregate number of shares available for awards before the May 2012 stockholder vote.

•

Reduction of the Per-Person Annual Award Limit Compared to the Limit Voted Upon in May 2012.  Setting a limit on the maximum number of shares that may be subject to all types of awards made to any participant during a calendar year at, in the aggregate, 600,000 for 2014 and 500,000 thereafter. These maximum limits are lower than that approved by a vote of the Company's stockholders in May 2012 (which vote is being challenged in the derivative litigation).

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Prohibition on Non-Performance Based Units.  Prohibiting the Committee from making non-performance based awards of performance units (including long-term incentive performance units ("LTIP units")) without future stockholder approval of an amendment authorizing such awards.

BACKGROUND

In 1998, as originally approved by our stockholders, the aggregate number of shares of the Company's common stock reserved and available to be awarded under the 1998 Plan was 6,300,000 shares. In 2008, the aggregate number of shares reserved for issuance was increased to 11,300,000.

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In May 2012, a majority of the Company's stockholders voted in favor of an amended and restated version of the 1998 Plan (the resulting version of the 1998 Plan, the "2012 Restated Plan"). The 2012 Restated Plan included, among other things, amendments that:

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extended the term of the 1998 Plan by five years (from December 31, 2013 to December 31, 2018);

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increased the aggregate number of shares of the Company's common stock reserved and available to be awarded under the 1998 Plan by 6,000,000 shares, such that immediately following the vote on the 2012 Restated Plan, approximately 6,787,387 shares were available to be awarded; and

•

set at 2,000,000 each the number of (a) options, (b) stock appreciation rights and (c) aggregate shares of restricted stock, shares of common stock and performance units that may be granted to any individual in a calendar year.

In August and September 2012, certain stockholders filed derivative and class lawsuits (the "Delaware Suits") in the Court of Chancery of the State of Delaware (the "Court") against the Company, members of its Board and the Company's Chief Executive Officer, David Simon, captioned Louisiana Municipal Police Employees Retirement System, et al. v. Bergstein, et al., Del. Ch., C.A. No. 7764-CS (the "LAMPERS Action") and Shepherd v. Simon, et al., Del. Ch., C.A. No. 7902-CS (the "Shepherd Action"). These lawsuits included challenges to an amendment to the 1998 Plan adopted by the Company's Board on July 6, 2011 (the "2011 Amendment") and an award to Mr. Simon of 1,000,000 LTIP units, which was made on July 6, 2011 (the "2011 CEO Retention Agreement"), as well as a claim challenging the validity of the 2012 Restated Plan based on allegations that certain disclosures made to the Company's stockholders in connection with the approval of the 2012 Restated Plan were inaccurate or misleading (the "Disclosure Claim").

THE BOARD BELIEVES RATIFICATION AND APPROVAL BENEFITS STOCKHOLDERS

We ask that stockholders ratify and approve the Current Plan (summarized above and described more fully below) at the 2014 Annual Meeting. Considerations favoring ratification and approval include the following:

OUR PAY-FOR-PERFORMANCE CULTURE

The price of the Company's common shares has outperformed the S&P 500 in 12 of the last 14 years. During the last 14 years, all of our executive officers, many employees and members of our senior management and all eligible directors have been granted awards under and participate in the 1998 Plan. Approximately 80 individuals are currently participants in the Current Plan. The Board believes that providing equity awards benefits the Company by helping to align the recipients' interests with those of the Company and its stockholders. A substantial portion of our executive officers' compensation is in the form of performance based equity awards.

OUR "BURN-RATE" IS LOW

The Company's three-year average "burn-rate" (calculated by dividing the total number of options, shares of restricted stock, restricted stock units and performance units granted and vested in 2011, 2012 and 2013 by the Company's basic weighted average common shares outstanding for 2011, 2012 and 2013), using Institutional Shareholder Services Inc.'s ("ISS") methodology, is approximately 0.21%, which is substantially below ISS's 2014 "cap" of 2.86% specific to Real Estate companies.

RATIFICATION AND APPROVAL MAY RESOLVE PENDING LITIGATION

The Company believes that stockholder ratification and approval of the Current Plan will resolve the issues raised in the Disclosure Claim. In delivering its ruling in the Delaware Suits on March 28, 2014, the Court expressed a belief that the alleged misrepresentations and omissions on which the Disclosure Claim is based are of a type that could be cured with a future ratifying vote, but did not issue any ruling or any assurance that such a vote would be found to cure the alleged misrepresentations and omissions. If the Current Plan is ratified and approved, we intend to move to dismiss the Disclosure Claim. Final dismissal of the Delaware Suits will permit the Company to focus on continuing to increase long-term stockholder value without the cost, expense and distraction of further litigation with respect to the Delaware Suits.

