TAUBMAN CENTERS, INC.

NON-EMPLOYEE DIRECTORS’ DEFERRED COMPENSATION PLAN

 

(Effective as of May 18, 2005)

 

The Taubman Centers, Inc. Non-Employee Directors’ Deferred Compensation Plan, as
it may be amended from time to time (the “Plan”), is intended to provide to the
Directors of Taubman Centers, Inc., a Michigan corporation (the “Company”)
incentives to continue to serve on the Board of Directors, to attract new
Directors with outstanding qualifications, and to strengthen the alignment of
the interests of the Directors with those of the shareholders by offering
Directors the opportunity to defer their retainer fees in common stock of the
Company. The Plan is effective as of May 18, 2005.

 

Article 1

Definitions

 

In the Plan, whenever the context so indicates, the singular or plural number,
and the masculine, feminine, or neuter gender shall each be deemed to include
the other, the terms “he,” “his,” and “him” shall refer to a Director, and the
capitalized terms shall have the following meanings:

 

1.1        “Account” means the record established and maintained to reflect the
RSUs credited to the Director pursuant to the Plan, and will not, under any
circumstances, constitute or be treated as a trust fund of any kind.

1.2        “Beneficiary” means:  (a) 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 a Director under the
Plan on the Director’s death; or (b) an individual who, as a result of
designation by a Director in a Beneficiary Designation, or as otherwise provided
in Article 5, succeeds to the rights and obligations of such Director under the
Plan on such Director’s death.

1.3        “Beneficiary Designation” means a writing executed by the Director
pursuant to Section 5.1 of the Plan.

1.4

“Board of Directors” means the Board of Directors of the Company.

1.5        “Business Day” means any day on which the New York Stock Exchange is
open for trading.

1.6

“Change of Control Event” means either:

(a)        a majority of the Board of Directors is replaced during a 12-month
period by directors whose appointment or election was not approved by a vote of
at least 50% of the directors comprising the Board of Directors on the date
immediately preceding the removal or election; or

 

(b) the acquisition by any person or more than one person acting as a group
other than A. Alfred Taubman or any of his immediate family members or lineal
descendants, any heir of the foregoing, any trust for the benefit of any of the
foregoing, any private charitable foundation, or any partnership, limited
liability company, or corporation owned or controlled by some or all of the
foregoing, of ownership of 50% or more of the total fair market value or total
voting power of the outstanding voting capital stock of the Company.

 

1.7        “Committee” means the Nominating and Corporate Governance Committee
of the Board of Directors.

 

 

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1.8        “Common Stock” means the common stock of the Company, par value $0.01
per share.

1.9        “Deferral Election Form” means a form executed by a Director pursuant
to Section 3.1 of the Plan.

1.10      “Director” means an individual who is and continues to serve as a
member of the Board of Directors; provided, however, that for purposes of this
Plan only, “Director” shall not include any member of the Board of Directors who
is an employee or officer of the Company or any of its affiliates.

1.11      “Fair Market Value” means the per share value of the Common Stock on
the applicable date, and is determined as follows:

 

(a)If the Common Stock is listed or admitted for trading on any national
securities exchange, the Fair Market Value is the closing price per share on
such exchange (or, if listed on more than one exchange, the principal said
exchange).

 

(b)If the Common Stock is not traded on any national securities exchange, but is
quoted on the National Association of Securities Dealers, Inc. Automated
Quotation System (NASDAQ System) or any similar system of automated
dissemination of quotations of prices in common use, the Fair Market Value is
the price per share equal to the mean between the closing high bid and the
closing low bid on such system on such date.

 

(c)If neither paragraph (a) nor paragraph (b) of this definition is applicable,
the Fair Market Value on the applicable date is determined by, or in accordance
with, a method or formula or process established from time to time by the Board
of Directors (or by the Committee if the Board of Directors so directs), in good
faith and in accordance with uniform principles consistently applied.

 

1.12      “Payment” or “Payable” or “Paid” means the issuance by the Company and
the transfer to the Director of shares of Common Stock equal to the number of
RSUs credited to the Account, with any fractional share being paid in cash.

