Document:

exv10w3

 

Exhibit 10.3

FORESTAR REAL ESTATE GROUP INC.

RESTRICTED STOCK UNITS AGREEMENT

     This Agreement is entered into between FORESTAR REAL ESTATE GROUP INC., a Delaware corporation
(“Forestar”), and Participant, and is an integral and inseparable term of Participant’s service as
an employee, non-employee director, or other service provider of Forestar or an Affiliate. In
consideration of the mutual covenants hereinafter set forth and for other good and valuable
consideration, Forestar and the Participant hereby agree as follows:

	 	1.	 	Grant of Restricted Stock Units. Subject to the restrictions, terms and conditions
of this Agreement (the “RSU Agreement”), the Forestar Real Estate Group Inc. 2007 Stock
Incentive Plan (the “Plan”) and the Forestar Standard Terms and Conditions for Restricted
Stock Units (the “Standard Terms and Conditions” ; together with the Plan and the RSU
Agreement, the “Plan Documents”), Forestar hereby awards to the Participant the number of
restricted stock units stated above (the “Restricted Stock Units”).
	 
	 	2.	 	Grant of DERs. Subject to the terms and conditions of the Plan Documents, the
Participant is hereby granted a Dividend Equivalency Right (“DER”) to accompany each
Restricted Stock Unit. Upon payment of a dividend to a holder of Common Stock, Participant
will be entitled to payment of an amount equal to the amount of such per Share dividend
payment, multiplied by the number of RSUs granted pursuant to this RSU Agreement, provided
that the Participant has not experienced a Separation from Service with Forestar and its
Affiliates through the date that such dividend payment was made (the “Dividend Payment Date”).
Payment under each DER shall be made by the later of December 31st of the year in
which the Dividend Payment Date occurred or 2 1/2 months after such Dividend Payment Date. The
form of payment under a DER will be made (at sole discretion of the Committee) in cash or in a
number of shares equal to amount of such payment, divided by the Fair Market Value of a Share
on the Dividend Payment Date, rounded to the nearest Share.
	 
	 	3.	 	Governing Documents. The Restricted Stock Units and DERs awarded hereby are subject
to all the restrictions, terms and provisions of the Plan Documents, which are herein
incorporated by reference, and to the terms of which the Participant hereby agrees.
Capitalized terms used in this RSU Agreement that are not defined herein shall have the
meaning set forth in the Plan Documents.
	 
	 	4.	 	No Stockholder Rights. The Restricted Stock Units will be represented by a book
entry credited in the name of the Participant and are not actual shares of Common Stock. The
Participant will not have the right to vote the Restricted Stock Units or any other rights of
a holder of Common Stock as a result of this grant of Restricted Stock Units. The Participant
acknowledges and agrees that (a) the Participant’s sole rights with respect to dividend
payments are with respect to the payments that arise from the DERs and, (b) the Participant
has no rights under this RSU Agreement or the Plan Documents with respect to the payment of
dividend payments or the adjustment of the Restricted Stock Units to reflect the payment of
cash dividends.

	 	5.	 	General Vesting Requirements. Except as otherwise provided in the Plan Documents and
subject to the conditions of Paragraph 6 hereof, Restricted Stock Units shall vest in
accordance with the Vesting Schedule above as of the occurrence of a Vesting Date (including
the Scheduled Vesting Date as set forth above), provided that the Participant has not
experienced a Separation from Service with Forestar and its Affiliates through such Vesting
Date. Notwithstanding the Vesting Schedule provided above, upon a Change in Control, all
unvested Restricted Stock Units

	 	 	 
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	 	 	 	shall immediately vest. Upon an Participant’s Separation from Service for any reason prior
to a Vesting Date (including a Change in Control), all Restricted Stock Units and
accompanying DERs shall be forfeited, and the Participant shall not thereafter have any
rights with respect to the Restricted Stock Units and DERs so forfeited.
	 
	 	6.	 	Committee Certification of Performance Goals. Except in connection with vesting upon
a Change in Control, in no event shall any Restricted Stock Units vest as of the scheduled
Vesting Date unless the Committee has certified that the Performance Goal set forth in
Exhibit A (if any) hereto has been achieved.
	 
