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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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March 26, 2010

Dear Fellow Stockholder:

        It is my pleasure to invite you to the 2010 Annual Meeting of Stockholders of Simon Property Group, Inc. This year's meeting will be held on Thursday, May 6, 2010 at 10:00 a.m. (EDT), at our executive offices located at 225 West Washington Street, Indianapolis, Indiana. At the meeting, stockholders will vote on the business items listed in the notice of the meeting, which follows on the next page.

        As we have done recently, we are furnishing proxy materials to many of our stockholders over the Internet. We believe that this e-proxy process expedites stockholders' receipt of proxy materials, lowers our costs and reduces the environmental impact of our annual meeting. On March 26, 2010, we mailed to a majority of our stockholders a Notice containing instructions on how to access our Proxy Statement and 2009 Annual Report to Stockholders and vote online. All other stockholders will receive these materials by mail. The proxy statement contains instructions on how you can (i) receive a paper copy of the proxy statement and annual report, if you only received a Notice by mail, or (ii) elect to receive your proxy statement and annual report over the Internet, if you received them by mail this year.

        Whether or not you plan to attend the meeting, your vote is important and we encourage you to vote promptly.

        You may vote your shares via a toll-free telephone number or over the Internet. If you received a paper copy of the proxy card by mail, you may sign, date and mail the proxy card in the envelope provided. Instructions regarding all three methods of voting are contained in the proxy statement and on the proxy card.

        I look forward to seeing you at the annual meeting.

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Simon Property Group, Inc.
225 West Washington Street
Indianapolis, Indiana 46204

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

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Simon Property Group, Inc.
225 West Washington Street
Indianapolis, Indiana 46204

PROXY STATEMENT

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        This proxy statement and accompanying proxy are being provided to stockholders on or about March 26, 2010 in connection with the solicitation by the Board of Directors of Simon Property Group, Inc. ("Simon," "we," "us," "our" or the "company") of proxies to be voted at the 2010 annual meeting on May 6, 2010.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

Why did some stockholders receive a Notice of Internet Availability of Proxy Materials?

        Certain of our stockholders will receive a Notice of Internet Availability of Proxy Materials, or Notice, which was or will be sent to stockholders on or about March 26, 2010, containing information on the availability of our proxy materials on the Internet. Stockholders who received the Notice by mail will not receive a printed copy of our proxy materials unless requested in the manner described in the Notice. The Notice explains how to access and review this proxy statement and our 2009 Annual Report to Stockholders, and how you may vote by proxy.

What is a proxy?

        A proxy is your legal designation of another person to vote on your behalf. By completing and returning the enclosed proxy card, you are giving the persons named in the proxy card, Herbert Simon and David Simon, the authority to vote your shares in the manner you indicate on your proxy card.

Who is qualified to vote?

        You are qualified to vote on all matters presented to the stockholders at the meeting if you own shares of our common stock, par value $.0001 per share, or Class B common stock, par value $.0001 per share, at the close of business on March 8, 2010.

        All of the Class B common shares are held by a voting trust as to which Herbert Simon and David Simon are the voting trustees. The Board is not soliciting proxies in respect of the Class B common shares.

How many shares may vote at the meeting?

        On March 8, 2010, there were outstanding 285,897,960 shares of common stock and 8,000 shares of Class B common stock. As a result, a total of 285,905,960 shares are entitled to vote (which we refer to in this proxy statement as the "voting shares") on all matters presented to stockholders at the meeting.

How many shares must be present to hold the meeting?

        The presence at the meeting in person or by proxy of holders of shares representing a majority of all the votes entitled to be cast at the meeting, or 142,952,981 voting shares, will constitute a quorum for the transaction of business.

What is the difference between a "stockholder of record" and a "street name" holder?

        These terms describe how your shares are held. If your shares are registered directly in your name with BNY Mellon Shareowner Services, our transfer agent, you are a "stockholder of record." If your shares are held in the name of a brokerage, bank, trust or other nominee as a custodian, you are a "street name" holder.

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How do I vote my shares?

        If you are a "stockholder of record," you have several choices. You can vote your shares by proxy:

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By mailing your proxy card;



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Over the telephone; or



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Via the Internet.

        Please refer to the specific instructions set forth on the Notice or printed proxy materials. For security reasons, our electronic voting system has been designed to authenticate your identity as a stockholder.

        If you hold your shares in "street name," your broker/bank/trustee/nominee will provide you with materials and instructions for voting your shares.

Can I vote my shares in person at the meeting?

        If you are a "stockholder of record," you may vote your shares in person at the meeting. If you hold your shares in "street name," you must obtain a proxy from your broker, bank, trustee or nominee, giving you the right to vote the shares at the meeting.

What do I need to do to attend the meeting in person?

        Proof of stock ownership and some form of government-issued photo identification (such as a valid driver's license or passport) will be required for admission to the meeting. Only stockholders who owned Simon Property Group, Inc. common stock as of the close of business on March 8, 2010 are entitled to attend the meeting.

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If your shares are registered in your name and you owned Simon Property Group, Inc. common stock as of the close of business on March 8, 2010, you only need to provide some form of government issued photo identification for admission.



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If your shares are held in a bank or brokerage account, contact your bank or broker to obtain a written legal proxy in order to vote your shares at the meeting. If you do not obtain a legal proxy from your bank or broker, you will not be entitled to vote your shares, but you can still attend the meeting if you bring a recent bank or brokerage statement showing that you owned shares of common stock on March 8, 2010.

What are my choices when voting?

        Proposal 1—You may cast your vote FOR ALL of the nominees for election as directors or vote AGAINST one or more of the nominees.

        Proposals 2—You may cast your vote FOR or AGAINST the proposal, or you may elect to abstain from voting your shares.

What are the Board's recommendations on how I should vote my shares?

        The Board recommends that you vote your shares as follows:

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Proposal 1: FOR ALL of the nominees for election as directors.



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Proposal 2: FOR the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm (independent auditors) for the year ending December 31, 2010.

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How would my shares be voted if I do not specify how they should be voted?

        If you sign and return a proxy card without indicating how you want your shares to be voted, the persons named as proxies will vote your shares as follows:

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Proposal 1: FOR ALL of the nominees for election as directors.



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Proposal 2: FOR the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm (independent auditors) for the year ending December 31, 2010.

What are broker non-votes?

        A broker non-vote occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary authority to vote for that particular proposal and has not received instructions from the beneficial owner as to how to vote its shares. Due to a recent regulatory change, Proposal 1, the election of directors, now falls into this category. If you do not provide your broker with voting instructions, your shares will not be voted on the election of directors.

What vote is required to approve each proposal?

        The voting trustees who vote the Class B common stock have advised us that they intend to vote all shares of the Class B common stock FOR the election of all nominees and proposal 2. Accordingly, to approve each of the proposals, the following votes are required from the holders of voting shares.

        All shares entitled to vote at the meeting are entitled to one vote per share.

Why did I receive more than one Notice or proxy card?

        You will receive multiple Notices or cards if you hold your shares in different ways (e.g., joint tenancy, trusts, custodial accounts) or in multiple accounts. If your shares are held by a broker (i.e., in "street name"), you will receive your proxy card or other voting information from your broker, and you will return your proxy card(s) to your broker. You should vote on and sign each proxy card you receive.

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Can I change my vote after I have mailed in my proxy card?

        You may revoke your proxy by doing one of the following:

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By sending a written notice of revocation to our Secretary at 225 West Washington Street, Indianapolis, Indiana 46204 that is received prior to the meeting, stating that you revoke your proxy;



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By signing a later-dated proxy card and submitting it so that it is received prior to the meeting in accordance with the instructions included in the proxy card(s); or



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By attending the meeting and voting your shares in person.

What happens if additional matters are presented at the annual meeting?

        We know of no other matters other than the items of business described in this proxy statement that can be considered at the meeting. If other matters requiring a vote do arise, the persons named as proxies will have the discretion to vote on those matters for you.

Who will count the votes?

        Broadridge Financial Solutions, Inc. will count the votes and will facilitate the engagement of an independent inspector of election. The inspector will be present at the meeting.

