Document:

Term Sheet for the Performance Unit

 

Exhibit 10.15

Technical Olympic USA, Inc. (“TOUSA”) Performance Unit Program

Term Sheet for Performance Unit Program

Pursuant to Section 6(c) of TOUSA Annual and Long-Term Incentive Plan (LTIP)

(as amended and restated effective January 1, 2005)

	 	 	 
	Program:

	 	This Performance Unit Program is pursuant to the authority set forth in
Section 6(c) of the LTIP.
	 
	 	 
	Awards:

	 	Performance Units (“Units”) will be awarded to eligible
Associates1. The number of Units to be awarded to Associates
will be proposed by the CEO and approved by the TOUSA Human Resources,
Compensation, and Benefits Committee (the “Committee”), except for awards
to the CEO which will be determined solely by the Committee.
	 
	 	 
	Eligible Associates:

	 	Associates of TOUSA and its wholly owned affiliates. Eligible Associates
may include:
	 
	 	 

	 	•	 	Corporate Associates (e.g., CEO, senior corporate executives and
their senior managers) and CEO-designated high potential associates at the
Corporate level
	 
	 	•	 	Operations Associates (e.g., senior regional executives and their
senior managers, division and unit presidents) and CEO-designated high
potential associates at the Operations level

	 	 	 
	Grant Date:

	 	Initial grant date effective as of January 1, 2005. Subsequent grants may
occur annually effective as of January 1 of such year.
	 
	 	 
	Vesting

Period/Vesting Date:

	 	The Vesting Period is three (3) years (e.g., for the initial grant,
January 1, 2005 to December 31, 2007). The Vesting Date is the last date
of the Vesting Period (e.g., for the initial grant, December 31, 2007).
	 
	 	 
	Expiration:

	 	Expiration shall occur automatically either upon payment in full of vested
Units or upon failure to vest, unless earlier terminated in accordance
with the Program. Upon expiration, all Unit rights and benefits are
terminated.
	 
	 	 
	Amount of Payment:

	 	Each Unit represents the right to be paid the amount equivalent to the
appreciation of one share of TOUSA common stock from the Unit Grant Date
to the Vesting Date (the “Unit Value”). The stock value on each of

 

			
	1	 	“Associate,” as used herein, is defined as “Employee” in the LTIP.

 

 

	 	 	 
	 

	 	the Grant Date and the Vesting Date shall be established as the equivalent of
the weighted average stock price (based on trading volume) of one share of
TOUSA common stock on the U.S. securities exchange on which such stock is
or was listed during the 90 days prior to and including such
dates.2 The Unit Value will be subject to adjustment as
described under “Adjustments” and “Multiple Incentive” below.
	 
	 	 
	Form of Payment:

	 	Payment shall be made in cash.
	 
	 	 
	Payment Dates:

	 	Payments shall be made: (1) 50% on March 31 in the year immediately
following the Vesting Date, and (2) 50% on March 31 in the second year
following the Vesting Date.3
	 
	 	 
	Vesting:

	 	Units will become vested on the Vesting Date if Return on Equity (ROE) and
Cumulative Earnings (CE) targets have been achieved. ROE and CE are
weighted equally for purposes of vesting, each at 50%, as follows:

	 	•	 	In the event that both are achieved, then 100% of Units are vested.
	 
	 	•	 	In the event that one, but not the other, is achieved, then 50% of
Units are vested and the remainder fail to vest.
	 
	 	•	 	In the event that neither is achieved, then Units fail to vest.

	 	 	 	Units that fail to vest shall automatically expire.

	 	 	 
	Targets/Results:

	 	Detailed ROE and CE targets for Unit awards shall be as proposed by the
CEO and approved by the Committee.
	 
	 	 
	 

	 	Return on Equity (ROE) during Vesting Period
	 
	 	 
	 

	 	ROE means, for any Vesting Period, the average of ROE during such Vesting
Period. Average ROE is calculated as: stockholders’ equity at the
beginning of Vesting Period (grant date), plus stockholder’s equity at the
end of each quarter during the Vesting Period, divided by thirteen (13).

 

			
	2	 	For example: If the weighted average
stock price (based on trading volume) during 90 days prior to and
including Grant Date=$25 and the weighted average stock price during 90
days prior to and including Vesting Date=$40, Unit Value=$15. With 1,000
Units, total Unit Value is $15 x 1,000 Units = $15,000, subject to
adjustments and taxes.
	 
