THE TAUBMAN COMPANY LLC
2008 OMNIBUS LONG-TERM INCENTIVE PLAN
RESTRICTED AND PERFORMANCE SHARE UNIT AWARD AGREEMENT

 

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 foster 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.

 
 

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ADDENDUM TO
RESTRICTED AND PERFORMANCE SHARE UNIT AWARD AGREEMENT

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
 
 

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