Will the meeting be accessible to disabled persons?

        Our executive offices are accessible to disabled persons. Please call us at least five days in advance at 317-685-7330 if you require any special accommodations.

How can I review the list of stockholders entitled to vote at the meeting?

        A list of stockholders entitled to vote at the meeting will be available at the meeting and for ten days prior to the meeting, between the hours of 8:45 a.m. and 4:30 p.m., at our offices at 225 West Washington Street, Indianapolis, Indiana 46204. If you would like to view the stockholder list, please contact our Secretary to schedule an appointment.

Who pays the cost of this proxy solicitation?

        We will pay the cost of preparing, assembling and mailing the proxy materials. We will also request banks, brokers and other holders of record to send the proxy materials to, and obtain proxies from, beneficial owners and will reimburse them for their reasonable expenses in doing so. In addition, we have hired MacKenzie Partners, Inc. to assist in the solicitation of proxies. We will pay MacKenzie Partners a fee of $10,000 for its services.

Is this proxy statement the only way that proxies are being solicited?

        Certain employees or other representatives of the company may also solicit proxies by telephone, facsimile, e-mail or personal contact. They will not be specifically compensated for doing so.

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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 8, 2010. Unless otherwise indicated in the footnotes, shares are owned directly and the indicated person has sole voting and investment power.

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(1)

Voting shares include shares of common stock and Class B common stock. Upon the occurrence of certain events, Class B common stock converts automatically into common shares (on a one-to-one basis). The amounts in the table also include common shares that may be issued upon the exercise of stock options that are exercisable within 60 days as well as the exchange of units of limited partnership interest, or units, of our majority-owned subsidiary, Simon Property Group, L.P., or the Operating Partnership, that are exchangeable either for common shares (on a one-to-one basis) or for cash.

(2)

Assumes the exercise of stock options and exchange of units by the subject holder only.

(3)

This group consists of Melvin Simon & Associates, Inc. ("MSA"), wholly owned subsidiaries of MSA, the estate of Melvin Simon, Herbert Simon, David Simon, MH Holdings, Inc. and related trusts for the benefit of the preceding. Herbert Simon is one of our directors and David Simon is an executive officer and director. MSA is owned 69.06% by the estate of Melvin Simon and 30.94% by a trust for the benefit of Herbert Simon. MH Holdings, Inc. is owned 50% by the estate of Melvin Simon and 50% by a trust for the benefit of Herbert Simon. 3,192,000 common shares and 8,000 shares of Class B common stock owned by one or more members of the group are held by voting trusts as to which Herbert Simon and David Simon are the voting trustees.

(4)

Includes 4,850,651 common shares currently outstanding; 31,513,363 common shares issuable upon exchange of units; 250,000 common shares issuable upon exercise of stock options that are exercisable within 60 days; and 8,000 shares of Class B common stock. Does not include 4,172,426 common shares issuable upon exchange of units held by members of the Simon Family other than the estate of Melvin Simon, Herbert Simon and David Simon or units held by trusts for the benefit of members of the Simon family over which MSA, Herbert Simon and David Simon do not have voting or dispositive power.

(5)

Based solely on information provided by The Vanguard Group, Inc. in a Schedule 13G filed with the Securities and Exchange Commission on February 3, 2010. The Vanguard Group, Inc. has the sole power to vote 447,163 shares of common stock and dispose of 23,817,526 shares. Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 399,275 shares of common stock and directs the voting of those shares.

(6)

Based solely on information provided by BlackRock, Inc. in a Schedule 13G filed with the Securities and Exchange Commission on January 29, 2010.

(7)

Based solely on information provided by Cohen & Steers, Inc., Cohen & Steers Capital Management, Inc. and Cohen & Steers Europe S.A. in a Schedule 13G filed with the Securities and Exchange Commission on February 12, 2010. The Cohen & Steers entities have the sole power to vote 13,145,128 shares of common stock and to dispose of 15,805,408 shares.

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CORPORATE GOVERNANCE MATTERS

Policies on Corporate Governance

        Our Board believes that good corporate governance is important to ensure that the company is managed for the long-term benefit of its stockholders. Each year, the Board or one of its committees reviews our Governance Principles, the written charters for each of its standing committees of the Board and our Code of Business Conduct and Ethics and amends them as appropriate to reflect new policies or practices. The current version of each of these documents is available on our Internet website, www.simon.com, in the Investors/Corporate Governance section, and will be provided 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 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.

Board Leadership Structure

        Until 2007, leadership of the Board of Directors was the responsibility of two executive Co-Chairmen of the Board—Melvin Simon and Herbert Simon. During that time, our Chief Executive Officer—David Simon—was responsible for directing our operations, employees and management. In 2007, the Board of Directors combined these two positions and David Simon has continued to hold the offices of Chairman and Chief Executive Officer since then. The Board of Directors believes that it is most efficient and effective for a single individual to fulfill these two leadership roles at this time. Combining the Chairman and Chief Executive Officer roles facilitates clear leadership responsibility and accountability, effective decision-making, and a cohesive corporate strategy.

        Because David Simon is our employee, the Lead Independent Director presides over executive sessions of the independent directors and plays an active role in setting Board agendas and facilitating interactions between the independent directors and the senior management team. The Board of Directors will re-evaluate its leadership structure on an ongoing basis and may change it as circumstances warrant.

Board Oversight of Risk Management

        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 mitigation strategies are validated with management and presented to the Audit Committee on an ongoing basis.

        Examples of major risks we have identified are our ability to access capital, changes in economic conditions and consumer spending, the risks from competition from other shopping venues, including internet sales, tenant bankruptcies and our ability to renew leases and otherwise lease space.

        The Audit Committee has standing agenda items for several of its meetings each year relating to its responsibilities in this process and reports on these items to the full Board. Our Vice President of Audit Services (who is also responsible for our internal audit function) 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 major financial risk exposures with our Chief Executive Officer and Chief Financial Officer and receives reports from other members of senior management with regard to other identified risks.

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        The recent activities of the Compensation Committee with respect to risks relating to our compensation policies and procedures are discussed on pages 38 to 39 of this proxy statement.

        Additional review or reporting on risks is conducted 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 on our Internet website, www.simon.com, as described above. 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.

        Herbert Simon, David Simon and Mr. Sokolov are our employees and, accordingly, are not considered independent directors.

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 resignation and recommend to the Board whether to accept or reject it. Both the 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 (a situation 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. 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 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, must comply with the advance notice requirements 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

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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 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 areas that are relevant to our business activities.

Director Qualifications

        The Board of Directors believes that its members should exhibit high standards of independent judgment and integrity, have a strong record of achievement, have an understanding of our business and the competitive environment in which we operate, and have diverse experiences and backgrounds. Directors should be committed to enhancing stockholder value on a long-term basis and have sufficient time to carry out their duties.

        In addition, the Board of Directors has determined that the Board as a whole should strive to have the right diversity, mix of characteristics and skills so it can perform its oversight responsibilities on an optimal basis. The Board believes that directors with skills, such as the following, can assist in meeting this goal:

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leadership of large, complex organizations;



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accounting and finance;



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capital markets;



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retail marketing;



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strategic planning;



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relevant industries, especially real estate acquisitions, development and operations;



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banking;



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legal and corporate governance;



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government and governmental relationships; and



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international business.

        Additional biographic and other information concerning the directors can be found at pages 17 to 20. Set forth below are key experiences, qualifications, attributes and skills that led the Governance and Nominating Committee to the conclusion that each such person is currently qualified to serve as a director:

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Melvyn E. Bergstein is the co-founder of a publicly-held consulting company and has served as its chief executive officer or the chief executive officer of its predecessors for many years where he has gained experience in finance, investor relations, compensation and strategic planning. He was director of one of the country's leading consulting firms. He has executed major consulting engagements with other companies operating in a wide range of businesses. He has served on the board of directors and as chairman of the oversight committee of a publicly-held company. He serves on our Audit Committee and Compensation Committee which he has chaired for a number of years. The Board of Directors has determined that he is an "audit committee financial expert."



