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EXHIBIT 10.3
AMENDED AND RESTATED
EMPLOYMENT AND CONSULTING AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AND CONSULTING AGREEMENT,
dated as of October 17, 1995, by and between U.S. Home Corporation (the
"Company"), and Xxxxxx X. Xxxxxxxx (the "Executive").
WHEREAS, the Company and the Executive are parties to an
Employment and Consulting Agreement, dated May 12, 1986, as amended by (i)
the First Amendment to Employment and Consulting Agreement, dated February
8, 1990, (ii) the Second Amendment to Employment and Consulting Agreement,
dated December 6, 1990, and (iii) the Third Amendment to Employment and
Consulting Agreement, dated May 25, 1993 (collectively, the "Agreement").
WHEREAS, the Company and the Executive desire to amend
and restate the Agreement as hereinafter provided.
WHEREAS, Section 7(c) of the Agreement permits such
amendment by written agreement of both parties.
NOW, THEREFORE, the Company and the Executive agree to
amend and restate the Agreement as follows:
1. Employment and Duties. The Company shall employ the
Executive, and the Executive shall be employed by the Company, as Chairman
and Co-Chief Executive Officer, at the Company's headquarters in Houston,
Texas (or such other location as shall be mutually satisfactory to the
Executive and the Company) for the term of this Agreement. In these
capacities, the Executive shall devote substantially all of his business
time and energies to the business of the Company and shall perform such
services as shall from time to time be assigned to him by the Board of
Directors of the Company.
2. Term. The term of the Executive's employment hereunder
shall continue until June 20, 1999; provided, however, that, unless either
party otherwise elects by notice in writing delivered to the other at least
90 days prior to June 20, 1999, or any subsequent anniversary of June 20,
1999, such term shall be automatically renewed for successive one-year
terms unless sooner terminated by the Executive's voluntary resignation or
otherwise terminated pursuant to the terms of this Agreement (the
"Employment Term").
3. Compensation and Benefits.
(a) Compensation. During each calendar year of the
Employment Term, the Company shall pay the Executive: (i) a base salary at
a rate of $425,000 per year (the "Base Salary"), payable in substantially
equal biweekly installments, and (ii) any cash bonus to which he is entitled
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pursuant to the provisions of Appendix A hereto, payable as promptly as
practicable after the end of each such calendar year, but in any event
by April 15 of the following year. Notwithstanding the foregoing, if the
Executive's applicable employee remuneration (as defined in Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code")) for any
taxable year would exceed the higher of $1 million or the maximum amount
deductible by the Company under Section 162(m) for such taxable year, the
amount otherwise payable shall be reduced to the higher of $1 million or the
maximum amount deductible under Section 162(m) and the excess shall be
deferred until the expiration of the Employment Term and shall be payable
in a cash lump sum on April 16 of the first year of the Consultation Period.
The deferred compensation shall accrue interest at the same rate charged the
Company from time to time under the Credit Agreement, dated as of September
29, 1995, among the Company, the First National Bank of Chicago, as agent,
and certain lenders named therein, as amended, restated, supplemented or
otherwise modified from time to time, or any successor facility. The
Executive's Base Salary and bonus shall be reviewed at least annually by the
Board of Directors of the Company, or pursuant to its delegation, and (i) at
a minimum, the Board shall increase the Base Salary annually commencing with
the 1996 calendar year by an amount determined by multiplying the current
Base Salary by the percentage increase in the Consumer Price Index --
U.S. City Average published by the Bureau of Labor Statistics of the United
States Department of Labor (or if that Index is no longer published by any
substantially equivalent successor thereto) (the "Consumer Price Index") in
the preceding calendar year, and (ii) the Board may increase the bonus from
time to time.
(b) Stock Options. On October 17, 1995, the
Executive was granted an option (the "Option") to purchase 50,000 shares of
the Company's common stock, $.01 par value per share (the "Common Stock"),
pursuant to the Company's 1993 Employee's Stock Option Plan. Such Option
shall be an "incentive stock option" within the meaning of Section 422 of the
Code to the extent permitted by Section 422(d) of the Code; to the extent
not permitted by Section 422(d), the remaining portion of the Option shall
be a nonqualified stock option. The Option shall be for a term of ten years
from, and shall be exercisable immediately at the fair market value of the
Common Stock on, the date of grant.
