Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As previously disclosed, Taylor Morrison Home Corporation (the “Company”) and C. David Cone, the Company’s current Executive Vice President and Chief Financial Officer, have entered into a Transition and Retirement Agreement, dated as of June 21, 2021, pursuant to which Mr. Cone will transition from the role of Chief Financial Officer effective December 31, 2021.
On October 27, 2021, the Company announced that Louis Steffens, the Company’s current President, Mergers & Acquisitions, would succeed Mr. Cone as the Company’s Executive Vice President and Chief Financial Officer, effective January 1, 2022 (the “Effective Date”).
Mr. Steffens, age 54, joined the Company in 2007 and he currently oversees the organization’s mergers and acquisitions. In his current role, he has been responsible for creating and implementing short and long-term strategic initiatives. Through the years, Mr. Steffens has led the Company through six successful acquisitions significantly expanding the company’s portfolio and positioning the Company as the fifth largest homebuilder in the nation. He previously served as the Company’s Regional President and Area President in the organization’s Central, Southeast and Florida Areas. Mr. Steffens has 30 years of experience in the homebuilding industry, having worked for two other national homebuilders, Pulte Homes and Beazer Homes, where he served in various leadership roles. He holds a bachelor’s degree in accounting from Michigan State University.
In connection with Mr. Steffens’ appointment, the Compensation Committee of the Board of Directors (the “Committee”) approved an Amended and Restated Employment Agreement for Mr. Steffens, dated as of October 26, 2021 and effective as of the Effective Date (the “Employment Agreement”). Pursuant to the terms of the Employment Agreement, Mr. Steffens employment with the Company will continue in effect until terminated by the Company or by Mr. Steffens, and Mr. Steffens will be entitled to receive (i) an annual base salary of $575,000; (ii) a target annual cash bonus award equal to 150% of Mr. Steffens’ base salary pursuant the Company’s annual bonus plan; and (iii) equity-based compensation awards under the Taylor Morrison Home Corporation 2013 Omnibus Equity Award Plan (the “2013 Omnibus Plan”), as determined by the Board or Committee in its sole discretion.
Under the Employment Agreement, upon a termination of Mr. Steffens’ employment without “cause” or a resignation for “good reason” (each as defined in the Employment Agreement and referred to herein as a “Qualifying Termination”), in addition to receiving his unpaid base salary, benefits, vacation pay, reimbursable expenses, and annual bonus earned but not paid in respect of a prior year, Mr. Steffens would be entitled to receive, subject to execution of a release of claims, (a) severance payments equal to a multiple of 1.5 times the sum of his base salary and the higher of his target bonus or average annual bonus paid in or payable in respect of (whichever results in a higher average) the three completed calendar years that preceded the date of termination payable over an 18-month period, (b) a 12-month COBRA subsidy, (c) a prorated annual bonus for the year of termination, based on actual performance, and (d) up to 12 months of outplacement assistance. However, if such termination occurs at any time (x) following the execution of a definitive agreement with a third party that, if consummated, would result in a “change in control” (as defined in the 2013 Omnibus Plan), but before such transaction is consummated (and subject to such consummation) or (y) within 24 months following a “change in control” (each, a “CIC Qualifying Termination”) then Mr. Steffens would be entitled to a lump sum payment equal to a multiple of 2.0 times the sum of his base salary and the higher of his target bonus or average annual bonus paid in or payable in respect of (whichever results in a higher average) the three completed calendar years that preceded the date of termination.
With respect to equity awards, the Employment Agreement provides that Mr. Steffens’ time-based equity awards will vest in full upon a CIC Qualifying Termination or upon Mr. Steffens’ death or disability. For equity awards subject to a performance condition, upon a change in control, all performance goals applicable to awards that vest based on both the completion of a period of service and the satisfaction of a performance condition will be deemed achieved at the “target” level, and Mr. Steffens will be eligible to vest in the performance award on the last date of the applicable service period, subject to his continued employment. However, if Mr. Steffens experiences a CIC Qualifying Termination, then he will vest in the performance award on the date of termination (or the date of the change in control, if later). In the event of Mr. Steffens’ death or disability, then Mr. Steffens (or his beneficiary) will remain eligible to vest in a pro-rated portion of his unvested performance awards based on a fraction, the numerator of which is the number of completed months in the applicable performance period at the time of such termination and the denominator of which is the number of months in the applicable performance period, multiplied by the number of shares of common stock which are finally determined to be earned and subject to the performance award following the completion of the performance period. The portion of each performance award eligible to vest shall be based on actual results for the applicable performance period and shall be determined in accordance with the terms of the applicable award agreement(s).
