Document:

Exhibit 10.27

 

WCI Management Incentive Compensation Plan

2014

 

I.                                        Background

 

WCI Communities, Inc. (the “Company” or “WCI”) has established a management incentive compensation plan as set forth below (the “MICP” or “Plan”) to incentivize certain key managers to focus on critical business plan objectives for the period commencing January 1, 2014 through December 31, 2014.  The Plan is a sub-plan established under the WCI Communities, Inc. Senior Executive Incentive Bonus Plan approved by the Board of Directors of the Company (the “Board”) on June 14, 2013 and approved by the stockholders of the Company on July 9, 2013 (the “Senior Executive Bonus Plan”).

 

II.                                   MICP Structure

 

The MICP is split into two (2) components: a) Objective (75%) (“Objective Component”) and b) Subjective (25%) (“Subjective Component”).  In the Objective Component of the Plan, payment of incentive bonuses under the MICP is independently conditioned upon the achievement of the following financial objective (“Financial Objective”):  2014 EBITDA.  The Financial Objective in this Objective Component will be measured independently and will be paid based on the respective grid in Appendix A. If actual performance with respect to the Financial Objective is below Threshold as set forth on Appendix A, there will be no MICP bonus payout with respect to the Financial Objective.  If actual performance with respect to the Financial Objective exceeds Max as set forth on Appendix A, the MICP bonus payout with respect to the Financial Objective will be at Max MICP Payout as set forth on Appendix A.  If actual performance is between any levels set forth on Appendix A, MICP bonus payout with respect thereto will be determined by linear interpolation.

 

Impairments taken in the calendar year 2014 shall be included in the Financial Objective calculation, but such calculation may be neutralized for impairments at the sole discretion of the Compensation Committee of the Board (the “Committee”) based upon facts and circumstances as it deems appropriate.  Exclusion of any other extraordinary items will be at the discretion of the Committee.

 

In the Subjective Component of the Plan, payment of incentive bonuses under the MICP is independently conditioned upon the individual MICP Participant’s performance as determined and approved by both the Board and the Committee in their discretion.  If actual performance with respect to this Subjective Component is below Threshold as determined by the Board or Committee, there will be no MICP bonus payout with respect to the Subjective Component.  If actual performance with respect to the Subjective Component exceeds Max as determined by the Board and Committee, the MICP bonus payout with respect to the Subjective Component will be at Max MICP Payout as set forth on Appendix A.  If actual performance is between any levels set forth on Appendix A, MICP bonus payout with respect thereto will be determined by linear interpolation.

 

1

 

The Financial Objective in the Objective Component and the Subjective Component will carry the following weighting as it relates to payment under the MICP:

 

	
·
    	
Financial Objective
    	
75
    	
%
    
	
·
    	
Subjective Component
    	
25
    	
%
    
	
 
    	
Total:
    	
100
    	
%
    
					

 

III.                              Participation

 

The initial participants of the Plan will be 22 key managers of the Company selected by the Company’s Chief Executive Officer (“CEO”) and approved by the Committee, but the number of participants in the MICP may vary as a result of new hires, terminations, or otherwise as provided in the next paragraph below (the “MICP Participants”).  Except with respect to replacement and new MICP Participants determined by the CEO as described below, the Target MICP bonus for each MICP Participant shall be determined by the CEO and approved by the Committee.  The combined threshold, target and maximum MICP bonuses for all of the MICP Participants will not exceed $1,300,000, $2,600,000, and $3,900,000, respectively, stated on an annualized basis. The list of the initial 22 MICP Participants and Target MICP bonuses has been approved by the Committee.

 

Provided that the combined threshold, target and maximum MICP bonuses for all of the MICP Participants do not exceed the amounts set forth in the preceding sentence, the CEO will have the discretion and authority, without the approval of the Committee, to: (i) adjust or reallocate individual target bonus amounts at any time up to a maximum of $25,000 per individual but only one time for each MICP Participant before finalizing the bonus payments, and (ii) replace or add MICP Participants in the normal course of business (i.e., resulting from a termination (with or without Cause (as defined below)), voluntary termination, new hire, promotion, or transfer, etc.).

