ELIGIBLE DIRECTORS' DEFERRED COMPENSATION/PHANTOM STOCK PLAN

 

THE MACERICH COMPANY

 

ELIGIBLE DIRECTORS’

DEFERRED COMPENSATION/PHANTOM STOCK PLAN

(As Amended and Restated as of July 30, 2009)

 

TABLE OF CONTENTS

 

 

 

			Page
ARTICLE I		TITLE, PURPOSE AND AUTHORIZED SHARES	1
ARTICLE II		DEFINITIONS	1
	2.1	Account	1
	2.2	Additional Compensation	1
	2.3	Average Fair Market Value	1
	2.4	Award Date	2
	2.5	Board of Directors	2
	2.6	Cash Account	2
	2.7	Cash or Combination Dividends	2
	2.8	Change in Control Event	2
	2.9	Code	3
	2.10	Common Stock	3
	2.11	Committee	4
	2.12	Company	4
	2.13	Compensation	4
	2.14	Current Cash Account	4
	2.15	Current Dividend Equivalent Cash Account	4
	2.16	Current Dividend Equivalent Stock Account	4
	2.17	Current Stock Unit Account	4
	2.18	Disability	4
	2.19	Discount Rate	4
	2.20	Disinterested Director	4
	2.21	Distribution Subaccount	5
	2.22	Dividend Equivalent	5

 

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	2.23	Dividend Equivalent Cash Account	5
	2.24	Dividend Equivalent Stock Account	5
	2.25	Effective Date	5
	2.26	Eligible Director	5
	2.27	Exchange Act	5
	2.28	Fair Market Value	5
	2.29	Interest Rate	5
	2.30	Plan	5
	2.31	Plan Year	5
	2.32	Prior Cash Account	6
	2.33	Prior Dividend Equivalent Cash Account	6
	2.34	Prior Dividend Equivalent Stock Account	6
	2.35	Prior Stock Unit Account	6
	2.36	Special Meeting Fees	6
	2.37	Stock Unit or Unit	6
	2.38	Stock Unit Account	6
	2.39	Unforeseeable Emergency	6
ARTICLE III		PARTICIPATION	6
ARTICLE IV		DEFERRAL ELECTIONS	7
	4.1	Initial Elections	7
	4.2	Subsequent Annual Elections	7
ARTICLE V		DEFERRAL ACCOUNTS	8
	5.1	Cash Account	8
	5.2	Stock Unit Account	8
	5.3	Dividend Equivalents; Dividend Equivalent Cash Account; Dividend Equivalent Stock Account	10
	5.4	Vesting	12
	5.5	Distribution of Benefits	13
	5.6	Adjustments in Case of Changes in Common Stock	16
	5.7	Company’s Right to Withhold	16
	5.8	Stockholder Approval	16
ARTICLE VI		ADMINISTRATION	16
	6.1	The Administrator	16

 

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	6.2	Committee Action	16
	6.3	Rights and Duties	17
	6.4	Indemnity and Liability	17
ARTICLE VII		PLAN CHANGES AND TERMINATION	18
ARTICLE VIII		MISCELLANEOUS	18
	8.1	Limitation on Eligible Directors’ Rights	18
	8.2	Beneficiaries	19
	8.3	Benefits Not Assignable; Obligations Binding Upon Successors	19
	8.4	Governing Law; Severability	19
	8.5	Compliance With Laws	19
	8.6	Headings Not Part of Plan	20

 

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THE MACERICH COMPANY

 

ELIGIBLE DIRECTORS’

DEFERRED COMPENSATION/PHANTOM STOCK PLAN

(As Amended and Restated as of July 30, 2009)

 

ARTICLE I
TITLE, PURPOSE AND AUTHORIZED SHARES

 

This Plan shall be known as “The Macerich Company Eligible Directors’ Deferred Compensation/Phantom Stock Plan.”  The purpose of this Plan is to attract, motivate and retain experienced and knowledgeable directors of The Macerich Company by permitting them to defer compensation and affording them the opportunity to link that compensation to an equity interest in the Company.  The total number of shares of Common Stock that may be delivered pursuant to awards under this Plan is 500,000, subject to adjustments contemplated by Section 5.6.