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Linda Walker Bynoe has served as the chief executive officer of a project management, consulting and financial advisory services company for fifteen years. Ms. Bynoe has diverse consulting and investment experience and expertise in accounting, financial reporting and corporate governance, serving on audit, compensation and risk committees of other public companies. She has many years of experience as a

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director of financial services and other complex corporations, including real estate investment trusts ("REITs"), which make her well-suited to serve on our Board. Ms. Bynoe received her M.B.A. from Harvard University. She has served as a director of several other publicly-held companies and brings those experiences to her service on our Compensation Committee and Governance and Nominating Committee.

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Larry C. Glasscock served as the chief executive officer of the nation's leading health benefits company for many years. He is experienced in leading a large public company, developing and implementing turnaround and growth strategies, and developing talent and participating in successful leadership transitions. In addition, Mr. Glasscock also worked in financial services for 20 years. He also serves, and has served, for over 15 years as a director of other public companies. Mr. Glasscock has experience serving on audit committees, including as chairman, and compensation committees of publicly traded companies.



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Karen N. Horn, Ph.D. has more than 30 years of experience in international finance and management, including her service as president of the Federal Reserve Bank of Cleveland and as a senior executive of a number of financial institutions. These experiences provide her with expertise in financial management and economic policy and an in-depth knowledge of the capital markets in which we actively participate. Dr. Horn serves as a director of several other publicly-held companies. She is a member of our Compensation Committee and Governance and Nominating Committee which she chairs.



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Allan Hubbard has more than 30 years experience as an entrepreneur having founded and led a company that acquires and grows companies in North America and Europe. He served on the board of directors of a major, publicly-held healthcare company for a number of years during which time he served on that board's audit, compensation and governance committees. Mr. Hubbard also has extensive government and economic policy experience having held key economic positions in the administrations of two U.S. Presidents. He is an honors graduate of Harvard Business School with an emphasis in finance and an honors graduate of Harvard Law School. Mr. Hubbard serves on our Compensation Committee and Audit Committee and has been designated as an "audit committee financial expert."



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Reuben S. Leibowitz has years of experience leading a private equity firm's real estate activities and developing long-term corporate strategies. Mr. Leibowitz practiced 15 years as a public accountant and a number of years specializing in tax issues. He has an in-depth understanding of our Premium Outlets® platform having served as a director of Chelsea Property Group, the publicly-held company we acquired in 2004. He serves on our Compensation Committee and Audit Committee and has been designated as an "audit committee financial expert."



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Daniel C. Smith, Ph.D. has spent decades teaching and conducting research, in the areas of financial management, compensation, human resource development, strategic brand management, marketing strategy and corporate governance. He serves as Dean of one of the country's top-rated business schools where he is responsible for financial oversight and long term financial planning, hiring and retention policies, compensation policies, public relations and the long term strategy of the school. He serves on our Governance and Nominating Committee and Audit Committee and has been designated an "audit committee financial expert."



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J. Albert Smith, Jr. has served as president and managing director of the Midwest operations of a major financial institution for a number of years during which time he has been involved in real estate lending activities. Through these experiences he has developed expertise in financial management and credit markets. He has served as our Lead Independent Director, is a member of our Governance and Nominating Committee and Audit Committee which he chairs. He has been designated an "audit committee financial expert."



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Herbert Simon is our co-founder and Chairman Emeritus. The retail real estate business that he and his brother, Melvin Simon, started decades ago established the foundation for all of our current operations

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and record of achievement. Mr. Simon's leadership of a preeminent professional basketball franchise has led to his service on the board of directors of the National Basketball Association.

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David Simon has served as our Chief Executive Officer or the chief executive officer of our predecessor for 15 years. During that time he has provided leadership in the development and execution of our successful growth strategy, overseeing numerous strategic acquisitions that have been consolidated into what is recognized as the nation's leading retail real estate company. David gained experience in mergers and acquisitions while working at major Wall Street firms before joining his father and uncle. David serves on the National Association of Real Estate Investment Trusts' board of governors which gives him an industry-wide perspective that extends beyond our own operations.



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Richard S. Sokolov has served as our Chief Operations Officer since 1996 immediately following our acquisition of DeBartolo Realty Corporation. Mr. Sokolov had served as chief executive officer and general counsel of DeBartolo Realty Corporation and its predecessor operations for a number of years. Mr. Sokolov serves as a trustee and a member of the Executive Committee of the International Council of Shopping Centers, the leading industry organization for retail real estate companies.

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, 2009 all applicable Section 16(a) filing requirements were met except that Mr. Rulli, one of the named executive officers, did not file a timely report for four gifts he made to members of his family during 2007 and 2008 which involved a total of 1,022 shares.

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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, which is available in the Investors/Corporate Governance section of our Internet website at www.simon.com, the Audit Committee must review and approve all related person transactions 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 Investors/Corporate Governance section of our Internet website at www.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 general counsel is charged with reviewing any conflict of interest involving any other employee.

Transactions with the Simons

        We are a party to noncompetition agreements with Herbert Simon and David Simon, collectively, the Simons. Pursuant to such agreements and except as set forth below, Herbert Simon is prohibited from engaging in the shopping center business in North America other than through the company or as a passive investor until the date that he is no longer one of our directors or officers, and David Simon is prohibited from engaging in the shopping center business in North America other than through the company and, with certain exceptions, for two years after he resigns or is terminated for cause. These restrictions will not prohibit Herbert Simon or David Simon from owning an interest in four (now two) shopping centers owned by the Simons that were not contributed to the Operating Partnership at the time of our predecessor's initial public offering in 1993. It is anticipated that such commitments will not, in the aggregate, involve a material amount of time, but no assurance can be given in this regard. In addition, Herbert Simon may pursue other investment activities in which he is currently engaged.

        We manage the shopping centers referred to above pursuant to management agreements that provide for a management fee and reimbursement of our direct and indirect costs. In 2009, we received $2,431,016 in fees and reimbursements for managing these centers. Seventy-nine percent (79%) of these fees are paid by a shopping center in which the Simons have a 50% interest. Although some of the agreements were not negotiated on an arms-length basis, they have been reviewed and approved by the Audit Committee and management believes that their terms are fair to us.

        We provide MSA with office space and legal, human resource administration, property specific financing and other support services in exchange for MSA's payment to us for the cost of those services. In 2009, MSA paid us $1,250,000 as MSA's share of the cost of these services. We also reimburse entities owned by MSA and David Simon, respectively, for our business use of the aircraft owned and operated by such entities. Our reimbursement for aircraft use is based upon a below market hourly cost of operating each of the aircraft in question and the verified number of hours of our use, plus reimbursement for certain out-of-pocket expenses. For our business use of aircraft in 2009, we reimbursed MSA $500,000 and David Simon's company $306,823. In addition, we reimbursed MSA $79,550 for maintenance, pilot and other support services that MSA provided with respect to our use of David Simon's company's aircraft. These payments and reimbursements were reviewed and approved by the Audit Committee.

        Our Charter requires that at least a majority of our directors be neither our employees nor members or affiliates of members of the Simon family (including Herbert Simon, David Simon, members of the immediate

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family of any of the late Melvin Simon or Herbert Simon or David Simon, other lineal descendants of any of the foregoing, estates of any of the foregoing, trusts established for the benefit of any of the foregoing or entities controlled by any of the foregoing). Our Charter further requires that transactions involving us in our capacity as general partner of the Operating Partnership, in which any member or affiliate of any member of the Simon family 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".

