Severance pacts adopted

Wednesday, May 14, 2003 | 11:37 a.m.

WASHINGTON -- Taubman Centers Inc. said it has adopted new severance agreements for all its employees in case rival shopping mall developer Simon Property Group Inc. succeeds in its hostile takeover attempt and fires the workers.

Simon owns the Forum Shops at Caesars in Las Vegas and is co-developing a downtown Las Vegas outlet mall.

The new agreements, detailed in a regulatory filing Monday, especially protect three of the Bloomfield Hills, Mich.-based Taubman's top executives: Chief Financial Officer Lisa Payne and Senior Vice Presidents John Simon and Courtney Lord.

If Simon Property fires the three executives, they each would get two and a half times their annual base salary and annual bonus plus another annual bonus for the year in which they are fired, according to the Securities and Exchange Commission filing.

For 2002, Payne received $819,000 in compensation. Taubman Centers paid Lord and Simon a little more than $550,000 each.

If they are fired, the executives' outstanding equity-based compensation awards would vest and all other outstanding awards under their compensation plans would be paid in full immediately.

All other Taubman Centers employees who are fired would get a lump sum equal to one-twelfth of their annual base salary and annual bonus, multiplied by the number of years of employment.

The sums, which are subject to limitations, exclude Chairman and Chief Executive Robert Taubman and Executive Vice President William Taubman. The filing didn't detail any proposed severance packages for those two executives.

Last week, a federal judge ruled that Taubman Centers' founding family couldn't use its 33.6 percent stake to block the $1.68 billion hostile tender offer by Simon Property, which began in November.

Indianapolis-based Simon Property is the country's largest owner of malls. Westfield America, a shopping mall subsidiary of an Australian company, has joined it in the takeover attempt.