|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
26-1336998
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
x
|
|
Accelerated filer
¨
|
|
Non-accelerated filer
¨
(Do not check if a
smaller reporting company)
|
|
Smaller reporting company
¨
|
|
Emerging growth company
¨
|
Title of Each Class
|
|
Number of Shares Outstanding as of May 4, 2018
|
Common Stock, par value $1.00 per share
|
|
41,938,936
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands, except per share amounts)
|
||||||
REVENUES
|
|
|
|
||||
Real estate sales
|
$
|
22,575
|
|
|
$
|
20,752
|
|
Other
|
24
|
|
|
1,553
|
|
||
|
22,599
|
|
|
22,305
|
|
||
COSTS AND EXPENSES
|
|
|
|
||||
Cost of real estate sales
|
(15,575
|
)
|
|
(11,896
|
)
|
||
Cost of other
|
(536
|
)
|
|
(38,616
|
)
|
||
Other operating expenses
|
(1,888
|
)
|
|
(5,082
|
)
|
||
General and administrative
|
(3,745
|
)
|
|
(4,691
|
)
|
||
|
(21,744
|
)
|
|
(60,285
|
)
|
||
GAIN ON SALE OF ASSETS
|
2,746
|
|
|
74,215
|
|
||
OPERATING INCOME
|
3,601
|
|
|
36,235
|
|
||
Equity in earnings of unconsolidated ventures
|
1,529
|
|
|
6,362
|
|
||
Interest expense
|
(2,136
|
)
|
|
(2,235
|
)
|
||
Interest and other income
|
1,652
|
|
|
676
|
|
||
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES
|
4,646
|
|
|
41,038
|
|
||
Income tax expense
|
(66
|
)
|
|
(16,211
|
)
|
||
NET INCOME FROM CONTINUING OPERATIONS
|
4,580
|
|
|
24,827
|
|
||
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAXES
|
—
|
|
|
418
|
|
||
CONSOLIDATED NET INCOME
|
4,580
|
|
|
25,245
|
|
||
Less: Net income attributable to noncontrolling interests
|
(46
|
)
|
|
(40
|
)
|
||
NET INCOME ATTRIBUTABLE TO FORESTAR GROUP INC.
|
$
|
4,534
|
|
|
$
|
25,205
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
|
|
|
||||
Basic
|
41,939
|
|
|
42,097
|
|
||
Diluted
|
41,966
|
|
|
42,406
|
|
||
NET INCOME PER BASIC SHARE
|
|
|
|
||||
Continuing operations
|
$
|
0.11
|
|
|
$
|
0.59
|
|
Discontinued operations
|
$
|
—
|
|
|
$
|
0.01
|
|
NET INCOME PER BASIC SHARE
|
$
|
0.11
|
|
|
$
|
0.60
|
|
NET INCOME PER DILUTED SHARE
|
|
|
|
||||
Continuing operations
|
$
|
0.11
|
|
|
$
|
0.58
|
|
Discontinued operations
|
$
|
—
|
|
|
$
|
0.01
|
|
NET INCOME PER DILUTED SHARE
|
$
|
0.11
|
|
|
$
|
0.59
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Consolidated net income
|
$
|
4,580
|
|
|
$
|
25,245
|
|
Adjustments:
|
|
|
|
||||
Depreciation and amortization
|
1,296
|
|
|
1,485
|
|
||
Change in deferred income taxes
|
661
|
|
|
29
|
|
||
Equity in earnings of unconsolidated ventures
|
(1,529
|
)
|
|
(6,362
|
)
|
||
Distributions of earnings of unconsolidated ventures
|
—
|
|
|
4,974
|
|
||
Share-based compensation
|
94
|
|
|
843
|
|
||
Real estate cost of sales
|
15,309
|
|
|
12,240
|
|
||
Real estate development and acquisition expenditures, net
|
