EMPLOYMENT AGREEMENT

Exhibit 10.12

EMPLOYMENT AGREEMENT

        This Employment Agreement is made and entered into by and among SIMON PROPERTY GROUP, Inc., a Delaware corporation (the "Parent"), SIMON PROPERTY GROUP ADMINISTRATIVE SERVICES PARTNERSHIP, L.P., an indirect subsidiary of the Parent (the "Company") and RICHARD S. SOKOLOV (the "Executive"), as of January 1, 2007.

        WHEREAS, Executive serves as President and Chief Operating Officer of Parent and its subsidiaries;

        WHEREAS, Parent, Company and Executive are parties to a certain Employment Agreement dated March 26, 1996 and effective as of August 9, 1996, as the same has been amended and supplemented ("Prior Agreement");

        WHEREAS, each of the Parent and the Company considers it essential to its best interests and the best interests of Parent's stockholders to foster the continued employment of Executive by the Parent and the Company;

        WHEREAS, Executive is willing so to continue his employment on the terms hereinafter set forth in this agreement (the "Agreement"); and

        WHEREAS, Executive has agreed that from and after the date hereof, this Agreement shall supersede in all respects the Prior Agreement and any other agreements, arrangements or understandings relating to the subject matter hereof.

        NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

ARTICLE I

EXECUTIVE REPRESENTATIONS

1.1

Executive Representations and Agreement

(a)

Executive agrees and acknowledges that as of the date hereof (i) this Agreement shall supersede the Prior Agreement in all respects and (ii) except as otherwise expressly provided in this Agreement, neither the Executive nor the Parent, the Company or their affiliates shall have any further rights, claims or obligations under any provisions of the Prior Agreement or any other existing agreements, arrangements or understandings relating to the subject matter hereof.

(b)

Executive represents and warrants to the Parent and the Company, that to the best of his knowledge, neither the execution nor delivery of this Agreement nor the performance of his duties hereunder violates or will violate the provisions of any other agreement to which he is a party or by which he is bound.

ARTICLE II

EMPLOYMENT, DUTIES AND RESPONSIBILITIES

2.1

Employment .    During the term of Executive's employment hereunder, Executive shall serve as the President and Chief Operating Officer of the Parent and agrees to serve, if elected, for no additional compensation as a trustee or director of the Parent and/or in the position of officer, trustee or director of any subsidiary or affiliate of the Parent. Executive hereby accepts such employment. Executive agrees to devote his full time and efforts to promote the interests of the

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• Parent and its affiliates. In addition, during the term of Executive's employment hereunder, the Parent shall use its best efforts to nominate Executive for election to, and to cause Executive to be elected to, the Board of Directors of Parent (the "Board") and to the Executive Committee of the Board and shall nominate Executive for re-election to the Board at each annual meeting of the Parent's shareholders at which directors of the Parent are to be elected.

2.2

Duties and Responsibilities .    During the term of Executive's employment hereunder, Executive shall perform such duties and exercise such supervision and authority over and with regard to the business of the Parent as are similar in nature to those duties and services customarily associated with the position of President and Chief Operating Officer, including authority, subject to the oversight of the Chief Executive Officer of the Parent and the Board, with respect to the day-to-day operations of the Parent, and development and implementation of business strategies. In exercising such authority the Executive shall routinely consult with, and report directly and only to, the Chief Executive Officer of the Parent and the Board.

2.3

Base of Operation .    Executive's principal base of operation for the performance of his duties and responsibilities under this Agreement shall initially be in Youngstown, Ohio; provided , however , that Executive shall perform such duties and responsibilities not involving a permanent transfer of his base of operation outside of Youngstown, Ohio at such other places as shall from time to time be reasonably necessary to fulfill his obligations hereunder and shall devote at least a majority of his business time to duties performed by Executive at the Parent's corporate offices in Indianapolis, Indiana.

ARTICLE III

TERM, EFFECTIVENESS

3.1

Term .    Unless earlier terminated pursuant to Article VI below, the term of this Agreement (the "Term") shall commence as of the date hereof and shall continue for a period of three (3) years and one month thereafter (January 31, 2010); provided , however , that the Term shall be automatically renewed for two (2) successive twelve month periods unless either party hereto gives at least 90 days prior written notice to the other of its election not to so renew the Term.

ARTICLE IV

COMPENSATION AND EXPENSES

4.1

Salary, Bonuses and Benefits .    As compensation and consideration for the performance by Executive of his obligations under this Agreement, Executive shall be entitled to the following (subject, in each case, to the provisions of ARTICLE VI hereof):

(a)

Base Salary .    The Company shall pay Executive a base salary during the Term, payable in accordance with the normal payment procedures of the Company, at the rate of $782,000 per annum. The Parent and the Company agree to review such compensation not less frequently than annually during the Term, which shall in any event be subject to review and approval by the Compensation Committee of the Board (the "Committee").

(b)

Retirement, Welfare and Other Benefits .    Executive shall participate during the Term in such pension, savings, profit sharing, life insurance, health, disability and major medical insurance plans, and in such other employee benefit plans and programs, for the benefit of the employees of the Parent and its affiliates, as may be maintained from time to time during the Term, in each case to the extent and in the manner available to other officers of the Parent and subject to the terms and provisions of such plans or programs. In addition, Executive will be afforded the same indemnity provisions regarding directors and officers liability that the Parent provides to its other senior executive officers and directors and Executive will be

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• • covered by any directors and officers liability policy generally in force for the Parent's senior executive officers and directors.