	3	 	For example, assuming a Grant Date of
1/1/05, with Vesting Date of 12/31/07, then 50% payment on 3/31/08 and 50%
payment on 3/31/09.

2

 

	 	 	 
	 

	 	Equity issuances will then be added in on a monthly weighted basis
commencing 9 months after the issuance. The average equity will then be
divided into net income for the year to calculate ROE.
	 
	 	 
	 

	 	Cumulative Earnings (CE) during Vesting Period
	 
	 	 
	 

	 	CE means, for any Vesting Period, the cumulative earnings during the
Vesting Period.
	 
	 	 
	 

	 	Extraordinary gains and losses (as defined by GAAP), payments under
management services agreements, and payments to affiliates are excluded
from all calculations. Extraordinary dividends4 will be
ascribed an earnings factor using the earnings ratio from the prior year.
	 
	 	 
	Multiple Incentive:

	 	As additional incentive to meet and exceed established ROE and CE targets,
multiples will be applied to the Unit Value, calculated as follows:

	 	•	 	Where at least 100% but less than 150% of target is achieved, Unit
Value shall be increased consistent with actual results.5
	 
	 	•	 	Where at least 150% of target is achieved, Unit Value shall be
multiplied by 150%.
	 
	 	 	 	As described in “Vesting” above, Multiple Incentive calculations shall
apply separately to each of ROE and CE targets.

	 	 	 
	Effect of
Termination of
Employment:

	 	By the Company Without Cause/By the Associate for Good Reason/Due to
Associate’s Death or Disability/Expiration of Employment Agreement
According to Terms6

	 	 	 	If, as of the date of termination, Units are:

	 	•	 	Vested, but not fully paid, then payments shall occur in the
ordinary course as if Associate were employed on the Payment Dates.
	 
	 	•	 	Not vested, then:

 

			
	4	 	Extraordinary dividends are dividends
exceeding 3% of net income on a trailing 4 quarter basis.
	 
	5	 	E.g., if 120% of target is achieved, then
Unit Value shall be multiplied by 120%.
	 
	6	 	Terms such as “For Cause,’
“For Good Reason,” “Death,” “Disability,”
etc. shall be defined as set forth in the Company’s standard form of
Employment Agreement, as such form may change from time to time, and
notwithstanding alternate definitions as may exist in individual employment
agreements.

3

 

	 	(a)	 	For Associates who have been employed for less than two (2) years
during the Vesting Period, all units will expire immediately.
	 
	 	(b)	 	For Associates who been employed for at least two (2) years during the
Vesting Period, all Units will remain outstanding for the remainder of the
Vesting Period. If the Units vest on the Vesting Date, then:

	 	•	 	Unit Value shall be reduced pro rata with Associate’s term of employment
during the Vesting Period7,
	 
	 	•	 	Multiple Incentive calculations will not apply, and
	 
	 	•	 	Payments shall occur in the ordinary course as if the Associate were
employed on the Payment Dates.

	 	 	 
	 

	 	By the Company for Cause or By the Associate Without Good Reason
	 
	 	 
	 

	 	All Units, whether vested or unvested, shall expire immediately.
	 
	 	 
	Change of Control:

	 	In the event of a Change of Control8, Units shall vest and be
payable as follows:
	 
	 	 
	 

	 	Corporate. For Corporate Associates:

	 	•	 	Vesting shall occur immediately upon a Change of Control,
	 
	 	•	 	In the event of a “409A Change of Control9,” Full Unit
Value is payable within 90 days.
	 
	 	•	 	In the event of a Change of Control that does not constitute a
409A Change of Control, payment shall occur in the ordinary course as if
there were no change or termination in the program and the Associates were
employed on the Payment Dates.

	 	 	 	Operations. For Operations Associates, no change in vesting or payment
schedules shall apply, so long as the program remains in existence and
without modification after the Change of Control occurs. In the event of
a material program change or its termination during the Vesting Period in
which the Change of Control occurred, then:

	 	•	 	Vesting shall occur immediately upon the date of such material
change or termination,

 

			
	7	 	E.g., if the Associate’s employment
terminates 6 months prior to the Vesting Date (thus Eligible Associate was
employed for 30 of 36 months, or 83%, of the Vesting Period), then the Unit
Value would be adjusted downward from 100% to 83%.
	 
	8	 	“Change of Control” is defined
on Annex A of this Term Sheet.
	 
	9	 	“409A Change of Control” shall
mean a Change of Control within the meaning of Section 409A(a)(2)(A)(iv)
of the Code and applicable guidance thereunder.