 

IV.                               MICP Vesting and Payment

 

As outlined below, Company management will provide the Committee with a calculation supported by relevant backup information for the Financial Objective in the Objective Component, as well as a certification signed by the CEO and CFO as to the Company’s achievement under the Financial Objective (the “MICP Documentation”).  The presented MICP Documentation shall include any items of an unusual or nonrecurring nature which may affect the calculation of the Financial Objective.

 

Management shall prepare and present to the Committee the MICP Documentation required for payment of the Financial Objective, no later than February 28, 2015. Any bonuses with respect to the Financial Objective will be reviewed and approved by the Committee and payment made during calendar year 2015 no later than March 15, 2015.  Without limiting the Company’s rights under Section 5 of the Senior Executive Bonus Plan, the Company retains the right to recover any monies paid to MICP Participants under the Financial Objective to the extent that the subsequent audited financial statements demonstrate such monies as not earned under the Plan.

 

2

 

Management shall prepare and present to the Committee their recommendations on the Subjective Component performance level achieved no later than February 28, 2015.  Any bonuses with respect to the Subjective Component will be reviewed and approved by the Committee and payment made during calendar year 2015 no later than March 15, 2015.  The Committee shall make final determinations with respect to all bonus payments under the Subjective Component.  Dollars earned under this Subjective Component may be moved between participants at the sole discretion of the Committee and are not subject to any individual caps.

 

In the event that prior to December 31, 2014 an MICP Participant dies, then the MICP bonus shall vest for such MICP Participant and shall be prorated based upon such MICP Participant’s number of completed full calendar months of active employment by the Company during calendar year 2014 through the date of his or her death and shall be paid at the same time that MICP bonuses are otherwise paid to MICP Participants under the MICP.

 

In the event that prior to December 31, 2014 the Company terminates the employment of an MICP Participant following such MICP Participant’s permanent disability (as defined below), then the MICP bonus shall vest for such MICP Participant and shall be prorated based upon such MICP Participant’s number of completed full calendar months of active employment by the Company during calendar year 2014 through the date of such termination and shall be paid at the same time that MICP bonuses are otherwise paid to MICP Participants under the MICP. For purposes of the MICP, the determination of “permanent disability” shall be made by the Committee.

 

In the event that on or prior to December 31, 2014 the employment of an MICP Participant is terminated by the Company with or without Cause, or an MICP Participant voluntarily terminates his or her employment, and neither of the two immediately preceding paragraphs applies, bonus eligibility under the MICP for said MICP Participant shall be forfeited.

 

For clarification purposes, in the event an MICP bonus award for an MICP Participant vests on December 31, 2014, and subsequent to that date (but prior to the pay-out date for such bonus award), such MICP Participant’s employment with the Company terminates for any reason other than (a) for Cause or (b) voluntary resignation, then in such event the MICP Participant shall be entitled to receive such bonus, and shall be paid such bonus at the same time that bonuses are otherwise paid under the MICP in accordance with the Plan, and if such termination is by the Company for Cause or due to voluntary resignation, such bonus award will be forfeited.

 

If, at any time on or before December 31, 2014, a “change in control event” (as defined below) occurs with respect to the Company AND as a result of such change in control event (a) the employment of an MICP Participant is terminated by the Company without Cause, OR (b) an MICP Participant is “demoted” (as defined below) and such MICP Participant thereafter terminates his or her employment with the Company (a “CIC Termination Event”), then such MICP Participant’s MICP bonus shall immediately vest as of the date of such CIC Termination Event, and shall be paid within 30 days after the date of such CIC Termination Event at the greater of the: (i) the full 12 month Target bonus per Appendix A for the Financial Objective, or (ii) the full 12 month bonus that would be payable based upon the actual results through the date of the CIC Termination Event. For purposes of the MICP, an MICP Participant shall be deemed to have been “demoted” if prior to December 31, 2014 (a) the MICP Participant’s base salary is reduced

 

3

 

(excluding any such reduction that affects all WCI employees generally), or (b) there has been a material change in the MICP Participant’s title, duties or responsibilities. For purposes of the MICP, a “change in control event” shall have the same meaning as used in Treasury Regulation Section 1.409A-3(i)(5), except that the reference to a change in effective control of a company which occurs when a person or group acquires (during a 12 month period) “30%” or more of the total voting power of a company’s stock, shall be changed to “50%” or more of the total voting power of the Company’s stock. A termination of employment shall not be deemed to have occurred for purposes of this paragraph unless such termination is a “separation of service” within the meaning of Section 409A of the Code.

