Exhibit 10.3
FORM OF EMPLOYMENT AGREEMENT
AGREEMENT, made as of this 1st day of December, 1997, by and between
CONTINENTAL HOMES HOLDING CORP., a Delaware corporation (the "Company"), and
[Employee] (the "Employee").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has approved the employment
of the Employee on the terms and conditions set forth in this Agreement; and
WHEREAS, the Employee is willing, for the consideration provided, to
continue in the employment of the Company on the terms and conditions set forth
in this Agreement;
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
1. Employment. The Company hereby agrees to continue to employ the
Employee, and the Employee hereby accepts such continued employment, upon the
terms and conditions set forth in this Agreement.
2. Term. The term (the "Term") of the Employee's employment under this
Agreement shall be the period commencing
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on December 1, 1997 and shall continue until November 30, 1999, unless sooner
terminated by termination of the Employee's employment pursuant to Section 5, 6
or 7.
3. Position and Duties. During the Term, the Employee shall serve as
[Position] of MIS of the Company, and shall have such responsibilities and
authority as commensurate with such office and as may from time to time be
prescribed by or pursuant to the Company's By-laws. The Employee shall devote
substantially all of his working time and efforts to the business and affairs of
the Company.
4. Compensation. During the Term, the Company shall provide the Employee
with the following compensation and other benefits:
(a) Base Salary. The Company shall pay to the Employee base salary at the
initial rate of $[ ] per annum, which shall be payable in accordance
with the standard payroll practices of the Company. Such base salary
rate shall be reviewed annually in accordance with the Company's
normal policies beginning in calendar year 1998; provided, however,
that at no time during the Term shall the Employee's base salary be
decreased from the rate
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then in effect except with the written consent of the Employee.
(b) Bonus. The Employee shall participate in a bonus program maintained by
the Company.
(c) Other Benefits. In addition to the compensation and benefits otherwise
specified in this Agreement, the Employee (and, if provided for under
the applicable plan or program, his spouse) shall be entitled to
participate in, and to receive benefits under, the Company's employee
benefit plans and programs that are or may be available to senior
executives generally and on terms and conditions that are no less
favorable than those generally applicable to other senior executives
of the Company. At no time during the Term shall the Employee's
participation in or benefits received under such plans and programs be
decreased except (i) in connection with across-the-board reductions
similarly affecting substantially all senior executives of the Company
or (ii) with the written consent of the Employee.
(d) Expenses. The Employee shall be entitled to prompt reimbursement of
all reasonable expenses
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incurred by him in performing services hereunder, provided he properly
accounts therefor in accordance with the Company's policies.
(e) Office and Services Furnished. The Company shall furnish the Employee
with office space, secretarial assistance and such other facilities
and services as shall be suitable to the Employee's position and
adequate for the performance of his duties hereunder.
5. Termination of Employment by the Company.
(a) Cause. The Company may terminate the Employee's employment for Cause
if (i) the Employee willfully engages in conduct which is or would
reasonably be expected to be materially and demonstrably injurious to
the Company, (ii) the Employee willfully engages in an act or acts of
dishonesty resulting in material personal gain to the Employee at the
expense of the Company, (iii) the Employee is convicted of a felony,
(iv) the Em-
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ployee engages in an act or acts of gross malfeasance in connection
with his employment hereunder, (v) the Employee commits a material
breach of the confidentiality provision set forth in Section 10, or
(vi) the Employee exhibits demonstrable evidence of alcohol or drug
abuse having a substantial adverse effect on his job performance
hereunder. The Company shall exercise its right to terminate the
Employee's employment for Cause by (i) giving him written notice of
termination at least 45 days before the date of such termination
specifying in reasonable detail the circumstances constituting such
Cause; and (ii) delivering to the Employee a copy of a resolution duly
adopted by the affirmative vote of not less than a majority of the
entire membership of the Board of Directors (except the Employee),
after reasonable notice to the Employee and an opportunity for the
Employee and his counsel to be heard before the Board of Directors,
finding that the Employee has engaged in the conduct set forth in this
subsection (a). In the event of such termination of the Employee's
employment for Cause, the Employee shall be entitled to receive (i)
his base salary pursuant to Section 4(a) and any other compensation
and benefits to the extent actually earned pursuant to this Agreement
or any benefit plan or program of the Company as of the date of such
termination at the
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normal time for payment of such salary, compensation or benefits and
(ii) any amounts owing under Section 4(d). Except as provided in
Section 9, the Employee shall receive no other compensation or
benefits from the Company.