 

1.13      “RSU” means the denomination used for deferred retainer fees pursuant
to the terms of the Plan, and may be expressed in whole or fractional units. One
RSU represents one share of Common Stock transferable to the Director on the
Payment date, and shall not represent any ownership interest in any actual
shares of Common Stock.

Article 2

Plan Administration

 

2.1        Administration. Except as otherwise provided in this Plan, the
Committee shall administer the Plan in accordance with the Plan’s terms. The
Committee may delegate to any person(s) or entity(ies) any of its powers,
rights, or obligations under the Plan. The Committee has complete discretionary
authority to interpret the Plan, to determine eligibility for and the amount of
Payments, to exercise all other rights and powers, and generally do anything
needed to operate, manage, and administer the Plan, and its decisions shall be
final and binding upon the Directors.

 

2.2        Expenses of Administration. The Company shall pay all costs and
expenses of administering the Plan.

 

 

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2.3        Change in Corporate Capitalization. In the event of any change in
corporate capitalization, such as a stock split, issuance of stock dividends, or
any corporate transaction, such as a merger, consolidation, separation,
spin-off, or other distribution of stock or property of the Company, or any
partial or complete liquidation of the Company, such adjustment shall be made in
the number and/or price of shares of Common Stock that may be subject to
outstanding Accounts under the Plan as is consistent with the change and may be
determined to be appropriate and equitable by the Committee, in its sole
discretion, to prevent dilution or enlargement of rights.

Article 3

Participation; Deferral Election Forms

 

3.1        Deferral Election Forms. Each Director may elect to defer up to 100%
of the annual retainer fee he shall receive in any calendar year with respect to
his service as a Director, including the portion of his annual retainer fee that
would otherwise be paid in stock under the Taubman Centers, Inc. Non-Employee
Directors Stock Grant Plan, by executing a written Deferral Election Form. Once
the election to defer is made, a Director will not have access to the amounts
deferred until service on the Board of Directors has terminated or until the
occurrence of a Change of Control Event. Deferrals of less than 100% of a
Director’s annual retainer fee will be made first from the cash portion of the
Director’s annual retainer fee and then from the portion that would otherwise be
paid in stock under the Taubman Centers, Inc. Non-Employee Directors Stock Grant
Plan. Each Deferral Election Form must specify the amount the Director elects to
defer, must state that the deferred retainer fee will be paid following the
termination of the Director’s service pursuant to Section 3.4 of the Plan, and
must be executed before the first day of the taxable year in which the Director
will earn the retainer fee subject to the Deferral Election Form or, if later,
within 30 days after he first becomes eligible for the Plan. A Deferral Election
Form will not apply to any retainer fees earned or paid prior to the date the
Deferral Election Form is executed.

 

3.2        Establishment of Accounts. An Account shall be established for each
Director. Each Account will be credited with the number of whole and fractional
RSUs equal to the deferred retainer fee divided by the Fair Market Value of the
Common Stock on the Business Day immediately before the date the Director would
otherwise have been entitled to receive the retainer fee subject to the Deferral
Election Form.

 

3.3        Dividends. On each day that the Company pays any cash dividends on
the outstanding shares of Common Stock, each Director’s Account shall be
credited, as of the record date of the applicable dividend payment, with the
number of whole and fractional RSUs equal to the dividend declared and paid on a
single share of Common Stock multiplied by the total number of RSUs credited to
the Director’s Account on the record date of the applicable dividend payment,
divided by the Fair Market Value of a single share of the Common Stock on the
Business Day immediately before the record date of the applicable dividend
payment.

 

3.4        Vesting and Payment of Accounts. Each Account shall be 100% vested at
all times, and shall be Paid to the Director as soon as administratively
practicable following the termination of the Director’s service on the Board of
Directors.

 

3.5        Director to Have No Rights as a Company Shareholder with Respect to
RSUs. A Director shall have no rights as a shareholder in the Company with
respect to RSUs in his Account.