Other Transactions

        Some of the limited partners of the Operating Partnership guarantee a portion of the mortgage debt obligations on certain properties through foreclosure guarantees. In each case, the loans (which are without recourse against us and our affiliates) were made by unrelated third party institutional lenders and the guarantees are for the benefit of each lender. In the event of foreclosure of the mortgaged property, the proceeds from the sale of the property are first applied against the amount of the guarantee and also reduce the amount payable under the guarantee. To the extent the sale proceeds from the disposal of the property do not cover the amount of the guarantee, then the limited partner is liable to pay the difference between the sale proceeds and the amount of the guarantee so that the entire amount guaranteed to the lender is satisfied. In addition, some of the limited partners have executed capital contribution obligation agreements which guarantee a portion of our third-party unsecured non-recourse debt obligations. In the event these loans are called, the proceeds realized from the lenders' exercise of their remedies would be applied against and reduce the amount of the contribution obligation. To the extent the proceeds from the exercise of lenders' remedies are less than the amount of the contribution obligation, the limited partner would be obligated to make a capital contribution in an amount equal to the shortfall in the proceeds. As of December 31, 2009, the following directors, executive officers and beneficial owners of more than 5% of any class of our voting securities guaranteed the indicated amounts: Edward J. DeBartolo, Jr., et al.—$110,039,163; and MSA, wholly owned subsidiaries of MSA, the estate of Melvin Simon, Herbert Simon, David Simon and other members of the Simon family—$63,775,000.

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MEETINGS AND COMMITTEES OF THE BOARD

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, except for Daniel C. Smith, attended the 2009 annual meeting. During 2009, the Board of Directors met six times. Much of the Board's oversight responsibilities are conducted through its four standing committees. Those committees consist of an Audit Committee, a Compensation Committee, a Governance and Nominating Committee and an Executive Committee. During 2009, all directors, except for Pieter S. van den Berg, participated in 75% or more of the aggregate number of meetings of the Board and the committees on which they served. Mr. van den Berg retired from the Board in October 2009.

Executive Sessions of Independent Directors

        The independent directors meet in executive session without management present following each regularly scheduled Board meeting. In addition, the Board has designated J. Albert Smith, Jr. as Lead Independent Director. The Lead Independent Director presides over the executive sessions. He also helps to set agendas for Board meetings and serves as a liaison between the independent directors and the senior management team.

Committee Membership

        The table below provides current membership information for each of the standing committees of the Board.

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The Audit Committee

        The Audit Committee assists the Board in monitoring the integrity of our financial statements, the qualifications, independence and performance of our independent registered public accounting firm, the performance of our internal audit function and our compliance with legal and regulatory requirements. The Audit Committee has sole authority to appoint, subject to stockholder ratification, or replace our independent registered public accounting firm and pre-approves the auditing services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms thereof. The Audit Committee has authority to retain legal, accounting or other advisors. The Audit Committee reviews and discusses with management and our independent registered public accounting firm our annual audited financial statements, our quarterly earnings releases and financial statements, significant financial reporting issues and judgments made in connection with the preparation of our financial statements and any major issues regarding the adequacy of our internal controls. It also issues the report on its activities which appears on pages 23 to 25 of this proxy statement. The charter of the Audit Committee requires that each member meet the independence and experience requirements of the New York Stock Exchange, the Exchange Act and the rules and regulations of the Securities and Exchange Commission.

        The Board of Directors has determined that each of the current members of the Audit Committee qualifies as an "audit committee financial expert" as defined by rules of the Securities and Exchange Commission.

The Compensation Committee

        The Compensation Committee (1) sets remuneration levels for our executive officers, (2) reviews significant employee benefit programs, (3) establishes and administers our executive compensation programs and our stock incentive plan, (4) discusses with management the Compensation Discussion and Analysis, or CD&A, and, if appropriate, recommends its inclusion in our annual report on Form 10-K and proxy statement and (5) issues the report on its activities which appears on page 27 of this proxy statement. The CD&A begins on page 28 of this proxy statement. The charter of the Compensation Committee requires that each member meet the independence requirements of the New York Stock Exchange.

        The Compensation Committee has authority to retain the advice and assistance of compensation consultants and legal, accounting or other advisors. The Compensation Committee has retained Frederic W. Cook & Co., Inc., or Cook, as its independent compensation consultant to assist in the design of our executive compensation programs and to provide the Compensation Committee with executive compensation data from other companies of comparable size. In addition, the Compensation Committee reviews and takes into consideration the recommendations of management when making determinations on the compensation of all executive officers other than our Chairman and Chief Executive Officer. As discussed in the CD&A under "Role of Management in Compensation Decisions", these recommendations are initially developed by our human resources department and are then reviewed by our Chairman and Chief Executive Officer, who may make adjustments based upon his subjective assessment of the executive's performance.

Compensation Committee Interlocks and Insider Participation

        No member of the Compensation Committee during 2009 was an officer, employee or former officer of us or any of our subsidiaries or had any relationship requiring disclosure in this proxy statement pursuant to Securities and Exchange Commission regulations. None of our executive officers served as a member of a compensation committee or a director of another entity under the circumstances requiring disclosure in this proxy statement pursuant to Securities and Exchange Commission regulations.

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The Governance and Nominating Committee

        The Governance and Nominating Committee nominates persons to serve as directors and, in accordance with our Governance Principles, proscribes appropriate qualifications for Board members. The committee develops and recommends to the Board the Governance Principles applicable to the company and the Board, leads the Board in its annual evaluation of the Board's performance, oversees the assessment of the independence of each director and makes recommendations regarding compensation for non-employee directors. Members of the Governance and Nominating Committee are responsible for screening director candidates, but may solicit advice from our Chief Executive Officer and other members of the Board. The Governance and Nominating Committee has the authority to retain legal, accounting or other advisors, and has sole authority to approve the fees and other terms and conditions associated with retaining any such external advisors. The charter of the Governance and Nominating Committee requires that each member meet the independence requirements of the New York Stock Exchange.

        The nominees for election as directors by the holders of voting shares include Mr. Glasscock, who was recently appointed to the Board. His appointment was recommended by a member of the Governance and Nominating Committee. We did not pay any fees to third parties to identify or evaluate or assist in identifying or evaluating Mr. Glasscock or any other potential nominees.

The Executive Committee

        The Executive Committee can exercise all of the authority of the full Board of Directors except for those matters which Delaware law or our organizational documents require the full Board of Directors to act. The Executive Committee can approve any acquisition, disposition or investment in real estate in which our proportionate share of the transaction is less than $100 million. If our share is greater than $100 million, but less than $250 million, the Executive Committee can only approve the transaction with the consent of the Lead Independent Director. In addition, the Executive Committee can approve any financing or refinancing transaction in which our proportionate share is less than $500 million. Actions taken by the Executive Committee are reported to the full Board of Directors at its next meeting.

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PROPOSAL 1—ELECTION OF DIRECTORS

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        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 eight persons listed below as "Nominees for Director to be Elected by Holders of Voting Shares." All of the nominees are current directors. The Class B holders have nominated the three persons listed below as "Nominees for Director to be Elected by the Holders of Class B Common Stock." All of these three nominees are currently Class B directors.

        Our employment agreement with Mr. Sokolov contemplates that he will be elected to the Board of Directors and holders of Class B common shares have agreed to elect Mr. Sokolov to the Board.

        We expect each nominee for election as a director to 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 are set forth on the following pages. Additional information concerning the qualifications of the current directors appears on pages 8 to 10 of this proxy statement.

Security Ownership of Directors and Officers

        As of March 8, 2010, the nominees and our named executive officers:

•

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



•

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 Board.

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

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*

Less than one percent

(1)

All listed directorships are held in companies with securities registered under Section 12 of the Exchange Act or in companies registered as investment companies under the Investment Company Act of 1940, as amended, excluding the U.S.-Russia Foundation (Ms. Horn).

(2)

Includes the following common shares that may be purchased pursuant to stock options that are exercisable within 60 days: David Simon—250,000; Richard S. Sokolov—50,000; James M. Barkley—5,000; and all directors and executive officers as a group—305,000.

(3)

Includes the following common shares that may be issued upon exchange of units held by the following persons on March 8, 2010: the estate of Melvin Simon, Herbert Simon, David Simon, MSA and affiliates of MSA—31,513,363; Richard S. Sokolov—63,706; and all directors and executive officers as a group—31,577,069. Units are exchangeable either for common shares (on a one-for-one basis) or for cash.

