Lennar Corp 8-K, filed Mar 6, 2023
Lennar Corp (LEN)
About this 8-K
Lennar Corp filed this 8-K on March 6, 2023, reporting on events of February 28, 2023.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(e) In a continued effort to be responsive to the feedback we received from extensive outreach to our shareholders in 2022, management consulted with an independent compensation advisor to obtain additional input on how we could continue to improve on the progress we made in 2022 in aligning our executive compensation programs with shareholder interests.
Based on this continued engagement, feedback, and extensive internal management discussions, on February 28, 2023, the Compensation Committee (the “Committee”) of the Board of Directors of Lennar Corporation (the “Company”) approved additional changes noted below to the fiscal 2023 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.
A summary of the fiscal year 2023 Executive Compensation Program is shown below:
| Shareholder Feedback (“What We Heard From Our Shareholders”) |
Action (“What We Did”) |
Impact of Action (“Why This is Important”) | ||||||||
| Short-term Incentives |
Cap on short-term cash incentive payout | Established dollar cap on cash bonuses - $7M, $6M, and $6M for Stuart Miller, Rick Beckwitt, and Jon Jaffe, respectively (same as FY 2022).
|
✓ Limits total short-term award size | |||||||
| Lower pretax income (PTI) percentage | New for FY 2023: Reduced PTI payout percentage: |
✓ Decreases earned short-term incentives | ||||||||
| From | To | ✓ Strengthens the link between short-term incentive payouts and Company pretax income performance
| ||||||||
| Executive Chairman | 0.58% | 0.20% | ||||||||
| Co-CEOs | 0.51% | 0.15% | ||||||||
| Balance of Short- and Long-term Incentives
|
Equity incentives over cash | The incentive pay mix will be targeted at approximately 20% cash / 80% equity. (same as FY 2022). |
✓ Provides greater alignment with shareholders | |||||||
| Balance of Performance and Time-based Equity |
Long-term performance-based equity incentives over time-based equity incentives | New for FY 2023: Increased the performance-based equity component of total long-term incentives from 35% / 65% (time-based shares / performance shares) to a target of approximately 30% / 70% (time-based shares / performance shares).
|
✓ Provides even greater alignment with performance outcomes and long-term shareholder value creation | |||||||
| Above-median Performance Targets |
Above-median targets for relative metrics | New for FY 2023: Performance shares target will be increased from the 60th percentile to the 65th percentile relative to our peer group. | ✓ Requires even greater outperformance of our peers to earn target payouts | |||||||
| ✓ Strengthens the Pay for Performance link between Executive Compensation and Company performance relative to our peer group
| ||||||||||
| Strengthen Pay for Performance Link |
Lower threshold payout as a % of target |
New for FY 2023: Decreased payout level at threshold performance achievement from 50% of target to 30% of target for all performance goals. | ✓ Reduces compensation for underperformance
✓ Strengthens the Pay for Performance link between Executive Compensation and Company performance
| |||||||
On February 28, 2023, the Committee approved 2023 award agreements under the Company’s 2016 Incentive Compensation Plan, as amended and restated, relating to incentive compensation for Mr. Miller, Mr. Beckwitt, Mr. Jaffe, Diane Bessette, the Company’s Vice President, Chief Financial Officer and Treasurer, Jeff McCall, the Company’s Executive Vice President, and Mark Sustana, the Company’s Vice President, General Counsel and Secretary. 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 28, 2023, the Committee approved 2023 award agreements under the Company’s 2016 Equity Incentive Plan under which Mr. Miller, Mr. Beckwitt, Mr. Jaffe, Ms. Bessette and Mr. McCall were granted target awards of 191,755; 167,875; 167,875; 16,800 and 9,050 shares of Class A common stock, respectively, that are subject to performance-based vesting conditions, and 82,180; 71,950; 71,950; 16,800 and 9,050 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. In addition, Mr. Sustana was granted 16,025 shares of Class A common stock, one-third of which vest on each of February 14, 2024, February 14, 2025, and February 14, 2026. Mr. Sustana’s award agreement is in the form generally used under the 2016 Equity Incentive Plan.