 

3.6        Statement of Account. Within 100 days after the end of each calendar
year, the Committee shall submit to each Director a statement of his Account
setting forth the RSUs credited to his Account and the current fair market value
of the Common Stock as of the close of business on December 31st of such
calendar year, or as of such other date(s) as the Committee shall select.

 

 

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Article 4

Amendment and Termination of the Plan

 

4.1        Amendment or Termination of the Plan. The Plan will remain in effect
until it is terminated or abandoned by action of the Company. The Company may
from time to time suspend, discontinue, revise, amend, or terminate the Plan in
any respect whatsoever; provided, however, that except with the written consent
of a Director, no suspension, revision, amendment, or termination of the Plan
shall alter or impair any retainer fees previously deferred by such Director
under the Plan. If the Plan is terminated, no subsequent retainer fees shall be
deferred after the effective date of the termination, and any Account
outstanding at the time of termination shall become Payable pursuant to Section
3.4 of the Plan following the termination of the Director’s service on the Board
of Directors.

 

4.2        Change of Control Event. On the occurrence of a Change of Control
Event, the Plan shall terminate immediately, without any further action on the
part of the Committee, and each Director shall be Paid his Account as soon as
administratively feasible.

 

Article 5

Beneficiary Designation

 

5.1        Beneficiary Designation. Each Director may, at any time, designate a
Beneficiary or Beneficiaries (principal and contingent) to whom Payment under
the Plan will be made in the event of the Director’s death prior to Payment to
the Director under the Plan. Such designation may be changed at any time prior
to the Director’s death, without consent of any previously designated
beneficiary. All designations must be made in writing. A Beneficiary Designation
shall be effective only if properly completed and only on receipt by the
Committee. Any properly completed Beneficiary Designation received by the
Committee prior to the Director’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 Director in
determining who shall be entitled to receive Payment pursuant to such Director’s
Beneficiary Designation, unless the Director completes and submits after the
divorce a Beneficiary Designation which designates the former spouse as the
Director’s Beneficiary for purposes of the Plan.

 

5.2        In the Event of No Valid Designation. If a Director fails to
designate a Beneficiary as provided above, or if all designated Beneficiaries
predecease (or are deemed to predecease) such Director or die prior to Payment
of such Director’s Account, then such Director’s designated Beneficiary shall be
deemed to be the person(s) surviving such Director in the first of the following
classes in which there is a survivor, share and share alike:

 

(a)

Such Director’s surviving spouse.

 

(b)       Such Director’s children, except that if any of such Director’s
children predecease the Director 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) placed for adoption or foster care.

 

(c)

Such Director’s estate.

 

5.3        Dealings with Beneficiaries or Representatives of a Director. The
Committee may require such proper proof of death and such evidence of the right
of a Beneficiary to receive Payment of the Account as the Committee deems
necessary or advisable. The Committee’s determination of the right of any
Beneficiary to receive Payment of the Director’s Account under the Plan shall be
conclusive.

 

 

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Article 6

General Provisions

 

6.1        Status of Each Director is that of an Unsecured General Creditor.
Each Director and his Beneficiaries, heirs, successors, and assigns shall have
no legal or equitable rights, interest, or claims in any specific property or
assets of the Company or of any affiliate of the Company. Assets of the Company
or such other entities shall not be held under any trust for the benefit of any
Director or his Beneficiaries, heirs, successors, or assigns, or held in any way
as collateral security for the fulfilling of the obligations of the Company
under 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 Directors in the
future, subject to the conditions and provisions of the Plan.

 

6.2        Nonassignability. A Director’s rights and interests under the Plan
may not be assigned or transferred. 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 a
Director or any other person, or be transferable by operation of law in the
event of a Director’s or any other person’s bankruptcy or insolvency.

 

6.3        Execution. To record the adoption of the Plan, the Company has caused
the execution hereof this 18th day of May, 2005.

 

 

TAUBMAN CENTERS, INC.

a Michigan corporation

 

 

By:

/s/ Lisa A. Payne

 

    Lisa A. Payne

 

 

Its:

     Executive Vice President and

 

 

     Chief Financial and Administrative Officer

 

 

 

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