 

ARTICLE II
DEFINITIONS

 

Whenever the following terms are used in this Plan they shall have the meaning specified below unless the context clearly indicates to the contrary:

 

2.1          Account shall mean one or more of an Eligible Director’s Cash Account(s), Stock Unit Account(s), Dividend Equivalent Cash Account(s) and Dividend Equivalent Stock Account(s).  Each Account includes, to the extent applicable, any Distribution Subaccounts.

 

2.2          Additional Compensation with respect to a particular calendar year shall mean the difference (if any) between (i) the amount of an Eligible Director’s Compensation for such calendar year taken into account on the Award Date, and (ii) the amount of Compensation the Eligible Director would actually have been paid for such calendar year (including, without limitation, any such difference attributable to increases or decreases in annual retainer levels and regular meeting fees, any Special Meeting Fees, and any other Compensation not taken into account on the Award Date), in each case without giving effect to any election by the Eligible Director to defer Compensation hereunder.  For purposes of clarity, “Additional Compensation” may be a negative number.

 

2.3          Average Fair Market Value shall mean (i) for purposes of crediting any Stock Units hereunder pursuant to Section 5.2(a)(1), the average of the Fair Market Values of a share of Common Stock of the Company during the last 10 trading days preceding the Award Date, and (ii) for purposes of crediting any Stock Units hereunder pursuant to Section 5.2(a)(2), the average of the Fair Market Values of a share of Common Stock of the Company for the trading days occurring in the calendar year preceding the March 31 on which such Stock Units are credited.

 

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2.4          Award Date with reference to elections under Section 4.2 shall mean the January 1 that next follows the date of an Eligible Director’s election made pursuant to Section 4.2.  Award Date with reference to elections under Section 4.1shall mean the date next following the date that the Eligible Director files his or her election under Section 4.1.

 

2.5          Board of Directors shall mean the Board of Directors of the Company.

 

2.6          Cash Account shall mean a Current Cash Account and/or a Prior Cash Account.

 

2.7          Cash or Combination Dividends shall mean cash dividends and distributions to holders of shares of Common Stock, and dividends in connection with which holders of shares of Common Stock have the right to elect to receive cash, shares of Common Stock of equivalent value, or a combination thereof.

 

2.8          Change in Control Event

 

(a)           with respect to the provisions of Section 5.5A of the Plan set forth in Appendix A, which apply to the distribution of amounts deferred prior to January 1, 2005 and credited to Prior Cash Accounts, Prior Dividend Equivalent Cash Accounts, Prior Dividend Equivalent Stock Accounts and Prior Stock Unit Accounts, shall have the meaning specified for such term under The Macerich Company Amended and Restated 1994 Incentive Plan, as amended from time to time; and

 

(b)           with respect to the provisions of the Plan that apply to distributions from Current Cash Accounts, Current Dividend Equivalent Cash Accounts, Current Dividend Equivalent Stock Accounts and Current Stock Unit Accounts, shall mean

 

(1)           the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (such individual, entity, or group, a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of stock possessing 33% or more of the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that, for purposes of this definition, the following acquisitions shall not constitute a Change in Control Event; (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any affiliate of the Company or successor or (D) any acquisition by a Person having beneficial ownership of more than 50% of the Outstanding Company Voting Securities prior to the acquisition;

 

(2)           individuals who, as of any date (the “Initial Date”) after the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason, at any time within 12 months following the Initial Date, to constitute at least a

 

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majority of the Board; provided, however, that any individual becoming a director subsequent to the Initial Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (including for these purposes, the new members whose election or nomination was so approved, without counting the member and his predecessor twice) shall be considered as though such individual were a member of the Incumbent Board;

 

