THE TAUBMAN COMPANY LLC RESTRICTED AND PERFORMANCE SHARE UNIT AWARD AGREEMENT
THE
TAUBMAN COMPANY LLC
2008
OMNIBUS LONG-TERM INCENTIVE PLAN
Participant
Name: [ ]
Grant
Date: [ ]
RSUs
Granted: [ ]
PSUs
Granted: [ ]
Vesting Date:
[ ] (or,
if earlier, the “Vesting Date” defined inparagraph 4 of this Award
Agreement)
THIS AWARD AGREEMENT, dated as of this
[ ]
day of
[ ], 200__,
is entered into by and between THE TAUBMAN COMPANY LLC, a Delaware limited
liability company (the “Company”), and [ ] (the
“Participant”). Capitalized terms have the meaning defined herein or
as defined in the Plan, as applicable.
1. Incorporation of
Plan. This Award is granted as of
[ ],
pursuant to and subject to all of the terms and conditions of The Taubman
Company LLC 2008 Omnibus Long-Term Incentive Plan, as effective May 29, 2008,
and as may be amended from time to time (the “Plan”), the provisions of which
are incorporated in full by reference into this Award Agreement, which means
that this Award Agreement is limited by and subject to the express terms of the
Plan. A copy of the Plan is on file in the office of the
Company. If there is any conflict between the provisions of this
Award Agreement and the Plan, the Plan will control.
2. RSU
Award. The Company hereby grants the Participant an Award of
[ ] Restricted Share Units
(“RSUs”). Each RSU represents the right to receive, upon vesting and
the satisfaction of any required tax withholding obligation, one share of common
stock, par value $0.01, of Taubman Centers, Inc. (“TCO”) (“Common
Stock”).
3. PSU
Award. The Company hereby grants the Participant an Award of
[ ] Performance Share Units
(“PSUs”) subject to any adjustment upon vesting provided below. Each
PSU represents the right to receive, upon vesting and the satisfaction of any
required tax withholding obligation, one share of Common Stock, subject to
adjustment as provided elsewhere in this Award Agreement. The actual
number of the PSUs in which a Participant may ultimately vest shall be
determined according to the rules specified in the Addendum to this Award
Agreement.
4. Vesting
Date. “Vesting Date” means the date that is the earlier of (a)
the calendar date determined by the Compensation Committee and that is specified
above or (b) the death, Retirement or Disability of the Participant, or
occurrence of a Change in Control, provided that, in each case ((a) and (b)),
the Participant is in Service on such date.
5. Conversion of RSUs and PSUs,
and Issuance of Shares. As soon as practicable after the
vesting of this Award, TCO will issue and transfer to the Company one share of
Common Stock for (a) each RSU granted under this Award, and (b) each PSU granted
and vested under this Award as determined according to paragraph 3 above and the
Addendum to this Award Agreement. The Company will transfer the
shares of Common Stock to the Participant upon satisfaction of any required tax
withholding obligation. No fractional shares will be
issued.
6. Forfeiture in the Event of a
Termination of Service Due to Lay-off in Connection With a
Reduction-in-Force. The provisions of Section 10.6 of the Plan
providing for the full vesting of the unvested portion of the Award in the event
the Participant’s Service terminates due to lay-off in connection with a
reduction in force does not apply to the Award granted under this Award
Agreement. Instead, in the event the Participant’s Service terminates
due to a lay-off in connection with a reduction in force, the unvested portion
of the Award will automatically and immediately terminate and be forfeited by
the Participant, and the vested portion of the Award will continue in effect
according to terms of this Award Agreement.
7. Tax Withholding
Obligation. The Company will determine, in its discretion,
which of the following two methods will be used to satisfy the statutory minimum
tax withholding obligations in connection with the Payment of this
Award: (a) withholding from payment to the Participant
sufficient cash and/or shares of Common Stock issuable under the Award having a
fair market value sufficient to satisfy the withholding obligation; or
(b) payment by the Participant to the Company the withholding amount by
wire transfer, certified check, or other means acceptable to the Company, or by
additional payroll withholding in the event the Participant fails to pay the
withholding amount. To the extent that the value of any whole shares
of Common Stock withheld exceeds applicable tax withholding obligations, the
Company agrees to pay the excess in cash to the Participant through payroll or
by check as soon as practicable.
8. Rights of
Participant. This Award does not entitle the Participant to
any ownership interest in any actual shares of Common Stock unless and until
such shares are issued to the Participant pursuant to the terms of the
Plan. Since no property is transferred until the shares are issued,
the Participant acknowledges and agrees that the Participant cannot and will not
attempt to make an election under Section 83(b) of the Internal Revenue Code of
1986, as amended, to include the fair market value of the RSUs and PSUs in the
Participant’s gross income for the taxable year of the grant of the
Award.