(149,052
|
)
|
|
(13,740
|
)
|
||
Reimbursements from utility and improvement districts
|
—
|
|
|
1,180
|
|
||
Asset impairments
|
—
|
|
|
37,900
|
|
||
Gain on sale of assets
|
(2,746
|
)
|
|
(74,215
|
)
|
||
Other
|
1,588
|
|
|
945
|
|
||
Changes in:
|
|
|
|
||||
Notes and accounts receivable
|
1,197
|
|
|
(1,925
|
)
|
||
Prepaid expenses and other
|
(3,614
|
)
|
|
(647
|
)
|
||
Accounts payable and other accrued liabilities
|
(365
|
)
|
|
(8,556
|
)
|
||
Earnest money deposits
|
19,152
|
|
|
2,792
|
|
||
Income taxes
|
(570
|
)
|
|
15,433
|
|
||
Net cash used in operating activities
|
(113,999
|
)
|
|
(2,379
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Property, equipment, software and other
|
(36
|
)
|
|
(17
|
)
|
||
Oil and gas properties and equipment
|
—
|
|
|
(2,400
|
)
|
||
Investment in unconsolidated ventures
|
—
|
|
|
(1,915
|
)
|
||
Proceeds from sales of assets
|
228,555
|
|
|
77,510
|
|
||
Return of investment in unconsolidated ventures
|
187
|
|
|
1,511
|
|
||
Net cash provided by investing activities
|
228,706
|
|
|
74,689
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Additions to debt
|
207
|
|
|
304
|
|
||
Change in restricted cash
|
4
|
|
|
—
|
|
||
Distributions to noncontrolling interests, net
|
(300
|
)
|
|
—
|
|
||
Payroll taxes on restricted stock and stock options
|
—
|
|
|
(980
|
)
|
||
Net cash used in financing activities
|
(89
|
)
|
|
(676
|
)
|
||
|
|
|
|
||||
Net increase in cash and cash equivalents
|
114,618
|
|
|
71,634
|
|
||
Cash and cash equivalents at beginning of period
|
321,783
|
|
|
265,798
|
|
||
Cash and cash equivalents at end of period
|
$
|
436,401
|
|
|
$
|
337,432
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
|
(In thousands)
|
||||||
Real estate
|
$
|
291,307
|
|
|
$
|
386,222
|
|
Other
|
3,331
|
|
|
3,346
|
|
||
Assets not allocated to segments
(a)
|
486,460
|
|
|
372,344
|
|
||
|
$
|
781,098
|
|
|
$
|
761,912
|
|
(a)
|
Assets not allocated to segments at
March 31, 2018
principally consist of cash and cash equivalents of
$436,401,000
and restricted cash of
$40,013,000
. Assets not allocated to segments at
December 31, 2017
principally consist of cash and cash equivalents of
$321,783,000
and restricted cash of
$40,017,000
.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In thousands)
|
||||||
Revenues:
|
|
|
|
|
||||
Real estate
|
|
$
|
22,575
|
|
|
$
|
20,752
|
|
Other
|
|
24
|
|
|
1,553
|
|
||
Total revenues
|
|
$
|
22,599
|
|
|
$
|
22,305
|
|
Segment earnings (loss):
|
|
|
|
|
||||
Real estate
|
|
$
|
9,703
|
|
|
$
|
10,473
|
|
Other
|
|
(553
|
)
|
|
37,429
|
|
||
Total segment earnings
|
|
9,150
|
|
|
47,902
|
|
||
Items not allocated to segments
|
|
(4,550
|
)
|
|
(6,904
|
)
|
||
Income from continuing operations before taxes attributable to Forestar Group Inc.