(c) Retirement Benefit.
(i) In consideration of the Executive's past
services to the Company, the Executive shall be entitled to a retirement
benefit, payable monthly for his life, in an amount equal to 50 percent
of his highest monthly Base Salary during the Employment Term. Such
payments shall commence on the first day of the month coincident with or
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next following the later of the Executive's attainment of age 58 or the
end of the Employment Term (the "Commencement Date"); provided, however,
that if the Employment Term terminates prior to his attainment of age 58,
the Executive may elect by written notice to the Company to have such
payments commence on the first day of any month after such termination
of employment (the "Early Commencement Date") in a monthly amount equal
to the monthly amount that the Executive would have received at the
Commencement Date, reduced by one-third of one percent (.33%) per month
for each month by which the Early Commencement Date precedes the Commencement
Date. The amount of each payment hereunder shall be increased on each
January 1 following the Early Commencement Date or Commencement Date,
as applicable, by an amount determined by multiplying the amount of
each monthly payment made in the preceding year by the percentage increase,
if any, in the cost of living from the preceding January 1, as reflected by
the Consumer Price Index. The Executive's election to have his retirement
benefit payments commence on the Early Commencement Date shall not affect
the Company's obligation to pay consulting fees to the Executive in
accordance with Section 4 hereof.
The retirement benefit shall be an
unconditional, but unsecured, general credit obligation of the Company to the
Executive, and nothing contained in this Agreement, and no action taken
pursuant to it, shall create or be construed to create a trust of any kind
between the Company and the Executive. The Executive shall have no right,
title or interest whatever in or to any investments which the Company may
make (including, but not limited to, an insurance policy on the life of
the Executive) to aid it in meeting its obligations hereunder.
(ii) From time to time, the Company shall make
such contributions to the trust established under the Trust Agreement dated
as of December 18, 1986 (the "1986 Trust") between the Company, as grantor,
and Xxxxxxx X. Xxxxxxxx, as successor trustee, to provide a sufficient
reserve for the discharge of its obligation to pay the retirement benefit to
the Executive as provided in clause (i) of this Section 3(c) and clauses (ii)
and (iii) of Section 5(a) hereof.
(d) Expense Reimbursement. The Company shall
promptly pay, or reimburse the Executive for, all ordinary and necessary
business expenses incurred by him in the performance of his duties hereunder,
provided that the Executive properly accounts for them in accordance with
Company policy.
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(e) Other Benefit Plans, Fringe Benefits, and
Vacations
(i) The Executive shall be eligible to
participate in each of the Company's present employee benefit plans,
policies or arrangements and any such plans, policies or arrangements
that the Company may maintain or establish during the Employment Term and
receive all fringe benefits and vacations for which his position makes him
eligible in accordance with the Company's usual policies and the terms
and provisions of such plans, policies or arrangements.
(ii) The Company shall not terminate or
change, in such a way as to adversely affect the Executive's rights or reduce
his benefits, any employee benefit plan, policy or arrangement now in effect
or which may hereafter be established and in which the Executive is eligible
to participate, including, without limitation, the Company's profit sharing,
life insurance, disability and stock option plans, unless a plan, policy
or arrangement providing the Executive with at least equivalent rights
and benefits has been established.
(iii) From and after the last day of the
Employment Term, the Executive shall be entitled to participate in each of
the Company's employee benefit plans, policies or arrangements which provide
medical coverage and similar benefits to the Company's executive officers
(the "Company Medical Plan") on the same basis as the Company's other
executive officers. The Company shall bear the cost of medical coverage and
benefits during the Consultation Period (as defined below); thereafter,
the Executive shall bear such cost. After the Executive is eligible for
Medicare and the Company becomes a secondary payor (or its equivalent)
pursuant to Medicare or other applicable law, the Company shall provide
secondary medical coverage and benefits. If continued coverage under the
Company Medical Plan is not possible under the terms of any insurance policy
or applicable law following the Employment Term, the Company shall provide
the Executive with coverage equivalent to that provided to the Company's
other executive officers under a policy or arrangement acceptable to the
Executive. In the event of the Executive's death before the end of the
Consultation Period, the Company shall continue to provide such primary
and secondary medical coverage, as applicable, and benefits to the
Executive's spouse and dependents for the remainder of the Consultation
Period on the same basis as provided to the Company's other executive
officers.