4

 

	 	•	 	Unit Value shall be reduced pro rata to reflect the shortened
Vesting Period10,
	 
	 	•	 	Multiple Incentive calculations will not apply, and
	 
	 	•	 	Payments shall occur in the ordinary course as if there were no
change or termination in the program and the Associates were employed on
the Payment Dates.

	 	 	 
	Withholding:

	 	Upon payment of vested Units, federal and state income tax withholding and
payroll taxes will apply.
	 
	 	 
	Adjustments.

	 	Adjustments to Units and/or Unit Value shall be made if necessary to
prevent dilution or an enlargement of the benefit intended to be made
available under this program. Such adjustments shall occur automatically
in case of any event that may affect the common stock of the Company,
including but not limited to subdivisions or combinations of shares,
dividends or distributions, or certain other transactions or events, all
as set forth on Annex B of this Term Sheet.
	 
	 	 
	Transferability:

	 	Units shall not be transferable or assignable, except without
consideration to a permitted transferee, in accordance with Section
6(g)(iii)(c) of the TOUSA LTIP.
	 
	 	 
	Administration:

	 	The Committee shall have authority to direct administration of this
Program as provided by Section 6(c) of the LTIP. Terms and conditions of
each grant made under this Program, including specified targets for
performance results, shall be set forth in the award agreements provided
to each recipient at the time of the award, together with a copy of this
Program Term Sheet. The Committee may, in its discretion, make such
determinations necessary or advisable for the operation and administration
of this Program, provided that no modifications may be made to any award
that cause a dilution of the benefit intended to be granted to the
recipient.
	 
	 	 
	409A Compliance

	 	If and to the extent that the Board believes that any Awards may
constitute a “nonqualified deferred compensation plan” under Section 409A
of the Code, the terms and conditions set forth in the Award Agreement or
Letter for that Award shall be drafted in a manner that is intended to
comply with, and such terms and conditions (as well as the terms and
conditions of this Term Sheet and the Plan) shall be interpreted in a
manner consistent with, the applicable requirements of Section 409A of the
Code.

 

			
	10	 	Apply same calculations as set forth in
footnote 7.

5

 

Annex A

“Change of Control” means the occurrence of any of the following events, each of which shall
be determined independently of the others:

     (a) any “Person” (as defined below) becomes a “beneficial owner” (as such term is used in Rule
13d-3 promulgated under the Exchange Act) of forty percent (40%) or more of the stock of any member
of the Consolidated Group (as defined below) entitled to vote in the election of directors. For
purposes of this Exhibit A, the term “Person” is used as such term is used in Sections 13(d) and
14(d) of the Exchange Act; provided, however that the term shall not include any member of the
Consolidated Group, any trustee or other fiduciary holding securities under an employee benefit
plan of any member of the Consolidated Group, or any corporation owned, directly or indirectly, by
the shareholders of any member of the Consolidated Group;

     (b) shareholders of any member of the Consolidated Group adopt a plan of complete or
substantial (eighty-five percent (85%) or more) liquidation or an agreement providing for the
distribution of all or substantially all of the assets of such member;

     (c) any member of the Consolidated Group is party to a merger, consolidation, other form of
business combination or a sale of all or substantially all (eighty-five percent (85%) or more) of
its assets, unless the business of such member is continued following any such transaction by a
resulting entity (which may be, but need not be, such member) and the shareholders of such member
immediately prior to such transaction (the “Prior Shareholders”) hold, directly or indirectly, at
least forty percent (40%) of the voting power of the resulting entity (there being excluded from
the voting power held by the Prior Shareholders, but not from the total voting power of the
resulting entity, any voting power received by Affiliates of a party to the transaction (other than
such member) in their capacities as shareholders of such member); provided, however, that a merger
or ‘consolidation effected to implement a recapitalization of such member (or similar transaction)
in which no Person acquires more than thirty percent (30%) of the combined voting power of such
member’s then outstanding securities shall not constitute a Change in Control; or

     (d) any member of the Consolidated Group is a subject of a “Rule 13e-3 transaction” as that
term is defined in Exchange Act Rule 13e-3, and the first purchase has been made pursuant to such
transaction.

