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EXHIBIT 10.23
FIRST AMENDMENT TO THE
SECOND AMENDED AND RESTATED
EMPLOYMENT AND CONSULTING AGREEMENT
WHEREAS, U.S. Home Corporation (the "Company") and Xxxxx
Xxxxxxxxxx (the "Executive") have entered into the Second Amended and Restated
Employment and Consulting Agreement (the "Agreement"), dated as of February 9,
1999; and
WHEREAS, Section 5(d) of the Agreement provides for the making of
certain payments to the Executive in the event a Change in Control Event (as
defined therein) occurs, and provides for certain limitations on such payments;
and
WHEREAS, on February 9, 2000, the Board of Directors of the
Company (the "Board") resolved that the Agreement should be amended to remove
such limitations and to provide for an additional payment to the Executive under
certain circumstances, and the Executive agreed to such amendment on such date;
and
WHEREAS, Section 3(a) of the Agreement provides for a deferral of
a portion of the Executive's compensation under certain circumstances; and
WHEREAS, the Board had previously resolved that, for purposes of
determining whether the Executive's "applicable employee remuneration" for
calendar year 2000 exceeds the maximum amount deductible by the Company for such
year, the amount includible in his income by reason of the Company's attainment
of financial goals which required the removal of the restrictions placed on the
Company's common stock he was awarded under the Third Amended and Restated
Corporate Officers and Presidents of Operations Restricted Stock Plan shall be
ignored; and
WHEREAS, Section 7(c) of the Agreement permits an amendment by
written agreement of the parties.
NOW, THEREFORE, for good and valuable consideration, the Company
and the Executive agree that the Agreement shall be amended as set forth below.
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FIRST
The second sentence of Section 3(a) of the Agreement is hereby
amended in its entirety, to read as follows:
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;
provided, however, that any income that the Executive recognizes
in calendar year 2000 as a result of the vesting of otherwise
restricted shares under the Company's Third Amended and Restated
Corporate Officers and Presidents of Operations Restricted Stock
Plan by reason of the Company's attainment of financial goals
during calendar year 1999 shall not be included in the
determination of the amount deferred for either calendar year.
SECOND
Section 5(d) of the Agreement is hereby amended by the deletion of
the phrase "within the time period specified in subparagraph (iii) below" in the
ninth line thereof and the addition of the phrase "not later than 30 days after
he gives notice to the Company under this paragraph" in its place and stead.
THIRD
Section 5(d) of the Agreement is hereby amended by the deletion of
subparagraphs (ii) and (iii), by renumbering subparagraph (iv) as subparagraph
(iii), and by the addition of a new subparagraph (ii) to read as follows:
(ii) Notwithstanding anything herein to the contrary, if the
aggregate amounts payable pursuant to subparagraph (i) of this
paragraph (d) or under any other agreement, plan or arrangement
maintained by the Company (the "Change in Control Payments") are
or at any time becomes subject to the tax imposed by
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Section 4999 of the Code (the "Excise Tax"), the Company shall pay
to the Executive at the time specified below, an additional lump
sum cash amount (the "Gross-Up Payment") such that the net amount
retained by the Executive after deduction of any Excise Tax on the
Change in Control Payments and any federal, state and local income
tax and Excise Tax upon the payment provided by this subparagraph,
shall be equal to the Change in Control Payments. For purposes of
determining whether any of the Change in Control Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (A)
any other payments or benefits received or to be received by the
Executive in connection with a Control Change shall be treated as
"parachute payments" within the meaning of Section 280G of the
Code, and all "excess parachute payments" within the meaning of
such Section 280G shall be treated as subject to the Excise Tax,
unless in the opinion of tax counsel selected by the Company's
independent auditors and acceptable to the Executive, such other
payments or benefits (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in whole or
in part) represent reasonable compensation for services actually
rendered within the meaning of Section 280G of the Code, and (B)
the value of any non-cash benefits or any deferred payment or
benefits shall be determined by such independent auditors in
accordance with the principles of Section 280G of the Code. For
purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar
year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rates of taxation in
the state and locality of his residence on the date of his
termination of employment net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state
and local taxes. In the event that the Company furnishes the
Executive with a written opinion of its independent accountants
(reasonably satisfactory to the Executive) that the Excise Tax due
is subsequently determined to be less than the amount taken into
account hereunder at the time a Gross-Up Payment was made, the
Executive shall repay to the Company at the time that the amount
of such reduction in Excise Tax is finally determined, the portion
of the Gross-Up Payment attributable to such reduction plus
interest on the amount of such repayment at the rate provided in
Section 1274(b)(2)(B) of the Code. Notwithstanding the foregoing,
if any portion of the Gross-Up Payment to be refunded to the
Company has been paid to any federal, state or local tax
authority, repayment thereof shall not be required until an actual
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refund or credit of such portion has been made to or obtained by
the Executive from such tax authority, and any interest payable to
the Company shall not exceed the interest received or credited to
the Executive by any such tax authority. The Executive shall be
fully indemnified by the Company for any out-of-pocket costs,
expenses or fees attributable to the filing of any refund or other
claim. Notwithstanding the foregoing, in the event the Executive
notifies the Company that the Excise Tax has been determined (by
the Executive's tax counsel or otherwise) to exceed the amount
taken into account hereunder at the time a Gross-Up Payment was
made (including by reason of any payment the existence or amount
of which cannot be determined at the time of the Gross-Up
Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess Excise Tax (plus any interest payable with
respect to such excess) at the time that the amount of such excess
is finally determined. A Gross-Up Payment shall be paid to the
Executive not later than ten (10) business days following the
payment of any Change in Control Payments which are subject to
Section 4999 of the Code.
FOURTH
Except as set forth above, the Agreement shall remain in full
force and effect.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
amendment as evidence of its adoption as of February 9, 2000.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Co-Chief Executive
Officer
EXECUTIVE:
/s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