4. Consultation Period. From and after the last day of
the Employment Term and for a period of five years thereafter
(the "Consultation Period"), the Executive shall serve as a consultant to
the Company with respect to such business matters and at such times (not
more than four days per month and not more than two consecutive days per
week) as the Company may reasonably request within Xxxxxx County, Texas;
provided, however, that if the Consultant does not reside in Xxxxxx County,
he may perform his consulting duties hereunder at his then place of
residence and shall be required to come to Xxxxxx County not more than one
day in each calendar month. During the Consultation Period, the Company
shall pay the Executive (in addition to any other amounts to which he is
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entitled pursuant to this Agreement) a consulting fee, in substantially
equal biweekly installments, at the rate of $139,854 per year increased by
an amount determined by multiplying $139,854 by the percentage increase, if
any, in the cost of living between January 1, 1995 and the January 1
immediately preceding the date of commencement of the Consultation Period,
as reflected by the Consumer Price Index. The amount of the consulting fee
shall be increased on each January 1 during the Consultation Period by an
amount determined by multiplying the amount of the consulting fee paid in
the preceding year by the percentage increase, if any, in the cost of
living from the preceding January 1, as reflected by the Consumer Price
Index. During the Consultation Period, the Executive shall be reimbursed up
to an amount not to exceed $50,000 during each year of the Consultation
Period for any expenses incurred by the Executive for (i) the maintenance
of an office that shall be located other than at the Company's offices and
(ii) secretarial assistance, such expenses to be billed and paid monthly.
During the Consultation Period, the Executive shall not be required to
undertake any assignment inconsistent with the dignity, importance and
scope of his prior positions or with his physical and mental health at the
time. It is expressly understood between the parties that during the
Consultation Period, the Executive shall be an independent contractor and
shall not be subject to the direction, control, or supervision of the
Company. The provisions of Sections 5, 6 and 7 hereof shall continue to
apply to the Executive during the Consultation Period.
. 5. Termination.
(a) Death and Disability
(i) The Executive's employment hereunder shall
terminate upon his death or upon his becoming Totally Disabled. For purposes
of this Agreement, the Executive shall be "Totally Disabled" if he is
physically or mentally incapacitated so as to render him incapable of
performing his usual and customary duties as an executive (for the
Company or otherwise). The Executive's receipt of Social Security disability
benefits shall be deemed conclusive evidence of Total Disability for purposes
of this Agreement; provided, however, that in the absence of his receipt of
such Social Security benefits, the Board of Directors of the Company may,
in its sole discretion, but based upon appropriate medical evidence,
determine that the Executive is Totally Disabled.
(ii) In the event that the Executive is Totally
Disabled before his retirement benefit pursuant to Section 3(c) hereof has
commenced to be distributed (whether or not he is in the employ of the
Company at the time he is so Totally Disabled), such benefit shall commence
to be distributed to him on the first day of the month next following his
Total Disability, as if such payments had commenced at his Commencement
Date.
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(iii) In the event of the Executive's death (while
Totally Disabled or otherwise) after his retirement benefit has commenced to
be distributed pursuant to Section 3(c) hereof or subparagraph (ii) above,
as applicable, the Company shall continue to pay such retirement benefit
to his Beneficiary for her life. If the Executive's retirement benefit
pursuant to Section 3(c) hereof has not commenced to be distributed on the
date of his death, such benefit shall commence to be distributed to his
Beneficiary for her life on the first day of the month next following
his date of death, as if such payments had commenced at his
Commencement Date. For purposes of this Agreement, the Executive's
"Beneficiary" shall be deemed to be his spouse; if his spouse predeceases
him (or if he is not married at the time of his death), his Beneficiary
shall be deemed to be his estate which shall receive, in lieu of the
payments otherwise payable to the Executive's spouse hereunder, a lump
sum cash payment equal to the actuarial present value (determined on the
basis of a 6 percent per annum interest rate assumption and no decrement
for mortality) of the payments that would have been made to a spouse for her
life, assuming that such spouse was three years younger than the Executive
on his date of death. If the Executive predeceases his spouse, upon her
death, a lump sum cash payment equal to the amount of any cash and present
value of all property (including any annuity contracts) owned by the
1986 Trust as of the date of her death shall be paid by the Company to his
spouse's estate or any beneficiary or beneficiaries designated in her last
will and testament as soon as practicable after such calculation is
completed. The acturial present value of any annuity contracts shall be
calculated by the insurance company that issued such contract or, if any
such insurance company cannot supply such present value, by an enrolled
actuary.
