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EXHIBIT 10.13
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 Xxxxxx X. Xxxxxxxx (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:
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1. Employment and Duties. The Company shall employ the
Executive, and the Executive shall be employed by the Company, as Chairman and
Co-Chief Executive 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").
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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 $425,000 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 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,
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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 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
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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.
(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
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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.
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.
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(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
with the
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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
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(or its equivalent) pursuant to Medicare or other applicable law, the Company
shall provide secondary medical coverage and benefits. If continued 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
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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 $139,854 per
year increased by an amount determined by multiplying $139,854 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 be reimbursed up to an amount not to
exceed $50,000 during each year of the Consultation Period for any expenses
incurred by the Executive for (i) the maintenance of an office that shall be
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located other than at the Company's offices and (ii) secretarial assistance,
such expenses to be billed and paid monthly. 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 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
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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.
(iii) 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
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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 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
acturial present value of any annuity contracts shall be calculated by the
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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 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
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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 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.
(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
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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 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
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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 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
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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
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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 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
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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 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
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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 parties
at the following
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addresses or at such other address as a party may specify by notice to the
other.
To the Executive:
----------------
00000 Xxxxxxxx
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,
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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 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
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inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amended and Restated Employment and Consulting Agreement and Appendices A and B
thereto as evidence of their adoption this 17th day of October, 1995.
U.S. HOME CORPORATION
By
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Name: Xxxxx Xxxxxxxxxx
--------------------------
Title: President, Co-Chief
-----------------------
Executive Officer and
-----------------------
Chief Operating Officer
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EXECUTIVE:
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Name: Xxxxxx X. Xxxxxxxx
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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 Xxxxxx X.
Xxxxxxxx (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:
(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
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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: Xxxxx Xxxxxxxxxx
------------------------------
Title: President, Chief
---------------------------
Executive Officer and
---------------------------
Chief Operating Officer
---------------------------
EXECUTIVE:
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
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Appendix B
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 Xxxxxx X.
Xxxxxxxx (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 Board of Directors of the Company,
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(B) the Executive to no longer be the Chairman of
the Board of Directors and Co-Chief Executive Officer of the Company,
(C) even if the Executive maintains the positions
of Chairman of the Board of Directors and Co-Chief Executive 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
no longer be commensurate with those of the Co-Chief Executive 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
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Name: Xxxxx Xxxxxxxxxx
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Title: President, Co-Chief
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Executive Officer and
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Chief Operating Officer
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EXECUTIVE:
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Name: Xxxxxx X. Xxxxxxxx
6