(b) Disability. If the Employee incurs a Permanent and Total Disability,
as defined below, the Company may terminate the Employee's employment
by giving him written notice of termination at least 45 days before
the date of such termination. In the event of such termination of the
Employee's employment because of Permanent and Total Disability, (i)
the Employee shall be entitled to receive his base salary pursuant to
Section 4(a) and any other compensation and benefits to the extent
actually earned by the Employee pursuant to this Agreement or any
benefit plan or program of the Company as of the date of such
termination of employment at the normal time for payment of such
salary, compensation or benefits, and (ii) any amounts owing under
Section 4(d). For purposes of this Agreement, the Employee shall be
considered to have incurred a Permanent and Total Disability if he is
unable to engage in any substantial gain-
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ful employment by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not
less than 12 months. The existence of such Permanent and Total
Disability shall be evidenced by such medical certification as the
Secretary of the Company shall require and shall be subject to the
approval of the Compensation Committee of the Board of Directors of
the Company.
(c) Without Cause. The Company may terminate the Employee's employment at
any time and for any reason, other than for Cause or because of
Permanent and Total Disability, by giving him a written notice of
termination to that effect at least 45 days before the date of
termination. In the event of such termination of the Employee's
employment without Cause, the Employee shall be entitled to the
benefits described in Section 8.
6. Termination of Employment by the Employee.
(a) Good Reason. The Employee may terminate his employment for Good Reason
by giving the Company a written notice of termination at least 45 days
be-
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fore the date of such termination specifying in reasonable detail the
circumstances constituting such Good Reason. In the event of the
Employee's termination of his employment for Good Reason, the Employee
shall be entitled to the benefits described in Section 8. For purposes
of this Agreement, Good Reason shall mean (i) a significant reduction
in the scope of the Employee's authority, functions, duties or
responsibilities from that which is contemplated by this Agreement,
(ii) the relocation of the Employee's office location to a location
more than 50 miles away from the Employee's principal place of
employment on December 1, 1997, (iii) any reduction in the Employee's
base salary, (iv) a significant change in the Company's annual bonus
program adversely affecting the Employee, or (v) a significant
reduction in the other employee benefits provided to the Employee
(unless the Employee is fully compensated for the value of such
reduction through an increase in cash compensation); provided that, in
the event of a change of control of the Company involving X.X. Xxxxxx,
Inc., a substantial reduction in such employee benefits shall not be
deemed
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to have occurred for the purpose of clause (v) above after the
expiration of the 6-month period beginning on the date of such change
of control if the Employee shall be entitled to participate in and
receive benefits under the Company's or its successor's employee
benefit plans and programs that are or may be available to senior
executives generally and on terms and conditions that are no less
favorable than those generally applicable to other senior executives
of the Company or its successor. A significant reduction within the
meaning of clause (i) of the preceding sentence shall not be deemed to
have occurred merely because the Company ceases to be a public company
or because the Employee's title is changed, provided that the
Employee's authority, functions, duties and responsibilities otherwise
remain substantially the same as the authority, functions, duties and
responsibilities of a person with the Employee's position (as
specified in Section 3 herein and as of the date hereof) within a
comparably sized division of a national homebuilding company. A
significant reduction within the meaning of clause (v) of the second
preceding sentence shall not be
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deemed to have occurred merely by reason of the termination of the
Company's Equity Split Dollar Plan, provided that the Company assigns
to the Employee all rights which the Company may have under any life
insurance policy issued on the Employee's life under said plan,
including, without limitation, the right to reimbursement for any
premiums and administrative service fees paid by the Company (in which
event, subsection (f) of Section 8 of this Agreement shall have no
further applicability). If an event constituting a ground for
termination of employment for Good Reason occurs, and the Employee
fails to give notice of termination within 3 months after the
occurrence of such event, the Employee shall be deemed to have waived
his right to terminate employment for Good Reason in connection with
such event (but not for any other event for which the 3-month period
has not expired).
(b) Other. The Employee may terminate his employment at any time and for
any reason, other than pursuant to subsection (a) above, by giving the
Company a written notice of termination to that effect at least 45
days before the date of termination. In
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the event of the Employee's termination of his employment pursuant to
this subsection (b), the Employee shall be entitled to receive (i) his
base salary pursuant to Section 4(a) and any other compensation and
benefits to the extent actually earned by the Employee pursuant to
this Agreement or any benefit plan or program of the Company as of the
date of such termination at the normal time for payment of such
salary, compensation or benefits, and (ii) any amounts owing under
Section 4(d). Except as provided in Section 9, the Employee shall
receive no other compensation or benefits from the Company.
7. Termination of Employment By Death. In the event of the death of the
Employee during the course of his employment hereunder, the Employee's estate
shall be entitled to receive his base salary pursuant to Section 4(a) and any
other compensation and benefits to the extent actually earned by the Employee
pursuant to this Agreement or any other benefit plan or program of the Company
as of the date of such termination at the normal time for payment of such
salary, compensation or benefits, and any amounts owing under Section 4(d).