(b) The Executive's employment hereunder may be
terminated for Cause. For purposes of this Agreement, the term "Cause" shall
mean (i) the Executive's continuing willful failure to perform his duties
hereunder (other than as a result of total or partial incapacity due to
physical or mental illness), (ii) gross negligence or malfeasance by the
Executive in the performance of his duties hereunder, (iii) an act or
acts on the Executive's part constituting a felony under the laws of the
United States or any state thereof which results or was intended to
result directly or indirectly in gain or personal enrichment by the
Executive at the expense of the Company, or (iv) breach of the
provisions of Section 6(b) hereof.
(c) Without Cause. If the Executive's employment
or his retention as a consultant hereunder is terminated without Cause, as
soon as practicable (but not later than 30 days) after such termination,
he shall receive a lump sum cash payment equal to the sum of: (i) an amount
equal to his highest monthly Base Salary during the Employment Term prior
to such termination multiplied by the number of months remaining in the
Employment Term (but by not less than thirty-six months if such termination
occurs during the Employment Term); (ii) if such termination occurs during
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the Employment Term, an amount equal to the bonuses paid pursuant to
Section 3(a)(ii) hereof and Appendix A hereto or otherwise, whether or not
deferred, in respect of the most recently completed three calendar years;
(iii) an amount equal to the actuarial present value (determined on the
basis of a 6 percent per annum interest rate assumption and no decrement
for mortality) of the retirement benefit payments payable to him under
Section 3(c), commencing on the Commencement Date (or, if such payments
have commenced, such actuarial present value of the remaining payments);
and (iv) an amount equal to the consulting fees due him under Section 4 for
the term or remainder of the Consultation Period.
(d) Change in Control.
(i) If a Change in Control Event (as defined in
Appendix B hereto) occurs, the Executive shall (A) if he so elects by written
notice to the Company within 360 days after such Change in Control Event,
be entitled to terminate his employment, if not already terminated by the
Company, and, in either event, receive the amounts set forth in
paragraph (c) above (excluding the amount of the retirement benefit
described in Section 5(c)(iii)) within the time period specified in
subparagraph (iii) below, as if the Company had terminated his employment
without Cause, and (B) if he so elects by written notice to the Company
within 360 days after the occurrence of such Change in Control Event,
cause the Company to purchase the Executive's principal residence at its
fair market value. For purposes of this Agreement, such fair market value
shall be determined by two independent real estate firms, one of which
shall be selected by the Executive and one by the Company. If such real
estate firms fail to agree on such fair market value, the two firms so
selected shall select a third firm mutually acceptable to them and such
third firm's determination of fair market value shall be binding for all
purposes.
(ii) Notwithstanding anything to the contrary
herein, if the aggregate amounts payable pursuant to subparagraph (i)
of paragraph (d) hereof would cause any payment under such subparagraph
(i) to be subject to an excise tax as an "excess parachute payment"
under Section 4999 of the Code, such aggregate amounts payable hereunder
shall be reduced by the smallest amount necessary to ensure that
no payment hereunder shall be so treated under such Section 4999. Prior
to effecting such reduction, the Company shall give the Executive 30
days' written notice of the fact, amount and basis of such reduction, as
well as a determination of the shortest period of time over which such
aggregate amounts may be paid and not be treated as "excess parachute
payments." The Executive shall then have 30 days within which to elect in
writing to (A) receive a lump sum payment, reduced pursuant to the first
sentence hereof, or (B) receive the aggregate amounts payable pursuant to
subparagraph (i) hereof in annual installments over the time period set
forth in the Company's notice. In making the determinations called for
in this subparagraph (ii), the parties hereto shall rely conclusively
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on (1) the opinion of Xxx-Xxxxxxx, or such other consulting firm as the
Company shall designate (with the written consent of the Executive)
within one year of the date hereof as to the amount of the Executive's
compensation which constitutes "reasonable compensation" for purposes of
Section 280G of the Code, and (2) the opinion of Kwasha Lipton, or such
other actuarial firm as the Company shall designate (with the written
consent of the Executive) within one year of the date hereof as to any
present value calculations under Section 280G of the Code. The Company
shall bear all costs associated with obtaining such opinions.
