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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
Xxxxx Xxxxxxxxxx (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
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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 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
$415,000 per year (the "Base Salary"),
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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 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
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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
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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 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
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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")
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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 with the Company's usual
policies and the terms and provisions of such plans, policies or arrangements.
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(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
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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 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
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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 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
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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
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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 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
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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 the Executive's
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.
(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
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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 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
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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. 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 amount of the retirement benefit described in Section 5(c)(iii)) within the
time period specified in
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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'
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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 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.
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(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 the Executive
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 upon written notice to the Company, effective not more
than 10 days after such an 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
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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
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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.
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To the Executive:
2 Glendennig
Xxxxxxx, Xxxxx 00000
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
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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
Agreement and Appendices A and B thereto as evidence of their adoption this
17th day of October, 1995.
U.S. HOME CORPORATION
By -----------------------------
Name: Xxxxxx X. Xxxxxxxx
------------------------
Title: Chairman and Co-Chief
------------------------
Executive Officer
------------------------
EXECUTIVE:
--------------------------------
Name: Xxxxx Xxxxxxxxxx
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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 Xxxxx Xxxxxxxxxx (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: 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
(i) 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
(ii) 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
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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 ----------------------------
Name: Xxxxxx X. Xxxxxxxx
-----------------------
Title: Chairman and Co-Chief
-----------------------
Executive Officer
-----------------------
EXECUTIVE:
-------------------------------
Name: Xxxxx Xxxxxxxxxx
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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 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,
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(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 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.
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(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;
(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
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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.
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(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 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
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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 -------------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------
Title: Chairman and
---------------------------
Co-Chief Executive
---------------------------
Officer
EXECUTIVE:
----------------------------------
Name: Xxxxx Xxxxxxxxxx
6
