-----------------------------------
OMB APPROVAL
-----------------------------------
OMB NUMBER 3235-0059
EXPIRES: AUGUST 31, 2004
ESTIMATED AVERAGE BURDEN
HOURS PER RESPONSE........ 14.73
-----------------------------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
TAUBMAN CENTERS, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
SIMON PROPERTY GROUP, INC.
SIMON PROPERTY ACQUISITIONS, INC.
WESTFIELD AMERICA, INC.
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required.
/X/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies: Common Stock, par value $.01 per share, of Taubman
Centers, Inc.
(2) Aggregate number of securities to which transaction applies:
based on the Registrant's Preliminary Proxy Statement on
Schedule 14A filed on December 20, 2002, the Registrant's
Schedule 14D-9 filed on December 11, 2002 and the Registrant's
Quarterly Report on Form 10-Q for the period ended September
30, 2002, 62,186,277 shares of Common Stock, consisting of (i)
52,207,756 outstanding shares of Common Stock, (ii) 2,269
shares of Common Stock issuable upon conversion of the
31,767,066 outstanding shares of Series B Non-Participating
Convertible Preferred Stock, (iii) 7,097,979 shares of Common
Stock issuable upon conversion of outstanding partnership
units of The Taubman Realty Group Limited Partnership ("TRG")
and (iv) 2,878,273 shares of Common Stock issuable upon the
conversion of outstanding options (each of which entitles the
holder thereof to purchase one partnership unit of TRG which,
in turn, is convertible into one share of Common Stock).
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined): As provided by Rule 0-11(c), the filing fee
is based upon 1/50th of 1% of $20.00, the amount offered to be
paid per share of Common Stock in connection with the tender
offer being made in connection with this proxy solicitation,
multiplied by 62,186,277 shares of Common Stock.
(4) Proposed maximum aggregate value of transaction:
$1,243,725,540.
(5) Total fee paid: $248,745.11.
/ / Fee paid previously with preliminary materials.
/X/ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: $248,745.11.
(2) Form, Schedule or Registration Statement No.: Schedule TO,
File No. 005-42862, Amendment No. 1 to the Schedule TO and
Amendment No. 5 to the Schedule TO.
(3) Filing Party: Simon Property Group, Inc.; Simon Property
Acquisitions, Inc.; Westfield America, Inc.
(4) Dates Filed: December 5, 2002, December 16, 2002 and January
15, 2003.
Preliminary Materials dated February 21, 2003
----------------------------------------------
This proxy statement will be revised to reflect actual facts at the
time of filing of the definitive proxy statement.
----------------------------------------------
SOLICITATION OF AGENT DESIGNATIONS
IN CONNECTION WITH THE
CALLING OF A SPECIAL MEETING OF SHAREHOLDERS
OF
TAUBMAN CENTERS, INC.
PRELIMINARY SOLICITATION STATEMENT
OF
SIMON PROPERTY GROUP, INC.
SIMON PROPERTY ACQUISITIONS, INC.
WESTFIELD AMERICA, INC.
TO THE SHAREHOLDERS OF TAUBMAN CENTERS, INC.:
This Solicitation Statement (this "Solicitation Statement") and the
enclosed GREEN Appointment of Designated Agents ("Agent Designations") are being
furnished to holders of outstanding shares of common stock, par value $.01 per
share ("Common Stock" or the "Shares"), and Series B Non-Participating
Convertible Preferred Stock, par value $.001 per share ("Series B Preferred
Stock"), of Taubman Centers, Inc., a Michigan corporation (the "Company"), in
connection with the solicitation (this "Solicitation") of Agent Designations by
and on behalf of Simon Property Group, Inc. ("SPG Inc."), a Delaware
corporation, Simon Property Acquisitions, Inc. (including any successor thereto,
the "Purchaser" and, together with SPG Inc., "SPG"), a Delaware corporation and
a wholly owned subsidiary of SPG Inc., and Westfield America, Inc. ("WEA"), a
Missouri corporation, to provide for the calling of a special meeting of
shareholders of the Company for the purposes described herein (the "Special
Meeting"). The date of this Solicitation Statement is February __, 2003.
This Solicitation Statement and the enclosed GREEN Agent Designation
are first being sent or given to the Company's shareholders on or about February
__, 2003.
--------------------------------------------------------------------------------
IMPORTANT
THE PURPOSE OF THIS SOLICITATION IS TO FACILITATE THE CONSUMMATION OF THE
PURCHASER'S PENDING TENDER OFFER FOR ALL OF THE OUTSTANDING SHARES AT A PRICE OF
$20.00 PER SHARE IN CASH BY URGING YOU TO CALL THE SPECIAL MEETING. FOR A
DESCRIPTION OF THE TERMS AND CONDITIONS OF THE OFFER (AS DEFINED BELOW), SEE
"THE TENDER OFFER AND ACCOMPANYING LITIGATION."
OVER THE PAST SEVERAL MONTHS, THE BOARD OF DIRECTORS OF THE COMPANY (THE
"COMPANY BOARD") UNILATERALLY HAS TAKEN ACTIONS TO FRUSTRATE THE ABILITY OF THE
COMPANY'S COMMON SHAREHOLDERS TO RECEIVE $20.00 PER SHARE IN CASH IN CONNECTION
WITH THE OFFER. DESPITE THE FACT THAT APPROXIMATELY 85% OF THE COMMON STOCK WAS
TENDERED INTO THE OFFER AS OF FEBRUARY 14, 2003, THE COMPANY BOARD CONTINUES TO
REFUSE TO TAKE STEPS TO FACILITATE THE CONSUMMATION OF THE OFFER. SPG AND WEA
BELIEVE THAT THE COMPANY'S COMMON SHAREHOLDERS, AND NOT THE TAUBMAN FAMILY,
SHOULD DECIDE THE FUTURE OF THE COMPANY AND THAT THE COMPANY BOARD SHOULD NOT
PREVENT THE COMPANY'S COMMON SHAREHOLDERS FROM RECEIVING $20.00 PER SHARE IN
CASH FOR THEIR SHARES IN THE OFFER. THEREFORE, SPG AND WEA URGE YOU RETURN THE
GREEN AGENT DESIGNATION TO FACILITATE THE CALLING OF THE SPECIAL
--------------------------------------------------------------------------------
i
--------------------------------------------------------------------------------
MEETING.
AT THE SPECIAL MEETING, THE COMPANY'S SHAREHOLDERS WILL HAVE THE OPPORTUNITY TO
VOTE ON PROPOSALS TO REMOVE A KEY IMPEDIMENT TO THE OFFER BY AMENDING THE
COMPANY'S RESTATED ARTICLES OF INCORPORATION (AS AMENDED, THE "CHARTER") IN
ORDER TO SATISFY THE EXCESS SHARE CONDITION (AS DEFINED BELOW) TO THE OFFER.
BY RETURNING THE GREEN AGENT DESIGNATION, YOU WILL FACILITATE THE CALLING OF THE
SPECIAL MEETING AT WHICH THE COMPANY'S SHAREHOLDERS MAY TAKE ACTIONS THAT WILL
EXPRESS TO THE COMPANY BOARD THE SHAREHOLDERS' DESIRE TO ACCEPT THE OFFER AND TO
HAVE THE COMPANY BOARD TAKE ACTIONS TO MAKE THAT POSSIBLE. FOR A DESCRIPTION OF
THE ACTIONS PROPOSED TO BE TAKEN AT THE SPECIAL MEETING, SEE "THE SPECIAL
MEETING."
--------------------------------------------------------------------------------
Executed Agent Designations should be delivered, by fax or by mail
(using the enclosed envelope), to the Information Agent for the Offer, MacKenzie
Partners, Inc. ("MacKenzie Partners"), for delivery to the Company, on or before
__________, 2003 or such later date as SPG and WEA may from time to time
establish in accordance with the procedures set forth under the heading "Agent
Designation Procedures."
For the Special Meeting to be called and held pursuant to the Company's
Restated By-Laws (as amended, the "By-Laws"), Agent Designations in favor of
calling the Special Meeting must be executed by and received from the record
holder or holders of not less than 25% of all of the shares entitled to vote at
such meeting (the "Requisite Holders"). Alternatively, if Agent Designations in
favor of calling the Special Meeting are executed by and received from the
record holder or holders of not less than 10% of all of the shares entitled to
vote at such meeting, application may be made, pursuant to Section 403 of the
Michigan Business Corporation Act to the circuit court of Oakland County,
Michigan (the county in which the Company's principal office is located), to
order, for good cause shown, that the Special Meeting be called and held.
PLEASE SIGN, DATE AND RETURN THE ENCLOSED GREEN AGENT DESIGNATION IN
THE ENCLOSED ENVELOPE TODAY!
SIGNING AN AGENT DESIGNATION WILL NOT AFFECT YOUR ABILITY TO VOTE FOR
OR AGAINST ANY PROPOSAL PRESENTED AT THE SPECIAL MEETING.
Pursuant to this Solicitation Statement, SPG and WEA are soliciting
Agent Designations from the holders of outstanding shares of Common Stock and
Series B Preferred Stock to provide for the calling of the Special Meeting. By
signing an Agent Designation you will designate specified persons as your agents
and will authorize those persons to call, or request that the Company call, the
Special Meeting or to apply to the circuit court of Oakland County, Michigan
(the county in which the Company's principal office is located), to order, for
good cause shown, that the Special Meeting be called and held. At the Special
Meeting, SPG and WEA will, among other things, ask you to consider and vote upon
a proposal to amend the Charter to provide that the Excess Share Provision (as
defined below) would not apply to SPG, WEA or their respective affiliates (the
"Excess Share Proposal"). The Excess Share Proposal is described in detail under
the heading "The Special Meeting - The Excess Share Proposal". The purpose of
the Excess Share Proposal is to facilitate the consummation of the Offer. In
addition, SPG and WEA expect to request authority to initiate a vote for a
proposal to recess, adjourn or reschedule the Special Meeting for any reason,
including to allow inspectors of the election to certify the outcome of the
Excess Share Proposal, or to allow the solicitation of additional votes, if
necessary, to approve the Excess Share Proposal.
ii
AS OF 12:00 MIDNIGHT ON FEBRUARY 14, 2003, APPROXIMATELY 85% OF THE
COMPANY'S OUTSTANDING COMMON STOCK HAD BEEN VALIDLY TENDERED INTO THE OFFER AND
NOT WITHDRAWN. NOTWITHSTANDING THIS OVERWHELMING MANDATE FROM THE COMPANY'S
COMMON SHAREHOLDERS, ON FEBRUARY 17, 2003, BARELY TWO HOURS AFTER SPG'S AND
WEA'S ANNOUNCEMENT OF THE OVERWHELMING RESULTS OF THE OFFER, THE COMPANY
ANNOUNCED THAT THE COMPANY BOARD CONTINUED TO OPPOSE THE OFFER AND WOULD NOT
TAKE STEPS TO FACILITATE THE OFFER. THE COMPANY BOARD HAS A FIDUCIARY DUTY TO
ACT IN THE BEST INTERESTS OF THE COMPANY'S COMMON SHAREHOLDERS, WHO OWN
APPROXIMATELY 99% OF THE ECONOMIC VALUE OF THE COMPANY. AS DIRECTORS OF A PUBLIC
COMPANY, THE MEMBERS OF THE COMPANY BOARD SHOULD NOT ABDICATE THEIR FIDUCIARY
OBLIGATIONS BY HIDING BEHIND THE DICTATES OF ANY PARTICULAR GROUP OF
SHAREHOLDERS, PARTICULARLY SHAREHOLDERS (LIKE THE TAUBMAN FAMILY) WITH INTERESTS
DIVERGENT FROM THOSE OF THE COMPANY'S COMMON SHAREHOLDERS.
Two-thirds (2/3) of the voting power of the Company's voting securities
is needed to approve the Excess Share Proposal. SPG believes that Robert
Taubman, the Taubman family and various associates of the Taubman family acted
to form a group voting position for the purpose of blocking the Offer by giving
Robert Taubman the purported ability to control voting rights for shares of
Series B Preferred Stock and Common Stock held by members of the Taubman family
and certain associates of the Taubman family that together purportedly comprise
approximately 33.6% of the Company's voting power. SPG, as well as other
shareholders of the Company, have commenced litigation challenging the legality
of the voting rights of the shares held or controlled by the Taubman family, in
whole or in part, and the ability of the Taubman family to vote these shares to
prevent the Company's common shareholders from receiving $20.00 per Share in
cash pursuant to the Offer. SPG and WEA currently intend to proceed with the
solicitation of Agent Designations regardless of the outcome of SPG's litigation
against the Company, the Company Board and certain members of the Taubman
family.
The Excess Share Proposal can be approved if (i) the effective veto
power that the Taubman family purports to wield over the Offer is invalidated as
described in "The Tender Offer and Accompanying Litigation" or (ii) the Company
Board and/or the holders of the Series B Preferred Stock remove impediments to
the consummation of the Offer.
DESPITE THE FACT THAT THE COMPANY BOARD HAS STATED THAT THE TAUBMAN
FAMILY IS CATEGORICALLY OPPOSED TO A SALE OF THE COMPANY, SPG AND WEA BELIEVE
THAT THE COMPANY BOARD, ACTING AS FIDUCIARIES FOR THE COMMON SHAREHOLDERS, COULD
AND SHOULD TAKE ALL NECESSARY ACTIONS TO REMOVE THE IMPEDIMENTS TO THE
CONSUMMATION OF THE OFFER.
IF YOU BELIEVE THAT YOU (AND NOT THE TAUBMAN FAMILY) SHOULD DECIDE THE
FUTURE OF YOUR COMPANY AND THAT YOU SHOULD HAVE THE OPPORTUNITY TO RECEIVE
$20.00 PER SHARE IN CASH FOR ALL OF YOUR SHARES OF COMMON STOCK, SPG AND WEA
URGE YOU TO SIGN AND RETURN YOUR GREEN AGENT DESIGNATION PROMPTLY.
This Solicitation is being made by SPG and WEA, and not on behalf of
the Company Board. At this time, SPG and WEA are only soliciting your Agent
Designation for the purpose of calling the Special Meeting. SPG and WEA are not
currently seeking your proxy, consent or authorization for approval of the
Excess Share Proposal or any other proposal at the Special Meeting. After the
Special Meeting has been called, SPG and WEA will send you proxy materials
urging you to vote in favor of the proposals to be voted upon at the Special
Meeting.
YOUR AGENT DESIGNATION IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW
SHARES YOU OWN. FAILURE TO EXECUTE A GREEN AGENT DESIGNATION HAS THE SAME EFFECT
AS OPPOSING THE CALLING OF THE SPECIAL MEETING AND MAY IMPEDE CONSUMMATION OF
THE OFFER AND THEREBY THE ABILITY OF THE
iii
COMMON SHAREHOLDERS TO RECEIVE $20.00 PER SHARE IN CASH FOR THEIR SHARES OF
COMMON STOCK PURSUANT TO THE OFFER.
If your shares of Common Stock and/or Series B Preferred Stock are
registered in your own name, please sign, date and mail the enclosed GREEN Agent
Designation to MacKenzie Partners in the postage-paid envelope provided. If any
of your shares of Common Stock and/or Series B Preferred Stock are held in the
name of a brokerage firm, bank, bank nominee or other institution, only the
brokerage firm, bank, bank nominee or other institution can execute an Agent
Designation for such shares of Common Stock and/or Series B Preferred Stock and
will do so only upon receipt of specific instructions from the beneficial owner
of such shares of Common Stock and/or Series B Preferred Stock. Accordingly,
each shareholder who holds shares of Common Stock and/or Series B Preferred
Stock through a nominee such as a brokerage firm, bank, bank nominee or other
institution must contact the person responsible for the shareholder's account
and advise that person to execute and return the accompanying GREEN Agent
Designation. SPG and WEA urge you to confirm in writing your instructions to the
person responsible for your account and to provide a copy of such instructions
to SPG and WEA, care of MacKenzie Partners at the address below, so that SPG and
WEA will be aware of all instructions given and can attempt to ensure that such
instructions are followed.