(iii) The amounts payable pursuant to this
paragraph (d) shall be paid (or commence to be paid) to the Executive not
later than 10 days after he notifies the Company under subparagraph (ii)
above whether he wishes to receive such amounts in a lump sum or in
installments or, if no notice is given by the Company under subparagraph
(ii) above, within 30 days after the Executive gives notice to the Company
under subparagraph (i) above.
(iv) In addition to all other rights granted
him under this paragraph (d), if a Control Change (as defined in paragraph
(c) of Appendix B hereto) occurs, the Executive shall be entitled to elect
to terminate his employment with the Company upon written notice to the
Company, effective not more than 10 days after such election. In such
event, (A) the Consultation Period shall commence immediately upon
termination of employment and shall cease five years thereafter, (B) the
Executive shall be entitled to elect at any time to have payment of his
retirement benefit commence on the Early Commencement Date in an amount
determined in accordance with the provisions of Section 3(c) hereof, and
(C) the Company shall promptly, but not later than 10 days after such
election, transfer sufficient assets to the 1986 Trust so that the assets
of the 1986 Trust are then sufficient to discharge the obligations for the
consulting fees and retirement benefits due him in full.
6. Covenants.
(a) Confidentiality. The Executive acknowledges
that he has acquired and will acquire confidential information respecting
the business of the Company. Accordingly, the Executive agrees that,
without the written consent of the Company as authorized by its Board of
Directors, he will not, at any time, willfully disclose any such
confidential information to any unauthorized third party with an
intent that such disclosure will result in financial benefit to the
Executive or to any person other than the Company. For this purpose,
information shall be considered confidential only if such information is
uniquely proprietary to the Company and has not been made publicly
available prior to its disclosure by the Executive.
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(b) Competitive Activity. Until the end of the
Consultation Period, the Executive shall not, without the consent of the
Board of Directors of the Company, directly or indirectly, knowingly engage
or be interested in (as owner, partner, shareholder, employee, director,
officer, agent, consultant or otherwise), with or without compensation, any
business which (i) is in competition with any line of business being actively
conducted by the Company or any of its affiliates or subsidiaries during
the Employment Term or Consultation Period, or (ii) shall hire any person
who was employed by the Company or any of its affiliates or subsidiaries
within the six-month period preceding such hiring, except for any employee
whose annual rate of compensation is not in excess of $55,000. Nothing
herein, however, shall prohibit the Executive from acquiring or holding
not more than one percent of any class of publicly traded securities of
any such business.
(c) Remedy for Breach. The Executive acknowledges
that the provisions of this Section 6 are reasonable and necessary for the
protection of the Company and that the Company will be irrevocably damaged
if such covenants are not specifically enforced. Accordingly, the Executive
agrees that, in addition to any other relief to which the Company may be
entitled, the Company shall be entitled to seek and obtain injunctive
relief (without the requirement of any bond) from a court of competent
jurisdiction for the purposes of restraining the Executive from any
actual or threatened breach of such covenants. Notwithstanding anything to
the contrary herein, the provisions of this Section 6 shall cease to apply
to the Executive if his employment hereunder terminates without Cause or
following a Change in Control Event. In addition, in the event that
the Executive breaches the provisions of this Section 6 during the
Consultation Period, the Company's sole remedy shall be to terminate the
Executive for Cause.
7. Miscellaneous.
(a) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware
applicable to agreements made and to be performed in that State.
(b) Notices. Any notice, consent or other
communication made or given in connection with this Agreement shall be in
writing and shall be deemed to have been duly given when delivered by
United States registered or certified mail, return receipt requested, to
the parties at the following addresses or at such other address as a party
may specify by notice to the other.
To the Executive:
00000 Xxxxxxxx
Xxxxxxx, Xxxxx 00000
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To the Company:
U.S. Home Corporation
0000 Xxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Secretary
(c) Entire Agreement; Amendment. This Agreement
shall supersede any and all existing agreements between the Executive and
the Company or any of its affiliates or subsidiaries relating to the
terms of his employment. It may not be amended except by a written
agreement signed by both parties.
