UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

February 14, 2018

Date of Report (Date of earliest event reported)

 

 

LENNAR CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   1-11749   95-4337490

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

700 Northwest 107 th Avenue, Miami, Florida 33172

(Address of principal executive offices) (Zip Code)

(305) 559-4000

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

 

 

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e) On February 14, 2018, the Compensation Committee of the Board of Directors of Lennar Corporation (the “Company”) approved 2018 award agreements under the Company’s 2016 Incentive Compensation Plan relating to incentive compensation for Stuart Miller, the Company’s Chief Executive Officer, Rick Beckwitt, the Company’s President, and Jonathan Jaffe, the Company’s Vice President & Chief Operating Officer. The award agreements describe cash bonus opportunities based on the achievement of specified performance goals. Copies of the award agreements are filed as Exhibit 10.1 hereto.

In addition, on February 14, 2018, the Compensation Committee of the Board of Directors of the Company approved 2018 award agreements under the Company’s 2016 Equity Incentive Plan relating to equity compensation for Mr. Miller, Mr. Beckwitt, and Mr. Jaffe. Mr. Miller, Mr. Beckwitt, and Mr. Jaffe were granted target awards of 77,178, 69,078, 60,757 shares of Class A common stock, respectively, that are subject to performance-based vesting conditions, and 77,178, 69,078, 60,757 shares of Class A common stock, respectively, that are subject to service-based vesting conditions. A copy of the form of award agreement is filed as Exhibit 10.2 hereto.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit No.

  

Description of Document

10.1    2018 Award Agreements for Stuart Miller, Rick Beckwitt and Jonathan Jaffe.
10.2    Form of 2018 Award Agreement for Stuart Miller, Rick Beckwitt and Jonathan Jaffe.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: February 16, 2018     Lennar Corporation
    By:  

/s/ Bruce Gross

    Name:   Bruce Gross
    Title:   Vice President and Chief Financial Officer
LOGO   Exhibit 10.1

LENNAR CORPORATION

2018 TARGET BONUS OPPORTUNITY

CHIEF EXECUTIVE OFFICER

 

 

 

 

NAME

   ASSOCIATE ID#   

TARGET AWARD OPPORTUNITY [1]

Stuart Miller

   100003    0.73% of Lennar Corporation Pretax Income [2] after a 10.96% capital charge [3]

 

[1] The 2018 Target Bonus Opportunity program, under the 2016 Incentive Compensation Plan, is intended to encourage superior performance and achievement of the Company’s strategic business objectives. The bonus (if any) awarded under this plan may be adjusted downward at the sole discretion of the Compensation Committee of the Board of Directors, based on its assessment of the quantitative and qualitative performance of the CEO. Factors that may cause an adjustment include, but are not limited to, a comparison of the Company’s actual results (sales, closings, starts, etc) to budget, inventory management, corporate governance, customer satisfaction, and peer/competitor comparisons.

 

[2] Per our 2016 Incentive Compensation Plan (the “Plan”), Pretax Income shall take into account and adjust for goodwill charges, losses or expenses on early retirement of debt, impairment charges, and acquisition or deal costs related to the purchase or merger of a public company, in accordance with the Plan. Pretax Income is calculated as Net Earnings attributable to Lennar plus/minus income tax expense/benefit.

 

[3] Capital charge is calculated as follows: Tangible Equity = Stockholders Equity - Intangible assets (goodwill, title plants, and intangible assets).

PAYMENTS

 

•   The payment of any bonus shall be made no later than April 15th of the year following the fiscal year to which the bonus calculation applies, or if such day is not a business day, the next business day.

 

•   100% of the bonus payment is contingent on the recipient being employed with the Company on the applicable payment date. No bonus will be earned or paid unless the participant remains employed in good standing through such date.

My participation in this 2018 Target Bonus Opportunity program shall not entitle me to remain in the employ of the Company. My employment is at-will. The Target Bonus Opportunity will be adjusted annually to be in alignment with Company goals.

This document constitutes the entire agreement between the Company and me with respect to my bonus compensation and other matters stated herein; and supersedes and replaces all other agreements and negotiations, whether written or oral, pertaining to my bonus compensation or any other matter stated herein. This document may not be amended unless done so in writing and signed by all signatories to this document.

I affirm that the Alternative Dispute Resolution Policy set forth in Section 1.8 of the Associate Reference Guide shall apply to and govern all disputes 1) under this Target Bonus Opportunity and 2) related to my employment.