9. Beneficiary/Beneficiaries. Each
Participant may, at any time, subject to the provisions of Section 10.2 of the
Plan, designate a Beneficiary or Beneficiaries to whom payment under this Plan
will be made in the event of such Participant’s death. Beneficiary
Designation forms are available from Human Resources.
10. Registration. TCO
currently has an effective registration statement on file with the Securities
and Exchange Commission with respect to the shares of Common Stock subject to
this Award. TCO intends to maintain this registration but has no
obligation to do so. If the registration ceases to be effective, the
Participant will not be able to transfer or sell shares issued pursuant to this
Award unless exemptions from registration under applicable securities laws are
available. Such exemptions from registration are very limited and
might be unavailable. The Participant agrees that any resale by
him or her of the shares of Common Stock issued pursuant to this Award will
comply in all respects with the requirements of all applicable securities laws,
rules, and regulations (including, without limitation, the provisions of the
Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, and the respective rules and regulations promulgated
thereunder) and any other law, rule, or regulation applicable thereto, as such
laws, rules, and regulations may be amended from time to time. TCO will not be
obligated to either issue the shares or permit the resale of any shares if such
issuance or resale would violate any such requirements.
11. Acknowledgment of
Participant. The Participant accepts and agrees to the terms
of the Award as described in this Award Agreement and in the Plan, acknowledges
receipt of a copy of this Award Agreement, the Plan, and any applicable summary
of the Plan, and acknowledges that he or she has read all these documents
carefully and understands their contents.
12. General
Provisions.
a. Participant is Unsecured
General Creditor. The Participant and the Participant’s
Beneficiaries, heirs, successors, and assigns shall have no legal or equitable
rights, interest, or claims in any specific property or assets of the Company,
TRG, TCO, nor of any entity for which the Company or any affiliate of the
Company provides services. Assets of the Company or such other
entities shall not be held under any trust for the benefit of the Participant or
the Participant’s Beneficiaries, heirs, successors, or assigns, or held in any
way as collateral security for the fulfilling of the obligations of the Company
under this Award Agreement and the Plan. Any and all of the Company’s
and such other entities’ assets shall be, and remain, the general unrestricted
assets of the Company or such other entities. The Company’s sole
obligation under the Plan shall be merely that of an unfunded and unsecured
promise of the Company to pay the Participant in the future, subject to the
conditions and provisions of this Award Agreement and the Plan.
b. Nonassignability. The
Participant’s rights and interests under the Plan may not be assigned or
transferred other than by will or the laws of descent and distribution, and,
during the Participant’s lifetime, only the Participant personally, or, in the
event of the Participant’s legal incapacity or incompetence, the Participant’s
guardian or other legal representative, may exercise the
Participant’s rights under the Plan and this Award Agreement. A
Participant’s Beneficiary may exercise the Participant’s rights to the extent
they are exercisable under the Plan following the death of the
Participant. No part of the amounts payable under the Plan shall,
prior to actual Payment, be subject to seizure or sequestration for the payment
of any debts, judgments, alimony, or separate maintenance owed by the
Participant or any other Person, or be transferable by operation of law in the
event of the Participant’s or any other Person’s bankruptcy or
insolvency.
c. No Right to Continued
Employment. The adoption and maintenance of the Plan and the
grant of the Award to the Participant under this Award Agreement shall not be
deemed to constitute a contract of employment between the Company, an affiliate
of the Company, or of TRG or TCO, and the Participant or to be a condition of
the employment of the Participant. The Plan and the Award granted
this Award Agreement shall not confer on the Participant any right with respect
to continued employment by the Company or an affiliate of the Company, nor shall
they interfere in any way with the right of the Company or an affiliate of the
Company to terminate the employment of the Participant at any time, and for any
reason, with or without Cause, it being acknowledged, unless expressly provided
otherwise in writing, that the employment of the Participant is “at
will.”
13. Specified
Employee. Notwithstanding any other provision of the Plan or
this Award Agreement to the contrary, for any Payment under this Award Agreement
that is
made on
account of a Participant’s Retirement, and the Participant is a ‘specified
employee’ as determined under the default rules under Code Section 409A, and the
regulations
thereunder,
on the Retirement date, the payment will be made on the day next following the
date that is the six-month anniversary of the date of the Participant’s
Retirement, or,
if
earlier, the date of the Participant’s death; any Payments that would have been
paid prior to the six-month anniversary plus one day Payment date specified
above.