 

Notwithstanding anything to the contrary in the MICP, if an MICP Participant is party to an effective employment agreement with the Company, and there is a conflict between the terms of the MICP and such employment agreement, the terms and provisions of such employment agreement shall control.

 

V.                                    MICP Ratification & Approval; Administration

 

The Committee will have the responsibility for administering, operating and interpreting the Plan in accordance with its terms and conditions.  The Committee will have all powers necessary or appropriate to administer and operate the Plan. The Committee will have full discretionary authority in all matters related to the discharge of its responsibilities, and the exercise of its authorities and powers, under the Plan. All interpretations, constructions, determinations, decisions and actions of the Committee in relation to the Plan will be final, binding and conclusive on all MICP Participants and all other persons. Subject to its obligations under the Committee Charter, the Committee may delegate all or any part of its responsibilities and powers under this Article V to any person or persons selected by it.

 

VI.                                                                               Miscellaneous

 

A.            The adoption and maintenance of the Plan shall not be deemed to be a contract of employment or service between the Company or any of its affiliates and any MICP Participant.  Nothing in the Plan and no amount payable under the Plan will give any MICP Participant a right to continue to be an employee of the Company or any of its affiliates or in any other way affect the right of the Company or any of its affiliates to terminate the employment of any MICP Participant at any time, for any reason or no reason, with or without Cause or notice.  No MICP Participant or other person shall have any rights or claims in relation to the Plan except in accordance with the provisions of the Plan.

 

B.            To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. The Plan is “unfunded” and all payments provided for under the Plan shall be paid in cash from the general funds of the Company.  No MICP Participant shall have any interest in any specific asset of the Company as a result of the Plan. Nothing contained in the Plan and no action taken pursuant to the provisions of the Plan shall create or be construed to create a trust of any kind, or a fiduciary relationship among the Company, the Committee, the CEO and any MICP Participant or any other person.

 

4

 

C.            Any liability of the Company to any employee of the Company in relation to the Plan shall be based solely upon contractual obligations created by the Plan.  None of the Company, the Committee, the CEO or any other person participating in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability to any party for any action taken or not taken in connection with the Plan, except as may expressly be provided by statute.  None of the Company, the Committee or any such other person shall be liable to any MICP Participant or any other person as to any tax consequence expected, but not realized, by any such MICP Participant or other person in relation to participation in the Plan.

 

D.            No amount payable at any time under the Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment, or encumbrance of any kind.

 

E.             Any payment or other distribution under the Plan may be reduced by any amount (including employment taxes) required to be withheld by the Company or any of its affiliates with respect thereto under any applicable law, rule, regulation, order or other requirement of any governmental authority, and the Company and its affiliates may cause to be made, as a condition precedent to any payment under the Plan, appropriate arrangements with any MICP Participant for the satisfaction of any such taxes. In addition, the Company and its affiliates shall have full authority to withhold any taxes (including employment taxes) applicable to amounts payable hereunder from other compensation owing to any such MICP Participant other than pursuant to the Plan, to the extent permitted by applicable law.

 

F.              The Plan and all rights hereunder shall be governed by and construed and interpreted according to the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.

 

G.            The Committee, at any time and with or without prior notice, may amend, suspend or terminate the Plan, and each such amendment, suspension or termination shall be binding upon the Company, all MICP Participants and all other persons, provided, however, that no amendment, suspension or termination of the Plan shall materially and adversely affect the rights of any MICP Participant without such MICP Participant’s prior written consent, except such an amendment made to cause the Plan to comply with applicable law, tax rules or accounting rules.