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 2023. 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, 2022. 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 No. |
Description of Document | |
| 10.1 | 2023 Award Agreements under the Company’s 2016 Incentive Compensation Plan, as amended, for Mr. Miller, Mr. Beckwitt, Mr. Jaffe, Ms. Bessette, Mr. McCall and Mr. Sustana. | |
| 10.2 | Form of 2023 Award Agreement under the Company’s 2016 Equity Incentive Plan for Mr. Miller, Mr. Beckwitt, Mr. Jaffe, Ms. Bessette and Mr. McCall. | |
| 104 | Cover page Interactive data file (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: March 6, 2023 | Lennar Corporation | |||||
| By: | /s/ Diane Bessette | |||||
| Name: | Diane Bessette | |||||
| Title: | Vice President, Chief Financial Officer and Treasurer | |||||
Exhibit 10.1
LENNAR CORPORATION
2023 TARGET BONUS OPPORTUNITY
EXECUTIVE CHAIRMAN
| NAME |
ASSOCIATE ID# | TARGET AWARD OPPORTUNITY [1] | ||
| Stuart Miller | 100003 | 0.20% of Lennar Corporation Pretax Income [2] after a 7.3% capital charge [3] (Total Award Opportunity not to exceed $7,000,000) |
[1] The 2023 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 quantitative and qualitative performance. 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] 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 Company’s 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 Associate’s 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 Associate’s 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: Associate’s employment is at-will. Associate may resign from Associate’s employment at any time with or without cause or notice and the Company may terminate Associate’s employment at any time with or without cause or notice. |
| • | CONFIDENTIALITY AND NON-DISPARAGEMENT: By virtue of Associate’s 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 Company’s products, services, officers or employees, during or following Associate’s employment with the Company, subject to Associate’s 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 Associate’s employment with the Company and for twelve (12) months following the termination of Associate’s employment with the Company (“Non-Solicitation Period”), Associate will not directly or indirectly, on Associate’s 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 Associate’s termination or at any time during the three months preceding the Associate’s 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, Associate’s 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 Company’s 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 Associate’s employment (including, but not limited to, this Agreement), in accordance with the ADR Policy. |
| • | ENTIRE AGREEMENT; AMENDMENT; SURVIVING PROVISIONS; ASSIGNMENT: This Agreement constitutes the entire agreement between the parties with respect to Associate’s bonus and other matters stated herein, and supersedes and replaces all other agreements and negotiations, whether written or oral, pertaining to Associate’s 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 Associate’s 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 Associate’s intent to sign the Agreement and/or and represents Associate’s electronic signature, as the term is defined in the Applicable Law. Additionally, by Associate’s 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. Associate’s 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 Executive Chairman Lennar Corporation |
Teri P. McClure Chair, Compensation Committee Lennar Corporation | |||||||
LENNAR CORPORATION
2023 TARGET BONUS OPPORTUNITY
CO-CHIEF EXECUTIVE OFFICER & CO-PRESIDENT
| NAME |
ASSOCIATE ID# | TARGET AWARD OPPORTUNITY [1] | ||
| Rick Beckwitt | 168230 | 0.15% of Lennar Corporation Pretax Income [2] after a 7.3% capital charge [3] (Total Award Opportunity not to exceed $6,000,000) |
[1] The 2023 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 quantitative and qualitative performance. 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] 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 Company’s 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 Associate’s 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 Associate’s 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: Associate’s employment is at-will. Associate may resign from Associate’s employment at any time with or without cause or notice and the Company may terminate Associate’s employment at any time with or without cause or notice. |
| • | CONFIDENTIALITY AND NON-DISPARAGEMENT: By virtue of Associate’s 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 Company’s products, services, officers or employees, during or following Associate’s employment with the Company, subject to Associate’s 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 Associate’s employment with the Company and for twelve (12) months following the termination of Associate’s employment with the Company (“Non-Solicitation Period”), Associate will not directly or indirectly, on Associate’s 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 Associate’s termination or at any time during the three months preceding the Associate’s 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, Associate’s 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 Company’s 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 Associate’s employment (including, but not limited to, this Agreement), in accordance with the ADR Policy. |