|
|
$
|
4,600
|
|
|
$
|
40,998
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In thousands)
|
||||||
General and administrative expense
|
|
$
|
(3,653
|
)
|
|
$
|
(4,028
|
)
|
Share-based and long-term incentive compensation expense
|
|
(136
|
)
|
|
(895
|
)
|
||
Interest expense
|
|
(2,136
|
)
|
|
(2,235
|
)
|
||
Other corporate interest and other income
|
|
1,375
|
|
|
254
|
|
||
|
|
$
|
(4,550
|
)
|
|
$
|
(6,904
|
)
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
|
(In thousands)
|
||||||
Assets Held for Sale:
|
|
|
|
||||
Real estate
|
$
|
—
|
|
|
$
|
180,247
|
|
Property and equipment, net
|
1,360
|
|
|
1,360
|
|
||
|
$
|
1,360
|
|
|
$
|
181,607
|
|
|
|
|
|
||||
Liabilities Held for Sale:
|
|
|
|
||||
Accounts payable
|
$
|
—
|
|
|
$
|
1,017
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
|
(In thousands)
|
||||||
Entitled, developed and under development projects
|
$
|
258,873
|
|
|
$
|
127,442
|
|
Other real estate costs
|
2,834
|
|
|
2,938
|
|
||
|
$
|
261,707
|
|
|
$
|
130,380
|
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
|
|
(In thousands)
|
||||||
Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
6,359
|
|
|
$
|
13,119
|
|
Real estate
|
|
88,805
|
|
|
168,914
|
|
||
Other assets
|
|
1,353
|
|
|
21,721
|
|
||
Total assets
|
|
$
|
96,517
|
|
|
$
|
203,754
|
|
Liabilities and Equity:
|
|
|
|
|
||||
Accounts payable and other liabilities
|
|
$
|
5,208
|
|
|
$
|
13,101
|
|
Debt
(a)
|
|
45,761
|
|
|
85,133
|
|
||
Equity
|
|
45,548
|
|
|
105,520
|
|
||
Total liabilities and equity
|
|
$
|
96,517
|
|
|
$
|
203,754
|
|
|
|
|
|
|
||||
Forestar's investment in unconsolidated ventures
|
|
$
|
17,284
|
|
|
$
|
64,579
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In thousands)
|
||||||
Revenues
|
|
$
|
3,381
|
|
|
$
|
22,301
|
|
Earnings
|
|
$
|
4,280
|
|
|
$
|
12,221
|
|
Forestar's equity in earnings of unconsolidated ventures
|
|
$
|
1,529
|
|
|
$
|
6,362
|
|
(a)
|
As of March 31, 2018 and December 31, 2017, total debt outstanding includes
$4,576,000
and
$4,584,000
which is recourse to us.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Revenues
|
$
|
—
|
|
|
$
|
9
|
|
Cost of oil and gas producing activities
|
—
|
|
|
(6
|
)
|
||
Other operating expenses
|
—
|
|
|
(54
|
)
|
||
Loss from discontinued operations before income taxes
|
$
|
—
|
|
|
$
|
(51
|
)
|
Income tax benefit
|
—
|
|
|
469
|
|
||
Income from discontinued operations, net of taxes
|
$
|
—
|
|
|
$
|
418
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Operating activities:
|
|
|
|
||||
Accounts payable and other accrued liabilities
|
$
|
—
|
|
|
$
|
(3,000
|
)
|
|
$
|
—
|
|
|
$
|
(3,000
|
)
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
|
(In thousands)
|
||||||
Other receivables and accrued interest
|
$
|
1,416
|
|
|
$
|
2,557
|
|
Loans secured by real estate, average interest rate of 5.40%
at March 31, 2018 and at December 31, 2017
|
3,170
|
|
|
3,776
|
|
||
|
4,586
|
|
|
6,333
|
|
||
Allowance for bad debts
|
(26
|
)
|
|
(26
|
)
|
||
|
$
|
4,560
|
|
|
$
|
6,307
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
|
(In thousands)
|
||||||
3.75% convertible senior notes due 2020, net of discount
|
$
|
109,327
|
|
|
$
|
108,139
|
|
Other indebtedness — 5.50% interest rate
|
498
|
|
|
290
|
|
||
|
$
|
109,825
|
|
|
$
|
108,429
|
|
•
|
Level 1 — Quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
March 31, 2018
|
|
December 31, 2017
|
|
|
||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Valuation
Technique
|
||||
|
(In thousands)
|
|
|
||||||||||
Fixed rate debt
|
(110,266
|
)
|
|
(112,514
|