 

H.           The Company intends that bonus payments provided for in the Plan either be exempt from Section 409A of the Code or be provided in a manner that complies with the provisions of Section 409A of the Code and the Plan shall be interpreted and construed in a manner consistent with such intent.  Notwithstanding any provision of the Plan to the contrary, in the event that following the date of adoption of the Plan the Company determines that any provision of the Plan could otherwise cause any person to be subject to the penalty taxes imposed under Section 409A of the Code, the Company may adopt such amendments to the Plan or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Company determines are necessary or appropriate to comply with the requirements of Section 409A of the Code and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under Section 409A of the Code.  Notwithstanding anything herein to the contrary, in no event shall any liability for failure to comply with the requirements of Section 409A of the Code be transferred from an MICP

 

5

 

Participant or any other person to the Company or any of its affiliates, employees or agents pursuant to the terms of the Plan or otherwise.

 

I.                This Plan shall be administered consistent with the provisions of the Senior Executive Bonus Plan and in the event of any conflict between the terms of this Plan and the terms of the Senior Executive Bonus Plan, the terms of the Senior Executive Bonus Plan shall control.  For the avoidance of doubt, the bonus awards paid under this Plan constitute bonuses payable pursuant to the last sentence of Section 4(b) of the Senior Executive Bonus Plan.  Nothing in this Plan shall be deemed to constitute a “material modification” (within the meaning of Treasury Regulation Section 1.162-27(h)(1)(iii)) of the Senior Executive Bonus Plan and this Plan shall be interpreted accordingly.

 

J.                For purposes of this Plan, “Cause” (i) shall have meaning given to such term in any employment agreement with the Company to which the MICP Participant is a party (a “Cause Agreement”); or (ii) in the absence of an applicable Cause Agreement, shall mean that the MICP Participant: (1) has committed any felony or any other act involving fraud, theft, misappropriation, dishonesty, or embezzlement; (2) has committed intentional acts that materially impair the goodwill or business of the Company or cause material damage to its property, goodwill, or business; (3) has refused to, or willfully failed to, perform his or her material duties, which refusal or failure continues for a period of fourteen (14) days following notice thereof by the Company to the MICP Participant; or (4) has violated any written Company policies or procedures, which violation is not cured, to the extent susceptible to cure, within fourteen (14) days after the Company has given written notice to the MICP Participant describing such violation. For purposes of clause (ii) above, any voluntary termination by the MICP Participant in anticipation of a termination by the Company for Cause shall be deemed a termination by the Company for Cause.

 

6

 

Appendix A

 

2014 MICP Payout Grid

WCI Communities

 

The 2014 MICP Plan is split 75/25 in two components; Objective and Subjective

 

The 75% Objective Component will have the following Objective:  2014 Adjusted EBITDA plan

 

The 25% Subjective Component will be based on an individual’s performance to the organization at the discretion of the Board.

 

	
Description
    	
 
    	
Weight
    	
 
    	
Max
    	
 
    	
Target
    	
 
    	
Threshold
    	
 
    
	
Objective
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1) EBITDA
    	
 
    	
75
    	
%
    	
$
    	
2,925,000
    	
 
    	
$
    	
1,950,000
    	
 
    	
$
    	
975,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Subjective
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2) Individual Contribution
    	
 
    	
25
    	
%
    	
$
    	
975,000
    	
 
    	
650,000
    	
 
    	
$
    	
325,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
100
    	
%
    	
$
    	
3,900,000
    	
 
    	
$
    	
2,600,000
    	
 
    	
$
    	
1,300,000
    	
 
    

 

1) EBITDA

 

	
 
    	
 
    	
2014
    	
 
    
	
2014 Adjusted EBITDA Plan
    	
 
    	
$
    	
41,573,000
    	
 
    
					

 

	
 
    	
 
    	
EBITDA %
    	
 
    	
EBITDA $
    	
 
    	
MICP
    	
 
    	
MICP
    	
 
    
	
 
    	
 
    	
Achieved
    	
 
    	
Achieved
    	
 
    	
Payout %
    	
 
    	
Payout $
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Max
    	
 
    	
120.0
    	
%
    	
$
    	
49,887,600
    	
 
    	
150.0
    	
%
    	
$
    	
2,925,000
    	
 
    
	
 
    	
 