14. Definitions. As
used in this Award Agreement, the following definitions shall
apply:
a. “Beneficiary”
means: (i) an
individual, trust, estate, or family trust who or that, by will or by operation
of the laws of descent and distribution, succeeds to the rights and obligations
of the Participant under the Plan on the Participant’s death; or (ii) an
individual who, as a result of designation by the Participant in a Beneficiary
Designation, or as otherwise provided in the Beneficiary Designation rules set
forth below, succeeds to the rights and obligations of the Participant under the
Plan on such Participant’s death.
b. “Beneficiary
Designation” means a writing executed by the Participant pursuant to the
following rules:
i.
The Participant may, at any time, designate any Person or Persons as the
Participant’s Beneficiary or Beneficiaries (both principal as well as
contingent) to whom Payment under this Award Agreement will be made in the event
of such Participant’s death prior to Payment due the Participant under this
Award Agreement. Such designation may be changed at any time prior to
the Participant’s death, without consent of any previously designated
beneficiary. Any designation must be made in writing. A
Beneficiary Designation shall be effective only if properly completed and only
on receipt by the Company. Any properly completed Beneficiary
Designation received by the Company prior to the Participant’s death shall
automatically revoke any prior Beneficiary Designation. In the event
of divorce, the person from whom such divorce has been obtained shall be deemed
to have predeceased the Participant in determining who shall be entitled to
receive Payment pursuant to the Participant’s Beneficiary Designation, unless
the Participant completes and submits after the divorce a Beneficiary
Designation which designates the former spouse as the Participant’s Beneficiary
for purposes of this Award Agreement.
ii. If
the Participant fails to designate a Beneficiary as provided above, or if all
designated Beneficiaries predecease (or are deemed to predecease) the
Participant or die prior to Payment of the amounts due to the Participant under
this Award Agreement, then such Participant’s designated Beneficiary shall be
deemed to be the Person or Persons surviving the Participant in the first of the
following classes in which there is a survivor, share and share
alike:
|
|
A.
|
The
Participant’s surviving spouse.
|
|
|
B.
|
The
Participant’s children, except that if any of such Participant’s children
predecease the Participant but leave issue surviving, then such issue
shall take, by right of representation, the share their parent would have
taken if living. The term “children” shall include natural or
adopted children but shall not include a child (or children) whom the
Participant has placed for adoption or xxxxxx
care.
|
|
|
C.
|
The
Participant’s estate.
|
c. “Partnership
Agreement” means The Second Amendment and Restatement of Agreement of
Limited Partnership of The Taubman Realty Group Limited Partnership, as the same
has been and may subsequently be amended and/or supplemented.
d. “Payment” means the
transfer of shares of Common Stock equal to the number of RSUs and PSUs that
vest under this Award Agreement as of the Vesting Date, net of any taxes as
provided in paragraph 7 of this Award Agreement and Section 18.3 of the
Plan.
e. “Person” means an
individual, partnership (general or limited), corporation, limited liability
company, joint venture, business trust, cooperative, association, or other form
of business organization, whether or not regarded as a legal entity under
applicable law, a trust (inter vivos or testamentary), an estate of a deceased,
insane, or incompetent person, a quasi-governmental entity, a government or any
agency, authority, political subdivision, or other instrumentality thereof, or
any other entity.
IN WITNESS WHEREOF, this Award
Agreement is duly authorized as of the day and year first above
written.
PARTICIPANT
SIGNATURE THE TAUBMAN COMPANY LLC, a Delaware
limited liability company
______________________________ By: _____________________________
Date: _________________________
Its: _____________________________
Date: _____________________________
TAUBMAN CENTERS,
INC., a Michigan corporation, CONSENTS TO THE AWARD:
By: _____________________________
Its: ______________________________
Date: _____________________________
PLEASE
RETURN ONE SIGNED AGREEMENT TO
[ ]
BY
[
] AND KEEP ONE FOR YOUR RECORDS.
ADDENDUM
TO
This
Addendum relates to the Award Agreement dated
[ ],
200[ ], and made to
[ ] (the “Participant”),
and pursuant to which
[
] PSUs were awarded to the Participant. This Addendum provides the
rules for the determination of actual number of PSUs in which the Participant
may vest.
A. The
“Performance Period” is defined as the time period between the Grant Date as
specified in the Award Agreement and the Vesting Date determined by the
Compensation Committee and specified in the Award Agreement as
[
] (the “Specified Vesting Date”).