IF YOU HAVE ANY QUESTIONS ABOUT EXECUTING OR DELIVERING YOUR GREEN
AGENT DESIGNATION OR REQUIRE ASSISTANCE, PLEASE CONTACT:
[MACKENZIE PARTNERS, INC. LOGO]
105 MADISON AVENUE
NEW YORK, NEW YORK 10016
CALL COLLECT: (212) 929-5500
OR
CALL TOLL-FREE: (800) 322-2885
FAX: (212) 929-0308
iv
TABLE OF CONTENTS
PAGE
INTRODUCTION.................................................................1
THE TENDER OFFER AND ACCOMPANYING LITIGATION.................................4
BACKGROUND OF THE TENDER OFFER...............................................9
AGENT DESIGNATION PROCEDURES................................................16
THE SPECIAL MEETING.........................................................19
GENERAL............................................................19
THE EXCESS SHARE PROPOSAL..........................................19
RECESS OR ADJOURNMENT OF MEETING AND OTHER MATTERS.................21
CERTAIN INFORMATION ABOUT THE COMPANY.......................................22
CERTAIN INFORMATION ABOUT SPG INC., SPG L.P., THE PURCHASER
AND WEA IN THE SOLICITATION.................................................23
SOLICITATION EXPENSES AND PROCEDURES........................................24
SHAREHOLDER PROPOSALS.......................................................25
OTHER INFORMATION...........................................................25
SCHEDULE I.................................................................I-1
SCHEDULE II...............................................................II-1
SCHEDULE III.............................................................III-1
INTRODUCTION
On October 16, 2002, David Simon, Chief Executive Officer of Simon
Property Group, Inc. ("SPG Inc."), a Delaware corporation and the general
partner and the owner of the majority of the equity interests of Simon Property
Group, L.P., a Delaware limited partnership ("SPG L.P."), called Robert S.
Taubman, Chairman of the Board of Directors, President and Chief Executive
Officer of Taubman Centers, Inc., a Michigan corporation (the "Company"), to
express SPG Inc.'s interest in pursuing a business combination involving SPG
Inc. and the Company. Later that day, Mr. Simon sent a letter to Mr. Taubman
containing a written proposal describing SPG Inc.'s interest in a business
combination with the Company.
On October 22, 2002, SPG Inc. delivered a letter to the Company
containing a proposal to acquire the Company by SPG Inc. in a negotiated
transaction, in which holders of all the outstanding shares of common stock, par
value $.01 per share (the "Common Stock" or the "Shares"), of the Company would
receive $17.50 in cash per Share. On October 28, 2002, the Board of Directors of
the Company (the "Company Board") rejected SPG Inc.'s proposed offer, stating
that any discussions regarding a transaction would not be productive because the
Taubman family (with its purported greater than 30% voting stake) had informed
the Company Board that it is categorically opposed to the sale of the Company.
On November 13, 2002, SPG Inc. delivered a letter to the Company Board
setting forth the terms of its proposed business combination with the Company,
and calling on the Company Board for assistance in surmounting the obstacles to
a business combination presented by the Company's corporate governance
structure. This letter was publicly disclosed by means of a press release.
Within one hour of SPG Inc.'s press release, the Company issued a press release
that categorically rejected SPG Inc.'s proposal.
On December 5, 2002, Simon Property Acquisitions, Inc. (including any
successor thereto, the "Purchaser" and, together with SPG Inc., "SPG"), a
Delaware corporation and a wholly owned subsidiary of SPG Inc., commenced a
tender offer to purchase all the outstanding Shares at a price of $18.00 per
Share, net to the seller in cash, without interest thereon (as such price may be
amended in connection with the Offer, the "Offer Price"), upon the terms and
subject to the conditions set forth in an Offer to Purchase dated December 5,
2002 (the "Offer to Purchase") and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, constitute the "Offer").
On December 11, 2002, the Company filed a Schedule 14D-9 (as amended,
the "Company Schedule 14D-9") with the Securities and Exchange Commission (the
"Commission") recommending that the Company's common shareholders reject the
Offer. The recommendation was made despite the fact that the Offer Price, at
that time, represented a 35% premium over the $13.32 closing price of the Common
Stock on October 15, 2002 (the last trading day prior to SPG Inc.'s initial
private communication to the Company expressing its interest in pursuing a
business combination).
On January 15, 2003, SPG Inc., Westfield America, Inc., a Missouri
corporation ("WEA"), and the Purchaser announced that WEA had joined SPG's Offer
and that they had entered into an Offer Agreement (the "Offer Agreement"), which
provides, among other things, that (i) all decisions with respect to the Offer
shall be made jointly by SPG Inc. and WEA and (ii) if the Offer is consummated,
WEA (or its designated assignee) will acquire 50% of the Purchaser at a purchase
price equal to 50% of the aggregate Offer Price paid by the Purchaser in the
Offer, and SPG Inc. and WEA will jointly control the Common Stock purchased in
the Offer.
1
On that same day, SPG and WEA announced that the Offer Price was
increased to $20.00, that the Expiration Date of the Offer was extended to
February 14, 2003 and that unless two-thirds (2/3) of the outstanding Common
Stock, or 34,805,171 Shares (based on the number of Shares outstanding as of
December 16, 2002), were validly tendered and not withdrawn prior to 12:00
midnight New York City time on February 14, 2003, SPG and WEA would withdraw the
Offer and terminate their efforts to acquire the Company. SPG and WEA filed with
the Commission and distributed to the Company's shareholders a Supplement to the
Offer to Purchase, dated January 15, 2003 (the "Supplement"), a revised Letter
of Transmittal and the related revised Offer materials.
On January 21, 2003, the Company filed an amendment to the Company
Schedule 14D-9 with the Commission recommending that the Company's common
shareholders reject the Offer. The recommendation was made despite the fact that
the $20.00 per Share Offer Price represents a 50% premium over the $13.32
closing price of the Common Stock on October 15, 2002 (the last trading day
prior to SPG Inc.'s initial private communication to the Company expressing its
interest in pursuing a business combination). SPG and WEA do not believe that
the recommendation is in the best interests of the Company's common shareholders
because SPG and WEA believe the Company's common shareholders should be given
the opportunity to decide for themselves whether to tender their Shares and
receive $20.00 in cash per Share in the Offer.
On February 17, 2003, SPG and WEA announced that (i) 44,135,107 of the
52,207,756 Shares outstanding, representing approximately 85% of the Common
Stock, had been validly tendered and not withdrawn prior to 12:00 midnight New
York City time on February 14, 2003 and (ii) the Expiration Date of the Offer
was extended to 12:00 midnight New York City time on March 28, 2003.
Notwithstanding that approximately 85% of the Company's outstanding shares of
Common Stock had been tendered into the Offer, on February 17, 2003, barely two
hours after SPG's and WEA's announcement of the overwhelming results of the
Offer, the Company announced that the Company Board continued to oppose the
Offer and would not take steps to facilitate the Offer.
The Taubman family purportedly holds a significant voting stake in the
Company that may impede the potential sale of the Company, including the
satisfaction of certain conditions to the consummation of the Offer. SPG
believes that in 2002 a "control share acquisition" (within the meaning of
Chapter 7B (the "Michigan Control Share Act") of the Michigan Business
Corporation Act (the "MBCA")) occurred when Robert Taubman, the Taubman family
and various associates of the Taubman family acted to form a group voting
position for the purpose of blocking the Offer made up of the shares of the
Company's Series B Non-Participating Convertible Preferred Stock, par value
$.001 per share ("Series B Preferred Stock") and Common Stock held by members of
the Taubman family and certain associates of the Taubman family that together
purportedly comprised approximately 33.6% of the Company's voting power. SPG
believes that under the Michigan Control Share Act, such a transaction required
the approval of the holders of a majority of the disinterested shares of the
Company's voting stock in order for any member of the "group" to have the right
to vote any shares of the "group." SPG believes that because no such shareholder
approval has been sought or given, those shares have no voting rights. SPG is
seeking through the Complaint (as defined below), among other things, to
invalidate any voting rights with respect to these shares, on the ground (among
others) that aggregation of shares with a "group" purportedly comprising 33.6%
of the Company's voting power through the actions of Robert Taubman, the Taubman
family and those persons who entered into certain voting agreements with Robert
Taubman during November 2002 (the "Voting Agreements") was a "control share
acquisition" without a shareholder vote as required by the Michigan Control
Share Act. On January 28, 2003, the Company announced that Robert Taubman and
various associates of the Taubman family had purportedly terminated the Voting
Agreements. Notwithstanding the purported termination of these agreements, SPG
continues to believe that because Robert Taubman, the Taubman family and various
associates of the Taubman family acted to form a group voting position for the
purpose of blocking the Offer, any voting
2
rights with respect to the shares comprising the purported 33.6% voting
position held or controlled by the Taubman family should be invalidated. At a
hearing scheduled for March 21, 2003, the United States Federal Court for the
Eastern District of Michigan (the "Court") will consider SPG's claims to
invalidate the voting rights with respect to the shares held or controlled by
the Taubman family.
If the Series B Preferred Stock held or controlled by the Taubman
family is not invalidated and the Taubman family continues to oppose the Offer,
it is unlikely that the conditions to the consummation of the Offer will be
satisfied unless the Company Board or the holders of the Series B Preferred
Stock take actions to remove the impediments to the consummation of the Offer.
The purpose of this Solicitation is to facilitate the consummation of
the Offer by urging you to call a special meeting of shareholders of the Company
for the purposes described herein (the "Special Meeting"). At the Special
Meeting, SPG and WEA will, among other things, ask you to consider and vote upon
a proposal to amend the Company's Restated Articles of Incorporation (the
"Charter") to provide that the Excess Share Provision (as defined below) would
not apply to SPG, WEA or their respective affiliates (the "Excess Share
Proposal"). The Excess Share Proposal is described in detail under the heading
"The Special Meeting - The Excess Share Proposal". In addition, SPG and WEA
expect to request authority to initiate and vote for a proposal to recess,
adjourn or reschedule the Special Meeting for any reason, including to allow
inspectors of the election to certify the outcome of the Excess Share Proposal,
or to allow the solicitation of additional votes, if necessary, to approve the
Excess Share Proposal.
AS OF 12:00 MIDNIGHT ON FEBRUARY 14, 2003, APPROXIMATELY 85% OF THE
COMPANY'S OUTSTANDING COMMON STOCK HAD BEEN VALIDLY TENDERED INTO THE OFFER AND
NOT WITHDRAWN. NOTWITHSTANDING THIS OVERWHELMING MANDATE FROM THE COMPANY'S
COMMON SHAREHOLDERS, ON FEBRUARY 17, 2003, BARELY TWO HOURS AFTER SPG'S AND
WEA'S ANNOUNCEMENT OF THE RESULTS OF THE OFFER, THE COMPANY ANNOUNCED THAT THE
COMPANY BOARD CONTINUED TO OPPOSE THE OFFER AND WOULD NOT TAKE STEPS TO
FACILITATE THE OFFER. THE COMPANY BOARD HAS A FIDUCIARY DUTY TO ACT IN THE BEST
INTERESTS OF THE COMPANY'S COMMON SHAREHOLDERS, WHO OWN APPROXIMATELY 99% OF THE
ECONOMIC VALUE OF THE COMPANY. AS DIRECTORS OF A PUBLIC COMPANY, THE MEMBERS OF
THE COMPANY BOARD SHOULD NOT ABDICATE THEIR FIDUCIARY OBLIGATIONS BY HIDING
BEHIND THE DICTATES OF ANY PARTICULAR GROUP OF SHAREHOLDERS, PARTICULARLY
SHAREHOLDERS (LIKE THE TAUBMAN FAMILY) WITH INTERESTS DIVERGENT FROM THOSE OF
THE COMPANY'S COMMON SHAREHOLDERS.
Two-thirds (2/3) of the voting power of the Company's voting securities
is needed to approve the Excess Share Proposal. SPG believes that Robert
Taubman, the Taubman family and various associates of the Taubman family acted
to form a group voting position for the purpose of blocking the Offer comprising
approximately 33.6% of the Company's voting power. SPG, as well as other
shareholders of the Company, have commenced litigation challenging the legality
of the voting rights of the shares held or controlled by the Taubman family, in
whole or in part, and the ability of the Taubman family to vote these shares to
prevent the Company's common shareholders from receiving $20.00 per Share in
cash pursuant to the Offer. SPG and WEA currently intend to proceed with the
solicitation of the enclosed GREEN Appointment of Designated Agents ("Agent
Designations") regardless of the outcome of SPG's litigation against the
Company, the Company Board and certain members of the Taubman family.
The Excess Share Proposal can be approved if (i) the effective veto
power that the Taubman family purports to wield over the Offer is invalidated as
described in "The Tender Offer and Accompanying Litigation" or (ii) the Company
Board and/or the holders of the Series B Preferred Stock remove impediments to
the consummation of the Offer.
3
DESPITE THE FACT THAT THE COMPANY BOARD HAS STATED THAT THE TAUBMAN
FAMILY IS CATEGORICALLY OPPOSED TO A SALE OF THE COMPANY, SPG AND WEA BELIEVE
THAT THE COMPANY BOARD, ACTING AS FIDUCIARIES FOR THE COMMON SHAREHOLDERS, COULD
AND SHOULD TAKE ALL NECESSARY ACTIONS TO REMOVE THE IMPEDIMENTS TO THE
CONSUMMATION OF THE OFFER.
A Tender Offer Statement on Schedule TO (which includes the Offer to
Purchase) relating to the Offer was filed by SPG with the Commission on December
5, 2002. An amendment to the Tender Offer Statement on Schedule TO (which
includes the Supplement) relating to the Offer was filed by SPG and WEA with the
Commission on January 16, 2003. Such documents and any amendments or supplements
thereto may be obtained from the Commission, upon payment of the Commission's
customary charges, by writing to the Commission's principal office at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549. Such materials also are
available for inspection and copying at the principal office of the Commission
at the address set forth immediately above, and at the Commission's regional
office at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. This information also is available without charge on the
Commission's website at www.sec.gov.
Shares are only being sought for tender by means of and pursuant to the
terms of the Offer to Purchase, the Supplement and the related revised Letter of
Transmittal, as filed by SPG and WEA with the Commission as exhibits to the
Purchaser's Tender Offer Statement on Schedule TO on December 5, 2002 and on
January 16, 2003, respectively.
IF YOU BELIEVE THAT YOU (AND NOT THE TAUBMAN FAMILY) SHOULD DECIDE THE
FUTURE OF YOUR COMPANY AND THAT YOU SHOULD HAVE THE OPPORTUNITY TO RECEIVE
$20.00 PER SHARE IN CASH FOR ALL OF YOUR SHARES OF COMMON STOCK, SPG AND WEA
URGE YOU TO COMPLETE, SIGN AND RETURN YOUR GREEN AGENT DESIGNATION PROMPTLY.
CALLING THE SPECIAL MEETING IS AN IMPORTANT STEP IN FACILITATING THE
CONSUMMATION OF THE OFFER. SIGNING AN AGENT DESIGNATION WILL NOT AFFECT YOUR
ABILITY TO VOTE FOR OR AGAINST ANY PROPOSAL PRESENTED AT THE SPECIAL MEETING.
SIGNING AND RETURNING AN AGENT DESIGNATION CARD WILL NOT CONSTITUTE A
TENDER OF YOUR SHARES OF COMMON STOCK PURSUANT TO THE OFFER OR OBLIGATE YOU TO
TENDER YOUR SHARES OF COMMON STOCK PURSUANT TO THE OFFER. YOU MUST SEPARATELY
TENDER YOUR SHARES OF COMMON STOCK PURSUANT TO THE OFFER TO PURCHASE, THE
SUPPLEMENT AND THE REVISED LETTER OF TRANSMITTAL IF YOU WISH TO PARTICIPATE IN
THE OFFER.