    	
115.0
    	
%
    	
$
    	
47,808,950
    	
 
    	
137.5
    	
%
    	
$
    	
2,681,250
    	
 
    
	
 
    	
 
    	
110.0
    	
%
    	
$
    	
45,730,300
    	
 
    	
125.0
    	
%
    	
$
    	
2,437,500
    	
 
    
	
 
    	
 
    	
105.0
    	
%
    	
$
    	
43,651,650
    	
 
    	
112.5
    	
%
    	
$
    	
2,193,750
    	
 
    
	
Target MICP
    	
 
    	
100.0
    	
%
    	
$
    	
41,573,000
    	
 
    	
100.0
    	
%
    	
$
    	
1,950,000
    	
 
    
	
 
    	
 
    	
95.0
    	
%
    	
$
    	
39,494,350
    	
 
    	
87.5
    	
%
    	
$
    	
1,706,250
    	
 
    
	
 
    	
 
    	
90.0
    	
%
    	
$
    	
37,415,700
    	
 
    	
75.0
    	
%
    	
$
    	
1,462,500
    	
 
    
	
 
    	
 
    	
85.0
    	
%
    	
$
    	
35,337,050
    	
 
    	
62.5
    	
%
    	
$
    	
1,218,750
    	
 
    
	
Threshold
    	
 
    	
80.0
    	
%
    	
$
    	
33,258,400
    	
 
    	
50.0
    	
%
    	
$
    	
975,000Exhibit 10.28

 

WCI COMMUNITIES, INC.

2013 INCENTIVE AWARD PLAN

 

RESTRICTED STOCK AWARD GRANT NOTICE

 

WCI Communities, Inc., a Delaware corporation, (the “Company”), pursuant to its 2013 Incentive Award Plan (the “Plan”), hereby grants to the individual listed below (“Holder”), the number of shares of the Company’s Common Stock set forth below (the “Restricted Stock Award”).  This Restricted Stock Award is subject to all of the terms and conditions as set forth herein and in the Restricted Stock Award Agreement attached hereto as Exhibit A (the “Restricted Stock Agreement”) (including, without limitation, the Restrictions (as defined in the Restricted Stock Agreement)) and the Plan, each of which is incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Restricted Stock Agreement.

 

	
Holder:
    	
 
    	
[            ]
    
	
 
    	
 
    	
 
    
	
Grant   Date:
    	
 
    	
[            ]
    
	
 
    	
 
    	
 
    
	
Total   Number of Shares of Restricted Stock:
    	
 
    	
[        ]   shares
    
	
 
    	
 
    	
 
    
	
Purchase   Price:
    	
 
    	
$0.00
    
	
 
    	
 
    	
 
    
	
Vesting   Schedule:
    	
 
    	
All   shares covered by the Restricted Stock Award shall vest and the Restrictions   on such shares shall lapse on the first business day [immediately prior   to the Company’s annual shareholders meeting occurring in the calendar year   following the calendar year which includes the Grant Date](1) [on or   following the third anniversary of the Grant Date](2), subject to Holder’s   continued employment with or service to the Company or a Subsidiary through   such vesting date.
    

 

By his or her signature and the Company’s signature below, Holder and the Company agree to be bound by the terms and conditions of the Plan, the Restricted Stock Agreement and this Grant Notice.  Holder has reviewed the Restricted Stock Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Restricted Stock Agreement and the Plan.  Holder hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator of the Plan upon any questions arising under the Plan, this Grant Notice or the Restricted Stock Agreement. If Holder is married, his or her spouse has signed the Consent of Spouse attached to this Grant Notice as Exhibit B.

 

	
WCI COMMUNITIES, INC.:
    	
 
    	
HOLDER:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
By:
    	
 
    
	
Print   Name:
    	
 
    	
 
    	
 
    	
Print   Name:
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(1)  For directors

 

(2)  For employees

 

 

EXHIBIT A

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

WCI COMMUNITIES, INC. RESTRICTED STOCK AWARD AGREEMENT

 

Pursuant to the Restricted Stock Award Grant Notice (the “Grant Notice”) to which this Restricted Stock Award Agreement (the “Agreement”) is attached, WCI Communities, Inc., a Delaware corporation (the “Company”) has granted to Holder the right to purchase the number of shares of Restricted Stock under the WCI Communities, Inc. 2013 Incentive Award Plan, as amended from time to time (the “Plan”), as set forth in the Grant Notice.