If the Current Plan is not ratified and approved, and if the plaintiff in the Shepherd Action ultimately prevails on his claim that certain disclosures made to the Company's stockholders in connection with the approval of the 2012 Restated Plan were deficient and misleading, it is possible that certain awards made prior to January 1, 2014, and all awards granted after December 31, 2013, including awards made pursuant to the modification of the 2011 CEO Retention Agreement and those to be granted in the future, may be invalidated. Such invalidation of awards may give rise to further litigation and may negatively impact the Company's ability to incent and retain key employees and officers.

The foregoing summary is qualified in its entirety by the discussion below, including reference to the Current Plan, as set forth below and as set forth in Appendix A to this proxy statement. Stockholders are encouraged to read the description of the entire proposal and the text of the Current Plan set forth in Appendix A (which provides a comparison reflecting differences between the Current Plan and the 1998 Plan as it existed prior to stockholder approval of the 2012 Restated Plan).

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GENERAL

THE 2012 RESTATED PLAN

At the 2012 Annual Meeting of Stockholders of the Company held on May 17, 2012, a majority of the Company's stockholders voted to approve the 2012 Restated Plan, with 156,671,436 shares voting "FOR", and 106,059,748 voting "AGAINST", and with 111,505 abstentions and 9,506,079 broker non-votes.

The 2012 Restated Plan, in addition to other changes: (1) extended the term of the 1998 Plan by five years (from December 31, 2013 to December 31, 2018); (2) increased the aggregate number of shares of the Company's common stock available for awards under the 1998 Plan by 6,000,000, such that following stockholder approval of the 2012 Restated Plan, there remained approximately 6,787,387 shares available to be awarded; (3) set at 2,000,000 each the number of (a) options, (b) stock appreciation rights, and (c) aggregate shares of restricted stock, shares of common stock and performance units that may be granted to any individual in a calendar year and (4) changed the provisions relating to automatic grants of restricted stock to eligible directors.

THE DELAWARE SUITS

In August and September 2012, certain stockholders filed the Delaware Suits.

The LAMPERS Action alleged that the members of the Company's Board breached their fiduciary duties and exceeded their authority under the 1998 Plan, as it existed prior to July 6, 2011, by (1) adopting without stockholder approval the 2011 Amendment permitting the Company to issue LTIP units that were to vest pursuant to continued service without the satisfaction of performance-based criteria; and (2) approving, pursuant to that amendment, the 2011 CEO Retention Agreement, which awarded LTIP units that vest pursuant to continued service without the satisfaction of performance-based criteria. The LAMPERS Action further alleged that Mr. Simon breached his fiduciary duties by accepting the 2011 CEO Retention Agreement. The LAMPERS Action also included claims concerning disclosures made to the Company's stockholders in connection with the approval of the 2012 Restated Plan.

On February 15, 2013, the defendants (other than the Company, which is a nominal defendant) moved for judgment on the pleadings in the LAMPERS Action. At a hearing held on May 30, 2013, and in an Order dated June 11, 2013, the Court granted that motion in part, dismissing the claims concerning disclosures made to the Company's stockholders in connection with the approval of the 2012 Restated Plan, and otherwise denying the motion. On July 19, 2013, the plaintiff in the LAMPERS Action moved for summary judgment, and on September 6, 2013, the defendants (other than the Company) cross-moved for summary judgment.

The Shepherd Action alleged that the members of the Company's Board breached their fiduciary duties and exceeded their authority under the 1998 Plan, as it existed prior to 2012 Restated Plan, by awarding more than 600,000 LTIP units to Mr. Simon in a calendar year. The Shepherd Action further alleged that Mr. Simon breached his fiduciary duties and was unjustly enriched by accepting the 2011 CEO Retention Agreement. The Shepherd Action also included the Disclosure Claim, alleging that certain disclosures made to the Company's stockholders in connection with the approval of the 2012 Restated Plan were deficient and misleading in two principal respects: first, such disclosures characterized the 2012 Restated Plan as "adding limits on the number of shares that may be issued as certain types of awards to any person during a calendar year," while the Disclosure Claim alleges that the 2012 Restated Plan did not add per-person limits, but instead increased existing per-person limits, on such issuances; and second, such disclosures characterized that aspect of the 2012 Restated Plan as a "non-substantive" change, while the Disclosure Claim alleges that the change was substantive. Based upon the Disclosure Claim, the Shepherd Action seeks relief including rescission of the 2012 Restated Plan.