| • | ENTIRE AGREEMENT; AMENDMENT; SURVIVING PROVISIONS; ASSIGNMENT: This Agreement constitutes the entire agreement between the parties with respect to Associate’s bonus and other matters stated herein, and supersedes and replaces all other agreements and negotiations, whether written or oral, pertaining to Associate’s 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 Associate’s 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 Associate’s intent to sign the Agreement and/or and represents Associate’s electronic signature, as the term is defined in the Applicable Law. Additionally, by Associate’s 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. Associate’s 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: | ||||||||
| Rick Beckwitt Co-Chief Executive Officer & Co-President Lennar Corporation |
Stuart Miller Executive Chairman Lennar Corporation | |||||||
LENNAR CORPORATION
2023 TARGET BONUS OPPORTUNITY
CO-CHIEF EXECUTIVE OFFICER & CO-PRESIDENT
| NAME |
ASSOCIATE ID# | TARGET AWARD OPPORTUNITY [1] | ||
| Jon Jaffe | 103706 |
0.15% of Lennar Corporation Pretax Income [2] after a 7.3% capital charge [3] (Total Award Opportunity not to exceed $6,000,000) |
[1] The 2023 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 quantitative and qualitative performance. 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] 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 Company’s 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 Associate’s 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 Associate’s 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: Associate’s employment is at-will. Associate may resign from Associate’s employment at any time with or without cause or notice and the Company may terminate Associate’s employment at any time with or without cause or notice. |
| • | CONFIDENTIALITY AND NON-DISPARAGEMENT: By virtue of Associate’s 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 Company’s products, services, officers or employees, during or following Associate’s employment with the Company, subject to Associate’s 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 Associate’s employment with the Company and for twelve (12) months following the termination of Associate’s employment with the Company (“Non-Solicitation Period”), Associate will not directly or indirectly, on Associate’s 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 Associate’s termination or at any time during the three months preceding the Associate’s 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, Associate’s 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 Company’s 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 Associate’s employment (including, but not limited to, this Agreement), in accordance with the ADR Policy. |
| • | ENTIRE AGREEMENT; AMENDMENT; SURVIVING PROVISIONS; ASSIGNMENT: This Agreement constitutes the entire agreement between the parties with respect to Associate’s bonus and other matters stated herein, and supersedes and replaces all other agreements and negotiations, whether written or oral, pertaining to Associate’s 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 Associate’s 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 Associate’s intent to sign the Agreement and/or and represents Associate’s electronic signature, as the term is defined in the Applicable Law. Additionally, by Associate’s 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. Associate’s 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: | ||||||||
| Jon Jaffe Co-Chief Executive Officer & Co-President Lennar Corporation |
Stuart Miller Executive Chairman Lennar Corporation | |||||||
LENNAR CORPORATION
2023 TARGET BONUS OPPORTUNITY
CHIEF FINANCIAL OFFICER
| NAME |
DEPARTMENT |
ASSOCIATE ID# |
TARGET AWARD OPPORTUNITY [1] | |||
| Diane Bessette | Executive | 100128 | 400% of base salary |
The following are measured to determine % of target paid out:
| PERFORMANCE CRITERIA
[2] |
PERCENT OF TARGET AWARD |
PERFORMANCE LEVELS / TARGET BONUS OPPORTUNITY |
||||||||
| THRESHOLD | PERCENT OF TARGET |
|||||||||
| • Meet or exceed FY 2023 business plan profitability
• Maximize cash generation and allocate capital to create greater shareholder value
• Continue with debt reduction strategies to further strengthen the balance sheet
• Enforce corporate governance, company policy and procedure adherence, strong internal controls
• Leadership matters: drive change, build great teams, be accountable, and embrace new programs to improve Company performance
• Continue transformation of the FP&A Department
• Continue transformation of the Treasury Department
• Begin transformation of the Technology Department |
100% | |
Good Very Good Exceptional |
|
25% 50% 100% |
| ||||
|
|
||||||||||
| TOTAL [1] |
100% | |||||||||
[1] The 2023 Target Bonus Opportunity 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 quantitative and qualitative performance. Factors that may cause an adjustment include, but are not limited to, a comparison of the associate’s performance to others in the program, economic or market considerations, etc.
[2] The Co-CEOs may adjust the weightings for the performance criteria at their sole discretion.
