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
November 17, 2022
Date of Report (Date of earliest event reported)
(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.) |
5505 Blue Lagoon Drive, Miami, Florida 33126
(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)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Class A Common Stock, par value $.10 | LEN | New York Stock Exchange | ||
Class B Common Stock, par value $.10 | LEN.B | New York Stock Exchange |
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. |
Throughout 2022, we received feedback from extensive outreach to our shareholders to obtain their suggestions for changes to our executive compensation programs. We also consulted with an independent compensation advisor to obtain additional input. Based on this feedback, on November 17, 2022, the Compensation Committee (the “Committee”) of the Board of Directors of Lennar Corporation (the “Company”) approved the significant changes noted below to the fiscal 2022 executive compensation programs for each of Stuart Miller, the Company’s Executive Chairman, Rick Beckwitt, the Company’s Co-Chief Executive Officer and Co-President, and Jonathan Jaffe, the Company’s Co-Chief Executive Officer and Co-President.
SUMMARY
The Company expects to deliver record earnings in fiscal 2022. Notwithstanding these results, the Committee has established new 2022 compensation programs for Messrs. Miller, Beckwitt, and Jaffe as follows:
• | Total compensation for each of the executive officers for fiscal 2022 is expected to be reduced approximately 11-12% from total compensation earned for fiscal 2021. |
• | Short-term cash incentives will be a lower percentage of total compensation. Additionally, such incentives will be subject to a maximum annual payout cap set as a dollar amount. |
• | Long-term equity incentives will be a higher percentage of total compensation. Long-term equity incentives include both time-based shares and performance shares. The mix between time-based shares and performance shares will be weighted more heavily towards performance shares. The time-based shares vest over three years and the performance shares are based on three years of performance. |
• | The performance shares target will be increased, requiring even greater performance relative to our peer group. |
WHAT WE HEARD FROM OUR SHAREHOLDERS |
CHANGES FOR FISCAL 2022 | |
• Evaluate total executive compensation relative to peers. |
• Total compensation for our two Co-CEOs for fiscal 2022 will be reduced approximately 12% from total compensation for fiscal 2021.
• Target total compensation for each CEO is approximately $30 million
• Total Executive Chairman compensation for fiscal 2022 will be reduced approximately 11% from total compensation for fiscal 2021.
• Target total compensation is approximately $34 million | |
• Short-term cash incentives should be a lower percentage of total compensation, and long-term equity incentives should be a higher percentage of total compensation. Suggested incentive pay mix: 30% cash / 70% equity. |
• The incentive pay mix will be targeted at approximately 20% cash / 80% equity.
• The increased equity percentage will provide even greater alignment with shareholders. | |
• Short-term cash incentive bonuses should be subject to a maximum annual payout cap set as a dollar amount. |
• Short-term cash incentive bonus for each Co-CEO will be capped at $6 million.
• Short-term cash incentive bonus for our Executive Chairman will be capped at $7 million. | |
• Long-term equity incentives should be more heavily weighted towards performance shares versus time-based shares. Suggested weighting: 40% time-based shares / 60% performance shares. |
• The total value of long-term equity incentives will be weighted with a target of approximately 35% in value of time-based shares and 65% in value of performance shares to be accomplished by issuing additional performance shares.
• The increase in the performance share allocation will provide even greater alignment with shareholders. | |
• Performance shares target award payouts should only be provided in connection with outperformance versus peers, which provides a stronger link between executive pay and Company performance. Target should be greater than 50th percentile. Suggested target: 55th percentile. |
• Performance shares target award payouts will be increased to the 60th percentile.
• The increase in the performance target goals (for gross profit percentage, return on tangible capital, and total shareholder returns) to the 60th percentile relative to those in our peer group will further strengthen the alignment between executive pay and Company performance. |
Earlier in the year, the Committee authorized the establishment of a bonus pool to be funded by reductions in executive cash bonuses that would provide additional compensation to Associates at the lower end of the Company’s compensation levels. Based on the significant changes in cash bonus compensation described above that we are implementing in response to shareholder and independent compensation advisor feedback, combined with the recognition of challenging market conditions throughout fiscal 2022, the Company decided against establishing the bonus pool. Rather, the Company adjusted compensation upward throughout the year for certain Associates at the lower end of the Company’s compensation levels to reward and ensure the retention of the Company’s valued Associates. These adjustments provided more immediate benefits to the Associates in a highly inflationary period.
The Amended and Restated 2022 Award Agreements under the Company’s 2016 Incentive Compensation Plan, as amended and restated (“Incentive Plan”), and the Form of the Amended and Restated 2022 Award Agreement under the Company’s 2016 Equity Incentive Plan, as amended and restated (“Equity Plan”), are attached as exhibits to this filing and are incorporated by reference herein. In addition, the Form of the 2022 Award Agreement under the Equity Plan under which Mr. Miller, Mr. Beckwitt and Mr. Jaffe were granted target awards of 89,064, 77,470, and 77,470 shares of Class A common stock, respectively, that are subject to performance-based vesting conditions, is attached as an exhibit to this filing and is incorporated by reference herein.