(3)           consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its subsidiaries, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each case if, following such Business Combination, any Person (excluding any entity resulting from such Business Combination or a parent of any such entity or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination or parent of any such entity) beneficially owns, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of stock of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that the ownership in excess of 50% existed prior to the Business Combination; or

 

(4)           consummation of a sale or other disposition of all or substantially all of the assets of the Company (an “Asset Transfer”), other than a transfer to (A) one or more of the beneficial owners (immediately before the Asset Transfer) of the then-outstanding shares of stock of the Company (“Outstanding Company Stock”) in exchange for or with respect to such Outstanding Company Stock of such beneficial owners, or (B) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company, or (C) a Person that owns, directly or indirectly, 50% or more of the total value or voting power of the Outstanding Company Stock, or (D) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by a Person described in the preceding clause (C).

 

Each event comprising a Change in Control Event under this Subsection (b) is intended to constitute a “change in ownership or effective control” or a “change in the ownership of a substantial portion of the assets” of the Company as such terms are defined for purposes of Section 409A of the Internal Revenue Code and such definition of “Change in Control Event” as used herein shall be interpreted consistently therewith.

 

2.9          Code shall mean the Internal Revenue Code of 1986, as amended.

 

2.10        Common Stock shall mean the Common Stock of the Company.

 

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2.11        Committee shall mean a Committee of the Board of Directors acting in accordance with Article VI and applicable Maryland law, or the Board of Directors.

 

2.12        Company shall mean The Macerich Company, a Maryland corporation, and its successors and assigns.

 

2.13        Compensation shall mean the annual retainer and regular meeting fees payable by the Company to an Eligible Director for a calendar year.

 

2.14        Current Cash Account shall mean a bookkeeping account maintained by the Company on behalf of each Eligible Director who elects to defer Compensation and Special Meeting Fees earned after December 31, 2004 in cash in accordance with Section 5.1.

 

2.15        Current Dividend Equivalent Cash Account shall mean a bookkeeping account maintained by the Company on behalf of an Eligible Director that is credited with Dividend Equivalents in the form of cash deferrals attributable to Stock Units credited to the Eligible Director’s Current Stock Unit Account (with respect to Compensation and Special Meeting Fees earned after December 31, 2004) in accordance with Section 5.3(b)(1).

 

2.16        Current Dividend Equivalent Stock Account shall mean a bookkeeping account maintained by the Company on behalf of an Eligible Director that is credited with Dividend Equivalents in the form of Stock Units attributable to Stock Units credited to the Eligible Director’s Current Stock Unit Account (with respect to Compensation and Special Meeting Fees earned after December 31, 2004) in accordance with Section 5.3(c)(1).

 

2.17        Current Stock Unit Account shall mean a bookkeeping account maintained by the Company on behalf of each Eligible Director who elects to defer Compensation and Special Meeting Fees earned after December 31, 2004 in Stock Units in accordance with Section 5.2.

 

2.18        Disability shall mean a medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months that renders an Eligible Director unable to engage in any substantial gainful activity.

 

2.19        Discount Rate shall mean an interest rate equal to 5% per annum.

 

2.20        Disinterested Director shall mean a member of the Board of Directors who is not generally disqualified from making decisions concerning this Plan or all actions hereunder under any applicable legal requirements, but in no event shall a member of the Board of Directors participate in any decision affecting only his or her benefits under this Plan.

 

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2.21        Distribution Subaccount shall mean a subaccount of an Eligible Director’s Account established to separately account for deferred Compensation and Special Meeting Fees (and Dividend Equivalents or other earnings or losses thereon) that are subject to different distribution elections.

 

2.22        Dividend Equivalent shall mean the amount of Cash or Combination Dividends paid by the Company after January 31, 1995 on that number of shares of Common Stock equivalent to the number of Stock Units then credited to an Eligible Director’s Stock Unit Account, or Stock Unit Accounts, as applicable, and Dividend Equivalent Stock Account, or Dividend Equivalent Stock Accounts, as applicable, which amount shall be allocated as additional Stock Units to the Eligible Director’s Dividend Equivalent Stock Account(s) or as additional deferrals to the Eligible Director’s Dividend Equivalent Cash Account(s), as provided in Section 5.3.