(4)

Includes the following restricted shares which are subject to vesting requirements: Melvyn E. Bergstein—1,889; Linda Walker Bynoe—1,732; Karen N. Horn, Ph.D.—1,889; Allan Hubbard—1,625; Reuben S. Leibowitz—1,732; Daniel C. Smith, Ph.D.—1,625; J. Albert Smith, Jr.—2,204; David Simon—26,841; Richard S. Sokolov—20,866; Stephen E. Sterrett—13,945; James M. Barkley—14,050; John Rulli—13,139; and all directors and executive officers as a group—120,249. Includes shares acquired through the reinvestment of dividends on common shares held in the Director Deferred Compensation Plan.

(5)

At March 8, 2010, there were 285,897,960 shares of common stock and 8,000 shares of Class B common stock outstanding. Upon the occurrence of certain events, shares of Class B common stock convert automatically into common shares (on a one-for-one basis). These percentages assume the exercise of stock options and the exchange of units for common shares only by the applicable beneficial owner.

(6)

At March 8, 2010, there were 343,563,896 outstanding units of which we owned, directly or indirectly, 285,905,960 or 83.2%. These percentages assume that no units are exchanged for common shares.

(7)

Does not include 1,564 shares of common stock held by charitable foundations of which Mr. Leibowitz is an officer or trustee. Mr. Leibowitz disclaims beneficial ownership of these shares.

(8)

Includes common shares, exercisable stock options and units owned by the estate of Melvin Simon, Herbert Simon and David Simon, MSA, affiliates of MSA and MH Holdings, Inc. See "PRINCIPAL STOCKHOLDERS."

(9)

Includes units beneficially owned by the estate of Melvin Simon, Herbert Simon, David Simon, MSA and affiliates of MSA.

(10)

Does not include shares and units beneficially owned by members of the Simon family other than the estate of Melvin Simon, Herbert Simon and David Simon or units held by trusts for the benefit of members of the Simon family over which the estate of Melvin Simon, Herbert Simon, David Simon and MSA do not have voting or dispositive power (4,172,426 units).

        THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR ALL OF THE NOMINEES NAMED ABOVE.

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PROPOSAL 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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        The Audit Committee has selected Ernst & Young LLP, or E&Y, as our independent registered public accounting firm for 2010, subject to the approval of our stockholders.

        The Report of the Audit Committee contains information on the amount of fees paid to E&Y during 2009 and 2008. We expect that representatives of E&Y will be present at the meeting and will be available to respond to appropriate questions. They will also have an opportunity to make a statement if they desire to do so.

        If the holders of a majority of voting shares voting on this matter do not ratify the selection, the Audit Committee will reconsider its choice taking into consideration the views of the stockholders and may, but will not be required to, appoint a different independent registered public accounting firm.

        THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL 2.

REPORT OF THE AUDIT COMMITTEE

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        The Audit Committee is responsible for monitoring the integrity of the company's consolidated financial statements, the qualifications, performance and independence of the company's independent registered public accounting firm, the performance of the company's internal auditor and the company's compliance with legal and regulatory requirements. We have the sole authority to appoint or replace the company's independent registered public accounting firm. The committee operates under a written charter adopted by the Board. The committee currently has five members. The Board has determined that each committee member is independent under the standards of director independence established under our Governance Principles, New York Stock Exchange listing standards and applicable securities laws.

        Management is responsible for the financial reporting process, including the system of internal control, for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States and for management's report on internal control over financial reporting. The company's independent registered public accounting firm is responsible for auditing the consolidated financial statements and expressing an opinion on the financial statements and the effectiveness of internal control over financial reporting. Our responsibility is to oversee and review the financial reporting process and to review and discuss management's report on internal control over financial reporting. We are not, however, professionally engaged in the practice of accounting or auditing and do not provide any expert or other special assurance as to such financial statements concerning compliance with laws, regulations or accounting principles generally accepted in the United States or as to the independence of the independent registered public accounting firm. We rely, without independent verification, on the information provided to us and on the representations made by management and the independent registered public accounting firm.

        We held nine meetings during 2009. The meetings were designed, among other things, to facilitate and encourage communication among the committee, management, the company's internal auditor and the independent registered public accounting firm, E&Y.

        We discussed with the company's internal auditor and E&Y the overall scope and plans for their respective audits. We met with the internal auditor and E&Y, with and without management present, to discuss the results of their examinations and their evaluations of the company's internal control. We reviewed and discussed the company's compliance with Section 404 of the Sarbanes-Oxley Act of 2002, including consideration of the

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Public Company Accounting Oversight Board's (PCAOB) Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting That is Integrated With an Audit of Financial Statements.

        We discussed with management the company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the company's risk assessment and risk management processes.

        We reviewed and discussed the audited consolidated financial statements for the year ended December 31, 2009 with management, the internal auditor and E&Y. We reviewed E&Y's report on our financial statements which indicated that the financial statements present fairly, in all material respects, our financial position and results of operations and cash flows in conformity with accounting principles generally accepted in the United States. We reviewed and discussed with management, the internal auditor and E&Y, management's report on the effectiveness of internal control over financial reporting and E&Y's report on internal control over financial reporting. We also discussed with management, the internal auditor and E&Y the process used to support certifications by the company's Chief Executive Officer and Chief Financial Officer that are required by the Securities and Exchange Commission and the Sarbanes-Oxley Act of 2002 to accompany the company's periodic filings with the Securities and Exchange Commission and the processes used to support management's report on internal control over financial reporting.

        We also discussed with E&Y matters required to be discussed by their professional standards, including, among other things, matters related to the conduct of the audit of the company's consolidated financial statements and the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

        We also received the written disclosures and the letter from E&Y required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with us concerning independence and we discussed with E&Y the independence of that firm.

        When considering E&Y's independence, we considered if services they provided to the company beyond those rendered in connection with their audit of the company's consolidated financial statements and the effectiveness of internal control over financial reporting and reviews of the company's quarterly unaudited consolidated financial statements were compatible with maintaining their independence. We concluded that the provision of such services by E&Y has not jeopardized E&Y's independence.

        Based on our review and these meetings, discussions and reports, and subject to the limitations on our role and responsibilities referred to above and in the Audit Committee Charter, we recommended to the Board that the company's audited consolidated financial statements for the year ended December 31, 2009 be included in the company's annual report on Form 10-K. The Committee has also selected E&Y as the company's independent registered public accounting firm for the year ended December 31, 2010 and will present the selection to the stockholders for ratification at the meeting.

        We approve all audit and permissible non-audit services to be provided to the company by E&Y prior to commencement of services. We have delegated to the Chairman of the Audit Committee the authority to approve specific services up to specified individual and aggregate fee amounts. These approval decisions are presented to the full Audit Committee at the next scheduled meeting after such approvals are made.

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        The company has incurred fees as shown below for services from E&Y. E&Y has advised us that it has billed or will bill the company the below indicated amounts for the following categories of services for the years ended December 31, 2009 and 2008, respectively:

The Audit Committee:

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

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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, 2009.

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(1)

Consists of the 1998 plan.

(2)

Includes 76,049 shares covered by awards assumed in connection with our acquisition of Chelsea Property Group in 2004. The weighted-average exercise price of such awards as of December 31, 2009 was $48.08.

(3)

The 1998 plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock and performance units. The original number of shares available for awards under the 1998 plan was 11,300,000. As of March 8, 2010, there are 3,465,873 shares available under the 1998 plan.

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COMPENSATION COMMITTEE REPORT

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        The Compensation Committee consists of the five directors named below, each of whom meets the independence standards of the company's Governance Principles, the New York Stock Exchange listing standards and applicable securities laws. The committee has overall responsibility for:

•

determining the compensation of the executive officers, including setting and determining achievement of established performance goals;



•

designing, with the active assistance of management and human resource experts and the committee's consultant, the company's executive compensation program;



•

administering the company's stock-based compensation plans and programs;



•

recommending any new elements of executive compensation or programs for consideration to the full Board of Directors; and



•

discussing the Compensation Discussion and Analysis required by Securities and Exchange Commission regulations with management and, if appropriate, recommending its inclusion in the company's annual report on Form 10-K and proxy statement.