Forward-Looking Statements. Some of the statements in this Form 8-K are “forward-looking statements,” as that term is defined in the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s earnings in fiscal 2022. These forward-looking statements are subject to risks, uncertainties and assumptions. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and uncertainties that could cause actual results and events to differ materially from those in the forward-looking statements. They include the risks detailed in the Company’s filings with the Securities and Exchange Commission, including the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021. We do not undertake any obligation to update forward-looking statements, whether as a result of new information, future events or otherwise.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit |
Description of Document | |
10.1 | ||
10.2 | ||
10.3 | ||
104 | Cover Page Interactive Data File--the cover page XBRL tags are embedded within the Inline XBRL document. |
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: November 21, 2022 | Lennar Corporation | |||||
By: | /s/ Diane Bessette | |||||
Name: | Diane Bessette | |||||
Title: | Vice President, Chief Financial Officer and Treasurer |
Exhibit 10.1
LENNAR CORPORATION
AMENDED AND RESTATED 2022 TARGET BONUS OPPORTUNITY
EXECUTIVE CHAIRMAN
NAME |
ASSOCIATE ID# |
TARGET AWARD OPPORTUNITY [1] | ||
Stuart Miller | 100003 | 0.58% of Lennar Corporation Pretax Income [2] after a 7.3% capital charge [3] | ||
(Total Award Opportunity not to exceed $7,000,000) |
[1] | The 2022 Target Bonus Opportunity Program, under the 2016 Incentive Compensation Plan, as amended and restated (the Plan), is intended to encourage superior performance and achievement of the Companys 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 quantitative and qualitative performance. Factors that may cause an adjustment include, but are not limited to, a comparison of the Companys actual results (sales, closings, starts, etc.) to budget, inventory management, corporate governance, customer satisfaction, and peer/competitor comparisons. |
[2] | 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. Pretax Income is calculated as Net Earnings attributable to Lennar plus/minus income tax expense/benefit. |
[3] | Capital charge is calculated as follows: Tangible Capital = Stockholders Equity Intangible Assets + Homebuilding Debt. |
| BONUS PAYMENTS: To earn a bonus pursuant to this Agreement, Associate must, in addition to all other requirements herein, comply with all legal and ethical standards set forth in the Companys Associate Reference Guide (ARG) and Code of Business Ethics and Conduct. A bonus otherwise earned under this Agreement shall be paid no later than February 28th of the year following the fiscal year for which the bonus is due, or if such day is not a business day, the next business day. Any bonus under this Agreement must be fully earned within the fiscal year stated above, subject to proration described below. A bonus for periods after this fiscal year is paid at the sole discretion of the Company, and in amounts determined at the sole discretion of the Company. Associate must be a full-time active employee with the Company on the date of payment (or on a leave of absence approved pursuant to the ARG) to earn a bonus, and no bonus will be paid or earned after Associates employment with the Company ends, regardless of whether the termination is voluntary or involuntary. |
| PRORATION: Unless otherwise provided by law, bonuses tied to accomplishing objectives over a specific period of time will be prorated based on the number of calendar days Associate was a full-time active employee with the Company during that period. This proration applies to all types of leave, including medical and non-medical. |
| NO PRIOR AGREEMENTS: Associate represents that Associate has no agreements, relationships, or commitments to any other person or entity that conflict with or would prevent Associate from performing any of Associates obligations to the Company. Associate has not disclosed and will not disclose to the Company and/or any affiliates and/or subsidiaries (Affiliate Companies), and will not use or induce the Company and/or any Affiliate Companies to use, any confidential or proprietary information or trade secrets belonging to others. Associate represents and warrants that Associate has not given or disclosed to the Company any property or confidential or trade secret information belonging to others. Associate agrees to indemnify, defend and hold harmless the Company and Affiliate Companies, and their officers, members, directors and employees, from any and all claims, damages, costs, expenses or liability, including reasonable attorneys fees, incurred in connection with or resulting from any breach or default of the representations and warranties contained in this provision. |
| AT-WILL EMPLOYMENT: Associates employment is at-will. Associate may resign from Associates employment at any time with or without cause or notice and the Company may terminate Associates employment at any time with or without cause or notice. |
| CONFIDENTIALITY AND NON-DISPARAGEMENT: By virtue of Associates employment with the Company, Associate will have access to and become familiar with various confidential and/or proprietary information, as described in Section 5.2 of the ARG, and Associate specifically agrees to comply with Section 5.2 of the ARG. Also, in accordance with Section 5.34 of the ARG, Associate agrees that Associate will not make any inaccurate, disparaging, or defamatory statements concerning the Company or the Companys products, services, officers or employees, during or following Associates employment with the Company, subject to Associates right to communicate with governmental bodies or agencies and/or to engage in activity protected by the National Labor Relations Act or any other applicable federal, state or local law. |