| • | 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 Company’s 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 Associate’s 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 Associate’s 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: Associate’s employment is at-will. Associate may resign from Associate’s employment at any time with or without cause or notice and the Company may terminate Associate’s employment at any time with or without cause or notice. |
| • | CONFIDENTIALITY AND NON-DISPARAGEMENT: By virtue of Associate’s 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 Company’s products, services, officers or employees, during or following Associate’s employment with the Company, subject to Associate’s 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 Associate’s employment with the Company and for twelve (12) months following the termination of Associate’s employment with the Company (“Non-Solicitation Period”), Associate will not directly or indirectly, on Associate’s 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 Associate’s termination or at any time during the three months preceding the Associate’s 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: Associate acknowledges and agrees that, to the extent permitted by governing law, Section 2.11 of the ARG applies to any bonus under this Agreement. Associate acknowledges and agrees that in addition to all other requirements in this Agreement to earn a bonus, Associate’s 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 Company’s 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 Associate’s employment (including, but not limited to, this Agreement), in accordance with the ADR Policy. |
| • | ENTIRE AGREEMENT; AMENDMENT; SURVIVING PROVISIONS; ASSIGNMENT: This Agreement constitutes the entire agreement between the parties with respect to Associate’s bonus and other matters stated herein, and supersedes and replaces all other agreements and negotiations, whether written or oral, pertaining to Associate’s 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 Associate’s 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 Associate’s intent to sign the Agreement and/or and represents Associate’s electronic signature, as the term is defined in the Applicable Law. Additionally, by Associate’s 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. Associate’s 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: | ||||||||||
| Please sign and return, hard copy or scan to the Total Rewards department in Miami or at totalrewards@lennar.com |
|
Rick Beckwitt Co-Chief Executive Officer and Co-President Lennar Corporation |
|
Jon Jaffe Co-Chief Executive Officer and Co-President Lennar Corporation | ||||||
LENNAR CORPORATION
2023 TARGET BONUS OPPORTUNITY
EXECUTIVE VICE PRESIDENT
| NAME |
DEPARTMENT |
ASSOCIATE ID |
TARGET AWARD OPPORTUNITY [1] | |||
| Jeff McCall | Executive Vice President | 207613 | 400% of base salary |
The following are measured to determine % of target paid out:
| PERFORMANCE CRITERIA
[2] |
PERFORMANCE LEVELS/ TARGET BONUS OPPORTUNITY | |||||
| Percentage of Target Award |
Threshold | Percent of Target | ||||
| • Meet or exceed FY 2023 business plan profitability
• Establish stand-alone Quarterra overhead structure
• Complete IT separation of SFR and MF application stacks
• Enforce corporate governance, company policy and procedure adherence, strong internal controls
• Leadership matters: drive change, build great teams, be accountable, and embrace new programs to improve Company performance
• Continue transformation of SFR debt strategy
• Begin transformation of Multi-Family capital efficiency strategy
• Execute on QMV3 portfolio strategy |
100% | Good Very Good Exceptional |
25% 50% 100% | |||
|
|
||||||
| TOTAL (1) |
100% | |||||
[1] The 2023 Target Bonus Opportunity 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 quantitative and qualitative performance. Factors that may cause an adjustment include, but are not limited to, a comparison of the associate’s performance to others in the program, economic or market considerations, etc.
[2] The Co-CEOs may adjust the weightings for the performance criteria at their sole discretion.
| • | 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 Company’s 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 Associate’s 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 Associate’s 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: Associate’s employment is at-will. Associate may resign from Associate’s employment at any time with or without cause or notice and the Company may terminate Associate’s employment at any time with or without cause or notice. |
| • | CONFIDENTIALITY AND NON-DISPARAGEMENT: By virtue of Associate’s 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 Company’s products, services, officers or employees, during or following Associate’s employment with the Company, subject to Associate’s 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 Associate’s employment with the Company and for twelve (12) months following the termination of Associate’s employment with the Company (“Non-Solicitation Period”), Associate will not directly or indirectly, on Associate’s 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 Associate’s termination or at any time during the three months preceding the Associate’s 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: Associate acknowledges and agrees that, to the extent permitted by governing law, Section 2.11 of the ARG applies to any bonus under this Agreement. Associate acknowledges and agrees that in addition to all other requirements in this Agreement to earn a bonus, Associate’s 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 Company’s 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 Associate’s employment (including, but not limited to, this Agreement), in accordance with the ADR Policy. |
| • | ENTIRE AGREEMENT; AMENDMENT; SURVIVING PROVISIONS; ASSIGNMENT: This Agreement constitutes the entire agreement between the parties with respect to Associate’s bonus and other matters stated herein, and supersedes and replaces all other agreements and negotiations, whether written or oral, pertaining to Associate’s 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 Associate’s 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 Associate’s intent to sign the Agreement and/or and represents Associate’s electronic signature, as the term is defined in the Applicable Law. Additionally, by Associate’s 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. Associate’s 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: |
|
| ||
| Please sign and return, hard copy or scan to the Total Rewards department in Miami or at totalrewards@lennar.com |
Rick Beckwitt Co-Chief Executive Officer & Co-President Lennar Corporation |
Jon Jaffe Co-Chief Executive Officer & Co-President Lennar Corporation | ||
LENNAR CORPORATION
2023 TARGET BONUS OPPORTUNITY
SR. CORPORATE MANAGEMENT ASSOCIATES
| NAME |
DEPARTMENT |
ASSOCIATE ID |
TARGET AWARD OPPORTUNITY [1] | |||
| Mark Sustana | Legal | 163237 | Up to 280% of Base Salary |
The following are measured to determine % of target paid out:
| PERFORMANCE CRITERIA
[2] |
PERFORMANCE LEVELS/ TARGET BONUS OPPORTUNITY | |||||
| PERCENT OF TARGET AWARD |
THRESHOLD | % OF TARGET | ||||
| • Meet or exceed FY 2023 business plan profitability
• Litigation management
• Regulatory compliance
• Oversight of Risk Management
• Oversight of Government Affairs
• Successful completion of special projects
• Leadership matters: drive change, build great teams, be accountable, and embrace new programs to improve Company performance
• Enforce corporate governance, company policy and procedure adherence, strong internal controls |
100% | Good Very Good Exceptional |
25% 50% 100% | |||
|
|
||||||
| TOTAL [1] |
100% | |||||
[1] The 2023 Bonus Opportunity program 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 quantitative and qualitative performance. Factors that may cause an adjustment include, but are not limited to, a comparison of the Associate’s performance to others in the program, economic or market considerations, etc.