        The committee has the authority to engage an independent compensation consultant or other advisors and has used Frederic W. Cook & Co., Inc., or Cook, in that capacity. Cook does no work for management unless requested by the Chairman of the Compensation Committee, receives no compensation from the company other than for its work in advising the committee, and maintains no other economic relationships with the company.

        The committee held eight meetings during 2009. The meetings were designed, among other things, to facilitate and encourage free and frank discussion between committee members and the consultant as well as extensive communication among committee members, executive management, and other company personnel involved in executive compensation matters. Also, during 2009, the Board of Directors appointed Mr. Bergstein, Mr. Leibowitz and J. Albert Smith, Jr. as members of an ad hoc Board committee whose responsibility was to study the subject of CEO compensation with the committee's consultant. The ad hoc committee met five times during 2009 and reported its findings to the full committee.

        The committee reviewed and discussed with management the Compensation Discussion and Analysis that immediately follows this report. Based on its review and these discussions with management, the committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the company's annual report on Form 10-K for the fiscal year ended December 31, 2009, and proxy statement for the 2010 annual meeting of stockholders.

The Compensation Committee:

Melvyn E. Bergstein, Chairman
Linda Walker Bynoe
Karen N. Horn, Ph.D.
Allan Hubbard
Reuben S. Leibowitz

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COMPENSATION DISCUSSION AND ANALYSIS

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Overview

        The following discussion is intended to supplement the more detailed information concerning executive compensation that appears in the rest of this section and in the tables and the accompanying narrative. Our goal is to provide a better understanding of our compensation practices and the decisions that affected the compensation payable for 2009 to our executive officers, including the Chairman and Chief Executive Officer and the other executive officers named in the Summary Compensation Table, or the named executive officers.

        The Compensation Committee of our Board of Directors, referred to in this section as the committee, plays a key role in designing and administering our executive compensation program. All principal elements of compensation paid to our executive officers are subject to approval by the committee. The Compensation Committee Report immediately precedes this discussion.

        The compensation we paid our executives for 2009 was impacted by the unfavorable economic conditions that began in 2008 that carried over into 2009. In early 2009 and at the request of management, the committee made substantial reductions in bonuses paid in 2009 for 2008 and incentive compensation payouts in 2009 for executives as a consequence of the uncertain economic and business conditions that then existed and to support management's focus on reducing costs. Management also instituted similar compensation reductions throughout the organization.

        By the time the committee made its compensation decisions in early 2010, economic and business conditions had improved, capital markets had stabilized, the company had improved its balance sheet and raised significant amounts of capital in a number of transactions and the reductions in operating expenses had their intended effects. In addition, the committee considered the many achievements made by the company during 2009 despite adverse economic conditions and the actions that management successfully executed to strengthen the company's balance sheet and liquidity and improve its portfolio. These favorable developments contributed to the committee's decisions to reward management with bonuses for 2009 and new long-term incentive awards. The committee's compensation decisions are described in more detail below.

Objectives

        We believe we are the leading retail real estate company in the United States. We have the largest market capitalization of any publicly traded real estate company in North America and own the largest portfolio by square footage of U.S. retail real estate. We depend on the knowledge, skills, experience, and talent of our senior executives in the highly-competitive real estate industry, in particular in the areas of real estate acquisitions, development, leasing and property management.

        To maintain and enhance our competitive position, our executive compensation program needs to:

•

maintain the team of executives who have made major contributions to our success and attract other highly qualified executives to strengthen that team;



•

motivate executives to improve their performance by contributing to the achievement of corporate and business unit goals as well as individual goals;



•

incentivize executives to pursue long-term positive performance for the company and its stockholders; and



•

align the interests of executives with those of our stockholders.

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        The committee has designed and administers our executive compensation program with the intention of incenting long-term superior performance. The committee monitors the effectiveness of our program on an ongoing basis. As we continue to grow in size and complexity, it is increasingly important for us to develop effective executive succession plans. For these plans to be effective, we believe it is necessary for our compensation to be competitive not only with other real estate companies, but also with other large enterprises, in both public and private sectors, with whom we compete for executive talent. The committee will continue to study and develop improvements to our compensation practices as circumstances warrant.

Principal Elements of Compensation

        To accomplish these objectives, we have designed a relatively simple executive compensation program. There are three major elements of our program—base salary, annual cash bonuses and long-term incentives.

        Although all three of these elements are integrated into our overall program, each serves a different purpose:

•

base salaries provide an appropriate level of fixed compensation that will promote executive recruitment and retention;



•

annual cash bonuses that primarily depend upon our overall financial performance in a year and the committee's qualitative assessment of the executives' contributions to that performance; and



•

long-term incentives which have typically taken the form of restricted stock awards made under the Simon Property Group, L.P. 1998 Stock Incentive Plan, or 1998 plan, operate to align the interests of our executives with the interests of our stockholders. Under annual stock incentive programs created from 2001 through 2008, the issuance of the restricted stock depended on the extent to which we achieved predetermined quantitative measures of performance including internal operational metrics such as Funds From Operations, or FFO, per share, and established indices against which we measured our total stockholder return. The committee also can make discretionary or special awards under the 1998 plan as it did in early 2010. The awards made under the 1998 plan also assist in retention of our executives because they are subject to multi-year continued service vesting requirements. In March 2010, the committee established a new Long-Term Incentive Performance Program, which the committee expects will replace the annual stock incentive program going forward.

        Reporting of Compensation in Tables.    Our historic practice is to pay cash bonuses and make equity awards to our executive officers in the year following the year for which performance was assessed. For cash bonuses, this allows the committee the opportunity to assess our and the executive officers' performance for the entire performance year. Equity awards have historically only been granted if specified goals for the performance year have been met. The determination of whether the goals have been met cannot be made until our financial results for a full performance year are available to the committee. The SEC rules allow us to report cash bonuses in the Summary Compensation Table in the performance year for which the bonuses were earned and not the performance year for which they were paid. However, SEC rules require us to report any equity awards in the Summary Compensation Table in the year in which they were awarded, not the performance year for which they were earned. Similarly, the Grants of Plan-Based Awards Table reports equity awards in the year they were awarded, not the performance year for which they were paid. As a result, the value of equity awards and total compensation reported in these tables does not present the elements of annual compensation in the same way the committee views them. To address this issue, the committee uses the concept of "total direct compensation" as a means to assess the competitiveness of our pay practices. Total direct compensation for a given year consists of base salary, cash bonus earned for that year and the grant date fair value of equity awards earned with respect to that year. This presentation is shown in the Supplemental Table on page 42 of this proxy statement. The committee believes that the amounts of total direct compensation paid to the named executive officers for the past three years as shown in the Supplemental Table is a more accurate way of comparing year over year compensation than the Summary Compensation Table.

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        Base Salaries.    Base salaries of executive officers are set at levels competitive with other companies engaged in the retail real estate industry and with other businesses of comparable size and scope with whom we compete for executive talent. The committee reviews base salaries for the executive officers annually and makes adjustments to reflect market conditions, changes in responsibilities and merit increases consistent with compensation practices throughout our organization. The committee did not approve any merit or other increases to 2008 base salaries of the executive officers for 2009.

        Annual Cash Bonuses.    At the beginning of the performance year, the committee approves target and stretch bonus amounts for each participant, ranging from 0 to 150% of the participant's base salary in effect at the end of the performance year. However, the committee has the discretion to award cash bonuses above the 150% level when it believes it is appropriate. Unlike the stock incentive programs in which the performance measures used for the named executive officers are based solely on company performance, the performance factors or goals for annual cash bonuses include both objective and subjective criteria and consider individual performance as well as company performance. For example, with respect to the CEO, the committee specified the following as some, but not all, of the performance factors or goals to be considered with respect to 2009:

•

Stockholder value creation



•

Earnings growth



•

Achievement of successful acquisition and development activity



•

Achievement of strategic business priorities



•

Operational efficiencies

        The annual cash bonus decisions for the named executive officers are determined by using a combination of objective and subjective criteria. However, the final amount of the annual cash bonuses to all of the named executive officers is within the committee's discretion, and may be increased or decreased from the original target and stretch levels. Ultimately, it is the committee's subjective assessment of each executive officer's performance which determines the amount of the bonus and not the operation of a mechanical formula. As a consequence of unfavorable economic conditions, the committee reduced annual cash bonuses paid to executive officers in 2009 for 2008 performance by approximately 40%. The increased bonuses paid in 2010 for 2009 performance reflected improving economic conditions, stabilized credit markets and the actions successfully executed by management during 2009 to maintain operating performance and strengthen our balance sheet and liquidity. The committee also considered the stockholder value created by management during difficult economic circumstances.

