EXHIBIT 10.4

 

Change of Control

Agreement

 

Between

HomeBanc Corp.

and

[NAME]

 

For purposes of this Agreement, a “Change of Control” shall mean the occurrence
of any of the following events:

 

  (a) individuals who, on the Effective Date, constitute the Board of Directors
of the Company (the “Incumbent Directors”) cease for any reason to constitute at
least a majority of such Board, provided that any person becoming a director
after the effective date and whose election or nomination for election was
approved by a vote of at least a majority of the Incumbent Directors then on the
Board shall be an Incumbent Director; provided, however, that no individual
initially elected or nominated as a Director of the company as a result of an
actual or threatened election contest with respect to the election or removal of
directors (“Election Contest”) or other actual or threatened solicitation of
proxies or consents by or on behalf of any “person” (such term for the purposes
of this section (a) being defined in Section 3(a)(9) of the Securities Exchange
Act of 1934 (the “Exchange Act”) and as used in Section 13(d)(3) and 14(d)(2) of
the Exchange Act) including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest, shall be deemed an Incumbent
Director, or

 

  (b) any person who becomes a “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act) directly or indirectly of either (i) 35% or more of the
then-outstanding shares of common stock of the Company (“Company Common Stock”)
or (ii) securities of the Company representing 35% or more of the combined
voting power of the Company’s then-outstanding securities eligible to vote for
the election of directors (the “Company Voting Securities”); provided, however,
that for the purposes of this paragraph (b), the following acquisitions of
Company Common Stock or Company Voting Securities shall not constitute a change
of control: (A) an acquisition directly from the Company, (B) an acquisition by
the Company or a subsidiary of the Company, (C) an acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
subsidiary of the Company or (D) an acquisition pursuant to a Non-Qualifying
Transaction (as defined in paragraph (c) below; or

 

  (c) the consummation of a recapitalization, reorganization, merger,
consolidation, or statutory share exchange under a similar form of transaction
involving the Company or a subsidiary of the Company (a “Reorganization”) or the
sale or other disposition of all or substantially all of the Company’s assets (a
“Sale”) or the acquisition of assets or stock of another entity (an
“Acquisition”), unless immediately following such Reorganization, Sale or
Acquisition: (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the outstanding Company Common
Stock and outstanding Company Voting Securities immediately prior to such
Reorganization, Sale or Acquisition beneficially own, directly or indirectly,
more than 50% of, respectively, the then-outstanding shares of common stock and
the combined voting power of the then-outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the entity
resulting from or surviving such Reorganization, Sale or Acquisition (including,
without limitation, an entity which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets or stock either
directly or through one or more subsidiary entities, the “Surviving Entity”) in
substantially the same proportions as their ownership immediately prior to such
Reorganization, Sale, or Acquisition, of the outstanding Company Common Stock
and the outstanding Company Voting Securities, as the case may be, and (B) no
person (other than (x) the Company or any subsidiary of the Company or (y) the
Surviving Entity or its ultimate parent entity, or (z) any employee benefit plan
( or related trust) sponsored or maintained by any of the foregoing) is the
beneficial owner, directly or indirectly, of 35% or more of the total common
stock or 35% or more of the total voting power of the outstanding voting
securities eligible to elect the board of directors of the Surviving Entity and
(C) at least a majority of the members of the board of directors of the
Surviving Entity were Incumbent Directors at the time of the Board’s approval of
the execution of the initial agreement providing for such Reorganization, Sale
or Acquisition (any Reorganization, Sale, or Acquisition which satisfies all of
the criteria specified in (A), (B), or (C) above shall be deemed to be a
“Non-Qualifying Transaction”); or

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  (d) approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

 

If employment is terminated by the Company and if it can reasonably be shown
that termination was ( i ) at the direction or request of a third party that had
taken steps reasonably calculated to effect a Change in Control after such
termination, or ( ii ) as otherwise defined does, in fact, occur, then the
Company will provide the following as if the Change in Control had occurred on
the date immediately preceding the Date of Termination:

 

(a) the sum of the following amounts, to the extent not previously paid (the
“Accrued Obligations”): (1) the base salary through the date of termination, (2)
a pro-rata bonus for the year in which the date of termination occurs, computed
as the product (x) of the target bonus for such year and a fraction (y), the
numerator of which is the number of days in the current fiscal year through the
date of termination, and the denominator of which is 365, (3) any accrued pay in
lieu of unused vacation, and (4) unless a later payout date is required under
the terms of any deferral plan or agreement, an vested compensation previously
deferred (together with any amount equivalent to accrued interest or earnings
thereon; and

 

(b) a severance payment as determined pursuant to clause (1) or (2) below, as
applicable:

 

(1) if the date of termination occurs before, or more than two years after, the
occurrence of a change of control, the severance payment shall be the product of
12 ( the regular severance factor) times one twelfth o the sum of (a) the base
salary in effect as of the date of termination and (b) the greater of the
average of the annual bonuses earned for the two fiscal years in which annual
bonuses were paid immediately preceding the year in which the date of
termination occurs or the target bonus for the year in which the date of
termination occurs; or

 

(2) if the date of termination occurs within two years after the occurrence of a
change of control, the severance payment shall be the product of 18 (the change
of control severance factor) times one-twelfth of the sum of the base salary in
effect as of the date of termination, and the greater of the average of the
annual bonuses earned for the two fiscal years in which annual bonuses were paid
immediately preceding the year in which the date of termination occurs, or the
target bonus for the year in which the date of termination occurs; and

 

(3) the Company shall continue to provide, for a number of months equal to the
Regular Severance Factor or the Change of Control Severance Factor (as
determined above, as applicable) after the date of termination (the “Welfare
Benefits Continuation Period”) or such longer period as may be provided by the
terms of the appropriate plan, program, practice or policy, any group health
benefits to which you and/or your eligible dependents would otherwise be
entitled under COBRA, or benefits substantially equivalent to those group
benefits which would have been provided to them in accordance with the Welfare
Plans provided by the Company if employment had not been terminated, provided,
however, that if employment with another company commences (including
self-employment) and group benefits are available under another
employer-provided plan, the Company’s obligation to provide benefits shall
cease, except as otherwise provided by law and provided further that the Welfare
Benefit Continuation Period shall run concurrently with any period for which you
are eligible to elect continuation coverage under COBRA; and

 

(4) all grants of stock options and other equity awards granted by the Company
and held by you as of the date of termination will become immediately vested and
exercisable as of the date of termination and to the extent necessary, this
Agreement is hereby deemed an amendment of any such outstanding stock option or
other equity award; and

 

(5) the Company shall provide you with reasonable outplacement services for a
period of one year; provided, that the Company shall be obligated to pay not
more than 25% of your annual base salary immediately in effect prior to the date
of termination for such outplacement services and that the period of services
may be shortened to such extent; and

 

(6) to the extent not theretofore paid or provided, the Company shall timely pay
or provide any other amounts or benefits required to be paid or provided or
which you are eligible to receive under any plan, program, policy or practice of
the Company to the extent provided to Peers prior to the date of termination
(“Other Benefits”).

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Change of Control Agreement as of                 , 200    .

 

HOMEBANC CORP.

By:

 

 

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Title:

 

 

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Associate Signature:

 

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