| NO SOLICITATION: Associate agrees that during Associates employment with the Company and for twelve (12) months following the termination of Associates employment with the Company (Non-Solicitation Period), Associate will not directly or indirectly, on Associates own behalf or through others, employ, suggest employment, or offer employment to any Applicable Associate of the Company and/or its Affiliate Companies, nor will Associate solicit, recruit, influence, or encourage any Applicable Associate to terminate his or her employment with the Company or Affiliate Companies. For purposes of this Agreement, Applicable Associate shall mean any person who is or was employed by the Company or Affiliate Companies at the time of Associates termination or at any time during the three months preceding the Associates termination of employment with the Company; or who is or was employed by the Company or Affiliate Companies at any time during the Non-Solicitation Period. Associate must disclose these obligations regarding solicitation to any employer with whom Associate becomes employed during the Non-Solicitation Period prior to commencing such employment. |
| CLAWBACK: Any award granted under this Agreement shall be and remain subject to the incentive compensation clawback or recoupment policy currently in effect under the Plan or any such policy that may in the future be adopted with regard to the Plan. Associate acknowledges and agrees that in addition to all other requirements in this Agreement to earn a bonus, Associates eligibility to earn a bonus is directly related to, and dependent on, compliance with the sections in this Agreement relating to confidential information, disparaging statements, and non-solicitation (all collectively, Restrictions). In the event the Company reasonably believes that Associate has violated any of the Restrictions at any time the applicable Restriction applied to Associate, the Company shall be entitled to seek all injunctive relief and recover all damages available to it under any legal theory; and Associate will forfeit, and if previously paid, repay any bonus previously paid by the Company to Associate. In accordance with applicable law, Associate authorizes the Company to directly deduct any sums claimed by the Company under this clawback provision from any wages owed to Associate by the Company. |
| ARBITRATION AND EQUITABLE RELIEF: Associate affirms that the Companys Dispute Resolution Mediation & Arbitration Policy (ADR Policy) set forth in Section 1.8 of the ARG will apply to and govern all disputes related to Associates employment (including, but not limited to, this Agreement), in accordance with the ADR Policy. |
| ENTIRE AGREEMENT; AMENDMENT; SURVIVING PROVISIONS; ASSIGNMENT: This Agreement amends and restates in its entirety the Lennar Corporation 2022 Target Bonus Opportunity Agreement for Stuart Miller. This Agreement constitutes the entire agreement between the parties with respect to Associates bonus and other matters stated herein, and supersedes and replaces all other agreements and negotiations, whether written or oral, pertaining to Associates bonus or any other matter stated herein. This Agreement may not be amended unless done so in writing and signed by Associate and an authorized representative of the Company. The following provisions of this Agreement survive the termination of this Agreement and/or the termination of Associates employment with the Company, irrespective of the grounds or reasons for such termination: No Prior Agreements; Confidentiality and Non-Disparagement; Non-Solicitation; Clawback; Arbitration and Equitable Relief; Severability; ARG; and this provision. This Agreement and all rights under this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective personal or legal representatives, executors, administrators, heirs, distributees, devisees, legatees, successors and assigns. Associate shall not, without the prior written approval (by a writing which does not include an electronic communication) of the Company, assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity. |
| SEVERABILITY; ARG: The provisions of this Agreement are severable, and if any part of this Agreement is found to be invalid or unenforceable, the remainder of this Agreement will not be affected and shall continue in full force and effect. If the scope of any restriction or covenant contained herein should be or become too broad or extensive to permit enforcement thereof to its full extent, then the Court or Arbitrator (as applicable, per the ADR Policy) is specifically authorized by the parties to enforce any such restriction or covenant to the maximum extent permitted by law, and Associate hereby consents and agrees that the scope of any such restriction or covenant may be modified accordingly in any proceeding brought to enforce such restriction or covenant. Associate will remain obligated to comply with all Company rules, policies, practices, and procedures, including any and all policies contained in the ARG as amended from time to time. In the event of a conflict between this Agreement and the ARG, the ARG shall govern. |
| COUNTERPARTS AND ELECTRONIC SIGNATURE: This Agreement may be executed in multiple counterparts. If this Agreement is electronically executed, it shall be deemed an electronic record, as the term is defined in the Electronic Signatures in Global and National Commerce Act and applicable state law (collectively, the Applicable Law). Clicking or otherwise activating any button associated with this Agreement demonstrates Associates intent to sign the Agreement and/or and represents Associates electronic signature, as the term is defined in the Applicable Law. Additionally, by Associates review of this Agreement and/or clicking on any button, Associate and the Company agree to use and accept electronic records and electronic signatures. |
The Company and Associate acknowledge and agree that bonuses are not automatic, but are awarded for individual performance, not just excellent market conditions. The Company shall make the final and binding determination of any amount payable under this Agreement; whether and/or when a bonus payment is quantifiable; whether an adjustment to any bonus is appropriate; and all standards, goals, targets, plans, deliveries, and benchmarks and whether they were met. Associates receipt of any bonus under this Agreement does not indicate or suggest that Associate will be eligible for any additional bonus at any time.