THE TENDER OFFER AND ACCOMPANYING LITIGATION
The purpose of the Offer is for SPG and WEA to acquire control of, and
ultimately all the Common Stock of, the Company. If the Offer is consummated,
SPG and WEA currently intend, as soon as practicable following the consummation
of the Offer, to propose and seek to have the Company consummate a merger or
similar business combination (the "Proposed Merger") with the Purchaser (or its
designated assignee) pursuant to which each then outstanding Share (other than
Shares held by the Purchaser, SPG Inc., WEA or their respective subsidiaries)
would be converted into the right to receive an amount in cash per Share equal
to the highest price per Share paid by the Purchaser pursuant to the Offer,
without interest. Consummation of the Offer is subject to the terms and
conditions described in the Offer to Purchase, the Supplement and the related
revised Letter of Transmittal, copies of which are available
4
upon request from the Information Agent for the Offer, MacKenzie Partners, Inc.
("MacKenzie Partners"), at the telephone numbers and address listed above. The
Offer is not being made for shares of Series A Cumulative Redeemable Preferred
Stock, $.01 par value, of the Company (the "Series A Preferred Stock") or the
Series B Preferred Stock. Each outstanding share of Series A Preferred Stock and
Series B Preferred Stock would remain outstanding following consummation of the
Proposed Merger.
SPG and WEA are seeking to negotiate with the Company with respect to
the combination of the Company with the Purchaser. SPG and WEA are willing to
allow the holders of interests in The Taubman Realty Group Limited Partnership
("Taubman L.P."), including the Taubman family, to retain their economic
interest in Taubman L.P., or at such holders' option, to participate in a
transaction on mutually acceptable terms to be agreed to by the parties whereby
such holders could receive either the Offer Price or an equivalent value for
such holders' limited partnership interests by exchanging such interests on a
tax efficient basis for SPG L.P. limited partnership interests and/or securities
of certain affiliates of WEA. Although they are open to discussing various
transactions with the holders of such limited partnership units, none of SPG,
Inc., WEA nor the Purchaser has made or is making an offer to exchange such
securities for any securities at this time. Any such offer would only be made in
accordance with applicable securities laws. Holders of interests in Taubman L.P.
and the Company's Series A and Series B Preferred Stock are not eligible to
receive the Offer Price or other consideration in connection with the Offer. The
Purchaser reserves the right to amend the Offer (including amending the number
of Shares to be purchased and the Offer Price) upon entering into a merger
agreement with the Company, or to negotiate a merger agreement with the Company
not involving a tender offer pursuant to which the Purchaser would terminate the
Offer and the Shares would, upon consummation of such merger, be converted into
cash and/or securities of SPG Inc., or its affiliates or certain affiliates of
WEA in such amounts as are negotiated by SPG Inc., WEA and the Company.
The Offer is conditioned upon, among other conditions set forth in the
Offer to Purchase and the Supplement, (i) there being validly tendered and not
withdrawn on or prior to the expiration of the Offer such number of Shares that
represents, together with Shares owned by the Purchaser, SPG Inc., WEA or any of
their respective subsidiaries, at least two-thirds (2/3) of the total voting
power (as described in the Offer to Purchase and the Supplement) of the Company
(the "Minimum Tender Condition"), (ii) the Purchaser being satisfied, in its
sole discretion, that after consummation of the Offer none of the Shares
acquired by the Purchaser shall be deemed "Excess Stock" (as defined in the
Company's Charter (the "Excess Share Condition")), (iii) full voting rights for
all Shares to be acquired by the Purchaser pursuant to the Offer having been
approved by the shareholders of the Company pursuant to the Michigan Control
Share Act or the Purchaser being satisfied, in its sole discretion, that the
provisions of such statute are invalid or otherwise inapplicable to the Shares
to be acquired by the Purchaser pursuant to the Offer (the "Control Share
Condition") and (iv) the Purchaser being satisfied, in its sole discretion,
that, after consummation of the Offer, Chapter 7A of the MBCA (the "Michigan
Business Combination Act") will not prohibit for any period of time, or impose
any shareholder approval requirement with respect to, the Proposed Merger or any
other business combination involving the Company and the Purchaser (or any other
affiliate of SPG Inc. or WEA) (the "Business Combination Condition").
On December 11, 2002, the Company filed the Company Schedule 14D-9
announcing that the Company Board had made certain amendments (the "December 10
By-Law Amendments") to the Company's Restated By-Laws (as amended, the
"By-Laws") on December 10, 2002. The December 10 By-Law Amendments included an
amendment to opt out of the Michigan Control Share Act and made certain other
procedural changes, including requiring advance notice for shareholder
nominations and proposals. Accordingly, SPG and WEA believe that, as of the
current date, the Control Share Condition has been satisfied. Notwithstanding
the foregoing, SPG and WEA believe there is a possibility that the Company
could, through a further amendment to the By-Laws, opt into the Michigan Control
Share Act. If the Company, through a further amendment to the By-Laws or
otherwise, again becomes subject to the
5
requirements of the Michigan Control Share Act, the Control Share Condition will
need to be satisfied again, and continue to be satisfied, before the Offer can
be consummated.
In the Company Schedule 14D-9, the Company disclosed, among other
things, that the requirements of the Michigan Business Combination Act do not
currently apply to it. As a result, SPG and WEA believe that, as of the current
date, the Business Combination Condition is satisfied. Nonetheless, in the
Company Schedule 14D-9 the Company indicated its belief that the Company may at
any time opt into the Michigan Business Combination Act through further action
by the Company Board. It is possible that, if the Company, through an action of
the Company Board or otherwise, becomes subject to the requirements of the
Michigan Business Combination Act, the Business Combination Condition will need
to be satisfied, and continue to be satisfied, before the Offer can be
consummated.
The Offer is also subject to other terms and conditions described in
the Offer to Purchase, the Supplement and the related revised Letter of
Transmittal. The Offer is not conditioned on the Purchaser obtaining financing.
The Offer is scheduled to expire at 12:00 midnight, New York City time on March
28, 2003, unless the Offer is extended.
On December 11, 2002, the Company filed the Company Schedule 14D-9 with
the Commission recommending that the Company's common shareholders reject the
Offer. The recommendation was made despite the fact that the Offer Price, at
that time, represented a 35% premium over the $13.32 closing price of the Common
Stock on October 15, 2002 (the last trading day prior to SPG Inc.'s initial
private communication to the Company expressing its interest in pursuing a
business combination). The Company Board publicly rejected an earlier offer by
SPG Inc. to acquire all of the Shares for $17.50 per Share, stating that any
discussions regarding a transaction would not be productive because the Taubman
family (with its purported over 30% voting stake) had informed the Company Board
that it is categorically opposed to the sale of the Company.
On January 15, 2003, SPG Inc. and WEA announced that SPG Inc., WEA and
the Purchaser had entered into the Offer Agreement and that WEA had joined in
the Offer under and on the terms of the Offer Agreement. On that same day, SPG
Inc. issued a press release announcing that the Offer Price was increased to
$20.00, that the Expiration Date of the Offer was extended to February 14, 2003,
and that unless two-thirds (2/3) of the outstanding Common Stock, or 34,805,171
Shares (based on the number of Shares outstanding as of December 16, 2002), were
tendered and not withdrawn prior to midnight on February 14, 2003, SPG Inc. and
WEA would withdraw the Offer and terminate their efforts to acquire the Company.
On January 21, 2003, the Company filed an amendment to the Company
Schedule 14D-9 with the Commission recommending that the Company's common
shareholders reject the Offer. The recommendation was made despite the fact that
the $20.00 per Share Offer Price represents a 50% premium over the $13.32
closing price of the Common Stock on October 15, 2002 (the last trading day
prior to SPG Inc.'s initial private communication to the Company expressing its
interest in pursuing a business combination). SPG and WEA do not believe that
the Company's recommendation is in the best interests of the Company's common
shareholders because SPG and WEA believe the Company's common shareholders
should be given the opportunity to decide for themselves whether to tender their
Shares and receive $20.00 per Share in cash pursuant to the Offer.
On February 17, 2003, SPG and WEA announced that (i) 44,135,107 of the
52,207,756 Shares outstanding, representing approximately 85% of the Common
Stock, had been validly tendered and not withdrawn prior to 12:00 midnight New
York City time on February 14, 2003 and (ii) the Expiration Date of the Offer
was extended to 12:00 midnight New York City time on March 28, 2003.
Notwithstanding that approximately 85% of the Company's outstanding shares of
Common Stock had been tendered into
6
the Offer, on February 17, 2003, barely two hours after SPG's and WEA's
announcement of the results of the Offer, the Company announced that the Company
Board continued to oppose the Offer and would not take steps to facilitate the
Offer.
SPG AND WEA BELIEVE THAT THE COMPANY BOARD, ACTING AS FIDUCIARIES FOR
THE COMMON SHAREHOLDERS, COULD AND SHOULD ENTER INTO NEGOTIATIONS WITH SPG AND
WEA RELATING TO A BUSINESS COMBINATION IN ORDER TO ALLOW THE HOLDERS OF SHARES
THE OPPORTUNITY TO RECEIVE $20.00 PER SHARE IN CASH. SPG AND WEA BELIEVE THAT
THE TAUBMAN FAMILY ALSO HAS FIDUCIARY DUTIES TO THE COMMON SHAREHOLDERS OF THE
COMPANY TO TAKE STEPS TO REMOVE THE IMPEDIMENTS TO THE CONSUMMATION OF THE
OFFER.
While SPG would prefer that the Company Board and the Taubman family
take actions to facilitate the Offer, SPG has also begun to take its own steps
to attempt to remove the impediments to the consummation of the Offer. On
December 5, 2002, SPG filed a Complaint for Declaratory and Injunctive Relief
against the Company, the Company Board and certain members of the Taubman family
in the Court (as amended by the First Amended Complaint and the Second Amended
Complaint (each as defined below), the "Complaint"). On December 30, 2002, SPG
filed a First Amended Complaint for Declaratory and Injunctive Relief against
the Company, the Company Board and certain members of the Taubman family in the
Court (the "First Amended Complaint"). Among other things, the Complaint seeks
to invalidate the veto power over the Offer that the Taubman family purports to
wield, and upon which the Company Board is implicitly relying. SPG also asserts
in the Complaint that the defendants are violating Michigan law by engaging in
conduct that is designed to impede the Offer and injure shareholders.
The Complaint challenges a series of tactical corporate mechanisms that
purportedly give the Taubman family a blocking voting position against the
Offer, including: (i) the Excess Share Provision (as defined below), which is
unalterable and unwaivable by the Company Board absent amendment of the Charter
by a two-thirds (2/3) shareholder vote, (ii) the Company Board issuing, in
violation of its fiduciary duties, shares of Series B Preferred Stock to the
Taubman family, which purported to increase the Taubman family's combined voting
power in the Company from less than 1% to over 30%, and (iii) that Robert
Taubman and the Taubman family, acting in concert with other shareholders of the
Company, had formed a "group" to acquire 33.6% of the voting power in the
Company and that such an acquisition constitutes a "control share acquisition"
under the Michigan Control Share Act, which required the approval of the holders
of a majority of the disinterested shares of the Company's voting stock for such
shares to have voting rights.
In general, the Michigan Control Share Act relates to the acquisition
by any person or group of voting power over voting shares of a Michigan
corporation that would increase the voting power of such person or group to or
above one-fifth (1/5), one-third (1/3) or a majority of the total voting power
of all the voting shares of the corporation. Under the Michigan Control Share
Act, the shares acquired in a such a "control share acquisition" only have
voting rights if a resolution granting full voting rights to those shares is
approved by a majority of the corporation's shareholders. SPG believes that in
2002 a "control share acquisition" occurred when Robert Taubman, the Taubman
family and various associates of the Taubman family acted to form a group voting
position for the purpose of blocking the Offer made up of the Series B Preferred
Stock and Common Stock held by members of the Taubman family and certain
associates of the Taubman family that together purportedly comprised
approximately 33.6% of the Company's voting power. Under the Michigan Control
Share Act, such a transaction required the approval of the holders of a majority
of the disinterested shares of the Company's voting stock in order for any
member of the "group" to have the right to vote any shares of the "group." SPG
believes that because no such shareholder approval has been sought or given,
those shares have no voting rights. SPG is seeking through the Complaint, among
other things, to invalidate any voting rights with respect to these
7
shares, on the ground (among others) that aggregation of shares by a "group"
purportedly comprising 33.6% of the Company's voting power through the actions
of Robert Taubman, the Taubman family and those persons who entered into Voting
Agreements with Robert Taubman was a "control share acquisition" without a
shareholder vote as required by the Michigan Control Share Act. On January 28,
2003, the Company announced that Robert Taubman and various associates of the
Taubman family had purportedly terminated the Voting Agreements. Notwithstanding
the purported termination of these agreements, SPG continues to believe that
because Robert Taubman, the Taubman family and various associates of the Taubman
family acted to form a group voting position for the purpose of blocking the
Offer, any voting rights with respect to the shares comprising the purported
33.6% voting position held or controlled by the Taubman family should be
invalidated. At a hearing scheduled for March 21, 2003, the Court will consider
SPG's claims to invalidate the voting rights with respect to the shares held or
controlled by the Taubman family.
In addition, SPG believes that the Company Board violated its fiduciary
duties in 1998 by its approval of the issuance of the Series B Preferred Stock
to the Taubman family. The Company Board's approval of the issuance of the
Series B Preferred Stock to the Taubman family caused, and SPG believes was
intended to cause, a fundamental reallocation of corporate power from the public
shareholders to the Taubman family. The issuance of the Series B Preferred Stock
gave the Taubman family, for the first time, the ability to exercise an
effective veto power to block any merger of the Company, to prevent the
consummation of any tender offer to the public shareholders, and to defeat any
proposed amendment to the Charter. This is because a merger of the Company
requires approval of two-thirds (2/3) of the voting power of the Company and
because a tender offer cannot be consummated unless the Charter is amended to
remove the Excess Share Provision, which amendment also requires approval of
two-thirds (2/3) of the Company's voting power. SPG believes that the issuance
of the Series B Preferred Stock was a breach of the Company Board's fiduciary
duties because the Series B Preferred Stock was issued for the impermissible
purpose of giving the Taubman family the ability to gain control over
fundamental decisions with respect to the Company and thus consisted an improper
interference with the rights of the public shareholders.
Furthermore, the issuance of the Series B Preferred Stock to members of
the Taubman family, who served on the Company Board at the time, and were bound
by fiduciary duties to protect the interests of holders of the Company's Common
Stock, was not disclosed in the press release that announced the 1998
restructuring transaction with the General Motors Pension Trusts in connection
with which the Series B Preferred Stock was purportedly issued (the "1998
Restructuring"). Indeed, the issuance of the Series B Preferred Stock was not
even mentioned until, on October 15, 1998, nearly two months after the 1998
Restructuring was first publicly announced, when the Company made a filing with
the Commission on Form 8-K which SPG believes falsely stated that the Company
"became obligated" to issue the Series B Preferred Stock to the Taubman family
in connection with the 1998 Restructuring. Even then, the filing provided no
explanation of the fact that the Series B Preferred Stock purported to give the
Taubman family an effective veto power over major transactions concerning the
Company including, in particular, any merger or unsolicited takeover offer. The
filing also failed to disclose that, through the issuance of the Series B
Preferred Stock primarily to the Taubman family, the Company Board had given the
Taubman family, acting together, the ability to effectively veto changes to the
Charter and By-Laws, thereby frustrating other fundamental corporate changes
that might be in the interest of the Company's public shareholders.
Through the Complaint, SPG seeks, among other things, (i) a declaration
that the Series B Preferred Stock and the other shares purportedly held or
controlled by the Taubman family do not have any voting rights, (ii) a
preliminary and permanent injunction preventing the Taubman family from voting
the shares held or controlled by it, and (iii) a declaration that both the
Company Board and the Taubman family have breached, and continue to breach,
their fiduciary duties to the Company's common
8
shareholders. SPG believes that the Taubman family, which holds an approximately
1% economic stake in the Company, should not be permitted to use the Series B
Preferred Stock and the other shares purportedly held or controlled by it to
veto the Offer and deny the holders of the Common Stock the ability to receive a
premium for their Shares. The Taubman family's 1% economic stake includes Common
Stock and Series B Preferred Stock owned by the Taubman family and is calculated
on an `as converted' basis at the fixed conversion ratio of 14,000 shares of
Series B Preferred Stock to one share of Common Stock.