I also understand and agree that for twelve (12) months following termination of my employment with Lennar, I will not, directly or indirectly, employ or offer employment to any Lennar Associate or solicit, recruit, influence or encourage any Lennar Associate to terminate his or her employment with Lennar. Lennar Associate shall mean any person who is, or who during the three (3) month period prior to such time had been, an employee of Lennar.

The Company and Associate acknowledge and agree that bonuses are not automatic, but are awarded for excellent individual performance, not just excellent market conditions. Therefore, the Compensation Committee of the Board of Directors may reduce any bonus amount at its sole discretion under any circumstance, and all such decisions will be final and binding. Receiving bonus compensation under this agreement does not indicate or suggest that I will receive, or will be entitled to, any additional bonus compensation at any time.

 

Signature:  

 

    

 

Date:  

 

    

 

 

Stuart Miller

Chief Executive Officer

Lennar Corporation

    

Steven Gerard

Chairman, Compensation Committee

Lennar Corporation

LOGO

LENNAR CORPORATION

2018 TARGET BONUS OPPORTUNITY

PRESIDENT

 

 

 

 

NAME

   ASSOCIATE ID#   

TARGET AWARD OPPORTUNITY [1]

Rick Beckwitt

   168230    0.63% of Lennar Corporation Pretax Income [2] after a 10.96% capital charge [3]

 

[1] The 2018 Target Bonus Opportunity program, under the 2016 Incentive Compensation Plan, is intended to encourage superior performance and achievement of the Company’s strategic business objectives. The bonus (if any) awarded under this plan may be adjusted downward at the sole discretion of the Compensation Committee of the Board of Directors, based on its assessment of the quantitative and qualitative performance of the President. Factors that may cause an adjustment include, but are not limited to, a comparison of the Company’s actual results (sales, closings, starts, etc) to budget, inventory management, corporate governance, customer satisfaction, and peer/competitor comparisons.

 

[2] Per our 2016 Incentive Compensation Plan (the “Plan”), Pretax Income shall take into account and adjust for goodwill charges, losses or expenses on early retirement of debt, impairment charges, and acquisition or deal costs related to the purchase or merger of a public company, in accordance with the Plan. Pretax Income is calculated as Net Earnings attributable to Lennar plus/minus income tax expense/benefit.

 

[3] Capital charge is calculated as follows: Tangible Equity = Stockholders Equity - Intangible assets (goodwill, title plants, and intangible assets).

PAYMENTS

 

  •   The payment of any bonus shall be made no later than April 15th of the year following the fiscal year to which the bonus calculation applies, or if such day is not a business day, the next business day.

 

  •   100% of the bonus payment is contingent on the recipient being employed with the Company on the applicable payment date. No bonus will be earned or paid unless the participant remains employed in good standing through such date.

My participation in this 2017 Target Bonus Opportunity program shall not entitle me to remain in the employ of the Company. My employment is at-will. The Target Bonus Opportunity will be adjusted annually to be in alignment with Company goals.

This document constitutes the entire agreement between the Company and me with respect to my bonus compensation and other matters stated herein; and supersedes and replaces all other agreements and negotiations, whether written or oral, pertaining to my bonus compensation or any other matter stated herein. This document may not be amended unless done so in writing and signed by all signatories to this document.

I affirm that the Alternative Dispute Resolution Policy set forth in Section 1.8 of the Associate Reference Guide shall apply to and govern all disputes 1) under this Target Bonus Opportunity and 2) related to my employment.

I also understand and agree that for twelve (12) months following termination of my employment with Lennar, I will not, directly or indirectly, employ or offer employment to any Lennar Associate or solicit, recruit, influence or encourage any Lennar Associate to terminate his or her employment with Lennar. Lennar Associate shall mean any person who is, or who during the three (3) month period prior to such time had been, an employee of Lennar.

The Company and Associate acknowledge and agree that bonuses are not automatic, but are awarded for excellent individual performance, not just excellent market conditions. Therefore, the Compensation Committee of the Board of Directors may reduce any bonus amount at its sole discretion under any circumstance, and all such decisions will be final and binding. Receiving bonus compensation under this agreement does not indicate or suggest that I will receive, or will be entitled to, any additional bonus compensation at any time.