Signature: |
|
| ||||
Date: |
|
| ||||
Stuart Miller | Teri P. McClure | |||||
Executive Chairman | Chair, Compensation Committee | |||||
Lennar Corporation | Lennar Corporation |
LENNAR CORPORATION
AMENDED AND RESTATED 2022 TARGET BONUS OPPORTUNITY
CO-CHIEF EXECUTIVE OFFICER & CO-PRESIDENT
NAME |
ASSOCIATE ID# |
TARGET AWARD OPPORTUNITY [1] | ||
Rick Beckwitt | 168230 | 0.51% of Lennar Corporation Pretax Income [2] after a 7.3% capital charge [3] | ||
(Total Award Opportunity not to exceed $6,000,000) |
[1] | The 2022 Target Bonus Opportunity Program, under the 2016 Incentive Compensation Plan, as amended and restated (the Plan), is intended to encourage superior performance and achievement of the Companys 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 quantitative and qualitative performance. Factors that may cause an adjustment include, but are not limited to, a comparison of the Companys actual results (sales, closings, starts, etc.) to budget, inventory management, corporate governance, customer satisfaction, and peer/competitor comparisons. |
[2] | 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. Pretax Income is calculated as Net Earnings attributable to Lennar plus/minus income tax expense/benefit. |
[3] | Capital charge is calculated as follows: Tangible Capital = Stockholders Equity Intangible Assets + Homebuilding Debt. |
| BONUS PAYMENTS: To earn a bonus pursuant to this Agreement, Associate must, in addition to all other requirements herein, comply with all legal and ethical standards set forth in the Companys Associate Reference Guide (ARG) and Code of Business Ethics and Conduct. A bonus otherwise earned under this Agreement shall be paid no later than February 28th of the year following the fiscal year for which the bonus is due, or if such day is not a business day, the next business day. Any bonus under this Agreement must be fully earned within the fiscal year stated above, subject to proration described below. A bonus for periods after this fiscal year is paid at the sole discretion of the Company, and in amounts determined at the sole discretion of the Company. Associate must be a full-time active employee with the Company on the date of payment (or on a leave of absence approved pursuant to the ARG) to earn a bonus, and no bonus will be paid or earned after Associates employment with the Company ends, regardless of whether the termination is voluntary or involuntary. |
| PRORATION: Unless otherwise provided by law, bonuses tied to accomplishing objectives over a specific period of time will be prorated based on the number of calendar days Associate was a full-time active employee with the Company during that period. This proration applies to all types of leave, including medical and non-medical. |
| NO PRIOR AGREEMENTS: Associate represents that Associate has no agreements, relationships, or commitments to any other person or entity that conflict with or would prevent Associate from performing any of Associates obligations to the Company. Associate has not disclosed and will not disclose to the Company and/or any affiliates and/or subsidiaries (Affiliate Companies), and will not use or induce the Company and/or any Affiliate Companies to use, any confidential or proprietary information or trade secrets belonging to others. Associate represents and warrants that Associate has not given or disclosed to the Company any property or confidential or trade secret information belonging to others. Associate agrees to indemnify, defend and hold harmless the Company and Affiliate Companies, and their officers, members, directors and employees, from any and all claims, damages, costs, expenses or liability, including reasonable attorneys fees, incurred in connection with or resulting from any breach or default of the representations and warranties contained in this provision. |
| AT-WILL EMPLOYMENT: Associates employment is at-will. Associate may resign from Associates employment at any time with or without cause or notice and the Company may terminate Associates employment at any time with or without cause or notice. |
| CONFIDENTIALITY AND NON-DISPARAGEMENT: By virtue of Associates employment with the Company, Associate will have access to and become familiar with various confidential and/or proprietary information, as described in Section 5.2 of the ARG, and Associate specifically agrees to comply with Section 5.2 of the ARG. Also, in accordance with Section 5.34 of the ARG, Associate agrees that Associate will not make any inaccurate, disparaging, or defamatory statements concerning the Company or the Companys products, services, officers or employees, during or following Associates employment with the Company, subject to Associates right to communicate with governmental bodies or agencies and/or to engage in activity protected by the National Labor Relations Act or any other applicable federal, state or local law. |
| NO SOLICITATION: Associate agrees that during Associates employment with the Company and for twelve (12) months following the termination of Associates employment with the Company (Non-Solicitation Period), Associate will not directly or indirectly, on Associates own behalf or through others, employ, suggest employment, or offer employment to any Applicable Associate of the Company and/or its Affiliate Companies, nor will Associate solicit, recruit, influence, or encourage any Applicable Associate to terminate his or her employment with the Company or Affiliate Companies. For purposes of this Agreement, Applicable Associate shall mean any person who is or was employed by the Company or Affiliate Companies at the time of Associates termination or at any time during the three months preceding the Associates termination of employment with the Company; or who is or was employed by the Company or Affiliate Companies at any time during the Non-Solicitation Period. Associate must disclose these obligations regarding solicitation to any employer with whom Associate becomes employed during the Non-Solicitation Period prior to commencing such employment. |