On January 22, 2003, the Court issued an opinion and order (the
"Order") denying in part, and granting in part, the Company and the other
defendants' motion to dismiss Count I of the Complaint. In the Order, the Court
held that the ISSUANCE in 1998 of the Series B Preferred Stock by the Company to
the Taubman family was not a "control share acquisition" under the Michigan
Control Share Act. However, the Court also ruled that the Taubman family's
purported blocking position in the Company may be challenged by SPG at a hearing
on March 21, 2003 on the grounds that the Taubman family's "group" voting power
was obtained without shareholder approval under the Michigan Control Share Act.
The Court held that SPG had pled sufficient facts from which it could infer that
Robert Taubman and the Taubman family, acting in concert with other shareholders
of the Company, had formed a "group" to acquire 33.6% of the voting power in the
Company, and that such an acquisition constituted a "control share acquisition"
under the Michigan Control Share Act. Therefore, the Court denied the Company's
motion to dismiss SPG's claim that Robert Taubman, the Taubman family and those
persons who entered into Voting Agreements with Robert Taubman constituted a
group and that their aggregation of shares was a "control share acquisition." At
the March 21, 2003 hearing, SPG will also be allowed to press its claims that
the Taubman family's Series B Preferred Stock was improperly acquired in breach
of fiduciary duties owed to the Company's public shareholders.
If the Court rules in favor of SPG at the March 21, 2003 hearing, the
entire 33.6% voting control the Taubman family purportedly wields is subject to
being legally invalidated.
On February 5, 2003, SPG filed a second amended complaint (the "Second
Amended Complaint") with the Court against the Company, the Company Board and
certain members of the Taubman family. The Second Amended Complaint includes
amendments to add Mr. Randall J. Smith, a holder of Common Stock, as a plaintiff
and to update information regarding the Offer to reflect certain changes to the
Offer since the filing of the First Amended Complaint.
BACKGROUND OF THE TENDER OFFER
On October 16, 2002, David Simon, Chief Executive Officer of SPG Inc.,
called Robert S. Taubman, Chairman of the Company Board and President and Chief
Executive Officer of the Company, to express SPG Inc.'s interest in pursuing a
business combination between SPG Inc. and the Company. Later that day, Mr. Simon
sent a letter to Mr. Taubman containing a written proposal describing SPG Inc.'s
interest in a business combination with the Company:
9
October 16, 2002
Robert S. Taubman
Chairman of the Board, President
and Chief Executive Officer
Taubman Centers, Inc.
200 East Long Lake Road, Suite 300
Bloomfield Hills, Michigan 48303
Dear Bob:
As you know from our conversations over the last few years, I
have long admired Taubman Centers, Inc. and the wonderful portfolio of
properties built by you and your family. I would like to discuss with
you Simon Property Group's proposal to acquire immediately all of the
publicly traded stock of Taubman Centers, Inc. for cash consideration
that represents an attractive premium to your common shareholders. In
addition, if your limited partners decide to participate, we will make
an equally attractive offer to combine their holdings into Simon's
operating partnership on a basis that affords both tax efficiencies and
liquidity.
We believe that a business combination of Simon and Taubman is
compelling, and most importantly, will produce substantial and
immediate value for your shareholders. In addition, your limited
partners will have the opportunity to convert their holdings to units
in the Simon operating partnership on the same economic basis or choose
to remain limited partners in the Taubman partnership. It is my
personal hope that you, your family and Taubman's board will share our
enthusiasm for a combination of our companies and that we can move
forward quickly.
Because of the importance of this matter, I would like to
present this proposal to you in person as soon as possible. At our
meeting, I will be prepared to discuss price and other specific
components of our proposal, and address any questions you may have
about the transaction. I will contact you shortly to arrange a meeting.
Sincerely,
/s/ David Simon
On October 21, 2002, Mr. Taubman returned Mr. Simon's phone call from
earlier that day and indicated that he had no interest in having any discussions
or meetings regarding SPG Inc.'s proposed business combination.
On October 22, 2002, SPG Inc. sent the following letter to Mr. Taubman:
October 22, 2002
Robert S. Taubman
Chairman of the Board, President
and Chief Executive Officer
Taubman Centers, Inc.
200 East Long Lake Road, Suite 300
Bloomfield Hills, Michigan 48303
Dear Bob:
I am genuinely disappointed by your response to my October 16,
2002 letter, your refusal to meet with me, and your decision to reject
out-of-hand our proposal to buy the public shares of Taubman Centers,
Inc. (the "Company") at a very significant premium to their current
market price. At a minimum, I thought you would want to meet with me to
discuss the specifics of our
10
proposal. Given the current state of the financial markets and
considering Simon's financial wherewithal and our demonstrated ability
to close deals and add value, our proposal represents a financial
opportunity for your shareholders that merits careful consideration.
Although I very much wanted to describe our proposal to you in
person, I am instead setting out its basic terms in this letter, so
that you and your board can review it carefully. We are prepared to pay
$17.50 for each share of Company common stock in cash. We are also
willing to provide equivalent value to the holders of all outstanding
limited partnership interests in The Taubman Realty Group Limited
Partnership (the "Operating Partnership") and allow them to exchange
those interests for limited partnership units in Simon's operating
partnership on a tax efficient basis or, at their option, remain
limited partners in your Operating Partnership.
Specifically, Simon would acquire all of the Company's
outstanding publicly held common stock pursuant to a merger agreement.
The individual steps to accomplish this merger would be as follows:
1. Simon (or its affiliate) would make a tender offer
to purchase all of Taubman's common stock for $17.50 per
share, net to each seller in cash.
2. As promptly as practicable after consummation of the
tender offer, an affiliate of Simon would merge with the
Company, and each non-tendering share of Company common stock
would be converted into the right to receive $17.50 per share
in cash.
We are also prepared to purchase, either for cash or through
an exchange of partnership interests, all limited partnership interests
in the Operating Partnership, which would include the acquisition of
the Company's Series B preferred stock. However, if your family and the
other limited partners would prefer to remain limited partners in the
Operating Partnership, we are prepared to accommodate that desire while
at the same time making our proposal available to holders of the
Company's publicly held common stock.
Our $17.50 per share all cash offer represents a price never
before realized in the Company's ten year trading history and affords
your shareholders a 30% premium to today's closing price, as well as a
premium to Wall Street's consensus net asset value for the Company.
This proposal is NOT subject to the receipt of financing or any due
diligence investigation of the Company and its subsidiaries or any
requirement that the limited partners exchange their interests.
We are well aware that the Company's charter contains an
"excess share provision" that prohibits the purchase of more than 8.23%
of the aggregate value of the Company's stock and that the board of
directors can only waive application of this provision to permit a
purchase of up to 9.9% of aggregate value. This provision, ostensibly
for the purpose of preserving the Company's status as a REIT, goes well
beyond what is necessary for that purpose and stands between the
Company's shareholders and their ability to realize a substantial
premium for their shares. Our proposal, therefore, must be conditioned
on the inapplicability of the Company's excess share provision to our
bid. In this regard, we note that Simon's acquisition of Company
securities need NOT jeopardize the Company's status as a REIT, and we
therefore believe that the Company's board of directors, as
fiduciaries, must take steps to amend the Company's charter to allow
our proposal to go forward for the benefit of the Company's common
shareholders. We also believe it is the responsibility of the holders
of the Series B Preferred Stock to approve such an amendment so as not
to impede the ability of the Company's common shareholders to receive a
significant premium, particularly given the fact that our proposal
allows the limited partners of the Operating Partnership the option to
either convert their holdings on a tax efficient basis or remain in
their existing structure.
While this letter outlines the basic terms of our proposal, we
are ready to work diligently with you and your team to finalize all
other terms of the deal.
11
Bob, I know this is a difficult subject for you personally,
but our proposal, which is intended to bring immediate and substantial
value to the Company's shareholders, warrants your serious and
immediate attention. I am confident that given the opportunity to meet
with you, we could finalize a mutually beneficial transaction between
our two great companies.
I will call you in the next few days, giving you sufficient
time to review this letter, so that we can agree on a time and place
for a meeting.
Sincerely,
/s/ David Simon
On October 25, 2002, Mr. Simon placed a call to Mr. Taubman's office
and left word requesting that Mr. Taubman return the call. On the evening of
October 28, 2002, Mr. Taubman called Mr. Simon at his residence and read to Mr.
Simon the following letter which Mr. Taubman then sent to Mr. Simon:
October 28, 2002
David Simon
Chief Executive Officer
Simon Property Group
115 West Washington Street
Indianapolis, Indiana 46204
Dear David,
This will respond to your letter dated October 22, 2002. The
Board of Directors of Taubman Centers has met and with the advice of
its outside financial and legal advisors, has considered your
unsolicited proposal. The Board is unanimous in concluding that the
company has no interest whatsoever in pursuing a sale transaction, and
that discussion as to such a transaction would not be productive.
Sincerely,
/s/ Robert S. Taubman
Chairman, President and Chief Executive Officer
After reading the letter, Mr. Taubman stated he would resist any
attempt by SPG Inc. to acquire the Company.
On November 1, 2002, Mr. Simon's office called Mr. Taubman's office
requesting a meeting with Mr. Taubman during the NAREIT national conference.
On November 5, 2002, in response to Mr. Simon's request of November 1,
2002, Mr. Taubman conveyed in a telephone conversation with Mr. Simon that he
would be willing to meet with Mr. Simon as long as there would be no discussion
about the contents of Mr. Simon's recent letters to Mr. Taubman.
On November 6, 2002, at the NAREIT national conference Mr. Simon
offered to provide Mr. Taubman further details regarding SPG Inc.'s offer to
acquire the Company and reinforced SPG Inc.'s willingness to accommodate the
needs of the Taubman family. Mr. Taubman refused to engage in any discussion
about a possible sale of the Company to SPG Inc.
On November 13, 2002, SPG Inc. delivered a letter to the Company Board
setting forth the terms of its proposed business combination with the Company,
and calling on the Company Board for
12
assistance in surmounting the obstacles presented by the Company's corporate
governance structure to such a business combination. This letter also was
publicly disclosed by means of the following press release:
INDIANAPOLIS, Nov. 13 -- Simon Property Group, Inc. (NYSE: SPG) today
made a written offer to acquire Taubman Centers, Inc. (NYSE: TCO) for
$17.50 per share in cash, a substantial current premium and a price
higher than Taubman Centers shares have ever traded. The letter sent
today to the Board of Directors of Taubman Centers by David Simon,
Chief Executive Officer of Simon Property Group, follows:
Dear Members of the Board of Directors:
As you may know, we recently made a written offer to Robert S. Taubman
to pay $17.50 in cash for each share of Taubman Centers, Inc. (the
"Company") common stock. Our all-cash offer would deliver to all
Taubman shareholders a substantial premium--approximately 18% above
yesterday's closing price and 30% above the price on the day we
initially made our offer--and it exceeds the highest price at which
Taubman shares have ever traded. Our offer represents a compelling
strategic and financial transaction that would produce substantial and
immediate value for all of your shareholders. We can move quickly since
our offer is not subject to the receipt of financing or any due
diligence investigation of the Company.
On several occasions, we have communicated our offer to Mr. Taubman and
suggested that we have an opportunity to discuss it with the members of
Taubman's board of directors. We wrote Mr. Taubman on October 16, 2002,
to request a meeting to present our offer. He refused to meet. On
October 22, 2002, we again wrote Mr. Taubman, this time setting forth
the basic terms of our offer. Once again, he refused even to have a
discussion, writing to us on October 28, 2002, that "the Company has no
interest whatsoever in pursuing a sale transaction..."
We are dismayed that Mr. Taubman continues in his refusal even to
discuss our offer--or indeed any sale transaction, particularly in
light of the fact that we have expressed a willingness to be very
flexible with respect to the structure of the proposed transaction. The
offer is not conditioned upon any participation by the Taubman family.
Instead we have agreed to accommodate any desire by the Taubman family
to retain its economic interest in the Taubman Realty Group Limited
Partnership, or, at their option, to participate in the transaction,
and receive either cash or equivalent value for their existing
partnership interests by exchanging them on a tax efficient basis for
partnership interests in the Simon operating partnership.
Since the Taubman family can choose to (1) retain its current Taubman
partnership units, (2) convert into Simon partnership units, or (3)
sell for cash, we can only conclude that Mr. Taubman's refusal even to
discuss our offer reflects the Taubman family's desire not to permit
the Company to be sold under any circumstances. While it is entirely
appropriate for the Taubman family to retain the right to choose
between various options with respect to the treatment of its own
partnership units, it is improper for these insiders to prevent public
shareholders from choosing to receive a premium for their shares.
Mr. Taubman apparently believes the Taubman family is not accountable
to the public shareholders because of the family's claimed blocking
position--via the Series B preferred stock--which was surreptitiously
issued in a "restructuring" transaction many years after the Company's
initial public offering without either proper disclosure or a
shareholder vote. We question both the propriety and validity of a
transaction which attempts to transfer to the Taubman family control
and a permanent veto over material decisions that rightfully belong to
the public shareholders of Taubman--such as an all- cash, premium offer
to acquire the Company.
The effect of the Series B preferred stock, for which the Taubman
family paid a total of only $38,400.00, is to disenfranchise the public
shareholders. This entrenchment device is a permanent
13
corporate governance defect embedded in the Company's structure--and it
continues to hurt the public shareholders. Indeed, between the time the
Series B shares were issued to the Taubman family in 1998 and our
October 22 offer letter, the price of Taubman common shares has fallen
by 4%.
We understand that the obstacles created in the governance structure by
the Taubman family, at the expense of the public shareholders, are
significant. However, with the cooperation of the Board of Directors,
acting as fiduciaries for the common shareholders, we believe these
obstacles are surmountable. We also trust that undisclosed economic or
governance burdens have not been, and will not be, imposed on Taubman
in response to our offer or otherwise.
We hope the Board will agree with us that our offer provides an
excellent opportunity for Taubman shareholders to realize immediate
liquidity and full value for their shares to an extent not likely to be
available to them in the marketplace or in any alternative transaction.
At a time when good corporate governance is particularly important to
investors, we seek your help in restoring the rights of the public
shareholders of Taubman.
We prefer to complete this acquisition through a negotiated
transaction. We stand ready to make a detailed presentation of our
offer to the Board and to answer any questions you may have.
Very truly yours,
David Simon
Chief Executive Officer
Within one hour of SPG Inc.'s November 13, 2002 press release, the
Company categorically rejected SPG Inc.'s proposal pursuant to the following
press release:
Bloomfield Hills, Michigan, November 13, 2002 - Taubman Centers, Inc.
(NYSE: TCO) confirmed today that it has received an unsolicited
proposal from Simon Property Group, Inc. (NYSE: SPG) seeking to acquire
control of the Company. Taubman Centers said that its Board of
Directors had previously met and, with the advice of its outside
financial and legal advisors, had considered the proposal. The Board
unanimously concluded that Taubman Centers has no interest in pursuing
a sale transaction and that discussions regarding such a transaction
would not be productive.
The Taubman family, large economic stakeholders with voting control of
more than 30% of Taubman Centers, has also confirmed that it has no
interest in pursuing a sale of the Company. A sale or other
extraordinary transaction would require a 2/3rds affirmative vote.
The Company stated, "The Taubman Centers Board of Directors has
unanimously rejected this proposal. In addition, the Taubman family has
informed the Board that is categorically opposed to the sale of the
Company. Given the family's position, any efforts to purchase Taubman
Centers would not be productive." Goldman, Sachs & Co. is acting as
financial advisor and the law firm of Wachtell, Lipton, Rosen & Katz is
acting as legal advisor.
On December 5, 2002, SPG filed the Complaint against the Company, the
Company Board and certain members of the Taubman family.
On December 5, 2002, the Purchaser commenced the Offer and filed a
preliminary proxy statement with the Commission for a potential shareholder
meeting under the Michigan Control Share Act to allow the Company's shareholders
to approve voting rights for the Shares that the Purchaser is seeking to
purchase in the Offer.
14
On December 11, 2002, the Company filed the Company Schedule 14D-9 with
the Commission announcing that the Company Board recommended that the Company's
shareholders reject the Offer and not tender their Shares pursuant to the Offer.
