TAUBMAN CENTERS INC : Entry into a Material Definitive Agreement, Change in Directors or Principal Officers, Other Events, Financial Statements and Exhibits (form 8-K)

Item 1.01. Entry into a Material Definitive Agreement.

Merger Agreement

On February 9, 2020, Taubman Centers, Inc., a Michigan corporation ("TCO" or the "Company"), The Taubman Realty Group Limited Partnership, a Delaware limited partnership (the "Taubman Operating Partnership" and, together with TCO, the "Taubman Parties"), Simon Property Group, Inc., a Delaware corporation ("Simon"), Simon Property Group, L.P., a Delaware limited partnership (the "Simon Operating Partnership"), Silver Merger Sub 1, LLC, a Delaware limited liability company and wholly owned subsidiary of the Simon Operating Partnership ("Merger Sub 1") and Silver Merger Sub 2, LLC, a Delaware limited liability company and wholly owned subsidiary of Merger Sub 1 ("Merger Sub 2" and, together with Simon, the Simon Operating Partnership and Merger Sub 1, the "Simon Parties"), entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which, subject to the satisfaction or waiver of certain conditions, Merger Sub 2 will be merged with and into the Taubman Operating Partnership (the "Partnership Merger") and TCO will be merged with and into Merger Sub 1 (the "REIT Merger" and, together with the Partnership Merger, the "Mergers"). Upon completion of the Partnership Merger, the Taubman Operating Partnership will survive (the "Surviving Taubman Operating Partnership") and the separate existence of Merger Sub 2 will cease. Upon completion of the REIT Merger, Merger Sub 1 will survive ("Surviving TCO") and the separate corporate existence of TCO will cease. Immediately following the Partnership Merger, the Surviving Taubman Operating Partnership will be converted (the "Conversion") into a Delaware limited liability company (the "Joint Venture").

Transaction Structure

At the effective time of the Partnership Merger (the "Partnership Merger Effective Time"), (i) each unit of partnership interest in the Taubman Operating Partnership (each, a "Taubman OP Unit") issued and outstanding immediately prior to the Partnership Merger Effective Time held by a limited partner of the Taubman Operating Partnership who is not a member of the Taubman Family (defined as the "Titanium Family" in the Merger Agreement) (the "Minority Partners") will be converted into the right to receive, at the election of such Minority Partner, the Common Stock Merger Consideration (as defined below) or 0.3814 limited partnership units in the Simon Operating Partnership; (ii) certain Taubman OP Units issued and outstanding immediately prior to the Partnership Merger Effective Time held by a member of the Taubman Family will remain outstanding as units of partnership interest in the Surviving Taubman Operating Partnership; and (iii) all other Taubman OP Units issued and outstanding immediately prior to the Partnership Merger Effective Time held by a member of the Taubman Family will be converted into the right to receive the Common Stock Merger Consideration. In addition, at the Partnership Merger Effective Time, each outstanding incentive unit in the Taubman Operating Partnership will vest and be converted into a Taubman OP Unit, to be treated in the Partnership Merger in the same manner as the Taubman OP Units held by the Minority Partners. The membership interests of Merger Sub 2 issued and outstanding immediately prior to the Partnership Merger Effective Time will automatically be converted into a number of units of partnership interest in Surviving Taubman Operating Partnership such that following the Partnership Merger, Merger Sub 1 and TCO will collectively own 80% (assuming, for purposes of this calculation, that the Taubman OP Units issuable under the Option Deferral Agreement (as defined in the Merger Agreement) among TCO, the Taubman Operating Partnership and Robert S. Taubman are outstanding interests of Surviving Taubman Operating Partnership) of the outstanding interests of Surviving Taubman Operating Partnership.