On December 17, 2012, the defendants (other than the Company, which is a nominal defendant) moved to dismiss the Shepherd Action, and on March 25, 2013, the defendants withdrew their motion and served an answer to the complaint. On July 23, 2013, the plaintiff in the Shepherd Action moved for partial judgment on the pleadings.

If the Current Plan is not ratified and approved, and if the Court rules in favor of the plaintiff in the Shepherd Action on the Disclosure Claim and rescinds the 2012 Restated Plan, it is possible that certain awards made prior to January 1, 2014, all awards granted after December 31, 2013 (including a portion of the awards constituting the modified 2011 CEO Retention Agreement discussed immediately below) and awards to be granted in the future, may be invalidated. The Board believes that such an outcome would be contrary to the best interests of the Company and its stockholders, because equity awards are a substantial component of total direct compensation for the Company's employees (including executive officers) and eligible directors, and align the interests of grantees with those of the Company's stockholders generally. For more details, see the "2011-2013 EXECUTIVE TOTAL DIRECT COMPENSATION MIX" section of this proxy statement that begins on page 25, and the "DIRECTOR COMPENSATION" section of this proxy statement that begins on page 16.

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THE MODIFICATION OF THE 2011 CEO RETENTION AGREEMENT

Effective as of December 31, 2013, the Committee and Mr. Simon agreed to certain modifications to the 2011 CEO Retention Agreement, to provide that all of the LTIP units awarded to Mr. Simon will generally be earned upon the satisfaction of performance-based criteria and that no more than 600,000 of such units will be granted to Mr. Simon in any calendar year. Specifically, pursuant to these modifications, (1) the Company canceled 720,000 of the 1,000,000 LTIP units granted pursuant to the 2011 CEO Retention Agreement, granted Mr. Simon 360,000 LTIP units on each of December 31, 2013, and January 1, 2014, and committed to grant Mr. Simon 280,000 LTIP units on January 1, 2015, at which time the remaining 280,000 units included in the 2011 CEO Retention Agreement will be canceled; and (2) the LTIP units granted on December 31, 2013, and January 1, 2014, and those to be granted on January 1, 2015, will generally be earned upon the satisfaction of performance-based criteria (in addition to service-based vesting requirements), provided that different vesting may apply upon certain terminations of employment. Under the 2011 CEO Retention Agreement, the after-tax portion of distributions paid on Mr. Simon's unvested LTIP units are used to buy shares of the Company's common stock, which are placed in escrow. As of December 31, 2013, there were 46,439 shares in escrow. In modifying the 2011 CEO Retention Agreement, the Committee and Mr. Simon agreed that the escrowed shares (and any shares purchased with distributions in respect of the remaining 280,000 LTIP units under the 2011 CEO Retention Agreement prior to such units' cancelation on January 1, 2015) will be released to Mr. Simon on a pro rata basis based upon the satisfaction of performance-based and service-based criteria. Under the modified 2011 CEO Retention Agreement, if Mr. Simon dies or is terminated by the Company due to disability, then all unvested LTIP units under the 2011 CEO Retention Agreement will automatically vest, and the automatic vesting of the LTIP units will cause the escrowed shares to be released to Mr. Simon. For more details concerning the 2011 CEO Retention Agreement, see the "COMPENSATION DISCUSSION AND ANALYSIS" section of this proxy statement that begins on page 21, and the "TERMINATION-RELATED PROVISIONS OF EMPLOYMENT AGREEMENT WITH DAVID SIMON" and "AMENDMENTS TO THE 2011 CEO RETENTION AGREEMENT" subsections of this proxy statement that begin on page 43. Further, the Committee determined, as reflected in the Company's January 2, 2014 Form 8-K, that it will not make non-performance based grants of LTIP units without stockholder approval of an amendment to the 1998 Plan authorizing such awards. The Current Plan does not permit non-performance based grants of LTIP units unless stockholder approval is obtained to allow such grants.