     Notwithstanding the foregoing, if, immediately after the occurrence of any event enumerated
above, the Continuing Directors control the majority of the Board of Directors of the Company (or,
in the case of any merger or combination in which the Company is not the surviving entity, continue
to constitute a majority of the board of directors of such successor entity), such event shall not
constitute a Change of Control for purposes of this Agreement until such time as the Continuing
Directors no longer constitute a majority of the Board of Directors of the Company (or the
successor entity, if applicable). “Continuing Directors” for this purpose means the members of the
Board of Directors of the Company on the Effective Date, provided that any person becoming a member
of the Board of Directors of the Company subsequent to such date whose election or nomination for
election was supported by a majority of the directors who at the time of the election or nomination
for election comprised the Continuing Directors shall be considered to be a Continuing Director.

“Consolidated Group” shall mean (i) the group of companies composed of Technical Olympic S.A. or
the Company, and (ii) any successor or surviving company of any of the foregoing entities.

 

 

Annex B

In the event that the outstanding shares of common stock shall be subdivided into a greater
number of shares (stock split) or the outstanding shares of common stock shall be combined into a
smaller number of shares (reverse split), the number of Units under each outstanding award shall be
automatically adjusted and shall, for calculation purposes only, be treated as one Unit equals one
share of common stock. Thus, simultaneously with the effectiveness of such subdivision or
combination, the number of Units (shares) shall be adjusted so as to be equal to the number of
Units (shares) that would be issuable as a result of applying such subdivision or combination with
respect to the Units (shares) subject to the outstanding Award immediately prior to the subdivision
or combination.

In the event a dividend or other distribution of common stock of the Company shall be paid in
respect of common stock, then immediately after the record date of such dividend or distribution,
the number of Units under each outstanding Award shall be automatically increased and shall, for
calculation purposes only, be treated as one Unit equals one share of common stock. Thus, the
number of Units (shares) shall be increased to include the dividend or other distribution that
would have been payable with respect to the Units (shares), without requiring the payment of any
additional consideration therefore.

In the event of any dividend or other distribution of other securities, property, or cash
(excluding cash dividends amounting to 3% or less of net income on a trailing 4 quarter basis paid
out of current earnings) not otherwise described above, then the Unit Value of each Unit under each
outstanding Award shall be increased as of the Vesting Date by that dollar amount equivalent to the
total dollar amount of any such dividends or distributions paid per share of common stock during
the Vesting Period.

In the event that any other corporate transaction or event occurs that affects the common stock or
if any other change in the corporate structure of the Company affecting the common stock occurs,
the Committee shall adjust the number of Units under each outstanding Award accordingly and shall,
for calculation purposes only, be treated as one Unit equals one share of common stock. Any such
adjustment shall be made in such manner as shall be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be granted under the Award.EX-4.(D) AMENDMENT NO. 2 ARTICLES OF INCORPORATION

 

Exhibit 4(d)

ARTICLES OF AMENDMENT

OF

AARON RENTS, INC.

I.

     The name of the corporation is:

AARON RENTS, INC.

II.

     The Amended and Restated Articles of Incorporation are amended by striking the first paragraph
of Article V thereof in its entirety and inserting in lieu thereof the following:

     “The Corporation shall have authority to issue shares of capital stock
consisting of One Hundred Million (100,000,000) shares of Common Stock, par value
$0.50 per share (“Common Stock”), Twenty-Five Million (25,000,000) shares of Class A
Common Stock, par value $0.50 per share (“Class A Common Stock”) (collectively, the
“Stock”), and One Million (1,000,000) shares of Preferred Stock, par value $1.00 per
share (“Preferred Stock”).”

III.

     At a duly called meeting of the Board of Directors held on February 21, 2006, the Board of
Directors duly adopted the foregoing amendment (the “Increased Common Stock Amendment”), and
declared the Increased Common Stock Amendment to be advisable and recommended and presented the
same to the Corporation’s shareholders for approval in accordance with the provisions of Section
14-2-1003 of the Georgia Business Corporation Code. Thereafter, the Increased Common Stock
Amendment was duly approved by the shareholders of the Corporation entitled to vote thereon on May
2, 2006 at a duly called meeting of the shareholders in accordance with the provisions of Section
14-2-1003 of the Georgia Business Corporation Code.

     IN WITNESS WHEREOF, AARON RENTS, INC., has caused these Articles of Amendment to the Amended
and Restated Articles of Incorporation to be executed by its duly authorized officer this 3rd day
of May, 2006.

	 	 	 	 	 
	 	AARON RENTS, INC. 

 	 
	 	By:  	

/s/ Gilbert L. Danielson
 	 
	 	 	Name:  	Gilbert L. Danielson 	 
	 	 	Title:  	Executive Vice President

and Chief Financial Officer

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