Pursuant to the terms and conditions in the Merger Agreement, at the effective time of the REIT Merger (the "REIT Merger Effective Time"), (i) each share of common stock, $0.01 par value per share, of TCO (the "TCO Common Stock") issued and outstanding immediately prior to the REIT Merger Effective Time will be converted into the right to receive $52.50 in cash (the "Common Stock Merger Consideration"); and (ii) each share of Series B Non-Participating Convertible Preferred Stock, $0.001 par value per share, of TCO (the "TCO Series B Preferred Stock") will be converted into the right to receive an amount in cash equal to the Common Stock Merger Consideration, divided by 14,000. Immediately prior to the REIT Merger Effective Time, TCO will issue a redemption notice and cause funds to be set aside to pay the redemption price for each share of Series J Cumulative Redeemable Preferred Stock, no par value, of TCO (the "TCO Series J Preferred Stock") and each share of Series K Cumulative Redeemable Preferred Stock, no par value, of TCO (the "TCO Series K Preferred Stock"), at their respective liquidation preference of $25.00 plus all accumulated and unpaid dividends to, but not including, the redemption date of such share (the "Redemption"). -------------------------------------------------------------------------------- In addition, at the REIT Merger Effective Time, (i) each outstanding restricted stock unit award of TCO (each, a "TCO RSU") and each outstanding performance stock unit award (each, a "TCO PSU") granted under the Taubman Stock Plans (defined as the "Titanium Stock Plans" in the Merger Agreement) that vest in accordance with its terms in connection with the closing of the Mergers will automatically convert into the right to receive the Common Stock Merger Consideration; (ii) each outstanding TCO RSU and TCO PSU that is not eligible to vest in accordance with its terms at the REIT Merger Effective Time will be converted into a cash substitute award to be paid (A) with respect to any such award granted prior to 2020, in accordance with the same service-vesting schedule that applied to the original TCO RSU or TCO PSU award and (B) with respect to any such award granted in 2020, in accordance with the same vesting schedule (including performance-vesting conditions) that applied to the original TCO RSU or TCO PSU award; (iii) each outstanding share of deferred TCO Common Stock (each, a "TCO DSU") granted under the Taubman Stock Plans will be converted into the right to receive the Common Stock Merger Consideration and (iv) each dividend equivalent right granted in tandem with any TCO RSU or TCO PSU (each a "TCO DER") will be treated in the same manner as the outstanding TCO RSU or TCO PSU to which such TCO DER relates.

Finally, at the effective time of the Conversion, the Option Deferral Agreement (as defined in the Merger Agreement) will be deemed to be amended so that each Option Deferred Unit (as defined in the Merger Agreement) will represent the right to receive, following the Conversion, one Reorganized Taubman OP Unit (defined as a "Reorganized Titanium OP Unit" in the Merger Agreement), and will remain subject to all other terms and conditions of the Option Deferral Agreement.

Following the Mergers and the Conversion, the Simon Operating Partnership will own 100% of the outstanding equity of Surviving TCO, Surviving TCO will own 80% . . .

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

As previously disclosed in a Current Report on Form 8-K filed by the Company on December 13, 2017, the Company adopted the Taubman Severance Plan for Senior Level Management (the "2017 Severance Plan"), which expired in accordance with its terms on December 11, 2019. The description of the 2017 Severance Plan set forth in such Form 8-K filed on December 13, 2017 is incorporated herein by reference. On February 9, 2020, TCO reinstated the 2017 Severance Plan, effective on such date, in substantially the same form as the 2017 Severance Plan. The foregoing description is qualified in its entirety by the reinstated 2017 Severance Plan, a copy of which is attached hereto as Exhibit 10.1 and which is incorporated herein by reference.

Item 8.01 Other Events.

Concurrent with and as a condition to the Simon Parties entering into the Merger Agreement, each member of the Taubman Family that owns TCO Common Stock, TCO Series B Preferred Stock or partnership units of the Taubman Operating Partnership (such equity interests, collectively, the "Subject Equity"), including certain affiliated entities of Robert S. Taubman and William S. Taubman and certain members of their immediate family, entered into a voting agreement with Simon (the "Voting Agreement") with respect to all of the Subject Equity beneficially owned by the Taubman Family. -------------------------------------------------------------------------------- The Taubman Family beneficially own approximately 90% of the outstanding shares of TCO Series B Preferred Stock, representing, together with TCO Common Stock beneficially owned by the Taubman Family, approximately 29% of the voting stock of TCO. Pursuant to the Voting Agreement, the Taubman Family have agreed to take the following actions, among others, during the term of the Voting Agreement: (1) vote the Subject Equity in favor of the REIT Merger, the Partnership Merger and the Conversion, as applicable; (2) vote the Subject Equity against any Acquisition Proposal; and (3) vote the Subject Equity against any other actions that would impede, interfere with, delay or prevent the consummation of the Mergers, the Conversion or the other transactions contemplated by the Merger Agreement. The Voting Agreement will terminate upon the earliest of (i) the termination of the Merger Agreement in accordance with its terms; (ii) the REIT Merger Effective Time; and (iii) the Taubman Family providing written notice to Simon that it is terminating the Voting Agreement at any time following (A) a Taubman Board Recommendation Change or (B) any change to the terms of the Merger Agreement that reduces the amount or changes the form of consideration payable to the Taubman Family or is otherwise materially adverse to the Taubman Family.