	 	7.	 	Payment of Restricted Stock Units. Subject to the terms and conditions of the Plan
Documents, Forestar will pay to the Participant an amount equal to the Fair Market Value per
Share of Common Stock on the Vesting Date, multiplied by the number of RSUs that vest on such
Vesting Date (the “Payment”). The Payment will be made as soon as practicable after the
Vesting Date, but not later than ninety days after the Vesting Date (or, if earlier, March 15
of the calendar year following the Vesting Date), provided that if the Vesting Date occurs
upon or after a Change in Control, the Payment shall be made not later than the fifth business
day after the Vesting Date. The form of the Payment will be made (at sole discretion of the
Committee) in cash or in a number of shares equal to amount of the Payment, divided by the
Fair Market Value of a Share on the Vesting Date, rounded to the nearest Share.
Notwithstanding the above, if Participant has either has (a) attained age 65 or (b) attained
age 55 and completed at least five years of employment or service with Forestar or any of its
Affiliates, the Payment will be subject to Exhibit B herein.
	 
	 	8.	 	Arbitration. The Participant and Forestar agree that this RSU Agreement arises out
of, and is inseparable from, the Participant’s employment or other service with Forestar or
any of its Affiliates. The Participant and Forestar further agree to final and binding
arbitration as the exclusive forum for resolution of any dispute of any nature whatsoever,
whether initiated by the Participant or Forestar, arising out of, related to, or connected
with Participant’s employment or other service with, or termination by, Forestar or any of its
Affiliates. This includes, without limitation, any dispute arising out of the application,
interpretation, enforcement, or claimed breach of this RSU Agreement. The only exceptions to
the scope of this arbitration provision are claims arising under any written agreement between
the Participant and Forestar or its Affiliate that expressly provides that such claims are not
subject to binding arbitration. Arbitration under this provision shall be conducted under the
employment dispute rules and procedures of either the American Arbitration Association or of
JAMS/Endispute, according to the preference of the party initiating such arbitration. Appeal
from, or confirmation of, any arbitration award under this paragraph may be made to any court
of competent jurisdiction under standards applicable to appeal or confirmation of arbitration
awards under the Federal Arbitration Act. This arbitration provision and related proceedings
shall be subject to and governed by the Federal Arbitration Act. 
	 
	 	9.	 	Section 409A Acknowledgement and Release. Participant understands that payments
under the Plan and this RSU Agreement are potentially subject to Section 409A of the Code
(“409A”) and that if the Plan and this RSU Agreement do not satisfy an exception to 409A or do
not comply with the requirements of 409A and the applicable guidance thereunder, then
Participant may incur adverse tax consequences under 409A. Participant acknowledges and
agrees that (a) Participant is solely responsible for all obligations arising as a result of
the tax consequences associated with payments under this RSU Agreement including, without
limitation, any taxes, interest or penalties associated with 409A, (b) Participant is not
relying upon any written or oral statement or representation by Forestar or any Affiliate
thereof, or any of their respective employees, directors, officers, attorneys or agents
(collectively, the “Company Parties”) regarding the tax effects associated with the execution
of this RSU Agreement and the payment under this RSU Agreement and the Plan, and (c) in
deciding to enter into this RSU Agreement, Participant is relying on his or her own judgment
and the judgment of the professionals of his or her choice with whom Participant has
consulted. Participant hereby releases, acquits and forever discharges the Company Parties
from all actions, causes of actions, suits, debts, obligations, liabilities, claims,

	 	 	 
	Restricted Stock Units Agreement
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	 	 	damages, losses, costs and expenses of any nature whatsoever, known or unknown, on account
of, arising out of, or in any way related to the tax effects associated with the execution
of this RSU Agreement and any payment under the Plan and this RSU Agreement.

	10.	 	Miscellaneous. The Committee may from time to time modify or amend this RSU
Agreement in accordance with the provisions of the Plan. This RSU Agreement shall be binding
upon and inure to the benefit of Forestar and its successors and assigns and shall be binding
upon and inure to the benefit of the Participant and his or her legatees, distributees and
personal representatives. This RSU Agreement may be executed by Forestar and the Participant
by means of electronic or digital signatures, which shall have the same force and effect as
manual signatures. Participant agrees that clicking “I Accept” in connection with or response
to any electronic communication or other medium has the effect of affixing the Participant’s
electronic signature to this RSU Agreement. Participant acknowledges and expressly agrees
that the Participant has read the RSU Agreement and the Plan Documents and agrees to their
terms. This RSU Agreement shall be governed by and construed in accord with federal law,
where applicable, and otherwise with the laws of the State of Texas.