 

2.23        Dividend Equivalent Cash Account shall mean a Current Dividend Equivalent Cash Account and/or a Prior Dividend Equivalent Cash Account.

 

2.24        Dividend Equivalent Stock Account shall mean a Current Dividend Equivalent Stock Account and/or a Prior Dividend Equivalent Stock Account.

 

2.25        Effective Date shall mean July 29, 1994.

 

2.26        Eligible Director shall mean a member of the Board of Directors of the Company who is compensated in such capacity and (as to any outstanding Account balances under this Plan) any such person who has Account balances under the Plan.

 

2.27        Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

2.28        Fair Market Value shall mean on any date the closing price of the stock on the Composite Tape, as published in the Western Edition of The Wall Street Journal, of the principal securities exchange or market on which the stock is so listed, admitted to trade, or quoted on such date, or, if there is no trading of the stock on such date, then the closing price of the stock as quoted on such Composite Tape on the next preceding date on which there was trading in such shares; provided, however, if the stock is not so listed, admitted or quoted, the Committee may designate such other exchange, market or source of data as it deems appropriate for determining such value for purposes of this Plan.

 

2.29        Interest Rate shall mean the rate that is 120% of the federal long-term rate for compounding on a quarterly basis, determined and published by the Secretary of the United States Department of Treasury under Section 1274(d) of the Code, for the month in which interest is credited.

 

2.30        Plan shall mean The Macerich Company Eligible Directors’ Deferred Compensation/Phantom Stock Plan, as amended from time to time.

 

2.31        Plan Year shall mean the applicable calendar year.

 

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2.32        Prior Cash Account shall mean a bookkeeping account maintained by the Company on behalf of each Eligible Director who elects to defer Compensation and Special Meeting Fees earned before January 1, 2005 in cash in accordance with Section 5.1.

 

2.33        Prior Dividend Equivalent Cash Account shall mean a bookkeeping account maintained by the Company on behalf of an Eligible Director that is credited with Dividend Equivalents in the form of cash deferrals attributable to Stock Units credited to the Eligible Director’s Prior Stock Unit Account (with respect to Compensation and Special Meeting Fees earned before January 1, 2005) in accordance with Section 5.3(b)(2).

 

2.34        Prior Dividend Equivalent Stock Account   shall mean a bookkeeping account maintained by the Company on behalf of an Eligible Director that is credited with Dividend Equivalents in the form of Stock Units attributable to Stock Units credited to the Eligible Director’s Prior Stock Unit Account (with respect to Compensation and Special Meeting Fees earned before January 1, 2005) in accordance with Section 5.3(c)(2).

 

2.35        Prior Stock Unit Account shall mean a bookkeeping account maintained by the Company on behalf of each Eligible Director who elects to defer Compensation and Special Meeting Fees earned before January 1, 2005 in Stock Units in accordance with Section 5.2.

 

2.36        Special Meeting Fees shall mean the meeting fees that are paid by the Company after January 31, 1995 to an Eligible Director for meetings during a deferral period in addition to the regular meetings contemplated at the time of a deferral election for that deferral period.

 

2.37        Stock Unit or Unit shall mean a non-voting unit of measurement that is deemed for bookkeeping purposes to be equivalent to one outstanding share of Common Stock of the Company solely for purposes of this Plan.

 

2.38        Stock Unit Account shall mean a Current Stock Unit Account and/or a Prior Stock Unit Account.

 

2.39        Unforeseeable Emergency shall mean a severe financial hardship to the Eligible Director resulting from an illness or accident of the Eligible Director, the Eligible Director’s spouse or a dependent (as defined in Section 152(a) of the Code) of the Eligible Director, loss to the Eligible Director’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Eligible Director.

 

ARTICLE III
PARTICIPATION

 

Each Eligible Director shall become a participant in the Plan by electing to defer his or her Compensation or Special Meeting Fees in accordance with Article IV.