(d) Waiver. The failure of a party to insist upon
strict adherence to any term of this Agreement on any occasion shall not be
considered a waiver thereof or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Agreement.
(e) Assignment. Except as otherwise provided in
this paragraph, this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, representatives,
successors and assigns. This Agreement shall not be assignable by the
Executive, and shall be assignable by the Company only to any corporation
or other entity resulting from the reorganization, merger or consolidation
of the Company with any other corporation or entity or any corporation or
entity to which the Company may sell all or substantially all of its assets,
and it must be so assigned by the Company to, and accepted as binding upon
it by, such other corporation or entity in connection with any such
reorganization, merger, consolidation or sale.
(f) Litigation Costs. In the event that the
Executive shall successfully prosecute a judicial proceeding to enforce any
provision of this Agreement, in addition to any other relief awarded the
Executive by the court in such action, the parties agree that the
judgment rendered shall award the Executive all of his attorneys'
fees, disbursements and other costs incurred by the Executive in
prosecuting such suit.
(g) Separability. If any provision of this
Agreement is invalid or unenforceable, the balance of the Agreement shall
remain in effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other
persons and circumstances.
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IN WITNESS WHEREOF, the parties hereto have duly executed
this Amended and Restated Employment and Consulting Agreement and
Appendices A and B thereto as evidence of their adoption this 17th day of
October, 1995.
U.S. HOME CORPORATION
By \s\ Xxxxx Xxxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: President, Co-Chief
Executive Officer and
Chief Operating Officer
EXECUTIVE:
By \s\ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
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Appendix A
This Appendix A is attached to and shall form a part of
the Amended and Restated Employment and Consulting Agreement, dated October
17, 1995, by and between U.S. Home Corporation (the "Company"), and Xxxxxx
X. Xxxxxxxx (the "Executive").
(a) The Executive's bonus, if any, for each calendar year
during the Employment Term commencing with the 1995 calendar year shall be
an amount equal to:
(i) one-half (1/2) of one percent (1%) of the first
$10,000,000 of the Company's Pre-Tax Income for such year, plus
(ii) three-fourths (3/4) of one percent (1%) of the
next $10,000,000 of the Company's Pre-Tax Income for such year, plus
(iii) one percent (1%) of the Company's Pre-Tax Income
for such year in excess of $20,000,000.
(b) In the event that the Executive's employment hereunder
is terminated for any reason prior to the end of a calendar year, including
the expiration of the Employment Term, his bonus for such year shall be an
amount, estimated in good faith by the Board of Directors of the Company
based on reasonable assumptions and projections, but without the benefit
of the report referred to in paragraph (c) below, equal to the bonus
otherwise determined pursuant to this Appendix A, multiplied by a fraction,
the numerator of which is the number of calendar months during such year
in which the Executive was employed by the Company for at least one business
day, and the denominator of which is 12.
(c) For purposes of this Agreement, the Company's
"Pre-Tax Income" for any year shall mean the income of the Company and its
consolidated and unconsolidated subsidiaries for such year, as reported by
the Company and certified by its independent certified public accountants,
except that no deduction shall be made for the bonus payable pursuant to
this Appendix A and Section 3(a)(ii) hereof for such year or for Federal
income and State and local franchise, gross receipts, or income taxes.
U.S. HOME CORPORATION
By \s\ Xxxxx Xxxxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: President, Chief
Executive Officer and
Chief Operating Officer
EXECUTIVE:
By \s\ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
00
Xxxxxxxx X
This Appendix B is attached to and shall form a part of
the Amended and Restated Employment and Consulting Agreement, dated October
17, 1995, by and between U.S. Home Corporation (the "Company"), and Xxxxxx
X. Xxxxxxxx (the "Executive").
(a) For purposes of this Agreement, a "Change in Control
Event" shall occur when a "Control Change" (as defined in paragraph (c)
below) is followed within two years by a "Material Change" (as defined in
paragraph (b) below).