The foregoing description of the Voting Agreement does not purport to be complete, and is qualified in its entirety by reference to the full text of the Voting Agreement. A copy of the Voting Agreement entered into by the Taubman Family, Simon and the Simon Operating Partnership is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

In addition, Robert S. Taubman has agreed with TCO to cooperate with the Special Committee of the TCO Board (the "Taubman Special Committee") in his capacity as a director and officer to facilitate the Go-Shop Process. Mr. Taubman has agreed to negotiate in good faith (on behalf of the Taubman Family) with a competing bidder that has made a proposal which the Taubman Special Committee determines is a Superior Proposal, or is reasonably likely to lead to a Superior Proposal, and that has a structure similar to the transactions with Simon. Mr. Taubman has also agreed to discuss in good faith with the Taubman Special Committee terms on which the Taubman Family might be willing to agree to an alternative transaction that does not have a structure similar to the transactions with Simon.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit    Description
  2.1  *   Agreement and Plan of Merger, dated as of February 9, 2020, by and
           among the Taubman Parties and the Simon Parties
  10.1     Taubman Severance Plan for Senior Level Management
  99.1     Voting Agreement, dated as of February 9, 2020, by and among Simon,
           Simon Operating Partnership and the other parties thereto
104        104 Cover Page Interactive Data File (embedded within the Inline XBRL
           document)

* Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. -------------------------------------------------------------------------------- FORWARD-LOOKING STATEMENTS

This Current Report on Form 8-K may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements reflect management's current views with respect to future events and financial performance. Forward-looking statements can be identified by words such as "will", "may", "could", "expect", "anticipate", "believes", "intends", "should", "plans", "estimates", "approximate", "guidance" and similar expressions in this Current Report on Form 8-K that predict or indicate future events and trends and that do not report historical matters. The forward-looking statements included in this Current Report on Form 8-K are made as of the date hereof. Except as required by law, the Company assumes no obligation to update these forward-looking statements, even if new information becomes available in the future. Actual results may differ materially from those expected because of various risks and uncertainties, including the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement? the inability to complete the proposed transaction due to the failure to obtain shareholder approval for the proposed transaction or the failure to satisfy other conditions to completion of the proposed merger? risks related to disruption of management's attention from the Company's ongoing business operations due to the proposed transaction? the effect of the announcement of the proposed transaction on the Company's relationships with its tenants, operating results and business generally; general economic conditions, and other factors. Such factors include, but are not limited to: changes in market rental rates; unscheduled closings or bankruptcies of tenants; relationships with anchor tenants; trends in the retail industry; challenges with department stores; changes in consumer shopping behavior; the liquidity of real estate investments; the Company's ability to comply with debt covenants; the availability and terms of financings; changes in market rates of interest and foreign exchange rates for foreign currencies; changes in value of investments in foreign entities; the ability to hedge interest rate and currency risk; risks related to acquiring, developing, expanding, leasing and managing properties; competitors gaining economies of scale through M&A and consolidation activity; changes in value of investments in foreign entities; risks related to joint venture properties; insurance costs and coverage; security breaches that could impact the Company's information technology, infrastructure or personal data; costs associated with response to technology breaches; the loss of key management personnel; shareholder activism costs and related diversion of management time; terrorist activities; maintaining the Company's status as a real estate investment trust; changes in the laws of states, localities, and foreign jurisdictions that may increase taxes on the Company's operations; and changes in global, national, regional and/or local economic and geopolitical climates.

You should review the Company's filings with the Securities and Exchange Commission, including "Risk Factors" in its most recent Annual Report on Form 10-K and subsequent quarterly reports, for a discussion of such risks and uncertainties.

IMPORTANT INFORMATION ABOUT THE TRANSACTION AND WHERE TO FIND IT

In connection with the proposed transaction between the Company and Simon, the Company will file with the U.S. Securities and Exchange Commission (the "SEC") a Proxy Statement of the Company (the "Proxy Statement"). The Company plans to mail to its shareholders the definitive Proxy Statement in connection with the proposed transaction. This Current Report on Form 8-K is not intended to and does not constitute the solicitation of any proxy, vote or approval. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AS THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, SIMON, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders will be able to obtain free copies of the Proxy Statement and other documents (when available) filed with the SEC by the Company through the website maintained by the SEC at www.sec.gov. In addition, investors and security holders will be able to obtain free copies of the documents filed with the SEC by the Company in the Investor Relations section of the Company's website at http://investors.taubman.com/investors or by contacting Erik Wright, Manager, Investor Relations at [e-mail] or [phone]. -------------------------------------------------------------------------------- PARTICIPANTS IN THE SOLICITATION

The Company and certain of its directors, executive officers and employees may be considered participants in the solicitation of proxies in connection with the solicitation of proxies from shareholders of the Company in favor of the proposed transaction. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the shareholders of the Company in connection with the proposed transaction, including a description of their respective direct or indirect interests, by security holdings or otherwise, will be included in the Proxy Statement described above filed with the SEC. Additional information regarding the Company's directors and executive officers is also included in the Company's proxy statement for its 2019 Annual Meeting of Shareholders, which was filed with the SEC on April 30, 2019, and its Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 28, 2019. These documents are available free of charge as described above. --------------------------------------------------------------------------------

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