The Company Schedule 14D-9 also announced the December 10 By-Law Amendments. SPG
believes that the Company adopted the December 10 By-Law Amendments opting out
of the Michigan Control Share Act in order to avoid a shareholder referendum on
the Offer.
On December 16, 2002, SPG filed a preliminary proxy statement with the
Commission relating to the solicitation of agent designations from the Company's
shareholders to provide for the calling of a special meeting of the Company's
shareholders. On December 16, 2002, SPG Inc. and the Purchaser filed an
amendment to the Schedule TO announcing that certain conditions to the Offer,
based on information disclosed by the Company in the Company Schedule 14D-9, had
been satisfied as of that date.
On December 20, 2002, the Company filed a preliminary solicitation
statement with the Commission and announced that the Company had made additional
amendments to the By-Laws relating to the timing and procedures to call a
special meeting of the Company's shareholders (the "December 20 By-Law
Amendments"). SPG believes that the Company adopted the December 20 By-Law
Amendments in order to impede SPG's ability to call a special meeting of the
Company's shareholders.
On December 30, 2002, SPG filed the First Amended Complaint against the
Company, the Company Board and certain members of the Taubman family, which,
among other things, challenges the validity of the December 20 By-Law
Amendments.
In January 2003, SPG Inc. and WEA held discussions concerning the terms
on which WEA might participate in the Offer. These negotiations culminated in
the execution on January 15, 2003 by SPG Inc., WEA and the Purchaser of the
Offer Agreement, pursuant to which the parties agreed, among other things, that
WEA would participate in the Offer if it were successful by acquiring 50% of the
Purchaser for a purchase price equal to 50% of the aggregate Offer Price paid by
the Purchaser in the Offer.
On January 15, 2003, SPG Inc. and WEA announced that SPG Inc., WEA and
the Purchaser had entered into the Offer Agreement and that WEA had joined in
the Offer under and on the terms of the Offer Agreement. On that same day, SPG
Inc. issued a press release announcing that the Offer Price was increased to
$20.00, that the Expiration Date of the Offer was extended to February 14, 2003,
and that unless two-thirds (2/3) of the outstanding Common Stock, or 34,805,171
Shares (based on the number of Shares outstanding as of December 16, 2002), were
tendered and not withdrawn prior to midnight on February 14, 2003, SPG Inc. and
WEA would withdraw the Offer and terminate their efforts to acquire the Company.
On January 21, 2003, the Company filed an Amendment No. 8 to the
Company Schedule 14D-9 with the Commission recommending that the Company's
common shareholders reject the Offer.
On February 17, 2003, SPG and WEA announced that (i) 44,135,107 of the
52,207,756 Shares outstanding, representing approximately 85% of the Common
Stock, had been validly tendered and not withdrawn prior to 12:00 midnight New
York City time on February 14, 2003 and (ii) the Expiration Date of the Offer
was extended to 12:00 midnight New York City time on March 28, 2003.
Notwithstanding that approximately 85% of the Company's outstanding shares of
Common Stock had been tendered into the Offer, on February 17, 2003, barely two
hours after SPG's and WEA's announcement of the overwhelming results of the
Offer, the Company announced that the Company Board continued to oppose the
Offer and would not take steps to facilitate the Offer.
15
AGENT DESIGNATION PROCEDURES
Pursuant to this Solicitation Statement (the "Solicitation Statement"),
SPG and WEA are soliciting Agent Designations from the holders of outstanding
shares of Common Stock and/or Series B Preferred Stock to provide for the
calling of the Special Meeting. By executing an Agent Designation, a shareholder
will designate specified persons as the shareholder's agents (each, a
"Designated Agent") and will authorize the Designated Agents (i) to call the
Special Meeting or request that the Company call the Special Meeting, (ii) if,
as described below, certain amendments to the By-Laws are not valid, to set the
date and time of the Special Meeting, (iii) to give notice of the Special
Meeting and any adjournment thereof, (iv) to exercise all rights of Requisite
Holders (as defined below) incidental to calling and convening the Special
Meeting and causing the purposes of the authority expressly granted pursuant to
the Agent Designations to the Designated Agents to be carried into effect, and
(v) to apply, if need be, to the circuit court in Oakland County, Michigan (the
county in which the Company's principal office is located) to order, for good
cause shown, that the Special Meeting be called and held. Agent Designations do
not grant the Designated Agents the power to vote any Shares at the Special
Meeting. To vote on the matters to be brought before the Special Meeting you
must vote by proxy or in person at the Special Meeting. If SPG and WEA obtain
sufficient Agent Designations to call the Special Meeting, SPG and WEA would
distribute the appropriate notice of the Special Meeting, together with proxy
materials and a proxy card, to the holders of record of Common Stock and Series
B Preferred Stock entitled to vote at the Special Meeting.
Executed Agent Designations should be delivered, by fax or by mail
(using the enclosed envelope), to the Information Agent for the Offer, MacKenzie
Partners for delivery to the Company, on or before __________, 2003 or such
later date as SPG and WEA may from time to time establish. If executed Agent
Designations from the Requisite Holders are received by SPG and WEA prior to
__________, 2003, SPG and WEA may call, or request that the Company call, the
Special Meeting at such time.
The record date for determining which shareholders are entitled to call
the Special Meeting and submit Agent Designations shall be the first date on
which Agent Designations are submitted to (i) the Company to call the Special
Meeting or to request that the Special Meeting be called or (ii) the circuit
court of Oakland County, Michigan (the county in which the Company's principal
office is located), to order, for good cause shown, that the Special Meeting be
called and held.
Prior to the December 20 By-Law Amendments, the validity of which is
being challenged by SPG, the By-Laws provided that record holders of not less
than 25% of the outstanding shares of the Company's capital stock entitled to
vote (the "Requisite Holders") could call the Special Meeting. The December 20
By-Law Amendments provide that the Requisite Holders may request that the
Company call the Special Meeting. Alternatively, pursuant to Section 403 of the
MBCA, record holders of not less than 10% of the Company's capital stock
entitled to vote may apply to the circuit court of Oakland County, Michigan (the
county in which the Company's principal office is located), to order, for good
cause shown, that the Special Meeting be called and held.
Based on the Company's Form 10-Q for the quarter ending September 30,
2002 and the Company Schedule 14D-9 and the Company's Preliminary Proxy
Statement, dated December 20, 2002 (the "Preliminary Proxy Statement"), as of
December 16, 2002 there were issued and outstanding (i) 52,207,756 Shares, (ii)
31,767,066 shares of Series B Preferred Stock, which shares are convertible into
shares of Common Stock at a rate of one share of Common Stock for each 14,000
shares of Series B Preferred Stock, in specified circumstances (with any
resulting fractional shares to be redeemed for cash), (iii) 7,097,979
partnership units of Taubman L.P. which have rights of conversion into 7,097,979
shares of Common Stock of the Company, and (iv) options to purchase 2,878,273
partnership units of Taubman
16
L.P. Each outstanding option is currently exercisable, and, pursuant to the
Charter, each unitholder who is issued a partnership unit of Taubman L.P.
(whether upon exercise of an option or otherwise) is also entitled to receive a
share of Series B Preferred Stock for a purchase price of $.001 per share. Each
outstanding share of Common Stock and each outstanding share of Series B
Preferred Stock is entitled to one vote for each matter submitted for a vote.
However, as described above, SPG, as well as other shareholders of the Company,
have filed lawsuits challenging the legality of the entire purported 33.6%
voting stake that SPG believes to be held or controlled by the Taubman family.
Agent Designations from holders of at least (A) 13,940,191 shares of
Common Stock and Series B Preferred Stock, in the aggregate (in addition to the
shares of Common Stock owned by SPG) will be required to call, or request that
the Company call, the Special Meeting pursuant to the By-Laws or the December 20
By-Law Amendments, as applicable, and (B) 5,569,477 shares of Common Stock and
Series B Preferred Stock, in the aggregate (in addition to the shares of Common
Stock owned by SPG) will be required to apply to the circuit court of Oakland
County to order, for good cause shown, that the Special Meeting be called, based
on (i) 52,207,756 shares of Common Stock and 31,767,066 shares of Series B
Preferred Stock outstanding on December 16, 2002, (ii) SPG's ownership of 11,000
shares of Common Stock as of the date of this Solicitation Statement, and (iii)
assuming the INVALIDATION of the voting rights of the entire purported 33.6%
voting stake that SPG believes to be held or controlled by the Taubman family
(comprised of 25,228,882 shares of Series B Preferred Stock owned by the Taubman
family, 500,437 shares of Common Stock owned by the Taubman family (which
includes 300,000 shares of Common Stock owned by Robert Taubman and William
Taubman as a result of the exercise of certain options), 885,560 shares of
Common Stock and 1,555,178 shares of Series B Preferred Stock subject to the
Voting Agreements between Robert Taubman and certain shareholders of the Company
that were purportedly terminated on January 28, 2003).
Agent Designations from holders of at least (A) 20,982,706 shares of
Common Stock and Series B Preferred Stock, in the aggregate (in addition to the
shares of Common Stock owned by SPG) will be required to call, or request that
the Company call, the Special Meeting pursuant to the By-Laws or the December 20
By-Law Amendments, as applicable, and (B) 8,386,482 shares of Common Stock and
Series B Preferred Stock, in the aggregate (in addition to the shares of Common
Stock owned by SPG) will be required to apply to the circuit court of Oakland
County to order, for good cause shown, that the Special Meeting be called, based
on (i) 52,207,756 shares of Common Stock and 31,767,066 shares of Series B
Preferred Stock outstanding on December 16, 2002, (ii) SPG's ownership of 11,000
shares of Common Stock as of the date of this Solicitation Statement, and (iii)
assuming the VALIDITY of the voting rights of the entire purported 33.6% voting
stake that SPG believes to be held or controlled by the Taubman family.
Prior to the December 20 By-Law Amendments, the By-Laws provided that
the Company's shareholders, not the Company Board, had the right to call the
Special Meeting, to be held between 10 and 60 days after providing notice of the
Special Meeting. SPG believes that the Company Board is frustrating the ability
of the common shareholders to exercise their voting rights through the December
20 By-Law Amendments adopted by the Company Board and is challenging the
validity of the December 20 By-Law Amendments in its litigation against the
Company, the Company Board and certain members of the Taubman family. Through
the December 20 By-Law Amendments, the Company Board transferred the power to
call a special shareholders' meeting from the Company's public shareholders to
the Company Board, and the Company Board gained significant new powers to delay
the timing of a special meeting. Prior to the December 20 By-Law Amendments, the
By-Laws permitted the Requisite Holders to call a special meeting to be held
between 10 and 60 days after providing notice of the meeting. Under the amended
By-Laws, the power to call a special shareholders' meeting now purportedly rests
with the Company Board. Under the December 20 By-Law Amendments, within 10
business days of receiving a shareholders' request, THE COMPANY BOARD (not the
Company's shareholders) fixes a record date and THE
17
COMPANY BOARD (not the Company's shareholders) sets the meeting date for between
30 and 90 days after the date of such board action. In each case, prior to the
December 20 By-Law Amendments the common shareholders could exercise these
powers. The effect of the transfer of these powers from the Company's
shareholders to the Company Board could well be to delay a special meeting of
the Company's shareholders by several weeks, if not months, thereby frustrating
the ability of the Company's common shareholders to exercise their voting
rights.
If the December 20 By-Law Amendments are found to be INVALID, following
receipt of Agent Designations from the Requisite Holders or the receipt of an
order from the circuit court ordering that the Special Meeting be called and
held, the Designated Agents would call the Special Meeting and fix the date and
time of the Special Meeting. Shortly thereafter, SPG and WEA would distribute
the appropriate notice of the Special Meeting, together with proxy materials and
a proxy card, to the holders of record of Common Stock and Series B Preferred
Stock entitled to vote at the Special Meeting.
However, if the December 20 By-Law Amendments are found to be VALID,
following receipt of Agent Designations from the Requisite Holders or the
receipt of an order from the circuit court ordering that the Special Meeting be
called and held, the Designated Agents would demand that the Company call the
Special Meeting and fix the date and time of the Special Meeting. The Company
would then be required to distribute the appropriate notice of the Special
Meeting. Shortly thereafter, SPG and WEA would distribute proxy materials and a
proxy card, to the holders of record of Common Stock and Series B Preferred
Stock entitled to vote at the Special Meeting.
You may revoke your Agent Designation at any time prior to the earlier
of __________, 2003 or the date on which SPG and WEA submit Agent Designations
from the Requisite Holders to the Company, by delivering a written revocation to
SPG and WEA, care of MacKenzie Partners, at the address or fax number set forth
on the back cover of this Solicitation Statement. Such a revocation must clearly
state that your Agent Designation is no longer effective. Any revocation of an
Agent Designation will not affect any action taken by the Designated Agents
pursuant to the Agent Designation prior to such revocation.
If your shares are held in the name of a brokerage firm, bank nominee
or other institution, only it can sign an Agent Designation with respect to your
shares and only upon receipt of your specific instructions. Accordingly, please
contact the person responsible for your account and give instructions for a
GREEN Agent Designation representing your shares to be signed. SPG and WEA urge
you to confirm in writing your instructions to the person responsible for your
account and to provide a copy of such instructions to SPG and WEA, care of
MacKenzie Partners, at the address or fax number set forth on the back cover of
this Solicitation Statement so that SPG and WEA will be aware of all
instructions given and can attempt to ensure that such instructions are
followed.
BY EXECUTING THE GREEN AGENT DESIGNATION AND RETURNING IT TO SPG AND
WEA, YOU ARE NOT COMMITTING TO CAST ANY VOTE IN FAVOR OR AGAINST, NOR ARE YOU
GRANTING ANY PROXY TO VOTE ON, ANY PROPOSAL TO BE BROUGHT BEFORE THE SPECIAL
MEETING. MOREOVER, EXECUTION OF THE GREEN AGENT DESIGNATION WILL NOT OBLIGATE
YOU IN ANY WAY TO TENDER YOUR COMMON STOCK PURSUANT TO THE OFFER.
18
BY AUTHORIZING THE CALLING OF THE SPECIAL MEETING, YOU WILL ALLOW THE
COMPANY'S SHAREHOLDERS TO PROTECT THEIR INTERESTS IN THE COMPANY BY EXPRESSING
THEIR VIEWS ON THE OFFER DIRECTLY TO THE COMPANY BOARD.
THE SPECIAL MEETING
GENERAL
SPG and WEA are furnishing the Solicitation Statement and a form of
Agent Designation to the holders of outstanding shares of Common Stock and
Series B Preferred Stock for the appointment of designated agents of the
shareholders to provide for the calling of the Special Meeting. For the Special
Meeting to be called and held pursuant to the By-Laws, Agent Designations in
favor of calling the Special Meeting must be executed by and received from the
Requisite Holders. Alternatively, if Agent Designations in favor of calling the
Special Meeting are executed by and received from the record holder or holders
of not less than 10% of all of the shares of capital stock entitled to vote at
such meeting, application may be made, pursuant to Section 403 of the MBCA to
the circuit court of Oakland County, Michigan (the county in which the Company's
principal office is located), to order, for good cause shown, that the Special
Meeting be called and held.
By signing an Agent Designation you will designate specified persons as
your agents and will authorize those persons to call, or request that the
Company call, the Special Meeting or apply to the circuit court of Oakland
County, Michigan (the county in which the Company's principal office is
located), to order, for good cause shown, that the Special Meeting be called and
held. Prior to the December 20 By-Law Amendments, the validity of which is being
challenged by SPG, the By-Laws provided that the shareholders calling the
special meeting have the right to set a date for such meeting and to give notice
thereof. However, pursuant to the December 20 By-Law Amendments, the Company
Board purportedly must call the Special Meeting and set a date for the Special
Meeting not less than 30 days and not more than 90 days after the date of such
action by the Company Board.
After the Special Meeting has been called, SPG and WEA will solicit
proxies from you in support of the proposals to be voted upon at the Special
Meeting, including the Excess Share Proposal, by sending you a proxy statement
and a proxy card for use therewith.