  (c)

  Equity Arrangements.
  
  

  (i)

  Executive shall participate during each calendar year during the Term commencing with fiscal year 2007, in the Parent's stock and performance incentive plans (or such plans of the Parent's affiliates maintained for the benefit of other officers of Parent) on the same basis as is made available to other executives of the Parent and approved by the Committee. As of the date hereof, 423,599 shares of restricted stock have been earned and awarded to Executive pursuant to the 1998 Incentive Stock Plan of Simon Property Group, L.P., as amended from time to time (the "Plan") but which remain subject to the vesting requirements of the Plan. Of that amount, 41,769 have not yet vested.
  
  

  (d)

  Bonus Opportunity .    Executive shall participate during the Term in the Parent's (or its affiliates') annual cash bonus plan for senior executives of the Parent as in effect from time to time, with a target annual bonus for each year during the Term equal to at least 75%, and a maximum bonus of not more than 150%, of Executive's base salary, and with the amount of any cash bonus to be approved by the Committee.
  
  

  (e)

  Vacation .    Executive shall be entitled to a reasonable paid vacation period (but not necessarily consecutive vacation weeks) during the Term.
  
  

  (f)

  Use of Aircraft .    To the extent reasonably practicable and feasible, the Company shall make available to the Executive the use of a chartered aircraft to transport to Executive to and from the Executive's home in Youngstown, Ohio and the Company's corporate offices in Indianapolis, Indiana, and for other incidental business related travel for Executive, all for the purpose of facilitating the performance of Executive's duties hereunder.
  
  

4.2

Expenses .    The Parent will reimburse, or will cause the Company to reimburse, Executive for reasonable business-related expenses incurred by him in connection with the performance of his duties hereunder during the Term, subject, however, to the Parent's and the Company's policies relating to business-related expenses as in effect from time to time during the Term. Executive shall be responsible for any of Executive's housing expenses incurred in connection with the performance of Executive's duties in Indianapolis, Indiana.

ARTICLE V

EXCLUSIVITY, ETC.

5.1

Exclusivity .    Executive agrees to perform his duties, responsibilities and obligations hereunder efficiently and to the best of his ability. Executive agrees that he will devote his entire working time, care and attention and best efforts to such duties, responsibilities and obligations throughout the Term. Executive also agrees that he will not engage in any other business activities, whether charitable or pursued for gain, profit, other pecuniary advantage or otherwise, that are competitive with the activities of the Parent or its affiliates or that would adversely effect Executive's ability to perform his duties hereunder. Executive agrees that all of his activities as an employee and/or trustee or director of the Parent or its affiliates shall be in conformity with all present and future policies, rules and regulations and directions of the Parent and its affiliates not inconsistent with this Agreement.

5.2

Other Employment Business Ventures .    Executive agrees that for so long as he is employed by the Parent, and for a period of one (1) year thereafter, he will not, directly or indirectly, become an employee, shareholder, partner, owner, officer, agent, director of, or otherwise associate with, any firm, person, business enterprise or other entity which is engaged in or competitive with, any

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• business engaged in by the Parent or its affiliates. Notwithstanding the foregoing, Executive may own, directly or indirectly, up to 5% of the outstanding capital stock of any business having a class of capital stock which is traded on any national stock exchange or in the over-the-counter market.

5.3

Confidentiality; Non-solicitation .

(a)

Executive agrees that he will not, at any time during or after the Term, make use of or divulge to any other person, firm, business enterprise or other entity, any trade or business secret, process, method or means, or any other confidential information concerning the business or policies of the Parent or its affiliates including, without limitation, any information, data, or other confidential information relating to customers, development programs, costs, marketing, trading, investment, sales activities, promotion, credit and financial data, manufacturing processes, financing methods, plans or the business and affairs of the Parent or its affiliates generally; provided that the foregoing shall not apply to information which is not unique to the Parent or its affiliates or which is generally known to the industry or the public other than as a result of the Executive's breach of this covenant. Executive agrees not to remove from the premises of the Parent or its affiliates, except as an employee of the Parent or its affiliates in pursuit of the business of the Parent or its affiliates or except as specifically permitted in writing by the Parent, any document or other object containing or reflecting any such confidential information. Executive recognizes that all such documents and objects, whether developed by him or by someone else, will be the sole exclusive property of the Parent and its affiliates. Upon termination of his employment hereunder, Executive shall forthwith deliver to the Parent all such confidential information, including without limitation all lists of customers, correspondence, accounts, records and any other documents or property made or held by him or under his control in relation to the business or affairs of the Parent or its affiliates, and no copy of any such confidential information shall be retained by him.

(b)

Executive agrees that for so long as he is employed by the Parent and for a period of one (1) year thereafter. Executive shall not, directly or indirectly, whether as an employee, consultant, independent contractor, partner, joint venturer or otherwise, (A) solicit or induce, or in any manner attempt to solicit or induce, any person employed by, or as agent of, the Parent or its affiliates to terminate such person's contract of employment or agency, as the