 

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ARTICLE IV
DEFERRAL ELECTIONS

 

4.1                                Initial Elections .  On or before the 30 th  day after first becoming an Eligible Director, a new Eligible Director may make an irrevocable election to defer all or a portion (in 10% increments) of his or her Compensation and/or Special Meeting Fees payable for services to be rendered by the Eligible Director after the date such election is filed with the Committee and during the remainder of the calendar year during which the Eligible Director first becomes an Eligible Director and/or during the next one or two calendar years in (a) cash, in accordance with Section 5.1, or (b) Stock Units, in accordance with Section 5.2.  Such election shall be in writing on a form provided by the Company and approved by the Committee and must be filed no later than the 30 th  day following the date that the Eligible Director first becomes an Eligible Director.  Such election may also specify that the amounts deferred pursuant to such election shall be paid under one of the optional forms of benefits set forth in Section 5.5(a).

 

4.2                                Subsequent Annual Elections .

 

(a)                                   General Rule .   On or before the date set forth in the applicable election agreement (but in no event later than December 31 of the year preceding the first year to which the election applies), each Eligible Director may make an irrevocable election to defer all or a portion (in 10% increments) of his or her Compensation and/or Special Meeting Fees payable for services to be rendered by the Eligible Director during the next one, two, or three calendar years in (a) cash, in accordance with Section 5.1, or (b) Stock Units, in accordance with Section 5.2.  Such election shall be in writing on forms provided by the Company and approved by the Committee.  Such election may also specify that the amounts deferred pursuant to such election shall be paid under one of the optional time and forms of distribution set forth in Section 5.5(a).

 

(b)                                   Special Rule for 2005 and 2006 Deferrals .   Any Eligible Director who filed a deferral election under this Plan prior to December 31, 2003 with respect to Compensation and/or Special Meeting Fees to be earned in 2005 and/or 2006 (a “Pre-Existing Deferral Election”) may file a new distribution election with respect to amounts to be deferred in 2005 and/or 2006 pursuant to such Pre-Existing Deferral Election (the “2005-2006 Deferrals”) no later than December 31, 2005.  If the Eligible Director does not file such a distribution election for such 2005-2006 Deferrals, then he or she shall be deemed to have elected to receive a distribution of his 2005-2006 Deferrals as provided in the Eligible Director’s most recent effective distribution election filed prior to December 31, 2004 with the Committee in accordance with Section 5.5A(b) with respect to all amounts deferred under such Pre-Existing Deferral Election.  Any further changes to the time and manner of distribution of the Participant’s 2005-2006 Deferrals shall be made in accordance with, and governed by, the provisions of Section 5.5(b) and not Section 5.5A(b).

 

(c)                                   2008 Distribution Elections .  Notwithstanding the provisions of Sections 4.1, 4.2(a), 4.2(b) and 5.5 hereof, a Participant may elect to change his or her distribution election with respect to his or her Current Cash Accounts, Current Dividend

 

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Equivalent Cash Accounts, Current Dividend Equivalent Stock Accounts and Current Stock Unit Accounts from among the optional times and forms of distribution set forth in Section 5.5(a) by filing a new election with the Committee on or after January 1, 2008 and on or before December 31, 2008.  Any such election change shall apply only to amounts that would not otherwise be payable in 2008 and shall not cause any amount to be paid in 2008 that would not otherwise be payable in 2008.