 

Signature:  

 

   

 

Date:  

 

   

 

 

Rick Bewitt

President

Lennar Corporation

   

Stuart Miller

Chief Executive Officer

Lennar Corporation

LOGO

LENNAR CORPORATION

2018 TARGET BONUS OPPORTUNITY

CHIEF OPERATING OFFICER

 

 

 

 

NAME

   ASSOCIATE ID#   

TARGET AWARD OPPORTUNITY [1]

Jon Jaffe    103706    0.55% of Lennar Corporation Pretax Income [2] after a 10.96% capital charge [3]

 

[1] The 2018 Target Bonus Opportunity program, under the 2016 Incentive Compensation Plan, is intended to encourage superior performance and achievement of the Company’s strategic business objectives. The bonus (if any) awarded under this plan may be adjusted downward at the sole discretion of the Compensation Committee of the Board of Directors, based on its assessment of the quantitative and qualitative performance of the COO. Factors that may cause an adjustment include, but are not limited to, a comparison of the Company’s actual results (sales, closings, starts, etc) to budget, inventory management, corporate governance, customer satisfaction, and peer/competitor comparisons.

 

[2] Per our 2016 Incentive Compensation Plan (the “Plan”), Pretax Income shall take into account and adjust for goodwill charges, losses or expenses on early retirement of debt, impairment charges, and acquisition or deal costs related to the purchase or merger of a public company, in accordance with the Plan. Pretax Income is calculated as Net Earnings attributable to Lennar plus/minus income tax expense/benefit.

 

[3] Capital charge is calculated as follows: Tangible Equity = Stockholders Equity - Intangible assets (goodwill, title plants, and intangible assets).

PAYMENTS

 

•   The payment of any bonus shall be made no later than April 15th of the year following the fiscal year to which the bonus calculation applies, or if such day is not a business day, the next business day.

 

•   100% of the bonus payment is contingent on the recipient being employed with the Company on the applicable payment date. No bonus will be earned or paid unless the participant remains employed in good standing through such date.

My participation in this 2018 Target Bonus Opportunity program shall not entitle me to remain in the employ of the Company. My employment is at-will. The Target Bonus Opportunity will be adjusted annually to be in alignment with Company goals.

This document constitutes the entire agreement between the Company and me with respect to my bonus compensation and other matters stated herein; and supersedes and replaces all other agreements and negotiations, whether written or oral, pertaining to my bonus compensation or any other matter stated herein. This document may not be amended unless done so in writing and signed by all signatories to this document.

I affirm that the Alternative Dispute Resolution Policy set forth in Section 1.8 of the Associate Reference Guide shall apply to and govern all disputes 1) under this Target Bonus Opportunity and 2) related to my employment.

I also understand and agree that for twelve (12) months following termination of my employment with Lennar, I will not, directly or indirectly, employ or offer employment to any Lennar Associate or solicit, recruit, influence or encourage any Lennar Associate to terminate his or her employment with Lennar. Lennar Associate shall mean any person who is, or who during the three (3) month period prior to such time had been, an employee of Lennar.

The Company and Associate acknowledge and agree that bonuses are not automatic, but are awarded for excellent individual performance, not just excellent market conditions. Therefore, the Compensation Committee of the Board of Directors may reduce any bonus amount at its sole discretion under any circumstance, and all such decisions will be final and binding. Receiving bonus compensation under this agreement does not indicate or suggest that I will receive, or will be entitled to, any additional bonus compensation at any time.

 

Signature:  

 

    

 

Date:  

 

    

 

 

Jon Jaffe

Chief Operating Officer

Lennar Corporation

    

Stuart Miller

Chief Executive Officer

Lennar Corporation

 

Exhibit 10.2

LENNAR CORPORATION

2018 RESTRICTED STOCK AGREEMENT

This is to certify that Lennar Corporation (“Lennar”) has granted Stuart Miller (the “Grantee”)              shares of Class A common stock, which are subject to the performance-based vesting criteria set forth below (the “Performance Shares”), and              shares of Class A common stock, which are subject to the time-based vesting criteria set forth below (the “Restricted Shares”, and together with the Performance Shares, the “Shares”). The Shares are being issued under the Lennar Corporation 2016 Equity Incentive Plan (the “Plan”). All capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Plan.