RECENT DEVELOPMENTS IN THE DELAWARE SUITS AND THE 2014 AMENDMENTS

On December 31, 2013, while the motions for summary judgment and partial judgment on the pleadings (referred to above) were pending, the defendants in the Delaware Suits moved to dismiss the plaintiffs' claims as moot based upon the modifications to the 2011 CEO Retention Agreement and the determination of the Committee that it will not make non-performance based grants of LTIP units without stockholder approval of an amendment to the 1998 Plan authorizing such awards. In submissions supporting such motions, the defendants, through their counsel, represented to the Court that the Committee would not grant awards under the 1998 Plan that exceed the 600,000 share threshold for any individual in a calendar year absent further stockholder approval of an amendment to the 1998 Plan authorizing such awards.

On February 13, 2014, the Board approved an amendment to the 1998 Plan that had been approved and recommended for approval by the Committee (the "February 2014 Amendment"). The February 2014 Amendment: (1) removed from the 1998 Plan certain language added by the 2011 Amendment; (2) required that grants of performance units be based on the attainment of specified performance goals over a performance cycle, and consequently, deleted a requirement that performance units based solely on completion of a period of service must have a minimum period of service of thirty-six (36) months; and (3) provided that the maximum number of shares that may be subject to awards granted to any participant under the 1998 Plan during a calendar year shall not exceed 600,000. The Company believed, and the defendants in the Delaware Suits contended, that the modifications to the 2011 CEO Retention Agreement and the February 2014 Amendment mooted the Delaware Suits.

In a March 28, 2014 ruling in a telephonic conference with counsel for the parties, the Court granted in part and denied in part the motions to dismiss the Delaware Suits as moot. The Court ruled that the modifications to the 2011 CEO Retention Agreement and the February 2014 Amendment "fully mooted" the challenges to the validity of the 2011 CEO Retention Agreement and the 2011 Amendment, but denied the motion to dismiss with respect to the Disclosure Claim. In delivering its ruling, the Court also expressed a belief that the alleged misrepresentations and omissions on which the Disclosure Claim is based are of a type that could be cured with a future ratifying vote, but did not issue any ruling or any assurance that such a vote would be found to cure the alleged misrepresentations and omissions. A formal order implementing the Court's ruling has not yet been issued. In its ruling, the Court stated that such formal order will bind defendants to their prior commitments and representations that, absent stockholder approval of an amendment to the 1998 Plan authorizing such awards, the Committee will neither make non-performance based grants of LTIP units nor grant awards under the 1998 Plan that exceed the 600,000 share threshold for any individual in a calendar year.

On April 4, 2014, the Board approved an amendment to the 1998 Plan that had been approved and recommended for approval by the Committee (the "April 2014 Amendment"). The April 2014 Amendment: (1) reduces the aggregate number of shares of the

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Company's common stock available for awards under the 1998 Plan by 1,000,000 (when compared to the 2012 Restated Plan), such that immediately following the April 2014 Amendment there remained approximately 3,931,178 shares available to be awarded; and (2) reduces the maximum number of shares that may be subject to awards granted to any participant during a calendar year starting in 2015 from 600,000 (under the February 2014 Amendment) to 500,000.

THE PROPOSED RATIFICATION AND APPROVAL OF THE CURRENT PLAN

While the Company is continuing to litigate the Disclosure Claim and does not believe that any prior disclosures with respect to the 1998 Plan were deficient in any respect, the Board has proposed that the Current Plan be submitted to the stockholders for ratification and approval at the 2014 Annual Meeting.

The Company believes that stockholder ratification and approval of the Current Plan is in the best interests of the Company and its stockholders and will moot the Disclosure Claim, thereby permitting the Company to avoid the additional cost, expense and distraction of further litigation, continue to focus on increasing long-term stockholder value, attract, retain and incent its employees and eligible directors and continue to align their interests with the interests of our stockholders. Further, if the Current Plan is not ratified and approved, and if the plaintiff in the Shepherd Action ultimately prevails on his claim that certain disclosures made to the Company's stockholders in connection with the approval of the 2012 Restated Plan were deficient and misleading, it is possible that certain awards made prior to January 1, 2014, and all awards granted after December 31, 2013, including awards made pursuant to the modification of the 2011 CEO Retention Agreement and those to be granted in the future, may be invalidated. Such invalidation of awards may give rise to further litigation and may negatively impact the Company's ability to incent and retain key employees and officers.

