FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit 10.23
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the “Amendment”) is entered into as of November
10, 2010 by and between Forestar Group Inc., a Delaware corporation (the “Company”) and Xxxxx X.
XxXxxxx (the “Executive”).
WHEREAS, the Company and the Executive are currently party to an Employment Agreement dated
August 9, 2007 (the “Employment Agreement”); and
WHEREAS, the Company and the Executive wish to amend the Employment Agreement for the sole
purpose of complying with Section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”) and IRS Revenue Ruling 2008-13.
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. Section 5(c)(i) of the Employment Agreement shall be deleted in its entirety and replaced
with the following:
(i) In lieu of any further salary payments to the Executive for periods
subsequent to the Date of Termination, the Company shall pay to the Executive a cash
severance payment equal to the Severance Multiple (as defined below) times the sum
of (A) Base Salary (without regard to any diminution giving rise to the Executive’s
assertion of Good Reason) and (B) the Executive’s target annual bonus for the prior
fiscal year pursuant to any annual bonus or incentive plan maintained by the Company
in respect of such fiscal year (or, if higher, the greatest actual annual bonus in
respect of any of the two (three if the Severance Multiple is three) preceding
fiscal years). For purposes of this Agreement: the “Severance Multiple” shall be two
(2), except that the “Severance Multiple” shall be three (3) if the applicable Date
of Termination occurs either during the first two years beginning on the Effective
Date or after such two-year period and within the two-year period following a Change
in Control as defined in Appendix B hereto; and the “Severance Period” shall be the
two (2) year period beginning on the Date of Termination, except that the “Severance
Period” shall be the three (3) year period beginning on the Date of Termination if
the Severance Multiple is three (3). Such payment shall be made as soon as
practicable (but in any event within five (5) days) following the Date of
Termination; provided that, to the extent required to satisfy the provisions of
Section 409A(a)(2)(B)(i) of the Code, such payments shall be made not earlier than
but as soon as practicable on or in any event within five (5) days after (with
interest at the 6-month certificate of deposit rate published in The Wall Street
Journal on the Date of Termination (or if not published on that date, on the next
following date when published) or, if less, the maximum rate that will avoid, if
applicable, the imposition of any additional excise taxes under Section 4999 of the
Code (the “409A Interest Rate”)) the date that is six (6) months after the Date of
Termination (the “409A Payment Date”). The amount payable pursuant to this clause
(i) shall be reduced by the amount of any cash severance or salary continuation
benefit paid or payable to the Executive under any other plan, policy or program of
the Company.
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2. Section 5(c)(v) of the Employment Agreement shall be deleted in its
entirety and replaced with the following:
(v) Notwithstanding any provision of any annual or long-term incentive plan
(exclusive of equity-based plans) to the contrary, the Company shall pay to the
Executive on or as soon as practicable (but in any event within five (5) days)
following the Date of Termination (or to the extent required to satisfy the
provisions of Section 409A(a)(2)(B)(i) of the Code, not earlier than but as soon as
practicable on or in any event within five (5) days after (with interest at the 409A
Interest Rate) the 409A Payment Date) a lump sum amount, in cash, equal to any
unpaid incentive compensation which has been allocated or awarded to the Executive
for a completed bonus cycle preceding the Date of Termination under any such plan
and which, as of the Date of Termination, is contingent only upon the continued
employment of the Executive to a subsequent date. Additionally, and notwithstanding
this Employment Agreement or anything in any annual or long-term incentive plan
(exclusive of equity-based plans) to the contrary, for any bonus cycle that has
begun but not completed as of Executive’s Date of Termination, the aggregate value
of all contingent incentive compensation awards to the Executive for the uncompleted
period under any such plans shall be payable or issuable to the Executive only to
the extent the performance goals and criteria (other than continued performance of
services) are achieved and certified by the Company’s Compensation Committee. The
amount paid (or number of unrestricted shares issued) under the foregoing sentence
shall be equal to the amount of the award, as determined pursuant to its terms (and
assuming continued employment until the end of the award period) multiplied by a
fraction, the numerator of which is the number of full months and any fractional
portion of a month during the period from the first day of the performance award
period through the Date of Termination and the denominator of which is the total
number of months in such performance award period (or if such fraction is greater
than 1/2, multiplied by one (1)). This Section 5(c)(v) shall, as of the date of grant
of any such award, form a part of the terms of any such award and constitute an
amendment to any such awards.
3. Section 5(c)(ix) of the Employment Agreement shall be amended by adding the following to
the end thereto:
Notwithstanding this subsection (ix) to the contrary or anything in any other
agreement with the Executive to the contrary, for any equity and equity-based awards
(other than stock options or stock appreciation rights) to the Executive that vest
or become payable if one or more specified performance goals or criteria (other than
continued performance of services) are achieved or the amount of such award that
vests or becomes payable depends upon the extent of achievement of one or more such
performance goals or criteria, such award shall vest and become payable only to the
extent the performance goals or criteria specified therein are actually achieved
(other than continued performance of services).
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4. Section 5(d) of the Employment Agreement shall be deleted in its entirety and replaced with
the following:
(d) Requirement of Release. Notwithstanding any other provision of
this Agreement, no amounts shall be payable or otherwise due pursuant to Section
5(b) or 5(c) hereof unless (i) the Executive (or his authorized representative, if
disabled or deceased) executes a release of claims against the Company in the form
set forth as Appendix C hereto within thirty (30) days following the Date of
Termination and (ii) the Executive (or his authorized representative, if disabled or
deceased) fails to revoke such release within such thirty (30) days and within any
period permitted by applicable law for its revocation. The amounts subject to this
Section 5(d) shall then be paid at the last day of such thirty (30) day period.
5. Except as otherwise provided above, the Employment Agreement shall remain unchanged and in
full force and effect.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above
written.
| FORESTAR GROUP INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx, XX | |||
| Xxxxxxx X. Xxxxxxx, XX | ||||
| Non-Executive Chairman | ||||
| EXECUTIVE |
||||
| /s/ Xxxxx X. XxXxxxx | ||||
| Xxxxx X. XxXxxxx | ||||
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