THE EXCESS SHARE PROPOSAL
If SPG and WEA are successful in this solicitation of Agent
Designations from the Requisite Holders or if Agent Designations in favor of
calling the Special Meeting are executed by and received from the record holder
or holders of not less than 10% of all of the shares entitled to vote at such
meeting and the circuit court in Oakland County, Michigan orders that the
Special Meeting be called and held, SPG and WEA expect to present the Excess
Share Proposal for a shareholder vote at the Special Meeting. The purpose of the
Excess Share Proposal is to facilitate the consummation of the Offer.
The Excess Share Proposal contemplates an amendment to the provisions
of Article III, Section 2, Subsection (d) of the Charter (the "Excess Share
Provision") to provide that the Excess Share Provision would not apply to SPG,
WEA or their respective affiliates. Consummation of the Offer is conditioned
upon the Purchaser being satisfied, in its sole discretion, that the Excess
Share Provision has been amended or waived in such manner that will permit the
Purchaser to purchase all of the Shares tendered pursuant to the Offer without
triggering the Excess Share Provision (the "Excess Share Condition").
The Excess Share Provision prohibits any person or entity, subject to
certain specified exceptions, from owning greater than 8.23% of the total
aggregate value (calculated according to the most
19
recent closing price of the Shares on the New York Stock Exchange (the "NYSE")
or, if unavailable, by the Company Board in its good faith determination) of the
outstanding capital stock (the "Ownership Limit"), which includes all
outstanding Common Stock and preferred stock of the Company; provided, however,
that "look-through entities" may receive an exception granted by the Company
Board to increase their Ownership Limit up to 9.9%. Any transfer that would
result in any person owning in excess of the Ownership Limit of the aggregate
value of the outstanding Common Stock and preferred stock of the Company, is
void from the moment of attempted transfer as to the shares of Common Stock
and/or preferred stock of the Company that are in excess of the Ownership Limit,
and the intended transferee acquires no rights, including voting rights, in such
shares. The Company is required to demand transfer of any stock transferred in
excess of the Ownership Limit ("Excess Stock") to a designated agent, acting for
the benefit of a charitable organization chosen by the Company Board, who will
then sell the Excess Stock in an arm's length transaction, and who will also
have the exclusive right to vote the stock prior to sale.
For a company to qualify as a real estate investment trust, or REIT,
under the Internal Revenue Code of 1986, as amended (the "Code"), not more than
50% of the value of the issued and outstanding stock of the company may be
owned, directly, or indirectly, by five or fewer individuals (as defined in the
Code) during the last half of a taxable year other than the first year of the
company's qualification as a REIT. SPG and WEA believe that consummation of the
Offer would not jeopardize the Company's status as a REIT because none of SPG
Inc., the Purchaser or WEA would be deemed an individual (as defined in the
Code) for purposes of the restriction on concentration of ownership of REITs as
described above.
The Company's Excess Share Provision cannot be waived by the Company
Board, absent a Charter amendment, to allow any person to own more than 9.9% of
the aggregate value of the Company's outstanding capital stock, subject to
certain specified exceptions. Article III, Section 2, Subsection (b) of the
Charter provides that actions to be taken by the shareholders of the Company
generally require the affirmative vote of the holders of two-thirds (2/3) of the
outstanding shares of capital stock of the Company entitled to vote thereon
("Two-Thirds Shareholder Approval"). Two-Thirds Shareholder Approval is required
in order to amend the Excess Share Provision to permit the Excess Share
Condition to be satisfied.
SPG believes that the Taubman family's purported control of
approximately one-third of the voting power of the Company's voting securities,
primarily through its ownership of Series B Preferred Stock issued in connection
with the 1998 Restructuring, gives the Taubman family an effective veto over any
potential takeover. Although the 1998 Restructuring did not deprive the
Company's common shareholders of their ability to tender their shares into the
Offer or vote their shares in connection with matters relating to the Offer or
otherwise, the issuance of the Series B Preferred Stock in the 1998
Restructuring to holders of limited partnership interests in Taubman L.P.
(including the Taubman family) effectively disenfranchised the Company's common
shareholders by giving various members of the Taubman family the ability to
exercise a purported veto right over significant corporate transactions
(including tender offers for the Company's common stock, such as the Offer) that
affect and could benefit the Company's common shareholders. In 2002, Robert
Taubman, the Taubman family and various associates of the Taubman family acted
to consolidate this purported veto right by giving Robert Taubman the purported
ability to control voting rights for shares of Series B Preferred Stock and
Common Stock held by members of the Taubman family and certain associates of the
Taubman family that together purportedly comprised over one-third (1/3) of the
Company's voting power. The Taubman family's purported veto right thus arises
through the combination of: (i) the voting stake in the Company purportedly
exercisable by Robert Taubman and the Taubman family, primarily through the
Series B Preferred Stock; (ii) the operation of the Company's Excess Share
provision; and (iii) the requirement that
20
two-thirds (2/3) of the Company's voting power approve amendments to certain
provisions in the Company's Charter and By-Laws.
SPG, as well as other shareholders of the Company, have commenced
litigation challenging the legality of the voting rights of the entire purported
33.6% voting stake that SPG believes to be held or controlled by the Taubman
family and the ability of the Taubman family to vote these shares in order to
prevent the Taubman family from, among other things, using its shares to impede
an amendment to the Charter which would satisfy the Excess Share Condition. On
January 28, 2003, the Company announced that Robert Taubman and various
associates of the Taubman family had purportedly terminated the Voting
Agreements. Notwithstanding the purported termination of these agreements, SPG
continues to believe that because Robert Taubman, the Taubman family and various
associates of the Taubman family acted to form a group voting position for the
purpose of blocking the Offer, any voting rights with respect to the shares
comprising the purported 33.6% voting position held or controlled by the Taubman
family should be invalidated. At a hearing scheduled for March 21, 2003, the
Court will consider SPG's claims to invalidate the voting rights with respect to
the shares held or controlled by the Taubman family.
The approval of the Excess Share Proposal requires (i) the effective
veto power that the Taubman family purports to wield over the Offer is
invalidated as described in "The Tender Offer and Accompanying Litigation", (ii)
the Company Board and/or the holders of the Series B Preferred Stock remove
impediments to the consummation of the Offer OR (iii) assuming that the actions
set forth in clauses (i) and (ii) above do not occur, the affirmative vote of
the holders of approximately 96% of the Company's outstanding voting stock
(excluding 25,228,882 shares of Series B Preferred Stock and 500,437 shares of
Common Stock held by the Taubman family).
RECESS OR ADJOURNMENT OF MEETING AND OTHER MATTERS
SPG and WEA expect to request, in the proxy solicitation relating to
the Special Meeting, authority (i) to initiate and vote for proposals to recess,
adjourn or reschedule the Special Meeting for any reason, including to allow
inspectors of the election to certify the outcome of the Excess Share Proposal
and any other proposals to be voted upon at the Special Meeting, or to allow the
solicitation of additional votes, if necessary, to approve the Excess Share
Proposal and any other proposals to be voted upon at the Special Meeting and
(ii) to oppose and vote against any proposal to recess, adjourn or reschedule
the Special Meeting for any reason. SPG and WEA do not currently anticipate
additional proposals on any substantive matters. Nevertheless, SPG and WEA
reserve the right either to modify the Excess Share Proposal or to cause
additional proposals to be identified in the notice of, and in the proxy
materials for, the Special Meeting. SPG and WEA are not aware of any other
proposals to be brought before the Special Meeting. However, should other
proposals be brought before the Special Meeting, SPG and WEA will vote its
proxies on such matters in their discretion. This Solicitation Statement is not
being delivered pursuant to the provisions of the Michigan Control Share Act,
and shall not, and is not intended to, be construed as an acquiring person
statement or a request for a control share special meeting. The Company's
By-Laws provide that the Michigan Control Share Act does not apply to the
Company.
IF THE SPECIAL MEETING IS CALLED, YOU WILL BE FURNISHED WITH NOTICE OF
THE SPECIAL MEETING AND PROXY MATERIALS RELATING TO THE EXCESS SHARE PROPOSAL.
THESE PROXY MATERIALS WILL CONTAIN MORE DETAILED INFORMATION CONCERNING THE
EXCESS SHARE PROPOSAL.
IF SPG AND WEA DO NOT OBTAIN SUFFICIENT AGENT DESIGNATIONS TO CALL THE
SPECIAL MEETING AND IF THE EXCESS SHARE PROPOSAL IS NOT APPROVED BY THE
21
COMPANY'S SHAREHOLDERS AT THE SPECIAL MEETING, IT IS UNLIKELY THAT CERTAIN
CONDITIONS TO THE OFFER WILL BE SATISFIED AND THAT SHARES OF COMMON STOCK WILL
BE ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER. IN SUCH EVENT, SPG AND WEA MAY
EITHER (1) TERMINATE THE OFFER OR (2) CONTINUE TO PURSUE THE OFFER AND THE
SATISFACTION OF THE CONDITIONS TO THE OFFER THROUGH NEGOTIATION, LITIGATION AND
OTHER MEANS.
CERTAIN INFORMATION ABOUT THE COMPANY
The information concerning the Company contained in this Solicitation
Statement has been taken from or based upon publicly available documents and
records on file with the Commission and other public sources and is qualified in
its entirety by reference thereto. None of the Purchaser, SPG Inc., WEA, their
respective affiliates, Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), the dealer manager for the Offer, MacKenzie Partners or
Computershare Investor Services ("Computershare"), the depositary for the Offer,
has received any representations from the Company regarding any information
contained in such documents or records or the completeness or accuracy of any
such information, and none of the Purchaser, SPG Inc., WEA, their respective
affiliates, Merrill Lynch, MacKenzie Partners or Computershare generally has
access to a means of obtaining independently verified information, or themselves
verifying any such information, concerning the Company. None of the Purchaser,
SPG Inc., WEA, their respective affiliates, Merrill Lynch, MacKenzie Partners or
Computershare take responsibility for the accuracy or completeness of the
information contained in such documents and records, or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to the
Purchaser, SPG Inc., WEA, their respective affiliates, Merrill Lynch, MacKenzie
Partners or Computershare, except to the extent required by law.
According to its Form 10-K for the year ended December 31, 2001, the
Company was incorporated in the State of Michigan in 1973 and shares of the
Company were first issued to the public in 1992. The principal executive offices
of the Company are located at 200 East Long Lake Road, Suite 300, P.O. Box 200,
Bloomfield Hills, Michigan 48303 and its telephone number is (248) 258-6800.
According to the September 30, 2002 10-Q, the Company is a real estate
investment trust, or REIT, under the Code, and is the general partner of Taubman
L.P. Taubman L.P. is an operating subsidiary that engages in the ownership,
management, leasing, acquisition, development, and expansion of regional retail
shopping centers and interests therein.
The Company is subject to the informational filing requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, is required to file periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the Commission's regional office located at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Information
regarding the public reference facilities may be obtained from the Commission by
telephoning 1-800-SEC-0330. The Company's filings with the Commission are also
available to the public without charge on the Commission's website
(http://www.sec.gov). Copies of such materials also may be obtained by mail from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Copies of many of the items filed
with the Commission and other information concerning the Company are available
for inspection at the offices of the NYSE located at 20 Broad Street, New York,
New York 10005.
22
CERTAIN INFORMATION ABOUT SPG INC., SPG L.P., THE PURCHASER
AND WEA IN THE SOLICITATION
SPG Inc. is a self-administered and self-managed REIT under the Code.
SPG L.P. is a subsidiary, and the primary operating partnership, of SPG Inc. SPG
L.P. is engaged primarily in the ownership, development, management, leasing,
acquisition, and expansion of income-producing properties, primarily regional
malls and community shopping centers. Through its affiliated management
companies, SPG L.P. provides architectural, design, construction and other
services to the properties SPG Inc. owns or in which SPG Inc. holds an interest,
as well as to certain other regional malls and community shopping centers owned
by third parties. SPG Inc. and SPG L.P. own or hold an interest in 242
income-producing properties in the United States, which consist of regional
malls, community shopping centers, specialty retail centers and office and
mixed-use properties in 36 states. SPG Inc. and SPG L.P. also own an interest in
five parcels of land held for future development. In addition, SPG Inc. and SPG
L.P. have ownership interests in eight additional retail real estate properties
operating in Europe and Canada. SPG Inc.'s principal executive offices are
located at National City Center, 115 West Washington Street, Suite 15 East,
Indianapolis, IN 46204, and its telephone number is (317) 636-1600.
SPG Inc. is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Such reports, proxy statements
and other information can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the Commission's regional office located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Information regarding the public reference facilities may be obtained from the
Commission by telephoning 1-800-SEC-0330. SPG Inc.'s filings are also available
to the public on the Commission's website (http://www.sec.gov). Copies of such
materials also may be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Copies of many of the items filed with the Commission and other
information concerning the Company are available for inspection at the offices
of the NYSE located at 20 Broad Street, New York, New York 10005.
The Purchaser is a Delaware corporation organized in November 2002 and
a wholly owned direct subsidiary of SPG Inc., with its principal offices located
at National City Center, 115 West Washington Street, Suite 15 East,
Indianapolis, IN 46204. The telephone number of the Purchaser is (317) 636-1600.
The Purchaser has not carried on any activities other than in connection with
the Offer and this Solicitation.
The Purchaser is not subject to the informational filing requirements
of the Exchange Act, and, accordingly, it does not file reports or other
information with the Commission relating to its business, financial condition
and other matters.
WEA is a real estate investment trust specializing in enclosed shopping
centers. WEA has interests in sixty-three major shopping centers in the United
States branded as "Westfield Shoppingtowns". WEA's portfolio of Westfield
Shoppingtowns includes clusters of shopping centers in major markets in the East
Coast, Midwest and West Coast. WEA has shopping centers in 14 states, comprising
64.0 million square feet of retail space. WEA's principal executive offices are
located at 11601 Wilshire Boulevard, 12th Floor, Los Angeles, California 90025,
and its telephone number is (310) 478-4456.
WEA is controlled by Westfield America Trust, an Australian publicly
traded unit trust. Westfield America Trust is listed on the Australian Stock
Exchange and is currently the second largest
23
property trust listed on the Australian Stock Exchange. Westfield America
Trust's sole investment is a 74.7% economic interest in WEA. Westfield America
Management Limited ("WAML") is the responsible entity and trustee of Westfield
America Trust. WAML is a wholly owned subsidiary of Westfield Holdings Limited,
an Australian company listed on the Australian Stock Exchange.
WEA is not subject to the informational filing requirements of the
Exchange Act, and, accordingly, it does not file reports or other information
with the Commission relating to its business, financial condition and other
matters.
As of the date of this Solicitation Statement, SPG owned 11,000 Shares,
in the aggregate. On November 15, 2002, SPG Inc. purchased 1,000 Shares at a
purchase price of $16.90 per Share in open market transactions. On November 27,
2002, the Purchaser purchased 5,500 Shares at a purchase price of $16.20 per
Share in open market transactions. Additionally, on November 27, 2002, SPG Inc.
purchased 2,700 Shares at a purchase price of $16.20 per share and 1,800 Shares
at a purchase price of $16.09 per Share, each in open market transactions. As of
the date of this Solicitation Statement, WEA did not own any Shares.
See SCHEDULE I for a list of directors and executive officers of SPG
Inc. and WEA who may assist MacKenzie Partners in soliciting proxies from the
Company's shareholders.
SOLICITATION EXPENSES AND PROCEDURES
Agent Designations may be solicited by mail, telephone, facsimile and
in person. Solicitations may be made by directors, officers, investor relations
personnel and other employees of SPG, WEA or their respective affiliates, none
of whom will receive additional compensation for such solicitations. SPG and WEA
have requested banks, brokerage houses and other custodians, nominees and
fiduciaries to forward all of its solicitation materials to the beneficial
owners of the Common Stock and Series B Preferred Stock they hold of record. SPG
and WEA will reimburse these record holders for customary clerical and mailing
expenses incurred by them in forwarding these materials to their customers.