SUMMARY OF THE CURRENT PLAN

THE 2012 RESTATED PLAN AND THE FEBRUARY AND APRIL 2014 AMENDMENTS

The following is a summary of the changes to the 1998 Plan resulting from the 2012 Restated Plan, the February 2014 Amendment, the April 2014 Amendment and certain other features of the Current Plan.

This summary is qualified in its entirety by reference to the Current Plan, as proposed to be ratified and approved, set forth as Appendix A to this proxy statement. Stockholders are advised to read the actual text of Appendix A.

The 2012 Restated Plan, in addition to other changes: (1) extended the term of the 1998 Plan to December 31, 2018; (2) increased the aggregate number of shares of the Company's common stock available for awards under the 1998 Plan by 6,000,000, such that following the 2012 Restated Plan, there remained approximately 6,787,387 shares available to be awarded; (3) set at 2,000,000 each the number of (a) options, (b) stock appreciation rights and (c) aggregate shares of restricted stock, shares of common stock and performance units that may be granted to any individual in a calendar year; and (4) changed the provisions relating to automatic grants of restricted stock to eligible directors.

The February 2014 Amendment (1) removed from the 1998 Plan certain language added by the 2011 Amendment; (2) required that grants of performance units be based on the attainment of specified performance goals over a performance cycle and, consequently, deleted a requirement that performance units based solely on completion of a period of service must have a minimum period of service of thirty-six (36) months; and (3) provided that the maximum number of shares that may be subject to awards granted to any participant under the 1998 Plan during a calendar year shall not exceed 600,000. The Company believed, and the defendants in the Delaware Suits contended, that the modifications to the 2011 CEO Retention Agreement and the February 2014 Amendment mooted the Delaware Suits.

Of these three changes to the 2012 Restated Plan, the Current Plan, which stockholders are asked to ratify and approve, incorporates (1) removal from the 1998 Plan of certain language added by the 2011 Amendment; and (2) the requirement that grants of performance units be based on the attainment of specified performance goals over a performance cycle and the consequent deletion of a requirement that performance units based solely on completion of a period of service must have a minimum period of service of thirty-six (36) months.

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With respect to the aggregate number of shares of the Company's common stock available for awards under the 1998 Plan, the April 2014 Amendment reduced the aggregate number of shares reserved for issuance by 1,000,000 shares (when compared to the 2012 Restated Plan), such that immediately following the April 2014 Amendment there remained approximately a total of 3,931,178 shares available to be awarded. With respect to the number of awards that may be granted to any individual in a calendar year, the April 2014 Amendment provides for a per-person limitation of 600,000 shares for 2014 and, commencing in 2015, a per-person limitation of 500,000 shares (1,500,000 shares less than the number permitted by the 2012 Restated Plan and 100,000 shares less than the number permitted by the February 2014 Amendment). The April 2014 Amendment is incorporated in the Current Plan, which stockholders are asked to ratify and approve.

Prior to stockholder approval of the 2012 Restated Plan, the 1998 Plan would have expired on December 31, 2013. The Board proposed in the 2012 Restated Plan to extend the expiration date of the 1998 Plan to December 31, 2018. The extension was intended to allow us to continue using equity-based incentive compensation awards with long-term performance periods and subsequent service-based vesting requirements, which we believe are the best means to align the interests of our employees, including our executive officers, and our eligible directors with those of our stockholders and promote the creation of long-term stockholder value. If the Current Plan, which includes the extension, is not ratified and approved, and if the plaintiff in the Shepherd Action ultimately prevails on the Disclosure Claim, certain awards made prior to January 1, 2014, all awards granted after December 31, 2013 (including awards made pursuant to the modification of the 2011 CEO Retention Agreement) and those to be awarded in the future, may be invalidated. As of April 1, 2014, the total number of shares as to which awards were made prior to January 1, 2014 that could be invalidated if the Current Plan is not ratified and approved is 219,727. As of April 1, 2014, the total number of shares as to which awards have been granted after December 31, 2013, and that the Company has agreed to grant in the future is 849,095. The total number of shares as to which awards have been granted or that the Company has agreed to grant in the future, in excess of the maximum number of shares under the 1998 Plan as it existed prior to the 2012 Restated Plan, is 1,068,822.