	 	 	 
	Restricted Stock Units Agreement
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EXHIBIT A

Performance Goal:

The RSU Performance Goal is a Return on Assets (“ROA”) of at least one percent (annualized) for the
Performance Measurement Period. ROA means earnings before interest and taxes (as currently shown
on the company income statement, or the reported equivalent in the event of any change in
reporting), divided by beginning of year total assets defined as company total assets (or the
reported equivalent in the event of any change in reporting.

For purposes of the foregoing, “Performance Measurement Period” means the period beginning the
first day of Forestar’s fiscal year that includes the Date of Grant and ending on the last day of
the fiscal year immediately preceding the Scheduled Vesting Date (or, in the case of any Vesting
Date that occurs by reason of the Participant’s Retirement, through the end of the later of the
calendar quarter during which Retirement occurs or the first full calendar quarter after the Date
of Grant).

	 	 	 
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EXHIBIT B

Section 409A Payment Date in the Event of Certain Changes in Control

If, prior to the calendar year that includes the Scheduled Vesting Date, the Participant will have
either (a) attained age 65 or (b) attained age 55 and completed at least five years of service with
Forestar or any of its Affiliates, and assuming that the Participant does not incur a Separation
From Service prior to such calendar year, then the following shall apply:

Notwithstanding the provisions of paragraphs 5 and 7 of the RSU Agreement, if the Vesting Date
occurs by reason of a Change in Control and such Change in Control does not constitute a “change in
control event” (within the meaning of Treasury Regs. § 1.409A-3(i)(5)), (a) payment of the cash
value of the Restricted Stock Units shall not be made as soon as practicable after such Vesting
Date but shall instead be made as soon as practicable (but in all events within five business days)
after the earlier of the Participant’s Separation From Service (subject to paragraph 9 of the
Standard Terms and Conditions) or the Scheduled Vesting Date and (b) the cash value of the
Restricted Stock Units shall be determined based on Fair Market Value on the earlier of such dates.

	 	 	 
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FORESTAR REAL ESTATE GROUP INC.

STANDARD TERMS AND CONDITIONS

FOR RESTRICTED STOCK UNITS

	 	1.	 	Certain Definitions: For purposes of this Forestar Real Estate Group Inc. Terms and
Conditions for Restricted Stock Units (the “Standard Terms and Conditions”), the Forestar Real
Estate Group Inc. 2007 Stock Incentive Plan (the “Plan”), and the Agreement that evidences the
grant of Restricted Stock Units under the Plan (the “RSU Agreement”) to which this Standard
Terms and Conditions applies, the following terms shall have the meanings set forth below:

	 	a.	 	Change in Control:

	 	i.	 	A change in control shall be deemed to have occurred if the
event set forth in any one of the following paragraphs shall have occurred:

	 	(1)	 	any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of Forestar (not including in the
securities beneficially owned by such Person any securities acquired
directly from Forestar or its Affiliates) representing 20% or more of
the combined voting power of Forestar’s then outstanding securities,
excluding any Person who becomes such a Beneficial Owner in connection
with a transaction described in clauses (a), (b) or (c) of paragraph
(3) below;
	 
	 	(2)	 	within any twenty-four (24) month period, the
following individuals cease for any reason to constitute a majority of
the number of directors then serving on the Board: individuals who, on
the Effective Date, constitute the Board and any new director (other
than a director whose initial assumption of office is in connection
with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of
directors of Forestar) whose appointment or election by the Board or
nomination for election by Forestar’s shareholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof or
whose appointment, election or nomination for election was previously
so approved or recommended;
	 
	 	(3)	 	there is consummated a merger, consolidation of
Forestar or any direct or indirect subsidiary of Forestar with any
other corporation or any recapitalization of Forestar (for purposes of
this paragraph (III), a “Business Event”) unless, immediately following
such Business Event (a) the directors of Forestar immediately prior to
such Business Event continue to constitute at least a majority of the
board of directors of Forestar, the surviving entity or any parent
thereof, (b) the voting securities of Forestar outstanding immediately
prior to such Business Event continue to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof), in combination with the
ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of Forestar or any subsidiary of Forestar, at
least 60% of the combined voting power of the securities of Forestar or
such surviving entity or any parent thereof outstanding immediately
after such Business Event, and (c) in the event of a recapitalization,
no Person is or becomes the Beneficial Owner,