)
|
|
(109,197
|
)
|
|
(109,114
|
)
|
|
Level 2
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Numerator:
|
|
|
|
||||
Continuing operations
|
|
|
|
||||
Net income from continuing operations
|
$
|
4,580
|
|
|
$
|
24,827
|
|
Less: Net income attributable to noncontrolling interest
|
(46
|
)
|
|
(40
|
)
|
||
Earnings available for diluted earnings per share
|
$
|
4,534
|
|
|
$
|
24,787
|
|
|
|
|
|
||||
Discontinued operations
|
|
|
|
||||
Net income from discontinued operations available for diluted earnings per share
|
$
|
—
|
|
|
$
|
418
|
|
Denominator:
|
|
|
|
||||
Weighted average common shares outstanding — basic
|
41,939
|
|
|
42,097
|
|
||
Dilutive effect of stock options, restricted stock and equity-settled awards
|
27
|
|
|
309
|
|
||
Total weighted average shares outstanding — diluted
|
41,966
|
|
|
42,406
|
|
||
Anti-dilutive awards excluded from diluted weighted average shares
|
—
|
|
|
1,808
|
|
•
|
general economic, market or business conditions where our real estate activities are concentrated;
|
•
|
our ability to achieve our 2018 strategic initiatives;
|
•
|
the opportunities (or lack thereof) that may be presented to us and that we may pursue;
|
•
|
our ability to hire and retain key personnel;
|
•
|
our ability to obtain future entitlement and development approvals;
|
•
|
obtaining reimbursements and other payments from special improvement districts and timing of such payments;
|
•
|
accuracy of estimates and other assumptions related to investment in and development of real estate, the expected timing and pricing of land and lot sales and related cost of real estate sales, impairment of long-lived assets, income taxes, and share-based compensation;
|
•
|
the levels of resale housing inventory in our mixed-use development projects and the regions in which they are located;
|
•
|
fluctuations in costs and expenses, including impacts from shortages in materials or labor;
|
•
|
demand for new housing, which can be affected by a number of factors including the availability of mortgage credit, job growth and fluctuations in interest rates;
|
•
|
competitive actions by other companies;
|
•
|
changes in governmental policies, laws or regulations and actions or restrictions of regulatory agencies;
|
•
|
our partners’ ability to fund their capital commitments and otherwise fulfill their operating and financial obligations;
|
•
|
the effect of D.R. Horton's controlling level of ownership on us and our stockholders;
|
•
|
our ability to realize the potential benefits of the strategic relationship with D.R. Horton;
|
•
|
the effect of our strategic relationship with D.R. Horton on our ability to maintain relationships with our vendors and customers; and
|
•
|
the final resolutions or outcomes with respect to our contingent and other liabilities related to our business.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Revenues:
|
|
|
|
||||
Real estate
|
$
|
22,575
|
|
|
$
|
20,752
|
|
Other
|
24
|
|
|
1,553
|
|
||
Total revenues
|
$
|
22,599
|
|
|
$
|
22,305
|
|
Segment earnings (loss):
|
|
|
|
||||
Real estate
|
$
|
9,703
|
|
|
$
|
10,473
|
|
Other
|
(553
|
)
|
|
37,429
|
|
||
Total segment earnings
|
9,150
|
|
|
47,902
|
|
||
Items not allocated to segments:
|
|
|
|
||||
General and administrative expense
|
(3,653
|
)
|
|
(4,028
|
)
|
||
Share-based and long-term incentive compensation expense
|
(136
|
)
|
|
(895
|
)
|
||
Interest expense
|
(2,136
|
)
|
|
(2,235
|
)
|
||
Interest and other income
|
1,375
|
|
|
254
|
|
||
Income from continuing operations before taxes attributable to Forestar Group Inc.