Prior to the 2012 Restated Plan, the 1998 Plan contained provisions specifying the amount and timing of automatic grants of restricted stock to eligible directors (directors who are not our employees or employees of our affiliates). These provisions could not be changed without amending the 1998 Plan and having the amendment approved by stockholders. While we have used, and expect to continue to use, restricted stock awards under the 1998 Plan as an integral part of our compensation package for eligible directors, deleting the specific amounts and timing requirements for these awards gives the Governance and Nominating Committee (which makes recommendations to the Committee on our compensation program for eligible directors) and the Committee (which makes awards under the Current Plan, including those to eligible directors) the ability to make changes in the form and the amount of director compensation in the manner they determine most appropriate.

The Current Plan includes a requirement that restricted stock awarded to eligible directors be held in our Director Deferred Compensation Plan until the director retires, dies or becomes disabled or otherwise no longer serves as a director, including after the shares vest. Until the shares are delivered, the eligible directors may vote and are entitled to receive dividends of the shares; however, any dividends must be reinvested in additional shares of the Company's common stock, which must also be held in the Director Deferred Compensation Plan until the associated restricted shares are delivered to a former director.

Prior to the 2012 Restated Plan, the aggregate number of shares reserved for issuance under the 1998 Plan was 11,300,000. Through the 2012 Restated Plan, the number of shares reserved for issuance was increased to 17,300,000. The April 2014 Amendment reduced the number of shares reserved for issuance to 16,300,000 (1,000,000 shares less than the number permitted by the 2012 Restated Plan). We are asking stockholders to ratify and approve this aggregate number of shares reserved for issuance of 16,300,000. As of April 1, 2014, the number of shares available for issuance under future awards under the 1998 Plan (based on a total share reserve of 17,300,000) was 4,931,178 shares, pursuant to the limit set in the 2012 Restated Plan. The Board believes that setting the number of shares available for issuance at 16,300,000 is in the best interests of the Company. We expect that setting the number of shares available for issuance at 16,300,000 will be sufficient to allow us to continue our current equity-based incentive compensation programs through December 31, 2018. As stated above and in the "COMPENSATION DISCUSSION AND ANALYSIS" section of this proxy statement that begins on page 21, we use equity-based incentive compensation as a key component of our pay-for-performance philosophy.

The Shepherd Action contends that, prior to the 2012 Restated Plan, the 1998 Plan imposed a limitation on the number of awards that may be granted to any individual in a calendar year of 600,000 shares applicable to all awards, including stock options, stock appreciation rights, restricted stock, common stock and performance units. The defendants in the Shepherd Action disputed that contention and maintained that, prior to the 2012 Restated Plan, the 1998 Plan's annual per-person limit of 600,000 shares pertained solely to awards of stock options. The 2012 Restated Plan provided that the maximum number of shares that may be subject to awards granted to any individual in a calendar year shall not exceed 2,000,000 options, 2,000,000 stock appreciation rights

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and 2,000,000 in the aggregate of restricted stock, common stock and performance units. The February 2014 Amendment provided that the maximum number of shares that may be subject to all awards granted to any participant during a calendar year shall not exceed 600,000.

The April 2014 Amendment imposed an annual aggregate per-person grant limitation of 600,000 shares for years prior to 2015 and, commencing in 2015, 500,000 shares (1,500,000 shares less than the number permitted by the 2012 Restated Plan and 100,000 shares less than the number permitted by the February 2014 Amendment) for all awards, including stock options, stock appreciation rights, restricted stock, common stock and performance units. The Board believes that commencing in 2015, setting the annual aggregate per-person grant limitation at 500,000 shares is in the best interests of the Company and its stockholders.

The Current Plan, which stockholders are asked to ratify and approve, incorporates a number of other changes in the 1998 Plan resulting from the 2012 Restated Plan. These include:

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modifying the provisions of Section 1.5 to include a share reserve concept, clarifying the impact of forfeited awards and the impact of plans operated by companies acquired by the Operating Partnership or the Company;

•

adding new business criteria that may be used in performance goals (including (i) implementation or completion of critical activities, (ii) return on capital deployed, (iii) debt, credit or other leverage measures or ratios, (iv) improvement in cash flow and (v) net operating income);

•

permitting award agreements to be in electronic form;

•

authorizing the Committee to create subplans for awards to eligible persons outside the United States; and

•

adding provisions intended to promote compliance with legal requirements, including Rule 16b-3 promulgated under the Exchange Act and Section 10D of the Exchange Act, which requires forfeiture or recovery of compensation in certain circumstances.