 

ARTICLE I.

 

GENERAL

 

1.1                               Defined Terms.  Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.

 

1.2                               Incorporation of Terms of Plan.  The Award is subject to the terms and conditions of the Plan which are incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.

 

ARTICLE II.

 

AWARD OF RESTRICTED STOCK

 

2.1                               Award of Restricted Stock.

 

(a)                                 Award.  In consideration of Holder’s past and/or continued employment with or service to the Company or a Subsidiary, and for other good and valuable consideration which the Administrator has determined exceeds the aggregate par value of the Common Stock subject to the Award (as defined below), as of the Grant Date, the Company issues to Holder the number of shares of Restricted Stock (the “Restricted Shares”) set forth in the Grant Notice (the “Award”).  Holder is a Non-Employee Director or an Employee or Consultant of the Company or a Subsidiary.

 

(b)                                 Purchase Price; Book Entry Form.  The purchase price of the Restricted Shares is set forth on the Grant Notice.  At the sole discretion of the Administrator, the Restricted Shares will be issued in either (i) uncertificated form, with the Restricted Shares recorded in the name of Holder in the books and records of the Company’s transfer agent with appropriate notations regarding the Restrictions (as defined below) imposed pursuant to this Agreement, and upon vesting and the satisfaction of all conditions set forth in Section 2.2(d), the Company shall cause the book entries evidencing the Restricted Shares to indicate that the Restrictions have lapsed; or (ii) certificate form pursuant to the terms of Sections 2.1(c) and (d).

 

(c)                                  Legend.  Certificates representing Restricted Shares issued pursuant to this Agreement shall, until all Restrictions imposed pursuant to this Agreement lapse or shall have been removed and the Restricted Shares shall thereby have become vested or the Restricted Shares represented thereby have been forfeited hereunder, bear the following legend (or such other legend as shall be determined by the Administrator):

 

A-1

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING REQUIREMENTS AND MAY BE SUBJECT TO FORFEITURE UNDER THE TERMS OF A RESTRICTED STOCK AWARD AGREEMENT, BY AND BETWEEN WCI COMMUNITIES, INC. AND THE REGISTERED OWNER OF SUCH SHARES, AND SUCH SHARES MAY NOT BE, DIRECTLY OR INDIRECTLY, OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES, EXCEPT PURSUANT TO THE PROVISIONS OF SUCH AGREEMENT.”

 

(d)                                 Escrow.  The Secretary of the Company or such other escrow holder as the Administrator may appoint may retain physical custody of the certificates representing the Restricted Shares until all of the Restrictions (as defined below) imposed pursuant to this Agreement lapse or shall have been removed; in such event Holder shall not retain physical custody of any certificates representing unvested Restricted Shares issued to him.  Holder, by acceptance of the Award, shall be deemed to appoint, and does so appoint the Company and each of its authorized representatives as Holder’s attorney(s)-in-fact to effect any transfer of unvested forfeited Restricted Shares (or Restricted Shares otherwise reacquired by the Company hereunder) to the Company as may be required pursuant to the Plan or this Agreement and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer.

 

(e)                                  Delivery of Certificates Upon Vesting. As soon as administratively practicable after the vesting of any Restricted Shares subject to the Award, pursuant to Section 2.2(b), the Company shall, as applicable, either remove the notations on any Restricted Shares subject to the Award issued in book entry form which have vested or deliver to Holder a certificate or certificates evidencing the number of Restricted Shares subject to the Award which have vested.  Holder (or the beneficiary or personal representative of Holder in the event of Holder’s death or incapacity, as the case may be) shall deliver to the Company any representations or other documents or assurances required by the Company.  The Restricted Shares so delivered shall no longer be subject to the Restrictions hereunder.