B. The
“Peer Group” used in the determinations of Total Shareholder Return required by
paragraph C below shall be the individual companies that comprise the FTSE
NAREIT All REIT Index (Property Sector: Retail) (“the Index”) as constituted on
the Grant Date that is specified in the Award Agreement. No additions or
deletions will be made to the Peer Group during the Performance Period, i.e,
companies that are eliminated from the Index by the governing body of the Index
during the Performance Period will remain as members of the Peer Group, and
companies that are added to the Index by the governing body of the Index during
the Performance Period will not become members of the Peer Group. For
purposes of calculating Total Shareholder Return as required by paragraph C
below, the ending stock price for a company removed from the Index will be its
(1) last available closing price prior to its removal or (2) other relevant
value that can be ascribed to the stock as a result of an event of merger,
acquisition, bankruptcy, privatization, stock split, or other corporate
transaction. The Compensation Committee to the extent it deems
necessary and/or appropriate, it its sole discretion, shall determine the
treatment of companies removed from the Index and/or manage any extenuating
circumstances that may develop during the Performance Period in relation to the
composition of the Peer Group and/or the required computations of Total
Shareholder Return.
C. Subject
to the special rules for certain Vesting Date triggers in paragraphs D and E
below, the actual number of PSUs in which the Participant shall vest shall be
determined as follows:
Step One:
The Company’s Total Shareholder Return versus each member of the Peer Group’s
Total Shareholder Return shall be determined, with each Total Shareholder Return
calculated for the period beginning on the Grant Date and ending on the Vesting
Date (or, if no return data are available for the Vesting Date, the return data
for the first date prior to the Vesting Date for which such data
exist). The definition of Total Shareholder Return is contained in
paragraph F below. For purpose of this computation, the
Company’s Total Shareholder Return will be that of TCO.
Step
Two: The Company’s relative Total Shareholder Return performance
versus that of each member of the Peer Group computed in Step One shall be
determined in a percentile ranking.
Step
Three: A multiplier (the “PSU Multiplier”) shall be applied to the
Participant’s PSU award based on the Company’s relative performance determined
under Step Two and the following table:
|
Company
Performance vs. Peer Group
|
Resulting
PSU Multiplier
|
|
less
than the 25th percentile
|
zero
times
|
|
25th
percentile
|
0.5
times
|
|
50th
percentile (the “Target”)
|
1
times
|
|
75th
percentile
|
2
times
|
|
100th
percentile (Company is the highest performer)
|
3
times
|
With
respect to levels of Company performance that fall between the percentiles
specified above, the resulting PSU Multiplier will be interpolated on a linear
basis.
Step
Four: The product that results when the PSU Multiplier is applied to
the Participant’s PSU Award will be rounded up to the next whole
number. For example, if the product is 10,500.45 PSUs, the product
will be rounded up to 10,501 PSUs.
D. If
a Change in Control occurs prior to the Specified Vesting Date (or any other
Vesting Date trigger, e.g., death, Disability, or Retirement), the actual number
of PSUs in which the Participant shall vest shall be determined in the same
manner as paragraph B above, but the determination will be made as of the date
of the Change in Control, which date shall be the Vesting Date.
E. If
the Participant’s Vesting Date is his death, Disability or Retirement, the
actual number of PSUs in which the Participant shall vest shall be determined in
the same manner as paragraph B above, but the determination will be made as of
the date of the Participant’s death, Disability or Retirement (as applicable),
which date shall be the Vesting Date, except as
follows. Notwithstanding the preceding sentence, if the date of
death, Disability, or Retirement occurs less than one year from the Grant Date,
the PSU Multiplier to be used in the calculation under paragraph C above will be
that of 50th Percentile performance (1 times).
F. The
Company’s “Total Shareholder Return” for any period shall be determined using
the same methodology as used for determining each member of the Peer Group’s
Total Shareholder Return. Total Shareholder Return is defined as the
sum of: (1) a company’s average stock price at the end of the
Performance Period (determined using the company’s closing stock price on each
trading day within the 30 calendar days preceding the end of the Performance
Period, and which 30 calendar day period shall include the day on which the
Performance Period ends) minus the company’s average stock price at the
beginning of the Performance Period (determined using the company’s closing
stock price on each trading day within the 30 calendar days preceding the
beginning of the Performance Period, and which 30 calendar day period shall
include the Grant Date), and (2) the value of the cumulative amount of dividends
paid during the Performance Period, assuming same day reinvestment into stock,
divided by its stock price at the beginning of the Performance
Period. An example of this calculation is below.
Example: TSR = (Priceend
− Pricebegin
+ Dividends) / Pricebegin
3474767.15│030909