| CLAWBACK: Any award granted under this Agreement shall be and remain subject to the incentive compensation clawback or recoupment policy currently in effect under the Plan or any such policy that may in the future be adopted with regard to the Plan. Associate acknowledges and agrees that in addition to all other requirements in this Agreement to earn a bonus, Associates eligibility to earn a bonus is directly related to, and dependent on, compliance with the sections in this Agreement relating to confidential information, disparaging statements, and non-solicitation (all collectively, Restrictions). In the event the Company reasonably believes that Associate has violated any of the Restrictions at any time the applicable Restriction applied to Associate, the Company shall be entitled to seek all injunctive relief and recover all damages available to it under any legal theory; and Associate will forfeit, and if previously paid, repay any bonus previously paid by the Company to Associate. In accordance with applicable law, Associate authorizes the Company to directly deduct any sums claimed by the Company under this clawback provision from any wages owed to Associate by the Company. |
| ARBITRATION AND EQUITABLE RELIEF: Associate affirms that the Companys Dispute Resolution Mediation & Arbitration Policy (ADR Policy) set forth in Section 1.8 of the ARG will apply to and govern all disputes related to Associates employment (including, but not limited to, this Agreement), in accordance with the ADR Policy. |
| ENTIRE AGREEMENT; AMENDMENT; SURVIVING PROVISIONS; ASSIGNMENT: This Agreement amends and restates in its entirety the Lennar Corporation 2022 Target Bonus Opportunity Agreement for Rick Beckwitt. This Agreement constitutes the entire agreement between the parties with respect to Associates bonus and other matters stated herein, and supersedes and replaces all other agreements and negotiations, whether written or oral, pertaining to Associates bonus or any other matter stated herein. This Agreement may not be amended unless done so in writing and signed by Associate and an authorized representative of the Company. The following provisions of this Agreement survive the termination of this Agreement and/or the termination of Associates employment with the Company, irrespective of the grounds or reasons for such termination: No Prior Agreements; Confidentiality and Non-Disparagement; Non-Solicitation; Clawback; Arbitration and Equitable Relief; Severability; ARG; and this provision. This Agreement and all rights under this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective personal or legal representatives, executors, administrators, heirs, distributees, devisees, legatees, successors and assigns. Associate shall not, without the prior written approval (by a writing which does not include an electronic communication) of the Company, assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity. |
| SEVERABILITY; ARG: The provisions of this Agreement are severable, and if any part of this Agreement is found to be invalid or unenforceable, the remainder of this Agreement will not be affected and shall continue in full force and effect. If the scope of any restriction or covenant contained herein should be or become too broad or extensive to permit enforcement thereof to its full extent, then the Court or Arbitrator (as applicable, per the ADR Policy) is specifically authorized by the parties to enforce any such restriction or covenant to the maximum extent permitted by law, and Associate hereby consents and agrees that the scope of any such restriction or covenant may be modified accordingly in any proceeding brought to enforce such restriction or covenant. Associate will remain obligated to comply with all Company rules, policies, practices, and procedures, including any and all policies contained in the ARG as amended from time to time. In the event of a conflict between this Agreement and the ARG, the ARG shall govern. |
| COUNTERPARTS AND ELECTRONIC SIGNATURE: This Agreement may be executed in multiple counterparts. If this Agreement is electronically executed, it shall be deemed an electronic record, as the term is defined in the Electronic Signatures in Global and National Commerce Act and applicable state law (collectively, the Applicable Law). Clicking or otherwise activating any button associated with this Agreement demonstrates Associates intent to sign the Agreement and/or and represents Associates electronic signature, as the term is defined in the Applicable Law. Additionally, by Associates review of this Agreement and/or clicking on any button, Associate and the Company agree to use and accept electronic records and electronic signatures. |
The Company and Associate acknowledge and agree that bonuses are not automatic, but are awarded for individual performance, not just excellent market conditions. The Company shall make the final and binding determination of any amount payable under this Agreement; whether and/or when a bonus payment is quantifiable; whether an adjustment to any bonus is appropriate; and all standards, goals, targets, plans, deliveries, and benchmarks and whether they were met. Associates receipt of any bonus under this Agreement does not indicate or suggest that Associate will be eligible for any additional bonus at any time.