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8. Benefits Upon Termination Without Cause or For Good Reason. If the
Employee's employment with the Company shall terminate (i) because of
termination by the Company pursuant to Section 5(c) other than for Cause or
because of Permanent and Total Disability, or (ii) because of termination by the
Employee for Good Reason pursuant to Section 6(a), the Employee shall be
entitled to the following:
(a) The Company shall pay to the Employee his base salary pursuant to
Section 4(a) and any other compensation and benefits to the extent
actually earned by the Employee under this Agreement or any benefit
plan or program of the Company as of the date of such termination at
the normal time for payment of such salary, compensation or benefits.
(b) The Company shall pay the Employee any amounts owing under Section
4(d).
(c) The Company shall pay to the Employee as a severance benefit an amount
equal to twice the sum of (i) his annual rate of base salary
immediately preceding his termination of employment, and (ii) the
average of his three highest annual bonuses awarded under the
Company's regular annual bonus program for any of the five calendar
years
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preceding his termination of employment (or, if he was not eligible
for a bonus for at least three calendar years in such five-year
period, then the average of such bonuses for all of the calendar years
in such five-year period for which he was eligible), with any deferred
bonuses counting for the year earned rather than the year paid. Such
severance benefit shall be paid in a lump sum within 45 days after the
date of such termination of employment.
(d) The Company shall pay to the Employee as a bonus for the year of
termination of his employment an amount equal to a portion (determined
as provided in the next sentence) of the bonus awarded to him under
the Company's regular annual bonus program for the calendar year
immediately preceding the calendar year of the termination of his
employment, with any deferred bonuses counting for the year earned
rather than the year paid. Such portion shall be determined by
dividing the number of days of the Employee's employment during such
calendar year up to his termination of employment by 365 (366 if a
leap year). Such payment shall be made in a lump sum within 45 days
after the date
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of such termination of employment, and the Employee shall have no
right to any further bonuses under said program.
(e) During the period of 24 months beginning on the date of the Employee's
termination of employment, the Employee shall remain covered by the
medical, dental, vision, life insurance, and, if reasonably
commercially available through nationally reputable insurance
carriers, long-term disability plans of the Company that covered him
immediately prior to his termination of employment as if he had
remained in employment for such period. In the event that the
Employee's participation in any such plan is barred, the Company shall
arrange to provide the Employee with substantially similar benefits
(but, in the case of long-term disability benefits, only if reasonably
commercially available). Any medical insurance coverage for such
24-month period pursuant to this subsection (e) shall become secondary
upon the earlier of (i) the date on which the Employee begins to be
covered by comparable medical coverage provided by a new employer, or
(ii) the earliest date upon which the
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Employee becomes eligible for Medicare or a comparable Government
insurance program.
(f) At the end of the 24-month period described in subsection (e) above,
the Company shall assign to the Employee all rights which the Company
may have under any life insurance policy issued on the Employee's life
under the Company's Equity Split Dollar Plan (including, without
limitation, the right to reimbursement for any premiums and
administrative service fees paid by the Company).
(g) The Company shall arrange for an outplacement assistance firm to
provide outplacement assistance services to the Employee at the
Company's expense for a period of twelve months beginning on the date
of termination of the Employee's employment.
(h) Notwithstanding the other provisions of this Agreement, in the event
that the amount of payments or other benefits payable to the Employee
under this Agreement, together with any payments or benefits payable
under any other plan, program, arrangement or agreement maintained by
the Company or one of its affiliates, would constitute an "excess
parachute payment" (within the meaning of
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Section 280G of the Internal Revenue Code of 1986, as amended), the
payments under this Agreement shall be reduced (by the minimum
possible amounts) until no amount payable to the Employee under this
Agreement constitutes an "excess parachute payment" (within the
meaning of Section 280G of the Internal Revenue Code of 1986, as
amended). If, as a result of subsequent events or conditions
(including a subsequent payment or absence of a subsequent payment
under this Agreement or other plans, programs, arrangements or
agreements maintained by the Company or one of its affiliates), it is
determined that payments under this Agreement have been reduced by
more than the minimum amount required to prevent any payments from
constituting an "excess parachute payment", then an additional payment
shall be promptly made to the Employee in an amount equal to the
additional amount that can be paid without causing any payments to
constitute an "excess parachute payment." All determinations required
to be made under this subsection (h), including whether a payment
would result in an "excess parachute payment" and the assumptions to
be utilized in arriving at such de-
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termination, shall be made by a Big Six accounting firm selected by
the Company which shall provide detailed supporting calculations both
to the Company and the Employee as requested by the Company or the
Employee. All fees and expenses of the accounting firm shall be borne
solely by the Company and shall be paid by the Company. All
determinations made by the accounting firm under this subsection (h)
shall be final and binding upon the Company and the Employee.