|
4,600
|
|
|
40,998
|
|
||
Income tax expense
|
(66
|
)
|
|
(16,211
|
)
|
||
Net income from continuing operations attributable to Forestar Group Inc.
|
$
|
4,534
|
|
|
$
|
24,787
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Revenues
|
$
|
22,575
|
|
|
$
|
20,752
|
|
Cost of real estate sales
|
(15,575
|
)
|
|
(11,896
|
)
|
||
Operating expenses
|
(1,803
|
)
|
|
(3,879
|
)
|
||
|
5,197
|
|
|
4,977
|
|
||
Interest income
|
277
|
|
|
422
|
|
||
Gain on sale of assets
|
2,746
|
|
|
—
|
|
||
Equity in earnings of unconsolidated ventures
|
1,529
|
|
|
5,114
|
|
||
Less: Net income attributable to noncontrolling interests
|
(46
|
)
|
|
(40
|
)
|
||
Segment earnings
|
$
|
9,703
|
|
|
$
|
10,473
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Residential real estate
|
$
|
20,348
|
|
|
$
|
20,048
|
|
Commercial real estate
|
2,000
|
|
|
447
|
|
||
Other
|
227
|
|
|
257
|
|
||
|
$
|
22,575
|
|
|
$
|
20,752
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Owned and consolidated ventures:
|
|
|
|
||||
Residential lots sold
|
304
|
|
|
190
|
|
||
Revenue per lot sold
|
$
|
66,735
|
|
|
$
|
88,850
|
|
Commercial acres sold
|
25
|
|
|
4
|
|
||
Revenue per commercial acre sold
|
$
|
80,678
|
|
|
$
|
121,718
|
|
Ventures accounted for using the equity method:
|
|
|
|
||||
Residential lots sold
|
21
|
|
|
107
|
|
||
Revenue per lot sold
|
$
|
70,205
|
|
|
$
|
72,001
|
|
Commercial acres sold
|
—
|
|
|
46
|
|
||
Revenue per commercial acre sold
|
$
|
—
|
|
|
$
|
212,352
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Employee compensation and benefits
|
$
|
718
|
|
|
$
|
1,328
|
|
Property taxes
|
384
|
|
|
891
|
|
||
Professional services
|
223
|
|
|
830
|
|
||
Depreciation and amortization
|
27
|
|
|
35
|
|
||
Other
|
451
|
|
|
795
|
|
||
|
$
|
1,803
|
|
|
$
|
3,879
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Revenues
|
$
|
24
|
|
|
$
|
1,553
|
|
Cost of other
|
(536
|
)
|
|
(38,616
|
)
|
||
Operating expenses
|
(41
|
)
|
|
(971
|
)
|
||
|
(553
|
)
|
|
(38,034
|
)
|
||
Gain on sale of assets
|
—
|
|
|
74,215
|
|
||
Equity in earnings of unconsolidated ventures
|
—
|
|
|
1,248
|
|
||
Segment earnings (loss)
|
$
|
(553
|
)
|
|
$
|
37,429
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Employee compensation and benefits
|
$
|
1,746
|
|
|
$
|
2,033
|
|
Professional and consulting services
|
982
|
|
|
978
|
|
||
Facility costs
|
201
|
|
|
212
|
|
||
Depreciation and amortization
|
24
|
|
|
87
|
|
||
Insurance costs
|
132
|
|
|
162
|
|
||
Other
|
568
|
|
|
556
|
|
||
|
$
|
3,653
|
|
|
$
|
4,028
|
|
Exhibit
|
|
Description
|
|
|
|
3.1
|
|
|
10.1
|
|
|
10.2†*
|
|
|
10.3†*
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
101.1
|
|
The following materials from Forestar’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Cash Flows, and (iv) Notes to Consolidated Financial Statements.