SPG Inc. has retained MacKenzie Partners for solicitation and advisory
services in connection with this Solicitation. MacKenzie Partners will be paid
reasonable and customary compensation and will be reimbursed for certain
reasonable out-of-pocket expenses for acting (a) as solicitor in connection with
this Solicitation Statement and (b) as Information Agent in connection with the
Offer. MacKenzie Partners may also receive additional reasonable and customary
compensation for providing additional advisory services in connection with this
Solicitation. SPG Inc. has also agreed to indemnify MacKenzie Partners against
certain liabilities and expenses, including liabilities and expenses under U.S.
state and federal securities laws. MacKenzie Partners will solicit Agent
Designations from individuals, brokers, banks, bank nominees and other
institutional holders.
The entire expense of soliciting Agent Designations for the Special
Meeting is being borne by SPG and WEA. SPG and WEA will not seek reimbursement
for such expenses from the Company. Costs incidental to this Solicitation
include expenditures for printing, postage, legal and related expenses and are
expected to be approximately $700,000. Total costs incurred to date in
furtherance of or in connection with this Solicitation are approximately
$100,000.
------------------------
SPG Inc. has retained Merrill Lynch to act as the dealer manager and as
exclusive financial advisor to it in connection with the Offer. SPG Inc. has
agreed to pay Merrill Lynch reasonable and customary compensation for these
services and reimburse Merrill Lynch (in its capacity as dealer manager and
exclusive financial advisor) for its reasonable out-of-pocket expenses,
including the
24
reasonable fees and expenses of its outside counsel, incurred in connection with
its engagement, and will indemnify Merrill Lynch and certain related persons
against certain liabilities and expenses, including liabilities and expenses
under the federal securities laws. Merrill Lynch is also acting as exclusive
financial advisor to WEA in connection with the Offer. WEA has agreed to
indemnify Merrill Lynch and certain related persons against certain liabilities
and expenses, including liabilities under the federal securities laws. At any
time, Merrill Lynch and its affiliates may actively trade the debt and equity
securities of SPG Inc., WEA and their respective affiliates and the Company and
its affiliates for their own account or for the accounts of customers and,
accordingly, may hold a long or short position in those securities. Merrill
Lynch and its affiliates render various financing, investment banking and other
advisory services to SPG Inc., WEA and their respective affiliates and are
expected to continue to render such services, for which they have received and
expect to continue to receive customary compensation from SPG Inc., WEA and
their respective affiliates.
SHAREHOLDER PROPOSALS
According to the Company's proxy statement relating to its 2002 Annual
Meeting of Shareholders, any notice of a qualified shareholder submitting a
proposal to be included in the Company's proxy statement for its 2003 Annual
Meeting of Shareholders must have been in proper form and must have been
received by the Company no later than December 10, 2002.
OTHER INFORMATION
Certain directors, executive officers and employees of SPG Inc., WEA
and their respective affiliates, which persons may also assist MacKenzie
Partners in soliciting proxies, are listed on the attached SCHEDULE I. SCHEDULE
II and SCHEDULE III set forth certain information, as made available in public
documents, regarding the Company's capital stock held by the Company's principal
shareholders and its management.
THIS SOLICITATION STATEMENT IS NEITHER A REQUEST FOR THE TENDER OR
EXCHANGE OF SHARES NOR AN OFFER WITH RESPECT THERETO. THE PURCHASER'S OFFER IS
BEING MADE ONLY BY MEANS OF AND PURSUANT TO THE TERMS OF THE OFFER TO PURCHASE,
THE SUPPLEMENT AND THE RELATED REVISED LETTER OF TRANSMITTAL, AS FILED WITH THE
COMMISSION.
25
Please indicate your support FOR the call of the Special Meeting by
completing, signing and dating the enclosed GREEN Agent Designation and promptly
returning it in the enclosed envelope to:
Simon Property Group, Inc.
Simon Property Acquisitions, Inc.
Westfield America, Inc.
c/o MacKenzie Partners, Inc.
105 Madison Avenue
New York, New York 10016
No postage is necessary if the envelope is mailed in the United States.
SIMON PROPERTY GROUP, INC.
SIMON PROPERTY ACQUISITIONS, INC.
WESTFIELD AMERICA, INC.
February 21, 2003
26
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS OF SPG INC.
The following table sets forth the name of each director and executive
officer of SPG Inc. who may also assist MacKenzie Partners in soliciting proxies
from the Company's shareholders. Unless otherwise noted, each person's business
address is c/o Simon Property Group, Inc., National City Center, 115 West
Washington Street, Indianapolis, Indiana 46204. None of the officers, directors
or employees of SPG Inc. set forth in the table below will receive compensation
for soliciting proxies other than their ordinary compensation as an officer,
director or employee, as the case may be.
DIRECTORS AND EXECUTIVE OFFICERS OF SPG INC.
NAME AGE TITLE
---- --- -----
Birch Bayh...................................74 Director
Melvyn E. Bergstein..........................60 Director
Hans C. Mautner..............................65 Vice Chairman of the Board
G. William Miller............................77 Director
J. Albert Smith, Jr..........................62 Director
Pieter S. van den Berg.......................56 Director
Philip J. Ward...............................54 Director
Melvin Simon.................................76 Co-Chairman of the Board
Herbert Simon................................68 Co-Chairman of the Board
David Simon..................................41 Chief Executive Officer and Director
Richard S. Sokolov...........................52 President, Chief Operating Officer and Director
Fredrick W. Petri............................55 Director
M. Denise DeBartolo York.....................51 Director
Randolph L. Foxworthy........................58 Executive Vice President - Corporate Development
Gary L. Lewis................................44 Executive Vice President - Leasing
Stephen E. Sterrett..........................47 Executive Vice President - Chief Financial Officer
James M. Barkley.............................50 General Counsel and Secretary
Andrew A. Juster.............................50 Senior Vice President and Treasurer
John Rulli...................................46 Executive Vice President and Chief Administrative
J. Scott Mumphrey............................51 Executive Vice President - SPG Management Group
Shelly J. Doran..............................44 Vice President - Investor Relations
I-1
INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS OF WEA
The following table sets forth the name of each director and executive
officer of WEA who may also assist MacKenzie Partners in soliciting proxies from
the Company's shareholders. Unless otherwise noted, each person's business
address is c/o Westfield America, Inc., 11601 Wilshire Boulevard, 12th Floor,
Los Angeles, California 90025. None of the officers, directors or employees of
WEA set forth in the table below will receive compensation for soliciting
proxies other than their ordinary compensation as an officer, director or
employee, as the case may be.
DIRECTORS AND EXECUTIVE OFFICERS OF WEA
NAME AGE TITLE
---- --- -----
Peter S. Lowy................................44 Director; President and Chief Executive Officer
Richard E. Green.............................60 Director; Vice Chairman of Operations
Mark A. Stefanek.............................48 Director; Chief Financial Officer and Treasurer
Peter R. Schwartz............................43 Senior Executive Vice President
Dimitri Vazelakis............................49 Executive Vice President
John Schroder ..............................39 Executive Vice President
Randall J. Smith.............................53 Executive Vice President
Roger D. Burghdorf...........................55 Executive Vice President
I-2
SCHEDULE II
PRINCIPAL SHAREHOLDERS OF THE COMPANY
Set forth below is information regarding the Common Stock and the
Series B Preferred Stock owned by persons owning more than 5% of the total
number of shares of Common Stock and Series B Preferred Stock, on a combined
basis. Such information is derived from (i) the Preliminary Proxy Statement,
(ii) the Company's Proxy Statement for its 2002 Annual Meeting (the "2002 Proxy
Statement"), (iii) the September 30, 2002 10-Q, (iv) the Schedule 13D of Robert
S. Taubman and the other reporting persons listed therein, filed on January 18,
2000, amended by an Amendment No. 1 to Schedule 13D, dated November 14, 2002 and
an Amendment No. 2 to Schedule 13D, dated January 28, 2003 (the "Taubman Family
Schedule 13D") and (v) the Company Schedule 14D-9. All percentages set forth
below are based on 52,207,756 shares of Common Stock and 31,767,066 shares of
Series B Preferred Stock outstanding as of December 16, 2002, in each case based
on the Preliminary Proxy Statement.
According to the Charter, the Series B Preferred Stock generally votes
with the Common Stock on all matters. As described above under "The Tender Offer
and Accompanying Litigation," however, SPG, as well as other shareholders of the
Company, have commenced litigation challenging the legality of the voting rights
of the shares held or controlled by the Taubman family, in whole or in part, and
the ability of the Taubman family to vote these shares. According to the
Company's public filings, the 31,767,066 outstanding shares of Series B
Preferred Stock are convertible into shares of Common Stock at a rate of one
share of Common Stock for each 14,000 shares of Series B Preferred Stock, in
specified circumstances (any resulting fractional shares will be redeemed for
cash). Common Stock figures shown below assume that outstanding shares of Series
B Preferred Stock are not converted into Common Stock.
Based on information reported in or based on the September 30, 2002
10-Q and the 2002 Proxy Statement, SPG believes that certain holders of
partnership interests ("Units of Partnership Interests" or "Units") in The
Taubman Realty Group Limited Partnership ("TRG") have the ability to convert
7,097,979 Units into an equal number of shares of Common Stock. Common Stock
figures shown below assume that outstanding Units are not converted into shares
of Common Stock. According to the September 30, 2002 10-Q and the Company
Schedule 14D-9, SPG believes there are options to purchase 2,878,273 Units
outstanding (each of which entitles the holder thereof to purchase one Unit
which, in turn, is convertible into one share of Common Stock). Common Stock
figures shown below assume that outstanding options to purchase Units are not
exercised.
----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
Name and Address of Shares of Percent of Shares of Percent of Total Shares Percent of
Beneficial Owner Common Common Series B Series B Beneficially Total Shares
Stock Stock Preferred Preferred Owned
Beneficially Stock Stock
Owned Beneficially
Owned
----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
A. Alfred Taubman 186,937(1) * 24,669,087(2) 77.7% 24,856,024 29.6%
1820 S. Ocean Blvd.
South Palm Beach,
Florida 33480
----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
II-1
----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
Name and Address of Shares of Percent of Shares of Percent of Total Shares Percent of
Beneficial Owner Common Common Series B Series B Beneficially Total Shares
Stock Stock Preferred Preferred Owned
Beneficially Stock Stock
Owned Beneficially
Owned
----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
Morgan Stanley, Dean 5,325,013(3) 10.2% 0 n/a 5,325,013 6.3%
Witter, & Co.
Morgan Stanley Dean
Witter Asset
Management, Inc.
1585 Broadway
New York, NY 10036
----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
Security Capital Group 5,002,220(5) 9.6% 0 n/a 5,002,220 6.0%
Incorporated
Security Capital
Research Management
Incorporated
11 South LaSalle
Suite 200
Chicago, IL 60603
----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
LaSalle Investment 4,253,350(6) 8.1% 0 n/a 4,253,350 5.1%
Management, Inc.
LaSalle Investment
Management(Securities),
L.P.
200 East Randolph Drive
Chicago, Illinois 60601
----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
Cohen & Steers Capital 3,216,375(4) 6.2% 0 n/a 3,216,375 3.8%
Capital Management, Inc.
757 Third Avenue
New York, New York 10017
----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
Deutsche Bank AG 3,169,974(7) 6.1% 0 n/a 3,169,974 3.8%
Taunusanlage 12, D-60325
Frankfurt am Main
Federal Republic of
Germany
----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
-------------
* less than 1%
(1) Based on information set forth in the Preliminary Proxy Statement,
includes 100 shares of Common Stock
II-2
owned by Mr. A. Taubman's revocable trust and 186,837 shares of Common
Stock held by TRA Partners ("TRAP"). Mr. A. Taubman's trust is the
managing general partner of TRAP and has the sole authority to vote and
dispose of the Common Stock held by TRAP. Mr. A. Taubman disclaims any
beneficial ownership of the Common Stock held by TRAP and the other
entities discussed in footnote (2) below beyond his pecuniary interest in
the entities that own the securities.
(2) Based on information set forth in the Preliminary Proxy Statement, shares
of Series B Preferred Stock are owned by Mr. A. Taubman in the same manner
and in the same amounts as the Units of Partnership Interest (which Units
are NOT convertible into shares of Common Stock pursuant to the Second
Amended and Restated Continuing Offer, effective as of May 11, 2000, by
the Company to certain holders of Units) held by Mr. A.
Taubman as described below.
Mr. A. Taubman's holdings of Units of Partnership Interests consist of
9,875 Units of Partnership Interest held by Mr. A. Taubman's trust,
17,699,879 Units of Partnership Interest owned by TRAP, 11,011 Units of
Partnership Interest owned by Taubman Realty Ventures ("TRV"), of which
Mr. A. Taubman's trust is the managing general partner, and 1,975 Units of
Partnership Interest held by Taub-Co Management, Inc. ("Taub-Co").
Because, according to the Preliminary Proxy Statement, the sole holder of
voting shares of Taub-Co is Taub-Co Holdings Limited Partnership, of which
Mr. A. Taubman's trust is the managing general partner, Mr. A. Taubman may
be deemed to be the beneficial owner of the Units of Partnership Interest
held by Taub-Co. According to the Preliminary Proxy Statement, Mr. A.
Taubman disclaims beneficial ownership of any Units held by Taub-Co beyond
his pecuniary interest in Taub-Co. Also includes 6,327,098 Units of
Partnership Interest owned by TG Partners Limited Partnership ("TG
Partners"), 445,191 Units held by a subsidiary of TG Partners (such
subsidiary and TG Partners are collectively referred to as "TG") and
174,058 Units of Partnership Interest which are held by Courtney Lord, the
Company's Senior Vice President of Leasing, but for which Mr. Lord has
granted an irrevocable proxy to TG Partners. The 174,058 Units held by Mr.
Lord are not presently entitled to any partnership distributions except in
the event of a liquidation. Such Units will be released from the
irrevocable proxy and become entitled to receive distributions over the
three years remaining in the original five-year vesting period. Because,
according to the Preliminary Proxy Statement, Mr. A. Taubman, through
control of TRV's and TG Partners' managing partner, has sole authority to
vote and (subject to certain limitations) dispose of the Units of
Partnership Interest held by TRV and TG, respectively, Mr. A. Taubman may
be deemed to be the beneficial owner of all of the Units of Partnership
Interest held by TRV and TG. Mr. A. Taubman disclaims beneficial ownership
of any Units of Partnership Interest held by TRV and TG beyond his
pecuniary interest in those entities. Mr. A. Taubman disclaims any
beneficial ownership of the Series B Preferred Stock held by TRAP and the
other entities discussed above in footnote (1) beyond his pecuniary
interest in the entities that own the securities. Schedule III to this
Solicitation Statement sets forth the security ownership of management.
All of the 24,856,024 shares reported as being beneficially owned by Mr.
A. Taubman described above in this note (2) and in note (1) are included
in the shares listed for Mr. Robert S. Taubman, Chairman of the Company
Board and Chief Executive Officer of the Company on Schedule III.
(3) Based on information set forth in (a) the Preliminary Proxy Statement,
held on behalf of various investment advisory clients, none of which holds
more than 5% of the Common Stock and (b) Amendment No. 8 to Schedule 13G,
dated February 18, 2003.
(4) Based on information set forth in Amendment No. 7 to Schedule 13G, dated
February 3, 2003.
(5) Based on information set forth in Amendment No. 1 to Schedule 13G, dated
February 13, 2003.
(6) Based on information set forth in the Preliminary Proxy Statement,
includes ownership of Common Stock on behalf of Stichting Pensioenfonds
Voor de Gezondheid Geestelijke en Maatschappelijke Belangen.
(7) Based on information set forth in Schedule 13G, dated February 10, 2003.
II-3
SCHEDULE III
SECURITY OWNERSHIP OF MANAGEMENT
Set forth below is information regarding the Common Stock and the
Series B Preferred Stock owned by directors and officers of the Company,
individually and as a group on a combined basis. Such information is derived
from (i) the Preliminary Proxy Statement, (ii) the 2002 Proxy Statement, (iii)
the September 30, 2002 10-Q, (iv) the Taubman Family Schedule 13D and (v) the
Company Schedule 14D-9 and based on SPG's belief that notwithstanding the
purported termination of the Voting Agreements (as defined below) in January
2003, a group continues to exist comprised of shares held or controlled by the
Taubman Family and the shares subject to the Voting Agreements. All percentages
are based on 52,207,756 shares of Common Stock and 31,767,066 shares of Series B
Preferred Stock outstanding as of December 16, 2002, in each case based on the
Preliminary Proxy Statement.
