EXHIBIT 10.14
U.S. HOME CORPORATION
KEY EMPLOYEES'
SEVERANCE PAY PLAN
1. PURPOSE
U.S. Home Corporation (the "COMPANY") Key Employees' Severance Pay Plan
(the "PLAN") is intended to encourage continuity of employment by key
employees by providing them with an incentive to remain in the employ of
the Company or its subsidiaries despite a potential for a change of
control of the Company.
2. ELIGIBILITY
The corporate officers, other than the Chairman and Co-Chief Executive
Officer and President, Co-Chief Executive Officer and Chief Operating
Officer, and the presidents of operations of the Company shall be eligible
for, and shall participate in, benefits provided under the Plan (each an
"ELIGIBLE EMPLOYEE"). Such individuals as of the Effective Date (as
defined below) are set forth on Schedule A attached hereto.
3. BENEFITS
An Eligible Employee whose employment with the Company or a subsidiary of
the Company is terminated by the Company other than for Cause (as defined
below) or whose employment is Constructively Terminated (as defined below)
within two (2) years after the occurrence of a Change of Control (as
defined below) shall be entitled to (A) receive an amount equal to the
greater of (x) twelve (12) months of such Eligible Employee's Base Salary
(as defined below) or (y) one (1) month of such Eligible Employee's Base
Salary (as defined below) for each full year during which such Eligible
Employee was employed by the Company or its subsidiaries, and (B) continue
to participate in each of the Company's employee benefit plans, policies
or arrangements, which provide insurance, including, without limitation,
life insurance and long-term disability insurance, and medical benefits
(the "COMPANY INSURANCE PLANS"), on the same basis as the Company's other
executive officers for one year after the date of termination of
employment (the "TERMINATION BENEFITS").
4. PAYMENT OF BENEFITS
The Termination Benefits payable pursuant to Section 3(A) hereunder shall
be paid to an Eligible Employee in a single lump sum in cash as soon as
practicable (but in no event later than thirty (30) days) after such
Eligible Employee's employment is terminated pursuant to Section 3
hereunder. If continued coverage under any of the Company Insurance Plans
is not possible under the terms of any insurance policy or applicable law
following the date of termination of employment, the Company shall provide
the Eligible Employee with coverage equivalent to that provided to the
Company's other executive officers under a policy or arrangement
reasonably acceptable to the Eligible Employee. If an Eligible Employee
dies after becoming entitled to the Termination Benefits payable pursuant
to Section 3(A) hereunder but before payment thereof is made to such
Eligible Employee, such Termination Benefits shall be paid to the Eligible
Employee's estate in a single lump sum in cash as soon as practicable
after such Eligible Employee's death. If an Eligible Employee dies within
one year after becoming entitled to the Termination Benefits pursuant to
Section 3(B) hereunder, such Termination Benefits shall continue to be
provided for one year after the date of termination of the Eligible
Employee to the Eligible Employee's spouse and dependents on the same
basis as provided to the Company's other executive officers. The Company
may deduct from any Termination Benefit any federal, state or local taxes
required by law to be withheld.
5. DEFINITIONS
(a) "BASE SALARY" shall mean an amount equal to an Eligible Employee's
maximum annual base salary in effect at any time after the Effective
Date (as defined below), excluding any discretionary compensation or
bonus payable or paid to an Eligible Employee.