|
*
|
Filed herewith.
|
†
|
Management contract or compensatory plan or arrangement.
|
|
FORESTAR GROUP INC.
|
|
|
|
|
Date: May 9, 2018
|
By:
|
/s/ Charles D. Jehl
|
|
|
Charles D. Jehl
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Principal Accounting Officer)
|
Vesting Dates:
|
Subject to the terms of this Agreement, [fraction or number of RSUs vesting] of the RSUs will vest on each anniversary of the Grant Date (each such date,
|
|
(a)
|
The 2018 SIP is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;
|
|
(b)
|
The grant of the Award is voluntary and occasional and does not create any contractual or other right to receive future grants of awards, or benefits in lieu of awards, even if awards have been granted repeatedly in the past. All decisions with respect to future award grants, if any, will be at the sole discretion of the Company;
|
|
(c)
|
The Award and the Participant’s participation in the 2018 SIP will not be interpreted to form an employment contract or service contract or relationship with the Company or any Subsidiary;
|
|
(d)
|
The Participant is voluntarily participating in the 2018 SIP; and
|
|
(e)
|
The future value of the underlying Shares is unknown and cannot be predicted with certainty.
|
|
(a)
|
Responsibility for Taxes
. Regardless of any action taken by the Company with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Participant’s participation in the 2018 SIP and legally applicable to the Participant
(the “
Tax-Related Items
”)
,
the Participant acknowledges that the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and may exceed the amount actually withheld by the Company. The Participant further acknowledges that the Company (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including but not limited to, the grant, vesting or settlement of the Award, the subsequent sale of Shares acquired pursuant to such settlement, or the receipt of any dividends, and (b) does not commit to and are under no obligation to structure the terms of the grant or any aspect of the Award to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant has become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable or tax withholding event, as applicable, the Participant acknowledges that the Company may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
|
|
(b)
|
Withholding in Shares
. Subject to applicable law and the Company’s discretion, the Company may require the Participant to satisfy Tax-Related Items by deducting from the Shares otherwise deliverable to the Participant in settlement of the Award a number of whole Shares having a fair market value, as defined in the 2018 SIP, as of the date on which the Tax-Related Items arise, not in excess of the amount of such Tax-Related Items.
|
|
(c)
|
Permissible Withholding Methods
. The Company may satisfy its obligations for Tax-Related Items by:
|
|
|
(i)
|
withholding from the Participant’s cash compensation or fees paid to the Participant by the Company; or
|
|
|
(ii)
|
withholding from proceeds of the sale of Shares acquired upon vesting or settlement of the Award either through a voluntary sale or through a mandatory sale arranged by the Company (on the Participant’s behalf pursuant to this authorization); or
|
|
|
|
(iii)
|
allowing Participant to pay cash in the amount of the Tax-Related Items.; or
|
|
|
(iv)
|
any other method permitted by the Administrator.
|
|
(a)
|
Description of Electronic Delivery. The 2018 SIP documents, which may include but do not necessarily include: the 2018 SIP, this Agreement, the 2018 SIP Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the 2018 SIP, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.
|
|
(b)
|
Consent to Electronic Delivery. The Participant acknowledges that the Participant has read the “Delivery of Documents and Notices” section of this Agreement and consents to the electronic delivery of the 2018 SIP documents and Agreement, as described in this section. The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in this section or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents as described in this section.
|
|
/s/ Daniel C. Bartok
|
|
Daniel C. Bartok
Chief Executive Officer
|
|
/s/ Charles D. Jehl
|
|
Charles D. Jehl
Chief Financial Officer
|
|
/s/ Daniel C. Bartok
|
|
Daniel C. Bartok
|
|
/s/ Charles D. Jehl
|
|
Charles D. Jehl
|