Signature: |
|
| ||||
Date: |
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| ||||
Rick Beckwitt | Stuart Miller | |||||
Co-Chief Executive Officer & Co-President | Executive Chairman | |||||
Lennar Corporation | Lennar Corporation |
LENNAR CORPORATION
AMENDED AND RESTATED 2022 TARGET BONUS OPPORTUNITY
CO-CHIEF EXECUTIVE OFFICER & CO-PRESIDENT
NAME |
ASSOCIATE ID# |
TARGET AWARD OPPORTUNITY [1] | ||
Jon Jaffe | 103706 | 0.51% of Lennar Corporation Pretax Income [2] after a 7.3% capital charge [3] | ||
(Total Award Opportunity not to exceed $6,000,000) |
[1] | The 2022 Target Bonus Opportunity Program, under the 2016 Incentive Compensation Plan, as amended and restated (the Plan), is intended to encourage superior performance and achievement of the Companys 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 quantitative and qualitative performance. Factors that may cause an adjustment include, but are not limited to, a comparison of the Companys actual results (sales, closings, starts, etc.) to budget, inventory management, corporate governance, customer satisfaction, and peer/competitor comparisons. |
[2] | 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. Pretax Income is calculated as Net Earnings attributable to Lennar plus/minus income tax expense/benefit. |
[3] | Capital charge is calculated as follows: Tangible Capital = Stockholders Equity Intangible Assets + Homebuilding Debt. |
| BONUS PAYMENTS: To earn a bonus pursuant to this Agreement, Associate must, in addition to all other requirements herein, comply with all legal and ethical standards set forth in the Companys Associate Reference Guide (ARG) and Code of Business Ethics and Conduct. A bonus otherwise earned under this Agreement shall be paid no later than February 28th of the year following the fiscal year for which the bonus is due, or if such day is not a business day, the next business day. Any bonus under this Agreement must be fully earned within the fiscal year stated above, subject to proration described below. A bonus for periods after this fiscal year is paid at the sole discretion of the Company, and in amounts determined at the sole discretion of the Company. Associate must be a full-time active employee with the Company on the date of payment (or on a leave of absence approved pursuant to the ARG) to earn a bonus, and no bonus will be paid or earned after Associates employment with the Company ends, regardless of whether the termination is voluntary or involuntary. |
| PRORATION: Unless otherwise provided by law, bonuses tied to accomplishing objectives over a specific period of time will be prorated based on the number of calendar days Associate was a full-time active employee with the Company during that period. This proration applies to all types of leave, including medical and non-medical. |
| NO PRIOR AGREEMENTS: Associate represents that Associate has no agreements, relationships, or commitments to any other person or entity that conflict with or would prevent Associate from performing any of Associates obligations to the Company. Associate has not disclosed and will not disclose to the Company and/or any affiliates and/or subsidiaries (Affiliate Companies), and will not use or induce the Company and/or any Affiliate Companies to use, any confidential or proprietary information or trade secrets belonging to others. Associate represents and warrants that Associate has not given or disclosed to the Company any property or confidential or trade secret information belonging to others. Associate agrees to indemnify, defend and hold harmless the Company and Affiliate Companies, and their officers, members, directors and employees, from any and all claims, damages, costs, expenses or liability, including reasonable attorneys fees, incurred in connection with or resulting from any breach or default of the representations and warranties contained in this provision. |
| AT-WILL EMPLOYMENT: Associates employment is at-will. Associate may resign from Associates employment at any time with or without cause or notice and the Company may terminate Associates employment at any time with or without cause or notice. |
| CONFIDENTIALITY AND NON-DISPARAGEMENT: By virtue of Associates employment with the Company, Associate will have access to and become familiar with various confidential and/or proprietary information, as described in Section 5.2 of the ARG, and Associate specifically agrees to comply with Section 5.2 of the ARG. Also, in accordance with Section 5.34 of the ARG, Associate agrees that Associate will not make any inaccurate, disparaging, or defamatory statements concerning the Company or the Companys products, services, officers or employees, during or following Associates employment with the Company, subject to Associates right to communicate with governmental bodies or agencies and/or to engage in activity protected by the National Labor Relations Act or any other applicable federal, state or local law. |
| NO SOLICITATION: Associate agrees that during Associates employment with the Company and for twelve (12) months following the termination of Associates employment with the Company (Non-Solicitation Period), Associate will not directly or indirectly, on Associates own behalf or through others, employ, suggest employment, or offer employment to any Applicable Associate of the Company and/or its Affiliate Companies, nor will Associate solicit, recruit, influence, or encourage any Applicable Associate to terminate his or her employment with the Company or Affiliate Companies. For purposes of this Agreement, Applicable Associate shall mean any person who is or was employed by the Company or Affiliate Companies at the time of Associates termination or at any time during the three months preceding the Associates termination of employment with the Company; or who is or was employed by the Company or Affiliate Companies at any time during the Non-Solicitation Period. Associate must disclose these obligations regarding solicitation to any employer with whom Associate becomes employed during the Non-Solicitation Period prior to commencing such employment. |
| CLAWBACK: Any award granted under this Agreement shall be and remain subject to the incentive compensation clawback or recoupment policy currently in effect under the Plan or any such policy that may in the future be adopted with regard to the Plan. Associate acknowledges and agrees that in addition to all other requirements in this Agreement to earn a bonus, Associates eligibility to earn a bonus is directly related to, and dependent on, compliance with the sections in this Agreement relating to confidential information, disparaging statements, and non-solicitation (all collectively, Restrictions). In the event the Company reasonably believes that Associate has violated any of the Restrictions at any time the applicable Restriction applied to Associate, the Company shall be entitled to seek all injunctive relief and recover all damages available to it under any legal theory; and Associate will forfeit, and if previously paid, repay any bonus previously paid by the Company to Associate. In accordance with applicable law, Associate authorizes the Company to directly deduct any sums claimed by the Company under this clawback provision from any wages owed to Associate by the Company. |