(b) "CHANGE OF CONTROL" shall mean any of the following: (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, as
amended (the "EXCHANGE ACT"), disclosing that any person or group of
persons (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 (as such term is defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of fifty percent (50%) or more of the
combined voting power of the then outstanding equity of the Company
(as determined under paragraph (d) of Rule 13d-3 under the Exchange
Act, in the case of rights to acquire the common stock, $.01 par
value per share (the "COMMON STOCK"), of the Company); (ii) any
transaction or a series of related transactions (as a result of a
tender offer, merger, consolidation or otherwise whether or not the
Company is the continuing or surviving entity) that results in, or
that is in connection with, any person or group of persons (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), acquiring
beneficial ownership (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of fifty percent (50%) or more
of the combined voting power of the then outstanding equity of the
Company (as determined under paragraph (d) of Rule 13d-3 under the
Exchange Act, in the case of rights to acquire the Common Stock) or
of any person or group of persons (within the meaning of Section
13(d) of the Exchange Act) that possesses beneficial ownership (as
such term is defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of fifty percent (50%) or more of the combined voting
power of the then outstanding equity of the Company; (iii) the sale,
lease, exchange or other transfer of all or substantially all of the
assets of the Company to any person or group of persons (within the
meaning of Section 13(d) of the Exchange Act) in one transaction or a
series of related transactions; provided, that a transaction where
the holders of all classes of the then outstanding equity of the
Company immediately prior to such transaction own, directly or
indirectly, fifty percent (50%) or more of the aggregate voting power
of all classes of equity of such person or group immediately after
such transaction will not be a Change of Control under this clause
(iii); (iv) the liquidation or dissolution of the Company; provided,
that a liquidation or dissolution of the Company which is part of a
transaction or series of related transactions that does not
constitute a Change of Control under the "provided" clause of clause
(iii) above will not constitute a Change of Control under this clause
(iv);
or (v) 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.
(c) "CONSTRUCTIVELY TERMINATED" shall mean (i) a reduction in an amount
equal to or greater than fifteen percent (15%) of an Eligible
Employee's Base Salary, (ii) a material reduction in an Eligible
Employee's job function, duties or responsibilities or (iii) a
required relocation of an Eligible Employee of more than fifty (50)
miles from such Eligible Employee's current job location; provided,
however, that the employment with the Company or its subsidiaries of
a President of Operations who is an Eligible Employee will not be
deemed to be Constructively Terminated in the event he or she is
required to be a Division Chairman or Division President with the
Company or its subsidiaries and has job functions, duties or
responsibilities of a Division Chairman or Division President and/or
is required to relocate in connection with such change in position;
provided, further, that the employment of an Eligible Employee will
not be deemed Constructively Terminated unless such Eligible Employee
actually terminates his or her employment with the Company within
sixty (60) days after the occurrence of an event specified in clause
(i), (ii) or (iii) above.
(d) "CAUSE" shall mean (i) an Eligible Employee's continuing willful
failure to perform his or her duties (other than as a result of total
or partial incapacity due to physical or mental illness), (ii) gross
negligence or malfeasance by an Eligible Employee in the performance
of his or her duties, (iii) an act or acts on the part of an Eligible
Employee constituting a felony under the laws of the United States of
America, or any state thereof that results or was intended to result
directly or indirectly in gain or personal enrichment by such
Eligible Employee at the expense of the Company or its subsidiaries
or (iv) breach of any of the provisions set forth on Schedule B
attached hereto pertaining to confidentiality and competitive
activities.
6. MISCELLANEOUS
(a) The Plan shall be effective as of December 6, 1996 (the "EFFECTIVE
DATE").
(b) The Company reserves the right to modify or amend, in whole or in
part, the Plan; provided, however, that no such modification or
amendment shall be made within two (2) years following the occurrence
of a Change of Control.
(c) The compensation committee of the Board of Directors of the Company
(the "COMPENSATION COMMITTEE") shall respond to claims for benefits
under the Plan within thirty (30) days of their receipt and, if a
claim is wholly or partially denied, the Compensation Committee shall
provide the Eligible Employee with a written explanation of the
denial which shall state the specific reason or reasons the claim was
denied; the exact references to the Plan provisions that dealt with
the claim; a description of any additional material or information
necessary for him or her to revise and perfect the claim; an
explanation as to why such material or information is necessary; and
an explanation of the Plan's claims procedure. Within forty-five (45)
days after an Eligible Employee receives a denial of his or her
claim, such Eligible Employee may appeal his or her claim denial to
the Compensation Committee. The Eligible Employee or such Eligible
Employee's authorized representative may make a written request for a
review of the denial and to review applicable documents and may
submit comments and issues in writing. The Compensation Committee
shall decide an appeal within fifteen (15) days after receiving the
request for review. The Compensation Committee's decision on the
review shall be in writing, and shall include specific reasons for
the decision and references to the Plan provision upon which it was
based.