(i) Anything in this Agreement to the contrary notwithstanding, if the
Company approves any transaction with another business entity which it
wishes to qualify for "pooling of interests" accounting treatment and,
prior to the consummation of such transaction, the Company's
accountants advise that any benefits payable under this Agreement
might adversely affect the availability of such accounting treatment,
such benefits shall not be payable, and the Company and the Employee
shall negotiate in good faith to provide, if possible, an alternative
way of giving substantially equivalent economic benefits to the
Employee that would not ad-
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versely affect "pooling of interests" accounting treatment.
9. Entitlement To Other Benefits. Except as provided in this Agreement,
this Agreement shall not be construed as limiting in any way any rights or
benefits that the Employee or his spouse, dependents or beneficiaries may have
pursuant to any other plan or program of the Company.
10. Confidential Information. The Employee shall retain in confidence any
confidential information known to him concerning the Company, its subsidiaries,
and their respective businesses until such information is publicly disclosed.
This provision shall survive the termination of the Employee's employment for
any reason under this Agreement.
11. No Duty to Seek Employment. The Employee shall not be under any duty or
obligation to seek or accept other employment following termination of
employment, and no amount, payment or benefits due to the Employee hereunder
shall be reduced or suspended if the Employee accepts subsequent employment.
12. Non-Solicitation. The Employee agrees that, for a period of eighteen
months following the date of termination of his employment hereunder, he will
not solicit, directly or
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indirectly, any officer or employee of the Company or any of its subsidiaries or
affiliates to leave and work for any other employer and, further, that he will
not suggest to others that they approach or solicit any officer or employee of
the Company or any of its subsidiaries or affiliates with respect to potential
employment elsewhere. This provision shall survive the termination of the
Employee's employment for any reason under this Agreement. If the Employee
breaches this provision in any significant respect, he shall forfeit his right
to receive the payments and benefits described in subsections (c) through (h) of
Section 8 (including, without limitation, payments and benefits already
received). To the extent any payments and benefits already received are so
forfeited, the Employee shall promptly return such payments and benefits to the
Company. In addition, the Company may seek other legal and equitable relief in
the event of any breach by the Employee of this Section 12.
13. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled by arbitration, conducted before a panel of
three arbitrators in Phoenix, Arizona in accordance with the applicable rules
and procedures of the American Arbitration Association then in effect.
Arbitration shall be the exclusive remedy for any such dispute or controversy
except only as to the failure to abide by an arbitration award rendered
hereunder. Judgment upon the
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award rendered by the arbitrators may be entered in any court having
jurisdiction. Such arbitration shall be final and binding on the parties. If the
Employee is awarded more than an insignificant amount compared with what the
Company asserted was due him or otherwise substantially prevails in the
arbitration, the Company shall reimburse the Employee for the costs incurred by
the Employee in connection with such arbitration, including without limitation
reasonable attorneys' fees, and hereby agrees to pay interest on any money award
obtained by the Employee from the date payment should have been made until the
date payment is made, calculated at the rate of 2% in excess of the LIBOR rate
in effect from time to time from the date that payment(s) to him should have
been made under the Agreement. If the Employee enforces the arbitration award in
court, the Company shall reimburse the Employee for the costs incurred in such
enforcement, including without limitation reasonable attorneys' fees.
14. Successors. This Agreement shall be binding upon and inure to the
benefit of the Employee and his estate and the Company and any successor of the
Company, but neither this Agreement nor any rights arising hereunder may be
assigned or pledged by the Employee.
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15. Severability. Any provision in this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
or affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Notices. All notices required or permitted to be given under this
Agreement shall be given in writing and shall be deemed sufficiently given if
delivered by hand or mailed by registered mail, return receipt requested, to his
residence in the case of the Employee and to its principal executive offices in
the case of the Company. Either party may by giving written notice to the other
party in accordance with this Section 16 change the address at which it is to
receive notices hereunder.
17. Controlling Law. This Agreement shall in all respects be governed by
and construed in accordance with the laws of the State of Delaware (without
giving effect to principles of conflict of laws).
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18. Changes to Agreement. This Agreement may not be changed orally but only
in a writing, signed by the party against whom enforcement is sought.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed an original but all
of which together shall constitute one and the same instrument.
20. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties with respect to its subject matter and supersedes all prior
agreements, drafts, and written or oral representations of either party.
IN WITNESS WHEREOF, the parties have executed this Agreement on the ____
day of December, 1997.
EMPLOYEE: CONTINENTAL HOMES HOLDING CORP.
______________________ By:______________________________
[Employee]
ATTEST:
By:______________________________
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Exhibit A
Employee Position Annual Salary
Xxxxxx X. Xxxx Vice President $150,000
Xxxxxxx X. Xxxxxxxx Vice President and General Counsel $165,000
Xxxxx X. Xxxxxxx President of Austin Division $176,000
