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Exhibit 10.2
SECOND AMENDED AND RESTATED EMPLOYMENT
AND CONSULTING AGREEMENT
SECOND AMENDED AND RESTATED EMPLOYMENT AND CONSULTING
AGREEMENT, dated as of February 9, 1999, by and between U.S. Home Corporation
(the "Company"), and Xxxxx Xxxxxxxxxx (the "Executive").
WHEREAS, the Company and the Executive are parties to an
Amended and Restated Employment and Consulting Agreement, dated as of October
17, 1995, as amended by the First Amendment to Amended and Restated Employment
and Consulting Agreement, dated as of February 11, 1997 (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 President,
Co-Chief Executive Officer and Chief Operating 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
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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, 2001; 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 extended for one additional year on June 20, 1999
(e.g., to June 20, 2002) and each subsequent anniversary thereof, 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 $590,000 per year (the "Base Salary"), payable in substantially equal
biweekly installments, and (ii) any cash bonus to which he is entitled 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
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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 Second Amended and Restated Credit
Agreement, dated as of September 11, 1998, 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 2000 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.
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(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 60 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 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.
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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.
(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
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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
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
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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 entitled pursuant to this Agreement) a consulting fee, in substantially
equal biweekly installments, at the rate of $134,260 per year increased by an
amount determined by multiplying $134,260 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 not be required to undertake any assignment inconsistent with
the dignity, importance and scope of
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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. In the
event of the
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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 the 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
actuarial 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.
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(b) For Cause. 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 the Employment Term, an amount
equal to the bonuses earned, including any amounts deferred, pursuant to Section
3(a)(ii) hereof and Appendix A hereto or otherwise, 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
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to the consulting fees due him under Section 4 for the term or remainder of the
Consultation Period. Notwithstanding the previous sentence, the Executive shall
have the option, exercisable by him by notice to the Company at any time prior
to receipt of the lump sum payment provided in the previous sentence, to receive
his retirement benefit payments payable as set forth in Section 3(c) hereof in
lieu of the lump sum payment set forth in clause (iii) of the preceding
sentence. In addition to the foregoing benefits, if the Executive is terminated
without Cause, he shall continue to be entitled to reimbursement for expenses
and other benefits following termination of employment, in the amounts and in
the manner set forth in Sections 3(d) and 3(e) hereof. For purposes of this
Agreement, the Executive will be deemed to be terminated without Cause upon the
(i) failure to elect the Executive to the office of chairman and chief executive
officer of the Company in the event of a vacancy in such office for any reason
and (ii) resignation of the Executive within 180 days of such vacancy.
(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 retirement benefit described in Section 5(c)(iii), which shall
instead be paid as set forth in Section 3(c) hereof, and excluding the
reimbursement for expenses and other benefits following termination of
employment under this Section, which shall instead be paid in the amounts and in
the manner set forth in Sections 3(d) and 3(e) hereof) within the time period
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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
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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.
(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
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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
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parties at the following addresses or at such other address as a party may
specify by notice to the other.
To the Executive:
2 Glendennig
Xxxxxxx, Xxxxx 00000
To the Company:
U.S. Home Corporation
00000 Xxxx Xxxx
X.X. Xxx 0000
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
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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
Second Amended and Restated Employment and Consulting Agreement and Appendices A
and B thereto as evidence of their adoption this 9th day of February, 1999.
U.S. HOME CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and
Co-Chief Executive Officer
EXECUTIVE:
/s/ Xxxxx Xxxxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxxxx
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Appendix A
This Appendix A is attached to and shall form a part of the
Second Amended and Restated Employment and Consulting Agreement, dated February
9, 1999, by and between U.S. Home Corporation (the "Company"), and Xxxxx
Xxxxxxxxxx (the "Executive").
(a) The Executive's bonus, if any, for each calendar
year during the Employment Term 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.
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(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/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and
Co-Chief Executive Officer
EXECUTIVE:
/s/ Xxxxx Xxxxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxxxx
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Xxxxxxxx X
This Appendix B is attached to and shall form a part of the
Second Amended and Restated Employment and Consulting Agreement, dated February
9, 1999, by and between U.S. Home Corporation (the "Company"), and Xxxxx
Xxxxxxxxxx (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 Chairman of the Board of Directors who is also the
Co-Chief Executive Officer,
(B) the Executive to no longer be
the President, Co-Chief
Executive Officer and Chief Operating Officer of the Company,
(C) even if the Executive maintains
the positions of President, Co-Chief Executive Officer and Chief Operating
Officer, his responsibilities to be
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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 be no longer commensurate
with those of the Co-Chief Executive Officer and Chief Operating 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 beneficial owner, directly or
indirectly, of 15 percent or more of the combined voting power of the
then-outstanding securities of the Company;
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(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-
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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.
U.S. HOME CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and
Co-Chief Executive Officer
EXECUTIVE:
/s/ Xxxxx Xxxxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxxxx
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