 

ARTICLE V
DEFERRAL ACCOUNTS

 

5.1                                Cash Account .

 

(a)                                   Current Cash Account .  Effective January 1, 2005, if an Eligible Director has elected or elects in accordance with Article IV to defer Compensation and/or Special Meeting Fees earned after December 31, 2004 in cash, the Committee shall establish and maintain a Cash Account for the Eligible Director under the Plan, which Account shall be a memorandum account on the books of the Company and shall be such Eligible Director’s “Current Cash Account.”  An Eligible Director’s Current Cash Account shall be credited as follows:

 

(1)                                  As of the last day of each calendar quarter, the Committee shall credit the Eligible Director’s Current Cash Account with an amount equal to the elected percentage of the Compensation deferred by the Eligible Director during such quarter;

 

(2)                                  As of the date payment of any Special Meeting Fees would otherwise be made, the Eligible Director’s Current Cash Account shall be credited with an amount equal to the elected percentage of the Eligible Director’s Special Meeting Fees; and

 

(3)                                  As of the last day of each calendar quarter, the Eligible Director’s Current Cash Account shall be credited with earnings equal to an amount determined by multiplying the balance credited to such Account as of the last day of the preceding quarter by one-fourth of the Interest Rate.

 

(b)                                   Prior Cash Account .  Effective January 1, 2005, the Cash Account (if any) established for an Eligible Director prior to January 1, 2005 shall be that Eligible Director’s “Prior Cash Account,” and no amount of Compensation or Special Meeting Fees earned after December 31, 2004 that such Eligible Director elects to defer under this Plan shall be credited to such Prior Cash Account.  As of the last day of each calendar quarter, the Eligible Director’s Prior Cash Account shall be credited with earnings equal to an amount determined by multiplying the balance credited to such Account as of the last day of the preceding quarter by one-fourth of the Interest Rate.

 

5.2                                Stock Unit Account .

 

(a)                                   Current Stock Unit Account .  Effective January 1, 2005, if an Eligible Director has elected or elects in accordance with Article IV to defer his or her

 

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Compensation and/or Special Meeting Fees earned after December 31, 2004 in Stock Units, the Committee shall establish and maintain a Stock Unit Account for the Eligible Director under the Plan, which Account shall be a memorandum account on the books of the Company and shall be such Eligible Director’s “Current Stock Unit Account.”  An Eligible Director’s Current Stock Account shall be credited as follows:

 

(1)                                  Regular Compensation .  If an Eligible Director has elected or elects to defer his or her Compensation earned after December 31, 2004 in Stock Units, the Committee shall credit on the Award Date to the Current Stock Unit Account of the Eligible Director a number of Units determined by dividing the present value of the Compensation deferred by the Eligible Director by the Average Fair Market Value of a share of Common Stock.  The present value shall be computed assuming the Compensation deferred would have been paid on the first day of the calendar year to which it relates (or, in the case of Compensation deferred under an election under Section 4.1 for the remainder of the calendar year in which the Eligible Director first becomes an Eligible Director,  on the Award Date) at the prevailing rate of Compensation at the time of the election made in accordance with Article IV, discounted to present value using the Discount Rate.

 

(2)                                  Additional Compensation .  If an Eligible Director has elected or elects to defer his or her Compensation and/or Special Meeting Fees earned after December 31, 2004 in Stock Units, the Committee shall, on the March 31 st  following the year in which there is any Additional Compensation with respect to such Eligible Director: (i) in the event such Additional Compensation is a positive number, credit the Eligible Director’s Current Stock Unit Account with a number of Units determined by dividing the portion of the Eligible Director’s Additional Compensation that is deferred by the Eligible Director under this Plan for that year by the Average Fair Market Value of a share of Common Stock, or (ii) in the event such Additional Compensation is a negative number, debit the Eligible Director’s Current Stock Unit Account a number of Units determined by dividing the portion of the Eligible Director’s Additional Compensation subject to such deferral election by the Average Fair Market Value of a share of Common Stock.  In no event, however, shall the Company make any reduction, during or after a particular year, in the level of Compensation and/or Special Meeting Fees for any Eligible Director for that particular year to the extent such reduction would result in the Eligible Director receiving any amount that would be treated as a “substitute for a payment of deferred compensation” within the meaning of Treas. Reg. Section 1.409A-3(f), or that would otherwise violate Section 409A of the Code, and would result in any tax, penalty or interest under Section 409A of the Code.

 

(b)                                   Prior Stock Unit Account .  Effective January 1, 2005, t