 

2.2                               Restrictions.

 

(a)                                 Forfeiture.  Any Restricted Shares subject to the Award which are not vested as of the date of Holder’s Termination of Service shall thereupon be forfeited immediately and without any further action by the Company.  For purposes of this Agreement, “Restrictions” shall mean the restrictions on sale or other transfer set forth in Section 3.2 and the exposure to forfeiture set forth in this Section 2.2(a).

 

(b)                                 Vesting and Lapse of Restrictions.  Subject to Section 2.2(a) hereof, the Award shall vest and Restrictions shall lapse in accordance with the vesting schedule set forth on the Grant Notice.

 

(c)                                  Tax Withholding.  Notwithstanding any other provision of this Agreement (including, without limitation, Section 2.1(b) hereof), no new certificate shall be delivered to Holder or Holder’s legal representative unless and until Holder or Holder’s legal representative shall have paid to the Company the full amount of all federal and state withholding or other taxes applicable to the taxable income of Holder resulting from the grant of Restricted Shares or the lapse or removal of the Restrictions.  Such payment shall be made by deduction from other compensation payable to Holder or in such other form of consideration acceptable to the Company which may, in the sole discretion of the Administrator, include:

 

A-2

 

(i)                                     Cash or check;

 

(ii)                                  To the extent acceptable to the Administrator, surrender of Shares held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences and having a Fair Market Value on the date of delivery equal to the minimum amount required to be withheld by statute; or

 

(iii)                               Other property acceptable to the Administrator (including, without limitation, through the delivery of a notice that Holder has placed a market sell order with a broker with respect to Shares for which the Restrictions are then subject to lapse, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of its withholding obligations; provided that payment of such proceeds is then made to the Company upon settlement of such sale).

 

The Company shall not be obligated to deliver any new certificate representing Restricted Shares to Holder or Holder’s legal representative or enter such Restricted Shares in book entry form unless and until Holder or Holder’s legal representative shall have paid or otherwise satisfied in full the amount of all federal, state and local taxes applicable to the taxable income of Holder resulting from the grant of the Award or the issuance of Restricted Shares hereunder.

 

(d)                                 Conditions to Delivery of Stock.  Subject to Section 2.1, the Restricted Shares deliverable under this Award may be either previously authorized but unissued Shares or issued Shares which have then been reacquired by the Company.  Such Shares shall be fully paid and nonassessable.  The Company shall not be required to issue or deliver any Shares under this Award prior to fulfillment of all of the following conditions:

 

(i)                                     The admission of such Shares to listing on all stock exchanges on which the Common Stock is then listed;

 

(ii)                                  The completion of any registration or other qualification of such Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable;

 

(iii)                               The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable;

 

(iv)                              The receipt by the Company of full payment for such Shares, including payment of any applicable withholding tax; and

 

(v)                                 The lapse of such reasonable period of time following the grant of this Award as the Administrator may from time to time establish for reasons of administrative convenience.

 

2.3                               Consideration to the Company.  In consideration of the grant of the Award by the Company, Holder agrees to render faithful and efficient services to the Company and the Subsidiaries.  Nothing in the Plan or this Agreement shall confer upon Holder any right to continue in the employ or service of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Holder at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Holder.

 

A-3

 

ARTICLE III.

 

OTHER PROVISIONS

 

3.1                               Tax Withholding and Section 83(b) Election. The Company shall be entitled to require a cash payment by or on behalf of Holder and/or to deduct from other compensation payable to Holder any sums required by federal, state or local tax law to be withheld with respect to the grant or vesting of the Award or the lapse of the Restrictions hereunder.  Holder understands that Section 83(a) of the Internal Revenue Code taxes as ordinary income the difference between the amount, if any, paid for the Restricted Shares and the Fair Market Value of such Restricted Shares at the time the Restrictions on such Restricted Shares lapse.  Holder understands that, notwithstanding the preceding sentence, Holder may elect to be taxed at the time of the Grant Date, rather than at the time the Restrictions lapse, by filing an election under Section 83(b) of the Code (an “83(b) Election”) with the Internal Revenue Service within 30 days of the Grant Date.  In the event that Holder files an 83(b) Election, Holder shall provide the Company a copy thereof prior to the expiration of such 30 day period.  Holder understands that in the event an 83(b) Election is filed with the Internal Revenue Service within such time period, Holder will recognize ordinary income in an amount equal to the difference between the amount, if any, paid for the Restricted Shares and the Fair Market Value of such Restricted Shares as of the Grant Date.  Holder further understands that an additional copy of such 83(b) Election form should be filed with his or her federal income tax return for the calendar year in which the date of this Agreement falls. Holder acknowledges that the foregoing is only a summary of the effect of United States federal income taxation with respect to the Award hereunder, and does not purport to be complete.  HOLDER FURTHER ACKNOWLEDGES THAT THE COMPANY IS NOT RESPONSIBLE FOR FILING HOLDER’S 83(b) ELECTION, AND THE COMPANY HAS DIRECTED HOLDER TO SEEK INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE INTERNAL REVENUE CODE, THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH HOLDER MAY RESIDE, AND THE TAX CONSEQUENCES OF HOLDER’S DEATH.