	 	 	 
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	 	 	 	directly or indirectly, of securities of Forestar or such surviving
entity or any parent thereof (not including in the securities
Beneficially Owned by such Person any securities acquired directly
from Forestar or its Affiliates) representing 20% or more of the
combined voting power of the then outstanding securities of Forestar
or such surviving entity or any parent thereof (except to the extent
such ownership existed prior to the Business Event);
	 
	 	(4)	 	the shareholders of Forestar approve a plan of
complete liquidation or dissolution of Forestar;
	 
	 	(5)	 	there is consummated an agreement for the sale,
disposition or long-term lease by Forestar of substantially all of
Forestar’s assets, other than (a) such a sale, disposition or lease to
an entity, at least 50% of the combined voting power of the voting
securities of which are owned by shareholders of Forestar in
substantially the same proportions as their ownership of Forestar
immediately prior to such sale or disposition or (b) the distribution
directly to Forestar’s shareholders (in one distribution or a series of
related distributions) of all of the stock of one or more subsidiaries
of Forestar that represent substantially all of Forestar’s assets; or
	 
	 	(6)	 	any other event that the Board, in its sole
discretion, determines to be a Change in Control for purposes of this
Agreement.
Notwithstanding the foregoing, a “Change in Control” under clauses
(1) through (5) above shall not be deemed to have occurred by virtue
of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the
common stock of Forestar immediately prior to such transaction or
series of transactions continue to have substantially the same
proportionate ownership in one or more entities which, singly or
together, immediately following such transaction or series of
transactions, own all or substantially all of the assets of Forestar
as constituted immediately prior to such transaction or series of
transactions.

	 	ii.	 	For purposes of this definition of “Change in Control”:

	 	(1)	 	“Affiliate” shall have the meaning set forth in
Rule 12b-2 promulgated under Section 12 of the Exchange Act.
	 
	 	(2)	 	“Beneficial Owner” shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
	 
	 	(3)	 	“Effective Date” means, the Date of Grant of
the applicable Restricted Stock Units.
	 
	 	(4)	 	“Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended from time to time.
	 
	 	(5)	 	“Person” shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, except that such term shall not include (i)
Forestar or any of its subsidiaries, (ii) a trustee or other fiduciary
holding securities under an employee benefit plan of Forestar or any of
its Affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such

	 	 	 
	Restricted Stock Units Agreement
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	 	 	 	securities, or (iv) a corporation owned, directly or indirectly, by
the stockholders of Forestar in substantially the same proportions as
their ownership of stock of Forestar.

	 	b.	 	Dividend Equivalency Rights or DERs: means a right granted in
connection with a Restricted Stock Unit to receive payment on the terms and conditions
set forth in the Plan Documents of an amount equivalent to any dividend paid to a
holder of Common Stock.
	 
	 	c.	 	Forestar: means Forestar Real Estate Group Inc. and any successor
thereto.
	 
	 	d.	 	Plan Documents: means the Plan.
	 
	 	e.	 	RSU Agreement: means the written Agreement executed by Forestar and a
Participant evidencing a grant of Restricted Stock Units under the Plan.
	 
	 	f.	 	Retirement: means a Participant’s voluntary Separation of Service
after either (i) attaining age 65 or (ii) attaining age 55 and completing at least five
years of service with Forestar or any of its Affiliates. A RSU Agreement may modify or
otherwise provide circumstances in which a Separation of Service constitutes a
Retirement.
	 
	 	g.	 	Separation From Service: means a Participant’s separation from service
(within the meaning of Treasury Regs. § 1.409A-1(h)) with Forestar and its Affiliates
after the Date of Grant of the relevant Restricted Stock Units, or, in the case of a
non-employee director, the director’s termination of service with the Board.
	 
	 	h.	 	Vesting Date: means, with respect to any award of Restricted Stock
Units hereunder, the earliest of (a) such date or dates as the Committee shall specify
in the Restricted Stock Units Agreement evidencing such award of Restricted Stock Units
as the Scheduled Vesting Date(s), (b) the occurrence of a Change in Control, (c) the
Participant’s death or Retirement, or (d) the Participant’s becoming disabled (within
the meaning of Section 409A of the Code).

	 	     Capitalized terms used herein but not defined herein shall have the meaning assigned to such
terms in the Plan.

	 	2.	 	Restricted Stock Unit Agreement; Acceptance and Execution: The grant of Restricted
Stock Units shall be evidenced by, and subject to the terms and conditions of, a RSU
Agreement. The RSU Agreement shall identify the Participant who has been granted the RSUs,
the Date of Grant, the number of Restricted Stock Units and accompanying DERs (if any) granted
pursuant to an Award, the dates upon which Restricted Stock Units and accompanying DERs (if
any) become vested an are payable. Restricted Stock Units shall be immediately cancelled and
expire if the applicable RSU Agreement is not executed (in such manner as may be specified by
Forestar) by such Participant (or his or her agent or attorney) and delivered to Forestar (in
such manner as may be specified by Forestar) within 60 days after the Date of Grant of the
Restricted Stock Units (unless an extension of such deadline for extenuating circumstances is
approved by a Vice President of Forestar). 
	 
	 	3.	 	Form of Awards: Restricted Stock Units and accompanying DERs, when issued, will be
represented by a book entry in the name of the Participant. Unless and until a certificate or
certificates representing Shares will have been issued by Forestar to Participant for payment
under an Restricted Stock Unit, Participant will not be or have any of the rights or
privileges of a shareholder of Forestar with respect to Shares issuable upon vesting of this
RSU.
	 
	 	4.	 	Vesting and Time of Payment: Provided that a Participant has not experienced a
Separation from Service with Forestar or an Affiliate through the Vesting Date, the
Participant shall vest and be entitled to payment under a Restricted Stock Unit on the Vesting
Date for such Restricted Stock Unit. The payment under a Restricted Stock Unit shall be made
no later than the date that is 2 1/2 months following the end of the year in which the Vesting
Date occurs. Notwithstanding the above, payment under a Restricted Stock Unit shall be
subject to paragraph 9 herein.

	 	 	 
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	 	5.	 	Payment Amount: The amount of payment under each Restricted Stock Unit shall be
equal to the Fair Market Value per Share of Common Stock on the Vesting Date of each such
Restricted Stock Unit.
	 
	 	6.	 	Dividend Equivalency Rights: Upon the payment of a dividend to a holder of Common
Stock, the holder of a DER will either be paid an amount equal to such dividend or be credited
such amount to a bookkeeping account, with such the amount reflected in such account to be
paid upon the vesting and payment of the underlying DER, provided a Participant has not
experienced a Separation from Service with Forestar or an Affiliate through the date such
dividend payment is made to a holder of Common Stock. Upon the Participant’s Separation from
Service with Forestar and its Affiliates or the vesting and payment of the accompanying RSU,
the DER will expire, and Participant shall not longer be entitled to payment under such DER.
	 
	 	7.	 	Nonalienation of Benefits: Except as required by applicable law, no right or benefit
under the Plan or any Restricted Stock Units Agreement shall be subject to anticipation,
alienation, sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or
charge, and any attempt to anticipate, alienate, sell, assign, hypothecate, transfer, pledge,
exchange, transfer, encumber or charge the same shall be void. No right or benefit hereunder
shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of
the person entitled to such benefit. If any Participant shall become bankrupt or attempt to
anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or
charge any right or benefit under the Plan or any Restricted Stock Units Agreement, then such
right or benefit shall, in the discretion of the Committee, cease and terminate, and in such
event, the Committee in its discretion may hold or apply the same or any part thereof for the
benefit of the Participant or his beneficiary, spouse, children or other dependents, or any of
them, in such manner and in such proportion as the Committee may deem proper.
	 
	 	8.	 	Withholding: Forestar’s obligation to pay Restricted Stock Units in accordance with,
and subject to the terms of, the applicable Restricted Stock Units Agreement, shall be subject
to the satisfaction of applicable federal, state and local tax withholding requirements (if
any). Restricted Stock Unit payments that are withheld to satisfy applicable withholding
taxes shall be determined based on the Fair Market Value of the Common Stock on the date the
withholding tax obligation arises. Only the required statutory minimum tax may be withheld;
excess tax withholding is not allowed.
	 
	 	9.	 	Section 409A: Notwithstanding any provision to the contrary in an RSU Agreement or
the Plan, if a Participant is a “specified employee” (within the meaning of Section
409A(a)(2)(B) of the Code), then to the extent required by Section 409A(a)(2)(B) of the Code,
no payment of Restricted Stock Units shall be made to the Participant prior to the earlier of
(a) the expiration of the six month period measured from the date of the Participant’s
Separation From Service, and (b) the date of the Participant’s death. An RSU Agreement may
also provide for additional or modified terms of vesting or payment of a Restricted Stock Unit
to those terms set forth in paragraph 4 herein following the date on which a Participant has
satisfied the age and/or service requirements for Retirement as set forth in paragraph 1e
above.
	 
	 	10.	 	No Right to Continued Employment; No Additional Rights: Nothing contained in the
Plan or in any Restricted Stock Units Agreement shall confer on any Participant any right to
continue in the employ or service of Forestar or any of its Affiliates or interfere in any way
with the right of Forestar or an Affiliate to terminate the employment or service of a
Participant at any time, with or without cause, notwithstanding the Restricted Stock Units
awarded to the Participant may be forfeited. Nothing in the Plan Documents or any Restricted
Stock Units Agreement shall be construed to give any employee, director or consultant of
Forestar or any Affiliate any right to receive an award of Restricted Stock Units or as
evidence of any agreement or understanding, express or implied, that Forestar or any Affiliate
will employ or retain the Participant in any particular position or at any particular rate of
remuneration, or for any particular period of time.
	 
	 	11.	 	Changes in Stock: In the event of any change in the outstanding stock covered by
Restricted Stock Units by reason of any stock dividend, split-up, spin-off, recapitalization,
reclassification,

	 	 	 
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	 	-9-

 

 

	 	 	 	combination or exchange of shares, merger, consolidation or liquidation or the like, the
Committee shall provide for a substitution for or adjustment in the number and class of
shares covered by the Restricted Stock Units. The Committee’s determination with regard to
any such substitution or adjustment shall be conclusive. The Committee may at any time, in
its sole discretion, make such amendments to the terms of Restricted Stock Units Agreements
as it deems necessary or appropriate to reflect any adjustments or substitutions made
pursuant to this paragraph.
	 
	 	12.	 	Exclusion from Pension, Profit-Sharing and Other Benefit Computations: By acceptance
of a Restricted Stock Units award under the Plan, a Participant shall be deemed to have agreed
that any compensation arising out of the award constitutes special incentive compensation that
shall not be taken into account as “salary”, “pay”, “compensation” or “bonus” in determining
the amount of any payment under any pension, retirement or profit-sharing plan of Forestar or
any Affiliate. In addition, each Participant shall be deemed to have agreed that neither the
award, vesting nor payment of Restricted Stock Units shall be taken into account in
determining the amount of any life insurance coverage or short or long-term disability
coverage provided by Forestar or any Affiliate.
	 
	 	13.	 	Applicability: These Standard Terms and Conditions shall apply to Restricted Stock
Units as to which the Committee designates it as applying, and the Committee may designate it
as applying in whole or in part in its discretion to a Restricted Stock Units award.
	 
	 	14.	 	Plan Controls: In the event of any conflict between the Plan and the terms of a
Restricted Stock Units Agreement or the Standard Terms and Conditions, the Plan shall govern.

	 	 	 
	Restricted Stock Units Agreement
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Exhibit 10.1

CENTEX CORPORATION

2003 ANNUAL INCENTIVE COMPENSATION PLAN

(Amended and Restated Effective January 1, 2008)

     1. Objective. The Centex Corporation 2003 Annual Incentive Compensation Plan (the “Plan”) is
designed to retain selected executive officers of Centex Corporation, and reward them for making
significant contributions to the success of Centex Corporation. These objectives are to be
accomplished by making annual awards under the Plan and thereby providing Participants with a
financial interest in the overall performance and growth of Centex Corporation. The Plan and
Awards granted hereunder are intended to be exempt from the requirements of Section 409A of the
Code, and shall be interpreted and administered in a manner consistent with that intent.

     2. Definitions. As used herein, the terms set forth below shall have the following respective
meanings:

     “Act” means the Securities Exchange Act of 1934, as amended.

     “Affiliate” means any direct or indirect subsidiary or parent of Centex Corporation and
any partnership, joint venture, limited liability company or other business venture or
entity in which Centex Corporation owns directly or indirectly at least 80% of the ownership
interest in such entity, as determined by the Committee in its sole and absolute discretion
(such determination by the Committee to be conclusively established by the grant of an Award
by the Committee to an officer or employee of such an entity).

     “Award” means an incentive compensation award payable in cash and granted to a
Participant pursuant to any applicable terms, conditions and limitations as the Committee
may establish in order to fulfill the objectives of the Plan.

     “Award Agreement” means a written agreement between Centex Corporation and a
Participant that sets forth the terms, conditions and limitations applicable to an Award.

     “Beneficiary” means such person or persons, or the trustee of an inter vivos trust for
the benefit of natural persons, designated by the Participant in a written election form
filed with the Committee as entitled to receive the Participant’s Award(s) in the event of
the Participant’s death, or if no such election form shall have been so filed, or if no
designated Beneficiary survives the Participant or can be located by the Committee, the
person or persons entitled thereto under the last will of such deceased Participant, or if
such decedent left no will, to the legal heirs of such decedent determined in accordance
with the laws of intestate succession of the state of the decedent’s domicile.

     “Board” means the Board of Directors of Centex Corporation as the same may be
constituted from time to time.

     “Centex Corporation” means Centex Corporation, a Nevada corporation, or any successor
thereto.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Committee” means the Compensation Committee of the Board.

     “Employment” means employment with Centex Corporation or an Affiliate.

1

 

     “Fiscal
Year” means April 1 through March 31.

     “Participant” means an executive officer of Centex Corporation who signs an Award
Agreement.

     “Plan” means this Centex Corporation 2003 Annual Incentive Compensation Plan, as set
forth herein and as may be amended from time to time.

     A pronoun or adjective in the masculine gender includes the feminine gender, and the singular
includes the plural unless the context clearly indicates otherwise.

     3. Eligibility. Only executive officers of Centex Corporation are eligible to participate in
this Plan. The Committee shall select the Participants in the Plan from time to time as evidenced
by the execution of Award Agreements under the Plan.

     4. Plan Administration. The Plan shall be administered by the Committee, which shall have
full and exclusive power to interpret this Plan and to adopt such rules, regulations and guidelines
for carrying out this Plan as it may deem necessary or appropriate in its sole discretion. All
decisions of the Committee shall be binding and conclusive on the Participants. The Committee
shall determine all terms and conditions of the Awards.

     No member of the Committee shall be liable for anything done or omitted to be done by him or
by any member of the Committee in connection with the performance of any duties under this Plan,
except for his own willful misconduct or as expressly provided by statute.

     5. Awards and Limitations Thereon. An Award will be paid only if specified performance goals
set forth in an Award Agreement have been achieved during the course of the relevant Fiscal Year
(or such shorter period as may be determined by the Committee) by an individual, Centex
Corporation, an Affiliate, or one or more business units of Centex Corporation or an Affiliate, as
applicable. The amount of the Award will be determined by reference to the formula contained in
the relevant Award Agreement, which will describe the performance goal or goals and the percentage
of the potential Award to be paid depending upon what level of the performance goal(s) is achieved.
By way of example, and not limitation, if the performance goal is return on beginning stockholders
equity of Centex Corporation, the formula will set forth different levels of return and the Award
to be paid depending upon the level of return achieved. Performance goals will be established no
later than the earlier to occur of (x) 90 days after the commencement of the period of service to
which the performance goal relates and (y) the lapse of 25% of the period of service (as scheduled
in good faith at the time the goal is established), and in any event while the outcome is still
substantially uncertain. Performance goals may include: (a) earnings, either in the aggregate or on
a per-share basis, reflecting such dilution of shares as the Committee deems appropriate, including
operating earnings, pre-tax earnings, earnings before interest and taxes, and earnings before
interest, taxes, depreciation and amortization; (b) gross or net revenue; (c) operating or net cash
flow; (d) financial return ratios (e.g., return or net return on one or more of the following:
assets, net assets, equity, invested capital, revenue); (e) margins, including net, operating or
pre-tax margins; (f) total shareholder return; (g) financial ratios (e.g., debt to capitalization
or debt to equity); (h) growth in financial measures or ratios (e.g., revenue, earnings, cash flow,
stockholders’ equity, margins); or (i) customer satisfaction, based on specified objective goals,
or a customer survey sponsored by Centex Corporation, an Affiliate, or one or more business units
of Centex Corporation or an Affiliate, as applicable. Unless otherwise stated, such a performance
goal need not be based upon an increase or positive result under a particular business criterion
and could include, for example, maintaining the status quo or limiting economic losses (measured,
in each case, by reference to specific business criteria). In interpreting Plan provisions
applicable to performance goals, it is the intent of the Plan to conform with the standards of
Section 162(m) of the Code and Treasury Regulation §1.162-27(e)(2)(i), and the Committee in
establishing such goals and interpreting the Plan shall be guided by such provisions.

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     The maximum Award that may be paid to any Participant under this Plan for a Fiscal Year is an
amount equal to two percent (2%) of the reported consolidated net income of Centex Corporation and
subsidiaries for such Fiscal Year.

     Payment of an Award will be made to the Participant within 21/2 months following the conclusion
of a Fiscal Year upon the conditions that (a) the performance goal or goals specified in the
relevant Award Agreement have been achieved and (b) the Committee has reviewed and approved the
Award. Notwithstanding the foregoing, payment may be made after the 21/2 month period if it is
administratively impracticable to make payment by the end of the 21/2 month period and the
requirements of Treasury Regulation § 1.409A-1(b)(4) are otherwise satisfied.

     If during the course of a Fiscal Year the Participant takes a position with Centex Corporation
or an Affiliate which is materially different from the position which he or she occupied at the
commencement of such Fiscal Year, and the Committee determines that such new position does not
involve comparable or greater executive responsibilities than were enjoyed by such Participant at
the beginning of such Fiscal Year, then the relevant Award Agreement will automatically be
terminated. The Committee will decide, in its sole and absolute discretion, whether the
Participant will receive a prorated Award for such Fiscal Year or will forfeit any interest in any
Award for such Fiscal Year. Such a prorated Award will only be paid if the Committee determines
that the relevant performance goals have been achieved.

     In the event that the Participant is not an employee on the last day of the Plan year, the
Award will be treated as set forth in the applicable Award Agreement or as otherwise specified by
the Committee.

     6. Tax Withholding. Centex Corporation shall deduct applicable taxes with respect to the
payment of any Award and to take such other action as may be necessary in the opinion of Centex
Corporation to satisfy all obligations for withholding of such taxes.

     7. Non-Assignability. Unless otherwise determined by the Committee, no Award or any other
benefit under this Plan shall be assignable or otherwise transferable except to a Beneficiary or by
will, the laws of descent and distribution or a domestic relations order. The Committee may
prescribe other restrictions on transfer. Any attempted assignment of an Award or any other benefit
under this Plan in violation of this Section 7 shall be null and void.

     8. Change in Control and Certain Corporate Transactions. Notwithstanding anything to the
contrary above, a change in control (as specified below), shall cause the maximum Award to each
Participant for the then current fiscal year to be paid to the Participant, immediately prior to
such change in control, without regard to the determination as to the periods or achievement of the
objective performance goals. For purposes of this Section 8, a change in control shall be deemed to
have taken place if there occurs a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Act
whether or not the Corporation is then subject to such reporting requirement: provided that without
limitation such a change in control shall be deemed to have occurred if:

     (i) a third person, including a “Group” as defined in Section 13(d)(3) of the Act,
becomes the beneficial owner of shares of the twenty-five cents ($0.25) par value common
stock of Centex Corporation having 50% or more of total number of votes that may be cast for
the election of Directors of Centex Corporation; or

     (ii) as a result of, or in connection with, a contested election for Directors, persons
who were Directors of Centex Corporation immediately before such election shall cease to
constitute a majority of the Board.

     9. Plan Year. The plan year will be coterminous with the Fiscal Year, while this Plan is in
effect. This Plan will govern annual cash incentive compensation payments following March 31, 2003.

3

 

     10. Amendment, Modification, Suspension or Termination. The Board may amend, modify, suspend
or terminate this Plan for the purpose of meeting or addressing any changes in legal requirements
or for any other purpose permitted by law, except that (i) no amendment or alteration that would
adversely affect the rights of any Participant under any Award previously granted to such
Participant shall be made without the consent of such Participant and (ii) no amendment or
alteration shall be effective prior to its approval by the shareholders of Centex Corporation, to
the extent such approval is required by applicable legal requirements.

     11. No Employment Guaranteed. No provision of this Plan or any Award Agreement hereunder shall
confer any right upon any executive officer to continued Employment.

     12. Governing Law. This Plan and all determinations made and actions taken pursuant hereto, to
the extent not otherwise governed by mandatory provisions of the Act or other securities laws of
the United States, shall be governed by and construed in accordance with the laws of the State of
Texas, without reference to any conflicts of law principles thereof that would require the
application of the laws of another jurisdiction.

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