SUMMARY OF ADDITIONAL TERMS AND PROVISIONS OF THE CURRENT PLAN

PURPOSE

The primary purpose of the Current Plan is to attract and retain the best available officers, key employees, eligible directors, advisors and consultants for positions of substantial responsibilities with us and our affiliates and to provide an additional incentive to such officers, key employees, eligible directors, advisors and consultants to exert their maximum efforts to maintain and enhance our, and the Operating Partnership's, performance and profitability. All of our officers, key employees, advisors and consultants and those of our affiliates (except for Herbert Simon) and all eligible directors are eligible to be granted awards under and participate in the Current Plan. Approximately 300 individuals are currently eligible to participate in the Current Plan. The Board believes that providing equity awards benefits the Company by aligning the recipients' interests with those of the Company.

Using the methodology provided by ISS, the Company's three-year average burn rate under the 1998 Plan is expected to be approximately 0.21%, which is substantially below ISS's 2014 "cap" of 2.86% for companies ISS evaluates in the Real Estate industry.

ADMINISTRATION

The Current Plan is administered by the Committee. The Committee, in its sole discretion, determines which eligible individuals will receive an award and the type, extent and terms of the awards to be granted to them. In addition, the Committee interprets the Current Plan and makes all other determinations deemed advisable for its administration.

AWARDS

The Current Plan provides for the grant of the following types of awards: incentive stock options within the meaning of Section 422 of the Internal Revenue Code, nonqualified stock options, stock appreciation rights or SARs, restricted stock, and performance units (including LTIP units). As of April 1, 2014, an aggregate of 4,231,601 shares of common stock were covered by outstanding awards made under the 1998 Plan, which consisted of (1) 182,898 shares of unvested restricted stock, and (2) 4,048,703 shares reserved for issuance in connection with outstanding awards of LTIP units. The closing price of our common stock as reported by the NYSE on April 1, 2014 was $164.92.

Stock options represent rights to purchase a specified number of shares of our common stock at a designated exercise price for a specified exercise period. SARs represent the right to acquire upon exercise of the award the amount by which the market value of a share of our common stock on the settlement date exceeds the base value of the award. This amount is then paid in cash or

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shares of our common stock using the market value on the settlement date. The Committee has not made any stock option awards to executive officers since 2001 and has never granted any awards of SARs.

Restricted stock awards, which may be subject to performance-based conditions, continuing service requirements, or other conditions, are grants of shares of our common stock that are subject to forfeiture provisions and transfer restrictions. In general, pending the lapse of such provisions and restrictions, certificates representing shares of restricted shares are held by us, but the grantee has all of the rights of a stockholder, including the right to vote the shares and the right to receive all dividends thereon.

While awards of restricted stock may be subject to forfeiture provisions and transfer restrictions for a period of time, there are no minimum or maximum durations for such provisions and restrictions, except that service-based vesting requirements, in most instances, have a restricted period of two, three or four years. In general, if employment is terminated for any reason other than death or disability prior to the lapse of the forfeiture provisions and transfer restrictions, the unvested portion of the shares will be terminated and returned to us. The Committee has the authority to accelerate or remove any or all of these forfeiture provisions and transfer restrictions. In the event of death prior to the expiration of the forfeiture provisions and transfer restrictions, the award will become fully vested.

PERFORMANCE UNITS

In accordance with the terms of the February 2014 Amendment, all performance units (including LTIP units) awarded under the Current Plan generally must be subject to satisfaction of one or more performance measures discussed below and may relate to shares of our common stock or equity interests in the Operating Partnership. The goals for any performance measures and all other terms and conditions of the award will be determined by the Committee. After a performance unit award is fully earned and vested, the performance units subject to the award may, subject to certain conditions, be converted into units of the Operating Partnership and thereafter may be exchanged for shares of our common stock, cash or a combination thereof, as determined by the Company, on a one-for-one basis. In general, if employment is terminated prior to attaining the specified goals, a performance unit award will be forfeited. The Committee, in its sole discretion, may provide that, in the event of a grantee's death, disability, retirement or such other circumstances as the Committee deems fair and equitable to the grantee and in our interest, the grantee will be entitled to full or partial payment with respect to such award.

With respect to certain awards to "covered employees" within the meaning of Section 162(m) that are intended to meet the conditions of Section 162(m), performance measures wi