 

HOLDER HEREBY ASSUMES ALL RESPONSIBILITY FOR FILING HOLDER’S 83(b) ELECTION AND PAYING ANY TAXES RESULTING FROM SUCH ELECTION OR FROM FAILURE TO FILE THE ELECTION AND PAYING TAXES RESULTING FROM THE LAPSE OF THE RESTRICTIONS ON THE UNVESTED RESTRICTED SHARES.

 

HOLDER UNDERSTANDS THAT HOLDER MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF HOLDER’S PURCHASE OR DISPOSITION OF THE RESTRICTED SHARES AND HOLDER REPRESENTS THAT HOLDER IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.

 

3.2                               Restricted Stock Not Transferable.  No Restricted Shares or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of Holder or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided, however, that this Section 3.2 notwithstanding, with the consent of the Administrator and subject to the terms of the Plan, the Restricted Shares may be transferred to a Permitted Transferee, pursuant to any such conditions and procedures the Administrator may require.

 

3.3                               Rights as Stockholder.  Except as otherwise provided herein, upon the Grant Date, Holder shall have all the rights of a stockholder with respect to the Restricted Shares, subject to the Restrictions herein, including the right to vote the Restricted Shares and the right to receive any cash or stock dividends paid to or made with respect to the Restricted Shares; provided, however, that at the discretion

 

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of the Company, and prior to the delivery of Restricted Shares, Holder may be required to execute a stockholders agreement in such form as shall be determined by the Company.

 

3.4                               Not a Contract of Employment.  Nothing in this Agreement or in the Plan shall confer upon Holder any right to continue to serve as an employee or other service provider of the Company or any of its Subsidiaries.

 

3.5                               Governing Law.  This Agreement shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof or of any other jurisdiction.

 

3.6                               Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

3.7                               Conformity to Securities Laws.  Holder acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, and state securities laws and regulations.  Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Award is granted, only in such a manner as to conform to such laws, rules and regulations.  To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

 

3.8                               Amendment, Suspension and Termination.  To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Committee or the Board; provided, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the Award in any material way without the prior written consent of Holder.

 

3.9                               Notices.  Notices required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed to Holder to his address shown in the Company records, and to the Company at its principal executive office.  By a notice given pursuant to this Section 3.9, either party may hereafter designate a different address for notices to be given to that party.  Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

 

3.10                        Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Holder and his or her heirs, executors, administrators, successors and assigns.

 

3.11                        Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Holder is subject to Section 16 of the Exchange Act, the Plan, the Award and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule.  To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

 

A-5

 

3.12                        Entire Agreement.  The Plan, the Grant Notice and this Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Holder with respect to the subject matter hereof.

 

3.13                        Limitation on Holder’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Holder shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Restricted Shares issuable hereunder.

 

A-6

 

EXHIBIT B

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

CONSENT OF SPOUSE

 

I,                                         , spouse of                               , have read and approve the foregoing Agreement.  In consideration of issuing to my spouse the shares of the common stock of WCI Communities, Inc. set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares of the common stock of WCI Communities, Inc. issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement.

 

 

	
Dated:                                 ,            
    	
 
    
	
 
    	
Signature   of Spouse
    

 

B-1

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