(b) A "Material Change" shall occur if:
(i) the Executive's employment hereunder is
terminated without Cause;
(ii) the Company makes any change in the Executive's
functions, duties or responsibilities from the position that the Executive
occupied on the date hereof or, if this Agreement has been renewed or
extended, the date of the last renewal or extension, but only if such change
would cause:
(A) the Executive to report to anyone other
than the Board of Directors of the Company,
(B) the Executive to no longer be the Chairman
of the Board of Directors and Co-Chief Executive Officer of the Company,
(C) even if the Executive maintains the
positions of Chairman of the Board of Directors and Co-Chief Executive
Officer, his responsibilities to be reduced from those in effect on the
date hereof or the date of the last renewal or extension of this Agreement,
as applicable, or to no longer be commensurate with those of the Co-Chief
Executive Officer of a company with gross annual sales of at least $800
million, or
(D) the Executive's position with the Company
to become one of lesser importance or scope;
(iii) the Company assigns or reassigns the Executive
(without his written permission) to another place of employment which is
more than 10 miles from his place of employment on the date hereof or the
date of the last renewal or extension of this Agreement, as applicable, and
which is not the corporate headquarters of the Company; or
(iv) the Company reduces the Executive's Base Salary
or otherwise breaches the terms of this Agreement.
(c) A "Control Change" shall occur if:
(i) a report on Schedule 13D is filed with the
Securities and Exchange Commission pursuant to Section 13(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") disclosing that
any person (within the meaning of Section 13(d) of the Exchange Act),
other than the Company (or one of its subsidiaries) or any employee
benefit plan sponsored by the Company (or one of its subsidiaries), is the
72
beneficial owner, directly or indirectly, of 15 percent or more of the
combined voting power of the then-outstanding securities of the Company;
(ii) any person (within the meaning of Section 13(d)
of the Exchange Act), other than the Company (or one of its subsidiaries)
or any employee benefit plan sponsored by the Company (or one of its
subsidiaries), shall purchase securities pursuant to a tender offer or
exchange offer to acquire any common stock of the Company (or securities
convertible into common stock) for cash, securities or any other
consideration, provided that after consummation of the offer, the person
in question is the beneficial owner (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of 15 percent or more of
the combined voting power of the then-outstanding securities of the
Company (as determined under paragraph (d) of Rule 13d-3 under the Exchange
Act, in the case of rights to acquire common stock);
(iii) the stockholders of the Company shall approve
(A) any consolidation or merger of the Company (1) in which the Company
is not the continuing or surviving corporation, (2) pursuant to which
shares of common stock of the Company would be converted into cash,
securities or other property, or (3) with a corporation which prior to such
consolidation or merger owned 15 percent or more of the cumulative voting
power of the then-outstanding securities of the Company, or (B) any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company; or
(iv) there shall have been a change in a majority
of the members of the Board of Directors of the Company within a 12-month
period, unless the election or nomination for election by the Company's
stockholders of each new director during such 12-month period was approved
by the vote of two-thirds of the directors then still in office who were
directors at the beginning of such 12-month period.
(d) Notwithstanding the foregoing, the issuance by the
Company of shares of Common Stock of the Company, $.01 par value per share,
convertible preferred stock of the Company, $.10 par value per share, and
Class B Warrants aggregating 15% or more of the combined voting power of
the Company to any one beneficial owner (as such term is used in Rule 13d-3
under the Securities Exchange Act of 1934, as amended) who is a holder of
claims or interests pursuant to the First Amended Consolidated Plan of
Reorganization of the Company and certain of its affiliates, as modified,
filed with the United States Bankruptcy Court for the Southern District of
New York (the "USH Plan") in exchange for such claims or interests shall
not be deemed to constitute a Control Change unless such person
subsequently increases its percentage beneficial ownership above the
percentage amount received pursuant to the USH Plan. Shares of common
stock, preferred stock and Class B Warrants acquired pursuant to the USH
Plan by creditors or stockholders for their claims or interests, though
73
less than 15% of the combined voting power of the Company, shall be
included in determining whether a person through acquisition of additional
shares, whether through purchase, exchange or otherwise, on or after the
Effective Date has subsequently become the beneficial owner of 15% or more
of the combined voting power of the Company, which shall, in such event,
constitute a Control Change.
U.S. HOME CORPORATION
By \s\ Xxxxx Xxxxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: President, Co-Chief
Executive Officer and
Chief Operating Officer
EXECUTIVE:
By \s\ Xxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