[2] The Co-CEOs and CFO may adjust the weightings for the performance criteria at their sole discretion.
| • | 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 Company’s 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 Associate’s 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 Associate’s 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: Associate’s employment is at-will. Associate may resign from Associate’s employment at any time with or without cause or notice and the Company may terminate Associate’s employment at any time with or without cause or notice. |
| • | CONFIDENTIALITY AND NON-DISPARAGEMENT: By virtue of Associate’s 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 Company’s products, services, officers or employees, during or following Associate’s employment with the Company, subject to Associate’s 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 Associate’s employment with the Company and for twelve (12) months following the termination of Associate’s employment with the Company (“Non-Solicitation Period”), Associate will not directly or indirectly, on Associate’s 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 Associate’s termination or at any time during the three months preceding the Associate’s 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: Associate acknowledges and agrees that, to the extent permitted by governing law, Section 2.11 of the ARG applies to any bonus under this Agreement. Associate acknowledges and agrees that in addition to all other requirements in this Agreement to earn a bonus, Associate’s 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 Company’s 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 Associate’s employment (including, but not limited to, this Agreement), in accordance with the ADR Policy. |
| • | ENTIRE AGREEMENT; AMENDMENT; SURVIVING PROVISIONS; ASSIGNMENT: This Agreement constitutes the entire agreement between the parties with respect to Associate’s bonus and other matters stated herein, and supersedes and replaces all other agreements and negotiations, whether written or oral, pertaining to Associate’s 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 Associate’s 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 Associate’s intent to sign the Agreement and/or and represents Associate’s electronic signature, as the term is defined in the Applicable Law. Additionally, by Associate’s 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. Associate’s 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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| ||
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Date: |
Rick Beckwitt Co-Chief Executive Officer & Co-President Lennar Corporation |
Jon Jaffe Co-Chief Executive Officer & Co-President Lennar Corporation | ||
| Please sign and return, hard copy or scan, to the Total Rewards Department in Miami or at totalrewards@lennar.com |
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| Diane Bessette VP, Chief Financial Officer & Treasurer Lennar Corporation |
Exhibit 10.2
LENNAR CORPORATION
2023 PERFORMANCE AND RESTRICTED STOCK AGREEMENT
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”), 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, 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, 2022 and ending on November 30, 2025. 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 one hundred and twenty (120) 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 |
Debt/EBITDA Multiple | ||||
| 0% | < 25th Percentile | < 25th Percentile | < 25th Percentile | > 1.70 | ||||
| 30% (threshold) | 25th Percentile | 25th Percentile | 25th Percentile | 1.40 | ||||
| 100% (target) | 65th Percentile | 65th Percentile | 65th Percentile | 1.10 | ||||
| 200% (maximum) | 75th Percentile | 75th Percentile | 75th Percentile | ≤ 0.80 |
| * | Relative Gross Profit Percentage, Relative Return on Tangible Capital, and Relative Total Shareholder Return are determined using Lennar’s 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 company’s 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 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. 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, 2024 | 1/3 | |||
| February 14, 2025 | 1/3 | |||
| February 14, 2026 | 1/3 | |||
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|
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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 Plan’s 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 | |||||
| February 28, 2023 | ||||||
| By: | ||||||
| Stuart Miller | ||||||
| Executive Chairman | ||||||