        We pay cash bonuses to executive officers in February or March of the year following the performance year so that our financial performance and the executives' performance for the entire year can be considered.

        Long-Term Incentives.    Long-term incentives are equity awards made under the 1998 plan, which is administered by the committee. The 1998 plan authorizes a variety of awards, including stock options, restricted stock and awards in the form of long-term incentive performance units of limited partnership interests, or LTIP Units. No stock options have been granted to employees since 2001.

        From 2001 to 2009, the committee had created annual stock incentive programs under the 1998 plan for seven consecutive years. The details of the 2008 stock incentive program that was paid out in 2009 are explained below. The committee allocated each participant an opportunity to receive an award valued in dollars that would be granted if absolute and relative performance measures were achieved. The determination of the extent to which the goals have been achieved is made after our financial results have been announced in the following year. As explained above, the committee did not approve a stock incentive program for 2009.

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        In 2010, the committee approved awards of LTIP Units under new long-term incentive programs for periods covering 2010 through 2012 which are discussed on pages 35 to 38 of this proxy statement.

        2008 Stock Incentive Program.    As in previous years, the payout in 2009 of the 2008 stock incentive program depended upon achieving "target" or "stretch" goals for FFO per share as an absolute performance measure and for two relative performance measures that compare our total stockholder return for the performance year to the returns experienced by two recognized stock indices—the MSCI US REIT Index and the S&P 500 Index.

        Depending on the extent to which these performance measures were achieved, the dollar values were then converted into shares of restricted stock using the average of the closing prices for our common stock for the ten day trading period commencing three days after we report earnings for the program year, or the ten day average price.

        The 2008 stock incentive program had the following additional terms:

•

Incentive opportunities designated in dollar values were allocated to participants, including approximately $6.5 million to the named executive officers assuming achievement at the target level.



•

The performance measures and weightings for the year applicable to the named executive officers were as follows:

•

If FFO per share exceeded $6.40 but was less than or equal to $6.50, an additional 2.5% in value would be awarded for each incremental $0.01 in FFO per share.



•

In addition to the executive officers, three other groupings participated in the 2008 program, each with somewhat different performance measures and weightings. The first of these groupings, consisting of senior employees who are heads of identified business units, had 50% of their award tied to the achievement of the performance measures established for the executive officers, with the remaining 50% tied to the achievement of pre-determined individual and business unit objectives. The remaining two groupings had at least a portion of their award based upon achievement of the target FFO per share goal of $6.40, with the balance tied to achievement of either defined financial goals and/or other pre-determined qualitative individual performance objectives.



•

Evaluations of individual performance were used to adjust the original award allocations on a positive or negative basis. The committee assigned each executive officer an individual rating for his or her program year performance ranging from "0" to "3." The committee delegated the authority to assess the individual performance of the other participants to a committee of senior management, which assigned similar ratings to other participants.



•

On February 27, 2009, the committee determined that all of the 2008 performance measures applicable to executive officers had been achieved at levels that would have resulted in a 75% payout percentage. In addition, because FFO per share for 2008 was $6.42, or $0.02 greater than the "target goal," the payout percentage would have been increased by an additional 5% increment to a potential payout of 80% of the original award allocations. In view of the uncertain economic conditions and management's

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focus on reducing costs, the committee reduced the payout to executive officers to a 40% payout or less. For participants in the remaining three groups, management advised the committee that applicable performance measures had been achieved resulting in payout percentages between 20% and 80% of initial opportunities. Based upon management's recommendation, the committee then further adjusted payouts for each participant in the three remaining groups to 40%, 50% or 60% of each participant's payout percentage using their assigned ratings. The adjusted values were then converted into shares of restricted stock using the ten day average price of $41.42. Fractional shares were rounded to the next full share. A total of 261,498 shares of restricted stock were awarded under the 2008 program, including 62,292 shares awarded to the named executive officers which are reported in the Grants of Plan-Based Awards in 2009 Table on page 43 of this proxy statement.

•

The shares of restricted stock vest in four equal annual installments commencing January 1, 2010 with a continuous service requirement, except for termination of service resulting from death, disability or, with the committee's approval, retirement. Executive officers who received restricted stock awards under the 2008 stock incentive program are not entitled to receive distributions denominated in common shares on unvested awards.

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 2009, our basic contribution to the 401(k) retirement plan was equal to 1.5% of the participant's 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. We reduced the basic contribution to 1.0% effective January 1, 2010. Our matching contributions are vested when made. Our basic and matching contributions are subject to applicable IRS limits and regulations. The contributions we made to the 401(k) accounts of the named executive officers are shown in the All Other Compensation column of the Summary Compensation Table on page 41. Executive officers also participate in health and welfare benefit plans on the same terms as other salaried employees.

        Employment and Change-in-Control Agreements.    The only executive officer who has an employment agreement with us is Mr. Sokolov who had an employment agreement in place with his previous employer—a company we merged with in 1996. A summary of Mr. Sokolov's employment agreement appears on page 48 of this proxy statement. Our named executive officers do not participate in or benefit from any "change in control" or "golden parachute" arrangements. Awards under the 1998 plan will vest in the event of a change in control.

        Deferred Compensation Plan.    We maintain a non-qualified 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 are separate accounts for the executives and the 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 2009 Table on page 45 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.

        Stock Option and Equity Award Grant Practices.    The committee has not granted any stock options to executives or other employees since 2001. The 1998 plan requires the exercise price of stock options to be set at the mean between the high and low sales prices of a share of common stock as reported by the New York Stock Exchange for the grant date.

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        Discretionary Awards.    The committee has the authority to grant discretionary or special awards under the 1998 plan.

Role of Management in Compensation Decisions

        The Chairman and Chief Executive Officer provides his recommendations to the committee on the compensation of each of the other executive officers. The Chairman and Chief Executive Officer develops his recommendations using third-party data, his own views regarding the executives' performance and the advice of our human resources department on such factors as compensation history, tenure, responsibilities, market data for competitive positions and retention concerns and the need to maintain consistency within the organization. Although the committee gives consideration to the Chairman and Chief Executive Officer's recommendations and to any views of its compensation consultant, the final compensation decisions affecting all executive officers are within its discretion.

Competitive Position

        In some years, management or the committee has reviewed data with regard to the compensation practices of other public real estate companies to assess the competitive position of our executive compensation program. During 2009, management engaged a separate compensation consultant to review how other real estate investment trusts were addressing executive compensation for 2008 and 2009. Management advised the committee that on average, senior level executives experienced a decline in total compensation for 2008, that many other companies were freezing base salaries at their prior year level and reducing bonuses by an average of 25-30% regardless of how the bonuses had been calculated in the past. The review also indicated that approximately one-half of the real estate investment trusts polled by the consultant had reduced awards under their restricted stock programs. In making its compensation decisions in 2009, the committee considered not only the information provided by management's consultant, but also other information from the committee's consultant and other sources.

2009 Compensation Decisions

        In response to the uncertain outlook that existed at the time, in early 2009, the committee and management took a number of actions to reduce compensation and operating expenses. For the named executive officers and other management personnel holding an office of Vice President or above, the committee or management, as applicable:

•

did not make any merit or other increases to 2008 base salaries for 2009;



•

approved annual cash bonuses paid in 2009 for 2008 performance at approximately 60% of the amounts paid in 2008 for 2007 performance;



•

reduced the individual payouts of the 2008 stock incentive program from an 80% payout based upon the achievement of applicable performance criteria to 40% or less; and



•

did not create an annual stock-based incentive compensation program for 2009.

        CEO Compensation.    The committee made the following decisions with respect to David Simon's compensation for 2009.

