SECOND AMENDMENT TO THE TAUBMAN REALTY GROUP

LIMITED PARTNERSHIP 1992 INCENTIVE OPTION PLAN

 

(As Amended and Restated Effective as of September 30, 1997)

 

WHEREAS, THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP, a Delaware limited
partnership (including any successor thereto “TRG” or the “Partnership”)
maintains The Taubman Realty Group Limited Partnership 1992 Incentive Option
Plan (as Amended and Restated Effective as of September 30, 1997) (the “Plan”);
and

 

WHEREAS, pursuant to Section 8.1 of the Plan, TRG has the authority to amend the
Plan and to make such other changes as the Partnership deems advisable; and

 

WHEREAS, TRG desires to amend the Plan effective as of January 1, 2003 to
prohibit the repricing of Options under the Plan.

 

NOW, THEREFORE, the Plan is hereby amended as follows:

 

1.

Section 3.1 of the Plan is amended in its entirety by substituting the
following:

 

“3.1      Administration. The Plan shall be administered by the Compensation
Committee in accordance with this Article 3. Except as otherwise provided in the
Partnership Agreement or this Plan, and the Compensation Committee shall have
the sole discretionary authority (i) to select the Employees who are to be
granted Incentive Options under the Plan, (ii) to determine the number of Units
of Partnership Interest in TRG to be optioned to an Employee, (iii) to authorize
the granting of Incentive Options, (iv) to interpret the Plan, (v) to establish
and modify administrative rules for the Plan, (vi) to impose such conditions and
restrictions on Incentive Options as it determines appropriate, (vii) to execute
Option Agreements, and (viii) to take any other actions in connection with the
Plan and the Incentive Options and to make all determinations under the Plan as
it may deem necessary or advisable.

 

It is anticipated that the Compensation Committee will act upon a recommendation
from the Manager in exercising the discretion granted to the Compensation
Committee under the Plan. Action taken or not taken by the Compensation
Committee on one or more occasions shall be without obligation to take or not
take such action on any other occasion(s).

 

The Compensation Committee may, subject to the provisions of the Partnership
Agreement, delegate to one or more Persons any of its powers, other than its
power to authorize the granting of Incentive Options, hereinbefore, hereinafter,
or pursuant to the Partnership Agreement provided or conferred, or designate one
or more Persons to do or perform those matters to be done or performed by the
Compensation Committee, including administration of the Plan. Any Person or
Persons delegated or designated by the Compensation Committee shall be subject
to the same obligations and requirements imposed on the Compensation Committee
and its members under the Plan and the Partnership Agreement.

 

Notwithstanding the foregoing provisions of this Section 3.1, any selection of
an officer or director of the Company to be granted an Incentive Option under
the Plan, and

 

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any decisions concerning the timing, pricing, and amount of a grant to an
officer or director of the Company, in the event such officer or director is
subject to the provisions of Section 16 of the Securities Exchange Act of 1934
at the time of grant, shall be made solely by those members of the Compensation
Committee, but in no event fewer than two, who are "disinterested persons"
within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934. In
view of the fact that, subject to certain restrictions, the Units of Partnership
Interest acquired upon exercise of an Incentive Option may be exchanged,
pursuant to the Continuing Offer, for shares of Common Stock, all grants of
Incentive Options to such officers and directors of the Company must further be
confirmed by a committee of two or more disinterested directors of the Company
(which confirmation shall be deemed made if such disinterested directors who
serve on such committee of the Board of Directors also serve on the Compensation
Committee).”

 

2.

Section 6.2 of the Plan is amended in its entirety by substituting the
following:

 

“6.2     Modification, Extension, and Renewal of Incentive Options. The
Compensation Committee may modify, extend, or renew outstanding Incentive
Options, or accept the cancellation or surrender of outstanding Incentive
Options (to the extent not previously exercised) except to the extent such
modification, extension, renewal, cancellation or surrender would constitute a
repricing of Options without satisfying any applicable shareholder approval
requirements. Notwithstanding the foregoing, no modification of an Incentive
Option shall, without the consent of the Optionee, alter or impair any rights or
obligations under any Incentive Option previously granted.”

 

3.

Section 7.16 is amended in its entirety by substituting the following:

 

“7.16    Surrender of Incentive Options. Except as provided in Section 6.2
prohibiting Option repricing, any Incentive Option granted under the Plan may be
surrendered to TRG for cancellation on such terms as the Compensation Committee
and the Optionee agree, including, but not limited to, terms which provide that
upon such surrender TRG shall pay to the Optionee cash or, subject to the
provisions of Section 7.17 hereof, Units of Partnership Interest, or a
combination of cash and Units of Partnership Interest.”

 

4.

Section 8.1 is hereby amended in its entirety by substituting the following:

 

“8.1     Amendment of the Plan. The Compensation Committee, may from time to
time suspend or discontinue the Plan or revise or amend the Plan in any respect
whatsoever. In addition, the Compensation Committee, may cause the Company to
adopt an incentive option plan in replacement of the Plan whereby options to
purchase shares of Common Stock of the Company are granted to Employees. In such
event, subject to Section 6.2, all outstanding Incentive Options shall be
adjusted to be consistent with the terms and provisions of the Plan and the
Continuing Offer, and in such manner as the Compensation Committee may deem
equitable or as may be required pursuant to applicable law; provided, however,
that except with the written consent of an Optionee or as otherwise specifically
provided herein with respect to a replacement plan, no amendment or suspension
of the Plan shall alter or impair any Incentive Option previously granted to
such Optionee under the Plan.”

 

5.         Except as expressly set forth herein, the terms and provisions of the
Plan shall continue unmodified and are hereby confirmed and ratified.

 

 

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6.         This Amendment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

 

7.         This Amendment shall be governed by and construed in accordance with
the laws of the State of Michigan.

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date
written below.

 

TAUBMAN REALTY GROUP,

a Delaware limited partnership

 

By:

Taubman Centers, Inc.

 

Its:

Managing General Partner

 

 

By:_/s/ Lisa A. Payne               

Lisa Payne

 

Its:

Executive Vice President/Chief

 

 

Financial and Administrative Officer

 

 

Date: 7/30/03   

 

 

 

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