| ARBITRATION AND EQUITABLE RELIEF: Associate affirms that the Companys Dispute Resolution Mediation & Arbitration Policy (ADR Policy) set forth in Section 1.8 of the ARG will apply to and govern all disputes related to Associates employment (including, but not limited to, this Agreement), in accordance with the ADR Policy. |
| ENTIRE AGREEMENT; AMENDMENT; SURVIVING PROVISIONS; ASSIGNMENT: This Agreement amends and restates in its entirety the Lennar Corporation 2022 Target Bonus Opportunity Agreement for Jon Jaffe. This Agreement constitutes the entire agreement between the parties with respect to Associates bonus and other matters stated herein, and supersedes and replaces all other agreements and negotiations, whether written or oral, pertaining to Associates bonus or any other matter stated herein. This Agreement may not be amended unless done so in writing and signed by Associate and an authorized representative of the Company. The following provisions of this Agreement survive the termination of this Agreement and/or the termination of Associates employment with the Company, irrespective of the grounds or reasons for such termination: No Prior Agreements; Confidentiality and Non-Disparagement; Non-Solicitation; Clawback; Arbitration and Equitable Relief; Severability; ARG; and this provision. This Agreement and all rights under this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective personal or legal representatives, executors, administrators, heirs, distributees, devisees, legatees, successors and assigns. Associate shall not, without the prior written approval (by a writing which does not include an electronic communication) of the Company, assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity. |
| SEVERABILITY; ARG: The provisions of this Agreement are severable, and if any part of this Agreement is found to be invalid or unenforceable, the remainder of this Agreement will not be affected and shall continue in full force and effect. If the scope of any restriction or covenant contained herein should be or become too broad or extensive to permit enforcement thereof to its full extent, then the Court or Arbitrator (as applicable, per the ADR Policy) is specifically authorized by the parties to enforce any such restriction or covenant to the maximum extent permitted by law, and Associate hereby consents and agrees that the scope of any such restriction or covenant may be modified accordingly in any proceeding brought to enforce such restriction or covenant. Associate will remain obligated to comply with all Company rules, policies, practices, and procedures, including any and all policies contained in the ARG as amended from time to time. In the event of a conflict between this Agreement and the ARG, the ARG shall govern. |
| COUNTERPARTS AND ELECTRONIC SIGNATURE: This Agreement may be executed in multiple counterparts. If this Agreement is electronically executed, it shall be deemed an electronic record, as the term is defined in the Electronic Signatures in Global and National Commerce Act and applicable state law (collectively, the Applicable Law). Clicking or otherwise activating any button associated with this Agreement demonstrates Associates intent to sign the Agreement and/or and represents Associates electronic signature, as the term is defined in the Applicable Law. Additionally, by Associates review of this Agreement and/or clicking on any button, Associate and the Company agree to use and accept electronic records and electronic signatures. |
The Company and Associate acknowledge and agree that bonuses are not automatic, but are awarded for individual performance, not just excellent market conditions. The Company shall make the final and binding determination of any amount payable under this Agreement; whether and/or when a bonus payment is quantifiable; whether an adjustment to any bonus is appropriate; and all standards, goals, targets, plans, deliveries, and benchmarks and whether they were met. Associates receipt of any bonus under this Agreement does not indicate or suggest that Associate will be eligible for any additional bonus at any time.
Signature: |
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Date: |
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Jon Jaffe | Stuart Miller | |||||
Co-Chief Executive Officer & Co-President | Executive Chairman | |||||
Lennar Corporation | Lennar Corporation |
Exhibit 10.2
LENNAR CORPORATION
AMENDED AND RESTATED 2022 RESTRICTED STOCK AGREEMENT
On February 28, 2022, Lennar Corporation (Lennar) granted ________ (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 were issued under the Lennar Corporation 2016 Equity Incentive Plan, as amended and restated (the Plan). In order to update the relative level of performance necessary to achieve target performance in connection with the Performance Shares, this Agreement amends and restates the 2022 Restricted Stock Agreement pursuant to which the Grantee was granted the Shares. 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 ________ 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, 2021 and ending on November 30, 2024. 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 ninety (90) 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* |
Relative Total Shareholder Return* |
Debt/EBITDA Multiple | ||||
0% |
< 25th Percentile | < 25th Percentile | < 25th Percentile | > 1.25 | ||||
50% (threshold) |
25th Percentile | 25th Percentile | 25th Percentile | 1.00 | ||||
100% (target) |
60th Percentile | 60th Percentile | 60th Percentile | 0.75 | ||||
200% (maximum) |
75th Percentile | 75th Percentile | 75th Percentile | ≤ .50 |
* | Relative Gross Profit Percentage, Relative Return on Tangible Capital, and Relative Total Shareholder Return are determined using Lennars Peer Group consisting of Beazer Homes USA, Inc., D.R. Horton, Inc., KB Home, M.D.C. Holdings, Inc., Meritage Homes Corporation, NVR, Inc., PulteGroup, Inc., Taylor Morrison Home Corporation, Toll Brothers, Inc., and TRI Pointe Group, Inc. 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 companys gross profit percentage, return on tangible capital, and total shareholder return would be reduced to -100% (i.e., assumed as worst performer within the Peer Group on the respective metrics). |
Payouts for performance between threshold and target payout levels and between target and maximum payout levels will be calculated by linear interpolation. 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, target achievement for the relative total shareholder return, 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 the number of shares that the Grantee would have earned if the Grantee had remained employed for the entire Performance Period. The actual payout will not occur until after the end of the Performance Period, at which time Lennars 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. 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.