•

The committee did not change David Simon's base salary from the 2008 amount.



•

As explained above, the incentive compensation payout made during 2009 was under the 2008 stock incentive program. In March 2009, the committee determined that David Simon had achieved the performance measures to the extent that an 80% payout of his $2,000,000 target award was appropriate. The payout was reduced to 40% of the target amount due to the unfavorable economic conditions which existed at the time. He received 19,315 restricted shares, calculated by dividing the

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payout amount by $41.42, the ten day average price. The restricted stock is subject to a four-year vesting commencing January 1, 2010.

        Other Named Executive Officer Compensation.    The committee made the following decisions with respect to the 2009 compensation of the named executive officers other than David Simon as follows:

•

The committee did not change the base salaries from the 2008 amounts for the other four named executive officers.



•

As explained above, the committee reduced the payouts in 2009 under the 2008 stock incentive program from 80% based on achievement of the performance measures to 40% or less. The committee approved the payout of the following restricted stock awards, calculated by dividing the payout amount by $41.42, the ten day average price: Mr. Sterrett—9,658 shares; Mr. Sokolov—14,486 shares; Mr. Barkley—9,658 shares; and Mr. Rulli—9,175 shares.

2010 Compensation Decisions

        In March 2010, the committee made several decisions that affect the compensation of our named executive officers for 2009 and thereafter, including cash bonuses and special restricted stock awards made with respect to 2009 performance, and a new long-term incentive compensation program beginning in 2010. The cash bonuses for 2009 awarded in 2010 appear in the Summary Compensation Table as 2009 compensation. The special restricted stock awards and the awards under the new long-term incentive compensation program will not be included in the Summary Compensation Table and other tables until next year. In making these decisions, the committee took into account not only the goals and objectives that have been set for each of the named executive officers for purposes of our annual cash bonus program, but also what it considered to be exemplary performance of the company during a difficult and challenging economic environment. In particular, the committee considered the following positive factors:

•

the substantial improvement in the price of our common stock during the course of 2009,



•

our industry leading ability to access capital markets on multiple occasions and raise substantial capital,



•

the significant deleveraging of portions of our balance sheet,



•

our ability to address maturing debts through extensions and refinancings,



•

the significant reductions in operating expenses while maintaining the quality of our corporate operations and assets,



•

our acquisition activity, including the negotiation of the definitive agreement to acquire all of the outlet shopping centers currently owned by Prime Outlets Acquisition Company and its affiliated entities,



•

the success of our ongoing selective disposition of non-core assets,



•

the reaffirmation of our credit ratings by certain ratings agencies,



•

paying 2009 quarterly dividends in a combination of cash and securities to preserve liquidity while maintaining REIT status, and



•

maintaining acceptable levels of tenant occupancy and rent spreads and proactively addressing tenant bankruptcies.

        The committee also took into account the reductions in bonuses which the executives had voluntarily accepted in early 2009 based on the uncertain outlook that existed at the time and the reduced payouts of stock awards to which the named executive officers would have otherwise been entitled to under the 2008 stock incentive program. In light of the above, the committee made the following decisions with respect to the named executive officers' compensation for 2010.

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        Base Salaries.    The committee set base salaries for 2010 as follows:

        Cash Bonuses.    On March 16, 2010, the committee, taking into account the executives' performance and the positive factors discussed above, approved the following cash bonuses for 2009: David Simon—$3,000,000; Mr. Sterrett—$750,000; Mr. Sokolov—$1,000,000; Mr. Barkley—$850,000; and Mr. Rulli—$500,000.

        Special Restricted Stock Awards.    On March 16, 2010, the committee made special awards under the 1998 plan in the form of restricted stock awards to the named executive officers in the following amounts: David Simon—42,108 shares; Mr. Sterrett—9,024 shares; Mr. Sokolov—10,828 shares; Mr. Barkley—9,024 shares; and Mr. Rulli—9,024 shares. A material consideration in the committee's decision to make the special awards was the decision made in early 2009 to not establish a stock incentive program for 2009 due to the uncertain economic conditions at the time. The committee also considered the positive factors explained above.

        The shares of restricted stock will vest over four years, subject to a continued service requirement, beginning January 1, 2011. Because the special awards were granted with respect to 2009 performance, we include the grant date fair value of those awards in 2009 compensation in the Supplemental Table on page 42.

        Total Direct Compensation.    Consistent with prior years, compensation tied in various ways to our performance comprised a significant portion of the compensation of the named executive officers. The bonuses paid in 2010 for 2009 were significantly greater than the bonuses paid in 2009 for 2008 due to the significant achievements that management made during 2009 despite adverse economic conditions. The decisions in early 2009 to reduce incentive compensation payouts in 2009 and not create a 2009 stock incentive program reflected the uncertain economic conditions and outlook that existed at the time. The special restricted stock awards granted in 2010 reflected the committee's assessment of management's achievements during 2009.

        New Long-Term Incentive Program.    As part of its ongoing evaluation of our executive compensation program, the committee has devoted considerable attention to assessing the effectiveness of our long-term equity-based incentive compensation arrangements which until recently have been the annual stock incentive program discussed earlier in this discussion. As a result of those deliberations, the committee adopted and made awards in 2010 under a new Long-Term Incentive Performance Program, or the LTIP Program, for certain of our senior executive officers.

        Awards under the LTIP Program take the form of LTIP Units, a form of limited partnership interest issued by the Operating Partnership. Awarded LTIP Units will be forfeited, in whole or in part, depending upon the extent to which 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 without reinvestment or compounding), over the performance period exceeds the relative and absolute performance targets as described below. The purpose of the LTIP Program is to further align the interests of senior management with those of stockholders by reinforcing our "pay-for-performance" structure that encourages the creation of stockholder value in excess of recognized benchmarks of performance. The LTIP Units awarded will be considered earned depending upon the extent to which the applicable TSR benchmarks are achieved during

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the performance period, and once earned will become the equivalent of units of limited partnership interest of the Operating Partnership, or Units, but only after an additional two year service-based vesting requirement that begins after the end of the performance period. Units are exchangeable for shares of the company's common stock on a one-for-one basis, or cash, as selected by the company. The LTIP Units, and any common shares for which they are exchangeable, will be awarded pursuant to our stockholder-approved equity plan.

        The committee expects to establish a LTIP Program each year in the future that will have a three year performance period, so that the three-year performance period of each LTIP Program will overlap two other programs for one or two years. To create this overlap for 2010, the committee has approved three LTIP Programs having one, two and three year performance periods, respectively. The performance period for the one year LTIP Program will end December 31, 2010; the performance period for the two year LTIP Program will end December 31, 2011; and the performance period for the three year LTIP Program will end December 31, 2012. We refer to these three programs as the one, two and three year 2010 LTIP Programs, or the 2010 LTIP Programs.

        The 2010 LTIP Programs use the same three performance measures to which we compare the TSR of our common stock using a baseline value of $79.80 per share (the closing sale price as reported by the NYSE for December 31, 2009) during the applicable performance period. The first relative performance measure, weighted at 60%, requires our TSR to equal or exceed the overall performance of the MSCI US REIT Index. The second relative performance measure, weighted at 20%, requires our TSR to equal or exceed the overall performance of the S&P 500 Index. The third performance measure, which is weighted at 20%, requires our TSR, viewed on an absolute basis, to exceed a specified target TSR. To achieve a 100% payout of the award based on all three measures, our TSR must exceed the performance of the MSCI US REIT Index by 3% or more, must exceed the performance of the S&P 500 by 2% or more on an annual basis and must be 12% per year or more. To receive a partial payout any one of the following must occur: our TSR must be greater than the MSCI US REIT Index minus 1%, our TSR must be greater than the S&P 500 minus 2% or our TSR on an absolute basis must be greater than 6.67% per year.

        The number of LTIP Units that have been earned will be determined by the committee when our financial results for the performance period are available using the following payout matrices (with linear interpolation between the specified payout percentages):

Relative TSR (Weighted 60%)—MSCI US REIT Index

Relative TSR (Weighted 20%)—S&P 500 Index

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