(d) The Company shall reimburse an Eligible Employee (or such Eligible
Employee's estate, as applicable) for any and all costs (including,
but not limited to, legal fees) incurred by such Eligible Employee
(or such Eligible Employee's estate, as applicable) in successfully
appealing (whether pursuant to paragraph 6(c) above, in a court of
competent jurisdiction or otherwise) a claim for benefits under the
Plan which was denied. Such Eligible Employee's benefits under the
Plan shall be paid to him or her (or to his or her estate, as
applicable) as soon as practicable (but not later than ten (10) days)
after such successful appeal, together with interest on such amount
from his or her date of termination of employment to the date of
payment at
the average prime or base lending rate of interest published or
publicly announced by the financial institution then providing
financing to the Company under the Company's credit facility (whether
or not such rate is actually charged by such financial institution)
in effect on such termination date.
(e) The establishment of the Plan shall not be construed as conferring
any legal rights upon any Eligible Employee or other person for a
continuation of employment, nor will it interfere with the rights of
the Company or any of its subsidiaries to discharge any Eligible
Employee and to treat such Eligible Employee without regard to the
effect which such treatment might have upon such Eligible Employee as
an Eligible Employee under the Plan.
(f) In the event that the Company finds that an Eligible Employee is
unable to care for his or her affairs because of illness or accident,
the Compensation Committee may direct that any payment due such
Eligible Employee, unless claim has been made therefor by a duly
appointed legal representative, be paid to such Eligible Employee's
spouse, child, parent or other blood relative, or to a person with
whom such Eligible Employee resides, and any such payment so made
will be a complete discharge of the liabilities under the Plan
therefor.
(g) The Plan shall be construed, regulated and administered under the
internal laws of the State of Delaware without regard to principles
of conflicts of laws.
(h) The Company shall request and use its best efforts to require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company or any of its subsidiaries
expressly to assume and agree to perform the obligations under the
Plan in the same manner and to the same extent that the Company would
be required to perform such obligations if no such succession had
taken place.
SCHEDULE A
U.S. HOME CORPORATION
KEY EMPLOYEES
Name Title
---- -----
Corporate Officers:
Gary L. Frueh Vice President - Tax and Audit
Craig M. Johnson Senior Vice President - Community
Development
Thomas A. Napoli Vice President - Finance and Chief
Financial Officer
Chester P. Sadowski Vice President - Controller and Chief
Accounting Officer
Richard G. Slaughter Vice President - Planning and Secretary
Kelly F. Somoza Vice President
Presidents of Operations:
Sam B. Crimaldi President of Operations,
U.S. Home South Florida
James R. Petty President of Operations and Chief
Executive Officer,
U.S. Home Mortgage Corporation
Christopher B. Rediger President of Operations,
U.S. Home Mountain
Michael T. Richardson President of Operations,
U.S. Home South
Philip J. Walsh, III President of Operations,
U.S. Home North and California
All capitalized terms used but not defined herein have the meaning
ascribed thereto in the U.S. Home Corporation Key Employees' Severance Plan.
SCHEDULE B
All capitalized terms used but not defined herein have the meaning
ascribed thereto in the U.S. Home Corporation Key Employees' Severance Plan.
A. CONFIDENTIALITY.
The Eligible Employee has and will acquire confidential information with
respect to the business of the Company and its subsidiaries. The Eligible
Employee will not, without the written consent of the Company as
authorized by the Board of Directors of the Company, 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 Eligible Employee or to any person other than the Company
and its subsidiaries. For this purpose, information will be considered
confidential only if such information is uniquely proprietary to the
Company or any of its subsidiaries and has not been made publicly
available prior to its disclosure by the Eligible Employee.
B. COMPETITIVE ACTIVITY.
Until the end of his or her employment, the Eligible Employee will devote
full business time to the business of the Company or its subsidiaries and
will not, without the written 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 otherwise), with or without compensation, any business which
is in competition with any line of business being actively conducted by
the Company or its subsidiaries during his or her employment period.
Nothing herein, however, will prohibit the Eligible Employee from
acquiring or holding not more than one percent (1%) of any class of
publicly-traded securities of any such business.