According to the Charter, the Series B Preferred Stock generally votes
with the Common Stock on all matters. As described above under "The Tender Offer
and Accompanying Litigation," however, SPG, as well as other shareholders of the
Company, have commenced litigation challenging the legality of the voting rights
of the shares held or controlled by the Taubman family, in whole or in part, and
the ability of the Taubman family to vote these shares. According to the
Company's public filings, the 31,767,066 outstanding shares of Series B
Preferred Stock are convertible into shares of Common Stock at a rate of one
share of Common Stock for each 14,000 shares of Series B Preferred Stock in
specified circumstances (any resulting fractional shares will be redeemed for
cash). Unless otherwise noted, Common Stock figures shown below assume that
outstanding shares of Series B Preferred Stock are not converted into Common
Stock.
Based on information reported in or derived from the September 30, 2002
10-Q and the 2002 Proxy Statement, SPG believes that certain holders of Units
have the ability to convert 7,097,979 Units into an equal number of shares of
Common Stock. Unless otherwise noted, Common Stock figures shown below assume
that outstanding Units are not converted into shares of Common Stock. According
to the September 30, 2002 10-Q and the Company Schedule 14D-9, SPG believes
there are options to purchase 2,878,273 Units outstanding (each of which
entitles the holder thereof to purchase one Unit which, in turn, is convertible
into one share of Common Stock). Unless otherwise noted, Common Stock figures
shown below assume that outstanding options to purchase Units are not exercised.
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ------------
Name and Address of Shares of Percent of Shares of Percent of Total Shares Percent of
Beneficial Owner Common Common Series B Series B Beneficially Total Shares
Stock Stock Preferred Preferred Owned
Beneficially Stock Stock
Owned Beneficially
Owned
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
Robert S. Taubman 2,176,548(1) 4.1% 26,784,060(2) 84.3% 28,960,608(3) 34.2%
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
William S. Taubman 709,035(4) 1.3% 5,925(5) * 714,960 *
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
Lisa A. Payne 608,328(6) 1.2% 0 n/a 608,328 *
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
Courtney Lord 2,034(7) * 193,095(8) * 195,129 *
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
John L. Simon 5,191(9) * 0 n/a 5,191 *
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
Graham T. Allison 1,430 * 0 n/a 1,430 *
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
III-1
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
Allan J. Bloostein 5,000 * 0 n/a 5,000 *
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
Jerome A. Chazen 10,000 * 0 n/a 10,000(10) *
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
S. Parker Gilbert 130,000(11) * 0 n/a 130,000 *
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
Peter Karmanos, Jr. 40,000 * 0 n/a 40,000 *
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
Directors and Executive Officers as a Group 2,978,531 5.6% 26,977,155 84.9% 29,955,686 35.3%
-------------------------------------------- --------------- ----------- --------------- ------------ ---------------- ----------
-----------------------
* less than 1%
(1) Based on information set forth in the Preliminary Proxy Statement and
the Taubman Family Schedule 13D and based on SPG's belief that
notwithstanding the purported termination of the Voting Agreements in
January 2003, a group continues to exist comprised of shares held or
controlled by the Taubman Family and the shares subject to the Voting
Agreements, consists of A) 885,560 shares of Common Stock subject, in
the aggregate, to the following voting agreements that were purportedly
terminated on January 28, 2003: (1) Voting Agreement among Mr. R.
Taubman, Max M. Fisher, as Trustee of The Max M. Fisher Revocable
Trust, and Martinique Hotel, Inc. (the "Fisher Agreement"); (2) Voting
Agreement between Mr. R. Taubman and John Rakolta Jr., Terry Rakolta,
the Eileen Heather Vanderkloot Irrevocable Trust, U/A dated 12/22/92,
the Lauren Rakolta Irrevocable Trust, U/A dated 12/22/92, the Paige
Alexandra Rakolta Irrevocable Trust, U/A dated 12/22/92 and the John
Rakolta, III Irrevocable Trust, U/A dated 12/22/92 (the "Rakolta
Agreement"); and (3) Voting Agreement between Mr. R. Taubman and Robert
C. Larson as Trustee of the Robert C. Larson Revocable Trust u/a/d
11/24/96, as amended (the "Larson Agreement", and together with the
Fisher Agreement and the Rakolta Agreement, the "Voting Agreements");
B) 245,016 presently vested options (each of which entitles the holder
thereof to purchase one Unit which, in turn, is convertible into one
share of Common Stock) granted to Mr. R. Taubman; C) 545,535 presently
vested options (each of which entitles the holder thereof to purchase
one Unit which, in turn, is convertible into one share of Common Stock)
granted to William S. Taubman; and D) 500,437 shares of Common Stock
collectively held by Mr. R. Taubman, together with The A. Alfred
Taubman Restated Irrevocable Trust, Mr. W. Taubman, TRA Partners, TRV,
Taub-Co, TG Partners and R&W-TRG LLC ("R&W") (the "Taubman Family").
(2) Based on information set forth in the Taubman Family Schedule 13D,
consists of 1,555,178 shares of Series B Preferred Stock subject, in
the aggregate, to the Voting Agreements that were purportedly
terminated on January 28, 2003 and 25,228,882 shares of Series B
Preferred Stock held by the Taubman Family.
(3) Based on information set forth in the Preliminary Proxy Statement and
the Taubman Family Schedule 13D, the Voting Agreements that were
purportedly terminated in January 2003, provided that Mr. R. Taubman
has the sole and absolute right to vote 885,560 shares of Common Stock
and 1,555,178 shares of Series B Preferred Stock. SPG believes that
notwithstanding the purported termination of such Voting Agreements, a
"group" continues to exist comprised of shares held or controlled by
the Taubman family and the shares subject to the Voting Agreements and
that the shares subject thereto should thus be allocated to Mr. R.
Taubman. As set forth in the Taubman Family Schedule 13D, the Taubman
Family holds 500,437 shares of Common Stock (excluding the 245,016 and
545,535 presently vested options (each of which entitles the holder
thereof to purchase one Unit which, in turn, is convertible into one
share of Common Stock) granted to Mr. R. Taubman and Mr. W. Taubman,
respectively) and 25,228,882 shares of Series B Preferred Stock. Based
on information contained in the Taubman family Schedule 13D and when
combined with the shares of Common Stock and Series B Preferred Stock
subject to the Voting Agreements that were purportedly terminated on
January 28, 2003 and excluding the vested options referred to above,
the Taubman Family and Mr. R. Taubman have the right to vote 26,784,060
shares of Series B Preferred Stock and 1,386,021 shares of Common
Stock, representing 33.6% of the outstanding voting stock of the
Company (calculated based on 52,183,395 shares of Common Stock and
31,767,066 shares of Series B Preferred Stock outstanding as of
November 11, 2002). Including the vested options referred to above, the
percentage of total shares would be
III-2
34.2% (calculated based on 52,207,756 shares of Common Stock and 31,
767,066 shares of Series B Preferred Stock outstanding as of December
16, 2002).
(4) Based on information set forth in the Preliminary Proxy Statement and
the Taubman Family Schedule 13D, consists of 545,535 shares of Common
Stock that Mr. W. Taubman has the right to receive upon the exchange of
Units of Partnership Interest that are subject to vested options
granted under the 1992 Incentive Option Plan of TRG ("Incentive
Options"), 150,000 shares of Common Stock owned by Mr. W. Taubman and
13,500 shares of Common Stock owned by his children and for which Mr.
W. Taubman disclaims any beneficial interest. According to the
Preliminary Proxy Statement, excludes all shares of Voting Stock held
by TRAP, TRV, Taub-Co, or TG because Mr. W. Taubman has no voting or
dispositive control over such entities' assets. Mr. W. Taubman
disclaims any beneficial interest in the Voting Stock held by TRAP,
TRV, Taub-Co, and TG beyond his pecuniary interest in the entities that
own the securities.
(5) Based on information set forth in the Preliminary Proxy Statement,
excludes 547,945 shares of Series B Preferred Stock that R&W holds and
that are included in Mr. R. Taubman's holdings described in footnote
(2) above. According to the Preliminary Proxy Statement, excludes all
shares of Voting Stock held by TRAP, TRV, Taub-Co, or TG because Mr. W.
Taubman has no voting or dispositive control over such entities'
assets. Mr. W. Taubman disclaims any beneficial interest in the Series
B Preferred Stock held by R&W and in the Voting Stock held by TRAP,
TRV, Taub-Co, and TG beyond his pecuniary interest in the entities that
own the securities.
(6) Based on information set forth in the Preliminary Proxy Statement,
consists of 7,500 shares of Common Stock that Ms. Payne owns and
600,828 shares of Common Stock that Ms. Payne will have the right to
receive in exchange for Units of Partnership Interest that are subject
to vested Incentive Options.
(7) Based on information set forth in the Preliminary Proxy Statement,
consists of 1,504 shares of Common Stock owned by Mr. Lord, 530 shares
of Common Stock owned by Mr. Lord's wife for which he disclaims any
beneficial interest.
(8) Based on information set forth in the Preliminary Proxy Statement,
consists of 193,095 shares of Series B Preferred Stock acquired by Mr.
Lord in exchange for all of Mr. Lord's equity interest in Lord
Associates, Inc. in November 1999. According to the Preliminary Proxy
Statement, does not include 174,058 shares of Series B Preferred Stock
acquired by Mr. Lord in connection with the Lord Associates transaction
for which Mr. Lord has granted to TG Partners an irrevocable proxy and
over which Mr. Lord has no voting or dispositive power.
(9) Based on information set forth in the Preliminary Proxy Statement,
consists of 2,000 shares of Common Stock that Mr. Simon owns and 3,191
shares of Common Stock which Mr. Simon may be deemed to own through his
investment in the Taubman Centers Stock Fund, one of the investment
options under the Company's 401(k) Plan.
(10) Based on information set forth in the Preliminary Proxy Statement,
excludes 15,000 shares of Series A Cumulative Redeemable Stock ("Series
A Preferred Stock") owned by Mr. Chazen and 30,000 shares (or, in the
aggregate, less than 1%) of Series A Preferred Stock owned by his
children and for which Mr. Chazen disclaims any beneficial ownership.
The Series A Preferred Stock does not entitle its holders to vote.
(11) Based on information set forth in the Preliminary Proxy Statement,
includes 80,000 shares of Common Stock held by The Gilbert 1996
Charitable Remainder Trust, an irrevocable trust of which Mr. Gilbert
is a co-trustee. According to the Preliminary Proxy Statement, Mr.
Gilbert disclaims any beneficial interest in such shares beyond any
deemed pecuniary interest as the result of his wife's current
beneficial interest in the trust.
III-3
Except as otherwise noted, the information concerning the Company contained in
this Solicitation Statement has been taken from or based upon publicly available
documents and records on file with the Commission and other public sources and
is qualified in its entirety by reference thereto. None of the Purchaser, SPG
Inc., WEA or their respective affiliates has received any representations from
the Company regarding any information contained in such documents or records or
the completeness or accuracy of any such information, and none of the Purchaser,
SPG Inc., WEA or their respective affiliates generally has access to a means of
obtaining independently verified information, or themselves verifying any such
information, concerning the Company. None of the Purchaser, SPG Inc., WEA or
their respective affiliates takes responsibility for the accuracy or
completeness of the information contained in such documents and records, or for
any failure by the Company to disclose events which may have occurred or may
affect the significance or accuracy of any such information but which are
unknown to the Purchaser, SPG Inc., WEA or their respective affiliates, except
to the extent required by law.
IMPORTANT
Your action is important! No matter how many Shares you own, please
give SPG and WEA your Agent Designation by:
1. SIGNING the enclosed GREEN AGENT DESIGNATION;
2. DATING the enclosed GREEN AGENT DESIGNATION; and
3. MAILING the enclosed GREEN AGENT DESIGNATION TODAY in the
envelope provided (no postage is required if mailed in the
United States).
If you hold your Shares in the name of one or more brokerage firms,
banks, nominees or other institution, only they can sign an Agent Designation
with respect to your Shares, and only upon receipt of your specific
instructions. Accordingly, please contact the person responsible for your
account and instruct that person to execute the GREEN AGENT DESIGNATION.
If you have any questions or require any additional information
concerning this Solicitation Statement, please contact MacKenzie Partners at the
address set forth below.
[MACKENZIE PARTNERS, INC. LOGO]
105 MADISON AVENUE
NEW YORK, NEW YORK 10016
CALL COLLECT: (212) 929-5500
OR
CALL TOLL-FREE: (800) 322-2885
FAX: (212) 929-0308
GREEN AGENT DESIGNATION CARD
AGENT DESIGNATION
TO SHAREHOLDERS OF TAUBMAN CENTERS, INC.
THIS AGENT DESIGNATION IS SOLICITED BY SIMON PROPERTY GROUP INC., SIMON
PROPERTY ACQUISITIONS, INC. AND WESTFIELD AMERICA, INC. FOR THE APPOINTMENT OF
DESIGNATED AGENTS TO PROVIDE FOR THE CALLING OF A SPECIAL MEETING OF THE
SHAREHOLDERS OF TAUBMAN CENTERS, INC. THIS AGENT DESIGNATION IS NOT BEING
SOLICITED BY THE BOARD OF DIRECTORS OF TAUBMAN CENTERS, INC.
Each of the undersigned hereby constitutes and appoints Stephen E.
Sterrett, James M. Barkley, Esq. and Shelly J. Doran, and each of them, with
full power of substitution, the proxies and agents of the undersigned (said
proxies and agents, together with each substitute appointed by any of them, if
any, collectively, the "Designated Agents") in respect of all common stock, par
value $.01 per share and Series B Non-Participating Convertible Preferred Stock,
par value $.001 per share, of Taubman Centers, Inc. (the "Company") owned by the
undersigned to do any or all of the following, to which each of the undersigned
hereby consents:
1. To take all action necessary (including applying to the
circuit court in Oakland County, Michigan) to provide for the
calling of (BUT NOT TO VOTE AT) a special meeting of
shareholders of the Company (the "Special Meeting"), for the
purpose of considering and voting upon the Excess Share
Proposal as described in the Solicitation of Agent
Designations of Simon Property Group, Inc., Simon Property
Acquisitions, Inc. and Westfield America, Inc.;
2. Without limitation of the foregoing, to fix the date and time
of the Special Meeting or any adjournment thereof, and to give
notice of the Special Meeting or any adjournment thereof and
the purposes for which the Special Meeting or any adjournment
thereof has been called;
3. TO EXERCISE ANY AND ALL OTHER RIGHTS OF EACH OF THE
UNDERSIGNED INCIDENTAL TO (I) PROVIDING FOR THE CALL OF THE
SPECIAL MEETING, (II) CAUSING NOTICE OF THE SPECIAL MEETING TO
BE GIVEN TO THE COMPANY'S SHAREHOLDERS AND (III) CAUSING THE
PURPOSES OF THE AUTHORITY EXPRESSLY GRANTED HEREIN TO THE
DESIGNATED AGENTS TO BE CARRIED INTO EFFECT; PROVIDED,
HOWEVER, THAT NOTHING CONTAINED IN THIS INSTRUMENT SHALL BE
CONSTRUED TO GRANT THE DESIGNATED AGENTS THE RIGHT, POWER OR
AUTHORITY TO VOTE ANY SHARES OWNED BY THE UNDERSIGNED AT THE
SPECIAL MEETING.
Date: ______________, 2003
_____________________________________________________
Signature
_____________________________________________________
Signature, if jointly held
Title:_______________________________________________
Please sign exactly as name appears hereon. When
shares are held by joint tenants, both should sign.
When signing as an attorney, executor, administrator,
trustee or guardian, give full title as such. If a
corporation, sign in full corporate name by President
or other authorized officer. If a partnership, sign
in partnership name by authorized person.
PLEASE SIGN, DATE AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE.