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EXHIBIT 10.5    
  

 
 

BROOKFIELD HOMES CORPORATION
  
    STOCK OPTION PLAN    
  

SECTION 1. GENERAL PROVISION  

1.1  Purpose  

The
purpose of the Stock Option Plan (the "Plan") of Brookfield Homes Corporation (herein called the "Corporation") is to advance the interests of the Corporation by (i) providing Eligible
Persons with additional incentive; (ii) encouraging stock ownership by such Eligible Persons; (iii) increasing their proprietary interest in the success of the Corporation;
(iv) encouraging them to remain with the Corporation or its Subsidiaries; and (v) attracting new employees, officers and directors. 

1.2  Administration  

	(a)
	The
Plan shall be administered by the Compensation Committee of the Board of Directors of the Corporation, or a sub-committee thereof (the "Committee").

	(b)
	Subject
to the limitations of the Plan, the Committee shall have the authority: (i) to grant Options to acquire shares of common stock of the Corporation (the "Common Shares")
to Eligible Persons; (ii) to determine the terms, limitations, restrictions and conditions upon such grants; (iii) to interpret the Plan and to adopt, amend and rescind such
administrative guidelines and other rules and regulations relating to the Plan as it shall from time to time deem advisable; and (iv) to make all other determinations and to take all other
actions in connection with the implementation and administration of the Plan as it may deem necessary or advisable. The Committee's guidelines, rules, regulations, interpretations and determinations
shall be conclusive and binding upon the Corporation and all other persons.

	(c)
	No
Option shall be granted under the Plan unless recommended by the Committee. 

1.3  Interpretation  

        For the purposes of the Plan, the following terms shall have the following meanings: 

	(a)
	"Code"
means the Internal Revenue Code of 1986, as amended;

	(b)
	"Eligible
Person" means a director, officer or employee of, or a consultant or any other person providing services to, the Corporation or of any Subsidiary;

	(c)
	"Fair
Market Value" means the last sale price regular way for Common Shares on the date of reference on the New York Stock Exchange, or, in case no sale takes place on such
date or if the Common Shares are not listed or admitted to trading on the New York Stock Exchange, as determined by any other appropriate method selected by the Committee.

	(d)
	"Option"
means an option to acquire Common Shares granted under the Plan;

	(e)
	"Participant"
means an Eligible Person to whom Options have been granted;

	(f)
	"Subsidiary"
means any company that is a subsidiary of the Corporation as defined in section 424(f) of the Code;

	(g)
	"Underlying
Share" means a Common Share issuable upon the exercise of an Option; and

	(h)
	"Year"
with respect to any Option granted under the Plan means the period of 12 months commencing on the date of the granting of such Option or on any anniversary thereof. 

Words
importing the singular number only shall include the plural and vice versa and words importing the masculine shall include the feminine. 

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The
Plan and all matters to which reference is made herein shall be governed by and interpreted in accordance with the laws of the State of Delaware. 

1.4  Shares Reserved  

	(a)
	All
shares of the Corporation issued under the Plan shall be Common Shares in the capital stock of the Corporation. Options may be granted in respect of authorized and unissued Common
Shares. 

The
maximum number of Common Shares which may be reserved for issuance under the Plan shall be 2,000,000 Common Shares, which number is subject to adjustment in accordance with the provisions of the
Plan. 

The
aggregate number of Common Shares with respect to which Options may be granted to any one person (together with their associates) under this Plan, together with all other incentive plans of the
Corporation (i) in any one year period shall not exceed 500,000 Common Shares, and (ii) in total shall not exceed 5% of the total number of common shares outstanding. 

Any
Common Shares subject to an Option that for any reason expires without having been exercised, shall again be available for grants under the Plan. No fractional shares shall be issued, and the
Committee may determine the manner in which fractional share value shall be treated. 

In
the event of any change in the outstanding Common Shares by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares, or other corporate
change, or in
the event of any issue of rights pursuant to a shareholder rights plan or other similar plan, the Committee shall make, subject to the prior approval of any relevant stock exchange, appropriate
substitution or adjustment in (i) the number or kind of shares or other securities reserved for issuance pursuant to the Plan; and (ii) the number and kind of shares subject to
unexercised Options theretofore granted and in the Exercise Price of such Options; provided, however, that no substitution or adjustment shall obligate the Corporation to issue or sell fractional
shares. In the event of the reorganization of the Corporation or the amalgamation, merger or consolidation of the Corporation with another corporation, or the payment of a special or extraordinary
dividend, the Committee may make such provision for the protection of the rights of Participants as the Committee in its discretion deems appropriate. 

1.5  Non-Exclusivity  

Nothing
contained herein shall prevent the Corporation from adopting other or additional compensation arrangements, subject to any required approval. 

1.6  Amendment and Termination  

No
Option shall be granted hereunder after July 31, 2012; provided, however, that the Board of Directors may at any time prior to that date amend, suspend or terminate the Plan or any portion
thereof. No such amendments, suspension or termination shall alter or impair any Options or any rights pursuant thereto granted previously to any Participant without the consent of such Participant.
In the event of termination of the Plan, the provisions of the Plan and any administrative guidelines, and other rules and regulations adopted by the Committee and in force at the time of the Plan
termination shall continue in effect during such time as an Option or any rights pursuant thereto remain outstanding. 

1.7  Compliance with Legislation  

The
Committee may postpone the exercise of any Option or the issue of any Underlying Shares pursuant to the Plan for such time as the Committee in its discretion may deem necessary in order to permit
the Corporation to effect or maintain registration of the Plan or the Common Shares issuable pursuant thereto under the securities laws of any applicable jurisdiction, or to determine that such shares
and the Plan are exempt from such registration. The Corporation shall not be obligated by any provision of the Plan or grant thereunder to sell or issue Common Shares in violation of the law of any
government having jurisdiction therein. In addition, the Corporation shall have no obligation to issue any Common Shares pursuant to the 

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Plan unless such Common Shares shall have been duly listed, upon official notice of issuance, with a stock exchange on which such Common Shares are listed for trading. 

1.8  Acceleration of Exercisability of Options Upon Occurrence of Certain Events.  

The
Committee may, in its discretion, provide in the case of any Option granted under the Plan that, in connection with any merger or consolidation which results in the holders of the outstanding
voting securities of the Corporation (determined immediately prior to such merger or consolidation) owning, directly or indirectly, less than a majority of the outstanding voting securities of the
surviving corporation (determined immediately following such merger or consolidation), or any sale or transfer by the Corporation of all or substantially all its assets or any tender offer or exchange
offer for or the acquisition, directly or indirectly, by any person or group of all or a majority of the then outstanding voting securities of the Corporation, such Option shall become exercisable in
full or part, notwithstanding any other provision of the Plan or of any outstanding Options granted thereunder, on and after (i) the fifteenth day prior to the effective date of such merger,
consolidation, sale, transfer or acquisition or (ii) the date of commencement of such tender offer or exchange offer, as the case may be. The foregoing sentence shall apply to any outstanding
Options which are incentive stock options to the extent permitted by Section 422(d) of the Code and any outstanding Options in excess thereof shall, immediately upon the occurrence of the event
described in clause (i) or (ii) of the foregoing sentence, be treated for all purposes of the plan as nonstatutory stock options and shall be immediately exercisable as such as provided
in the foregoing sentence. 

SECTION 2. OPTIONS  

2.1  Grants  

Subject
to the provisions of the Plan, the Committee shall have the authority to determine the limitations, restrictions and conditions, if any, in addition to those set forth in Section 2.3
hereof, applicable to the exercise of an Option, including, without limitation, the nature and duration of the restrictions, if any, to be imposed upon the sale or other disposition of the Underlying
Shares, and the nature of the events, if any, and the duration of the period in which any Participant's rights in respect of the Underlying Shares may be forfeited. An Eligible Person may receive
Options on more than one occasion under the Plan and may receive separate Options on any one occasion. 

2.2  Option Exercise Price  

The
Committee shall establish the exercise price ("Exercise Price") of each Option at the time such Option is granted, which shall not be less than the Fair Market Value of a Common Share on the date
of grant of such Option. 

        The
Exercise Price shall be subject to adjustment in accordance with the provisions of Section 1.4(b) hereof. 

2.3  Exercise of Options  

	(a)
	The
Committee shall determine the time or times at which an Option may be exercised in whole or in part, and the method or methods by which, and the form or forms (including, without
limitation, cash, Common Shares, or other property, or any combination thereof, having a value on the exercise date equal to the relevant Exercise Price) in which payment of the Exercise Price may be
made or deemed to have been made. The Committee may provide for the receipt, without payment by the Participant, of an amount per Option (the "Growth Amount") equal to the difference between the
Exercise Price of the Option and the Fair Market Value of the Common Shares, which Growth Amount, at the election of the Participant, will be payable either in cash or by the issuance by the
Corporation to the Participant of that number of Common Shares calculated by dividing the Growth Amount by the Fair Market Value of a Common Share.

	(b)
	Options
shall not be exercisable later than 10 years after the date of grant. 

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	(c)
	The
Committee may determine when any Option shall become exercisable and may determine that the Option shall be exercisable in installments.

	(d)
	Except
as otherwise determined by the Committee: (i) in the event that a Participant ceases to be an Eligible Person for any reason other than death, retirement or disability,
each of the Options held by the Participants shall cease to be exercisable after the date of termination of employment; (ii) in the event of termination of employment or ceasing to be a
director as a result of retirement, all of the Participant's Options shall continue in force notwithstanding the termination of his employment or ceasing to be a director; and (iii) in the
event of death, the legal representatives of a Participant may exercise the
Participant's Options within six months after the date of the Participant's death to the extent such Options were by their terms exercisable prior to his death or within the period of six months
following his death; but for greater certainty no Option shall be exercisable after its stated termination date. In the event that the legal representatives of a Participant who has died exercises the
Participant's Option in accordance with the terms of the Plan, the Corporation shall have no obligation to issue the Common Shares until evidence satisfactory to the Corporation has been provided by
such legal representatives that such legal representatives are entitled to acquire the Common Shares under the Plan.

	(e)
	Except
as provided in this Section 2.3(e), during the lifetime of a Participant, Options held by such Participant shall be exercisable only by him and no Option shall be
transferable other than by will or the laws of descent and distribution. The Committee may, in its discretion, provide that Options held by a Participant, other than incentive stock options, may be
transferred to or for the benefit of a member of his immediate family. For purposes hereof, the term "immediate family" shall mean a Participant's spouse and children (both natural and adoptive), and
the direct lineal descendants of his children.

	(f)
	Each
Option shall be confirmed by an agreement (an "Option Agreement") executed by the Corporation and by the Participant.

	(g)
	If,
as and when any Common Shares have been duly issued upon the exercise of an Option and in accordance with the terms of such Option and the Plan, such Underlying Shares shall be
conclusively deemed allotted as fully paid and non-assessable shares of the Corporation.

	(h)
	Options
may not be exercised for fewer than 100 Common Shares at any one time, unless the Participant holds Options for less than 100 Underlying Shares. 

SECTION 3. APPROVAL  

3.1  Approval  

The
Plan was approved by the Board of Directors on November    , 2002, and by the stockholders of the Corporation on November    , 2002. 

SECTION 4. MISCELLANEOUS  

4.1  Additional Provisions Applicable to Incentive Stock Options  

The
Committee may, in its discretion, grant Options under the Plan to Eligible Persons which constitute "incentive stock options" within the meaning of Section 422 of the Code; provided,
however, that (a) the aggregate Fair Market Value of the Common Shares with respect to which incentive stock options are exercisable for the first time by the Participant during any calendar
year shall not exceed the limitation set forth in Section 422(d) of the Code; and (b) if the Participant owns on the date of grant securities possessing more than 10% of the total
combined voting power of all classes of securities of the Corporation or of any parent or subsidiary of the Corporation, the price per share shall not be less than 110% of the Fair Market Value per
share on the date of grant and the period of exercise shall not be longer than five years from the date of grant. 

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4.2  Withholding  

It
shall be a condition to the obligation of the Corporation to issue Common Shares upon exercise of an Option that the Participant (or any beneficiary, transferee or person entitled to act under
Sections 2.3(d) or 2.3(e) hereof) pay to the Corporation, upon its demand, such amount as may be requested by the Corporation for the purpose of satisfying any liability to withhold
federal, state or local income or other taxes. If the amount requested is not paid, the Corporation may refuse to issue such Common Shares. 

4.3  Issuance of Certificates; Legends  

Common
Shares duly acquired under the terms of an Option shall be registered in the name of the Participant and a share certificate representing the number of such Common Shares shall be issued in the
name of the Participant, his or her legal representatives or as he, she or they may direct. The Corporation may endorse such legend or legends upon the certificates for Common Shares issued upon the
exercise of an Option granted hereunder and may issue such "stop transfer" instructions to its transfer agent in respect of such shares as, in its absolute discretion, it determines to be necessary or
appropriate. 

4.4  Correction of Defects, Omissions, and Inconsistencies  

The
Committee may correct any defect, supply any omission, or reconcile any inconsistency in this Plan in the manner and to the extent it shall deem desirable to carry this Plan into effect. 

4.5  Other Actions  

Nothing
contained in this Plan shall be construed to limit the authority of the Corporation to exercise its corporate rights and powers, including but not by way of limitation, the right of the
Corporation to grant or assume Options for proper corporate purposes other than under the Plan with respect to any employee or other person, firm, corporation or association. 

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EXHIBIT 10.6  

 
 

BROOKFIELD HOMES CORPORATION
  DEFERRED SHARE UNIT PLAN    
  

1.    PURPOSE  

        The purpose of the Brookfield Homes Corporation Deferred Share Unit Plan is to provide executives of the Corporation or its Subsidiaries, compensation
opportunities that are consistent with shareholder interests. 

2.    DEFINITIONS  

        The following terms, when used in the Plan, shall have the respective meanings set forth below, unless the context specifically requires otherwise. 

	

Corporation:	
 	

Brookfield Homes Corporation
	

Beneficiary:	
 	

A dependent or relation of the Executive.
	

Committee:	
 	

The Compensation Committee of the Board of Directors of the Corporation.
	

Fiscal Year:	
 	

The Corporation's Fiscal Year. The Corporation currently has a Fiscal Year end of December 31.
	

Notification Date:	
 	

The date during the year when the bonus is awarded for the prior year.
	

Participant:	
 	

An Executive who participates in the Plan.
	

Plan:	
 	

Brookfield Homes Corporation Deferred Share Unit Plan as set forth herein.
	

Executive:	
 	

A designated senior executive of the Corporation or a Subsidiary.
	

Share:	
 	

A share of common stock of Brookfield Homes Corporation.
	

Subsidiary:	
 	

A subsidiary of the Corporation.
	

NYSE:	
 	

The New York Stock Exchange.
	

Units:	
 	

The deferred share units issued to Participants in accordance with sections 6 and 8 of the plan.

3.    INTERPRETATION  

        This Plan is intended to qualify as a "prescribed plan" as defined in paragraph 6801 (d) of the Income Tax Regulations under the Income
Tax Act (Canada). As a result, the value of Units granted under the Plan, including dividend equivalents, will not be included in a Participant's income until the year the Units are redeemed.
This Plan is intended to qualify as an unfunded ERISA pension plan maintained by an employer for a select group of management or highly compensated employees. 

4.    ADMINISTRATION  

	(a)
	The
Plan shall be administered by the Committee and the Corporation will be responsible for all costs relating to the administration of the Plan.

	(b)
	The
Committee is authorized, subject to the provisions of the Plan, to establish such rules and regulations as it deems necessary for the proper administration of the Plan and to make
determinations and take such other action in connection with or in relation to the Plan as it deems necessary or advisable. Each determination or action made or taken pursuant to the Plan, including
interpretation of the Plan, shall be final and conclusive for all purposes and binding upon all parties. 

5.    ELIGIBILITY  

        Designated Executives are eligible to participate. 

 

6.    ELECTION OF PARTICIPANTS  

	(a)
	Participants
will have the option to elect each year to receive all or a portion of their Management Incentive Plan (MIP) bonus to which they may be entitled in the form of Units.

	(b)
	The
portion of the MIP bonus allocated to the Plan will be increased at the discretion of the Committee by a factor of up to two when calculating the number of Units granted.

	(c)
	A
Participant must indicate his/her decision to participate in the Plan during the first quarter of the fiscal year with respect to the MIP bonus for that Fiscal Year other than the
first year when such decision is required before the end of the fourth quarter of that Fiscal Year.

	(d)
	Once
the election is made to participate, it is irrevocable with respect to the MIP bonus for that Fiscal Year. 

7.    DEFERRED SHARE UNITS  

	(a)
	There
will be no Shares issued, authorized, reserved, purchased or sold at any time in connection with Units allocated under the Plan.

	(b)
	Under
no circumstances will Units be considered Shares, or entitle any Participant to the exercise of voting rights or to the exercise of any other rights arising from the ownership
of Shares.

	(c)
	No
certificates will be issued with respect to the Units.

	(d)
	One
(1) Unit is notionally equivalent to one (l) Share. Fractional Units are permitted under the Plan.

	(e)
	In
no event may the rights or interest of a Participant be assigned, encumbered or transferred, except to the extent that rights may pass to a Beneficiary or legal representative of a
Participant pursuant to the terms of the Plan upon the death of a Participant. 

8.    ALLOTMENT OF THE DEFERRED SHARE UNITS  

	(a)
	Following
the end of the Fiscal Year, once MIP bonuses have been determined, the adjusted dollar value of the portion of the MIP bonus allocated to the Plan will be divided by the
closing price of a Share on the NYSE on the Notification Date.

	(b)
	Additional
Units will be allotted to participants to reflect dividends paid on an equivalent number of Shares to the total Units held at the time of payment. The number of additional
Units will be determined by dividing the dollar value of the notional dividends by the closing price of a Share on the NYSE on the dividend payment date.

	(c)
	The
Corporation and its Subsidiaries, and their directors and officers, shall not be liable to any Participant, Beneficiary or legal representative for any decrease in the value of
Units that may occur. Any Participant, Beneficiary or legal representative will not be entitled, either immediately or in the future, absolutely or contingently, to receive or obtain any amount or
benefit designed to reduce the impact of any reduction in the fair market value of the Shares. 

9.    VESTING  

	(a)
	The
Units will vest over five years at the end of each year, ratably, except as indicated below.

	(b)
	In
the event of termination of a Participant by the Corporation or a Subsidiary within five years of an allotment of Units, the Participant will be eligible to all vested Units and
50% of any unvested Units at that time.

	(c)
	In
the event of death, all Units held by a Participant become fully vested. 

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10.  DESIGNATION OF A BENEFICIARY  

        The Participant may designate a Beneficiary who will be entitled to receive all amounts that may be received under the Plan after the Participant's death. If no
Beneficiary is designated, the legal representative of the Participant will be entitled to receive such amounts. 

11.  REDEMPTION OF THE DEFERRED SHARE UNITS  

	(a)
	Vested
Units can only be redeemed after cessation of employment whether due to termination, retirement or death, which is hereafter referred to as Retirement.

	(b)
	In
the event of death, a Participant's designated Beneficiary, or legal representative, as the case may be, shall be entitled to redeem the Units.

	(c)
	Redemption
of the Units must take place no later than 12 months following Retirement, by written notice delivered by the Participant, or his legal representative, to the
Committee (the "Notice of Redemption") or if no such Notice of Redemption is received, on the first anniversary of the Retirement.

	(d)
	The
value of the Units on redemption will be based on the closing price of a common share of the Corporation on the NYSE on the date the Notice of Redemption is received by the
Committee or if no such Notice is received, on the first anniversary of the Retirement. The value of the Units will be paid in cash less applicable statutory deductions and tax withholdings as
determined by the Committee. 

12.  ADJUSTMENTS  

        Appropriate adjustments will be made by the Committee, with respect to the number of Units, in order to adjust for the effect of subdivision or consolidation of
the Corporation's common shares, payment of dividends in stock (other than normal dividends), reclassification or conversion of the Shares, recapitalization, reorganization, capital distribution or
any other event which, in the judgement of the Committee justifies action by way of adjustment to the number of Units. 

13.  AMENDMENT OR TERMINATION  

        The Committee may amend, suspend or terminate the Plan at any time and in such manner and to such extent as it deems advisable. No such amendment, suspension or
termination shall materially adversely affect the rights of a Participant in respect of Units granted prior to the date of such amendment, suspension or termination. 

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BROOKFIELD HOMES CORPORATION
  DEFERRED SHARE UNIT PLAN TERM SHEET    
  

	
Purpose:	
 	

To provide senior executives with the ability to defer bonuses and invest the amounts in share units of the company on a pre-tax basis.
	
Eligibility:	
 	

Designated senior executives.
	
Participation:	
 	

Voluntary, up to 100% of the bonus to be deferred on an annual basis.
	
Enhanced Bonus:	
 	

Bonus to be increased by up to two times with the number of share units allocated based on the price on day of the award.
	
Vesting:	
 	

Over 5 years, at the end of each year, ratably.
	
Redemption:	
 	

Vested portion to be redeemed on cessation of employment — defined as retirement, death or resignation.
	
Administration:	
 	

Compensation Committee

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BROOKFIELD HOMES CORPORATION DEFERRED SHARE UNIT PLAN

BROOKFIELD HOMES CORPORATION DEFERRED SHARE UNIT PLAN TERM SHEET

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