Any cash dividends or other distributions on the Performance Shares are subject to the same performance-based vesting criteria and paid, if at all, to the Grantee upon satisfaction of the performance-based vesting criteria applicable to the underlying Performance Shares with respect to which they were paid or distributed (without regard to any time-based vesting criteria applicable thereto). In calculating the amount of cash dividends or other distributions to be paid, the total Performance Shares earned by the Grantee at the end of the Performance Period will be used, and those Performance Shares will be considered to be outstanding for the whole Performance Period.
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, 2023 |
1/3 | #,### | ||||||
February 14, 2024 |
1/3 | #,### | ||||||
February 14, 2025 |
1/3 | #,### | ||||||
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|
|
|
|||||
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 (or other income-recognition event) of any Shares. The Grantee will pay the withholding tax by the use of Shares becoming vested (or for which there was an income-recognition event) with a value as set forth in the Plan. If the Grantee is required to pay withholding tax with regard to shares that have not vested, a number of shares with a value equal to the amount of the withholding tax will be deemed immediately vested. Unless otherwise determined by the Committee, the Shares may not be assigned or transferred while they remain subject to possible forfeiture.
The Plan contains additional provisions which will affect the Shares. The Shares are subject in all respects to the Plans terms and conditions as they may be amended from time to time in accordance with the Plan, including the Clawback/Recoupment Policy provision in Section 14.2 of 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 |
GRANTEE | ||
November __, 2022 |
||||
By: |
By: |
Exhibit 10.3
LENNAR CORPORATION
2022 RESTRICTED STOCK AGREEMENT PERFORMANCE SHARES
This is to certify that Lennar Corporation (Lennar) has granted ________ (the Grantee) _________ shares of Class A common stock, which are subject to the performance-based vesting criteria set forth below (the Performance Shares). The Performance Shares are being issued under the Lennar Corporation 2016 Equity Incentive Plan, as amended and restated (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 ________ 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, 2021 and ending on November 30, 2024. 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 ninety (90) 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* |
Relative Total Shareholder Return* |
Debt/EBITDA Multiple | ||||
0% |
< 25th Percentile | < 25th Percentile | < 25th Percentile | > 1.25 | ||||
50% (threshold) |
25th Percentile | 25th Percentile | 25th Percentile | 1.00 | ||||
100% (target) |
60th Percentile | 60th Percentile | 60th Percentile | 0.75 | ||||
200% (maximum) |
75th Percentile | 75th Percentile | 75th Percentile | ≤ .50 |
* | Relative Gross Profit Percentage, Relative Return on Tangible Capital, and Relative Total Shareholder Return are determined using Lennars Peer Group consisting of Beazer Homes USA, Inc., D.R. Horton, Inc., KB Home, M.D.C. Holdings, Inc., Meritage Homes Corporation, NVR, Inc., PulteGroup, Inc., Taylor Morrison Home Corporation, Toll Brothers, Inc., and TRI Pointe Group, Inc. 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 companys gross profit percentage, return on tangible capital, and total shareholder return would be reduced to -100% (i.e., assumed as worst performer within the Peer Group on the respective metrics). |
Payouts for performance between threshold and target payout levels and between target and maximum payout levels will be calculated by linear interpolation. 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, target achievement for the relative total shareholder return, 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 the number of shares that the Grantee would have earned if the Grantee had remained employed for the entire Performance Period. The actual payout will not occur until after the end of the Performance Period, at which time Lennars 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. 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.
Any cash dividends or other distributions on the Performance Shares are subject to the same performance-based vesting criteria and paid, if at all, to the Grantee upon satisfaction of the performance-based vesting criteria applicable to the underlying Performance Shares with respect to which they were paid or distributed (without regard to any time-based vesting criteria applicable thereto). In calculating the amount of cash dividends or other distributions to be paid, the total Performance Shares earned by the Grantee at the end of the Performance Period will be used, and those Performance Shares will be considered to be outstanding for the whole Performance Period.
General
Lennar, or a subsidiary of Lennar, is required to collect from the Grantee and to pay withholding tax upon the vesting (or other income-recognition event) of any Performance Shares. The Grantee will pay the withholding tax by the use of Performance Shares becoming vested (or for which there was an income-recognition event) with a value as set forth in the Plan. If the Grantee is required to pay withholding tax with regard to shares that have not vested, a number of shares with a value equal to the amount of the withholding tax will be deemed immediately vested. Unless otherwise determined by the Committee, the Performance Shares may not be assigned or transferred while they remain subject to possible forfeiture.
The Plan contains additional provisions which will affect the Performance Shares. The Performance Shares are subject in all respects to the Plans terms and conditions as they may be amended from time to time in accordance with the Plan, including the Clawback/Recoupment policy in Section 14.2 of 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 | |||||
November __, 2022 | ||||||
By: | _________________ |