Performance Shares

The number of Performance Shares that the Grantee actually earns for the Performance Period will be determined based on the level of achievement of the performance goals set forth in the table below (the “Performance Goals”), with [ TARGET NUMBER ] Performance Shares to be earned if target performance levels are achieved. For purposes of this Agreement, the term “Performance Period” shall be the period commencing on December 1, 2017 and ending on November 30, 2020. All determinations of whether the Performance Goals have been achieved, the number of Performance Shares earned by the Grantee, and all other matters related to the Performance Shares shall be made by the Committee in its sole discretion. The Performance Shares are subject to forfeiture until they vest. Except as otherwise provided herein, the Performance Shares will vest and become non-forfeitable, if at all, on the date the Committee certifies the achievement of the Performance Goals (the “Vesting Date”). Performance Shares that have not vested by the Vesting Date shall be forfeited. Promptly following completion of the Performance Period (and no later than sixty (60) days following the end of the Performance Period), the Committee will review and certify in writing (a) whether, and to what extent, the Performance Goals for the Performance Period have been achieved, and (b) the number of Performance Shares that the Grantee shall earn, if any.

 

Payout   

Relative Gross

Profit Percentage*

  

Relative Return on

Tangible Capital*

  

Debt/EBITDA

Multiple

0%    < 25 th Percentile    < 25 th Percentile    >
50% (threshold)    25 th Percentile    25 th Percentile   

 

100% (target)    50 th Percentile    50 th Percentile   

 

200% (maximum)    75 th Percentile    75 th Percentile    £

 

 

* Relative Gross Profit Percentage and Relative Return on Tangible Capital are determined using Lennar’s Peer Group consisting of Beazer Homes USA, Inc., Meritage Homes Corporation, M.D.C. Holdings, Inc., Century Communities, Inc., NVR, Inc., D.R. Horton, Inc., PulteGroup, Inc., Hovnanian Enterprises, Inc., Toll Brothers, Inc. and KB Home. In the event a company within the Peer Group is acquired by a company outside the Peer Group, the company would be removed from the Peer Group. In the event a company files for bankruptcy during the performance period, the company’s gross profit percentage and return on tangible capital would be reduced to -100% (i.e., assumed as worst performer within the Peer Group on the respective metrics).

The number of Performance Shares earned is determined independently for each component (e.g., maximum achievement for the relative gross profit percentage component, target achievement for the relative return on tangible capital component, and below-threshold achievement for debt/EBITDA multiple component results in 100% payout).

In the event the Grantee has a Termination of Service on account of death or Disability prior to the Vesting Date, the Grantee will vest immediately on such date in the target number of Performance Shares.

In the event the Grantee has a Termination of Service on account of Retirement prior to the Vesting Date, the Grantee will vest in a pro rata portion of the number of shares that the Grantee would have earned if the Grantee had remained employed for the entire Performance Period, calculated by multiplying such number of shares by a fraction, the numerator of which equals the number of days that the Grantee was employed during the Performance Period and the denominator of which equals the total number of days in the Performance Period. The actual payout will not occur until after the end of the Performance Period, at which time Lennar’s performance during the Performance Period will be used to determine the number of shares that the Grantee would have earned if the Grantee had remained employed for the entire Performance Period prior to applying the pro rata factor. The payout to the Grantee who has a Termination of Service on account of Retirement will be made at approximately the same time as payouts are made to other Grantees with similar awards who are still employed by Lennar.

If within twenty-four months after a Change in Control, an event set forth in Section 13 of the Plan occurs, the Grantee will vest immediately on such date in the target number of Performance Shares.

Restricted Shares

The Restricted Shares subject to this Agreement shall be non-vested and subject to forfeiture as of the date of this Agreement. The Restricted Shares will vest as follows:

 

Vesting Date    % of Total
Award Vesting 		   
Restricted
Shares 		 
 
February 14, 2019    1/3  
February 14, 2020    1/3  
February 14, 2021    1/3  
  

 

 

Total

   100%  
  

 

 

The Restricted Shares may be forfeited prior to vesting upon specified conditions as set forth in the Plan.

General

Lennar, or a subsidiary of Lennar, is required to collect from the Grantee and to pay withholding tax upon the vesting of any Shares. The Grantee may either pay the withholding tax by cash or through the use of shares becoming vested. The Grantee will receive additional information regarding the payment of the tax at the time any Shares are scheduled to vest. If no election is made by the Grantee, the default election is to use shares for satisfying the tax liability. Unless otherwise determined by the Committee, the Shares may not be assigned or transferred while it remains subject to possible forfeiture.

The Plan contains additional provisions which will affect the Shares. The Shares are subject in all respects to the Plan’s terms and conditions as they may be amended from time to time in accordance with the Plan, which terms and conditions are incorporated herein by reference and made a part hereof and shall control in the event of any conflict with any other terms of this Agreement. A copy of the Plan is enclosed in this package in the “Award Information” section.

 

Dated:   LENNAR CORPORATION
 

Steven L. Gerard

Chairman, Compensation Committee

Lennar Corporation