EXHIBIT 10.11
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of January 1,
2003 (the "Effective Date"), by and between Technical Olympic USA, Inc., a
Delaware corporation (the "Employer"), and Ioannis (Yannis) Delikanakis (the
"Employee").
WHEREAS, the Employee currently serves as a member of the Employer's
Board of Directors and also provides additional and substantial services for the
Employer beyond the scope of his Board membership, which additional services are
presently provided by Employee to Employer without compensation;
WHEREAS, the Employer seeks to expand the range of services to be
provided by Employee to Employer and to compensate Employee for the provision of
these services through an incentive compensation package;
WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions of the employment relationship of the Employee with the
Employer;
NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:
1. DEFINITIONS. For the purposes of this Agreement, terms have
the meanings defined herein or on Exhibit A attached hereto unless the context
otherwise requires.
2. EMPLOYMENT, TERM AND DUTIES.
2.1 EMPLOYMENT TERM. The Employer hereby employs the
Employee, and the Employee hereby accepts employment by the Employer,
upon the terms and conditions set forth herein for an initial period to
begin on the Effective Date and end on the fifth (5) anniversary
thereof, unless terminated earlier in accordance with the provisions of
Section 4.
2.2 DUTIES. The Employee will serve as Executive Vice
President of the Employer during the Employment Period and will have
such duties and responsibilities as are reasonably consistent with such
position as described on Exhibit B attached hereto and shall perform
such special assignments as may be assigned or delegated to the
Employee from time to time by the Chief Executive Officer or the Board
of Directors of the Employer. In the performance of his duties
hereunder, the Employee shall report solely to the Chief Executive
Officer of the Employer. The Employee shall perform work as assigned by
the Chief Executive Officer, and shall work with the senior management
of the Employer in the advancement of the best interests of the
Employer.
It is acknowledged that the Employee is a member of the Board of
Directors and that his activities as a director shall not materially
interfere with his duties and responsibilities under this Agreement. If
the Employee is appointed or elected an officer or director of any
subsidiary of the Employer, the Employee will fulfill his duties as
such officer or director without additional compensation due from the
Employer or such subsidiary; however, any such appointment or election
may not be made without the Employee's
prior consent. Upon termination of his employment with the Employer,
the Employee hereby automatically resigns as of such date as an officer
of the Employer and as an officer and director of each subsidiary of
the Employer of which he is an officer or director, if any.
2.3 LOCATION. Employee's place of employment hereunder
shall be in the greater Athens, Greece metropolitan area, unless the
Employee consents otherwise in writing; provided, however, that the
Employee shall travel as reasonably necessary to perform his
obligations and duties to the Employer.
3. COMPENSATION AND BENEFITS.
3.1 BASE SALARY. The Employee shall receive a base salary
at the annual rate of $75,000, payable in installments consistent with
the Employer's normal payroll schedule, and subject to applicable
withholding and other taxes.
3.2 STOCK OPTIONS, BONUSES AND BENEFITS. The stock
options granted to the Employee with respect to 900,000 shares of
Employer stock, attached hereto as Exhibit C (the "Options"), in
addition to the base salary, shall constitute the only consideration to
be paid to the Employee for all services to be rendered by the Employee
under this Agreement. The Employee shall not receive any bonuses or any
other compensation, except the Options, for services rendered under
this Agreement, unless approved by the Board of Directors.
The Employee has agreed to waive the right to participate in any
employee benefit plan of the Employer (to the extent possible without
causing any plan that is intended to qualify under any provision of the
Internal Revenue Code to fail to qualify or to become disqualified).
The Employee hereby acknowledges that his waiver is knowing and
voluntary, and is an integral part of the compensation package
negotiated by the Employee with the Employer and contained in this
Agreement.
3.3 BUSINESS EXPENSES. In accordance with the rules and
policies that the Employer may establish from time to time for its
executives, the Employer shall reimburse the Employee for business
expenses reasonably incurred by him in the performance of his duties
hereunder. Requests for reimbursement must be accompanied by
appropriate documentation.
3.4 VACATION. The Employee shall be entitled to four (4)
weeks vacation per calendar year (prorated for less than a full year).
Unused vacation in excess of an aggregate of two (2) weeks for all
prior years shall not be accumulated or carried over from year to year,
and the Employee shall not be entitled to compensation for unused
vacation time except as provided in Section 4.
3.5 OFFICE AND SUPPORT STAFF. During the Employment
Period, the Employee shall be entitled to an office or offices of a
size and with furnishings and other appointments, and to secretarial
and other assistance, as provided at any time with respect to other
comparable executives of the Employer and its subsidiaries and/or as
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reasonably necessary to perform the Employee's duties and obligations
as set forth herein.
4. TERMINATION.
4.1 DEATH. This Agreement will terminate automatically
upon the death of the Employee.
4.2 TERMINATION NOTICE. Any other termination of the
Employee's employment shall be by written notice to the other party,
indicating the specific reason therefor and the date of the Employee's
termination of employment; provided, however, that such date may not be
earlier than thirty (30) days from the date of notice, unless waived by
the parties, or such termination is due to Cause, Good Reason or a
Change of Control, as defined in the Option agreements.
4.3 TERMINATION PAY. Upon termination of the Employee's
employment, the Employer will be obligated to pay the Employee or the
Employee's estate, as the case may be, only the Accrued Obligations,
payable via wire transfer to an account designated by the Employee or
the Employee's legal representative in a lump sum in cash within thirty
(30) Business Days of the date of termination. The Options shall be
governed separately by the terms of their grant agreements as attached
hereto as Exhibit C.
4.4 NO MITIGATION; NO OFFSET. In the event of any
termination of the Employee's employment under this Agreement, the
Employee shall be under no obligation to seek other employment, and
there shall be no offset against amounts due under this Agreement on
account of any remuneration attributable to any subsequent employment
that the Employee may obtain. The Employer's obligation to perform its
obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which
the Employer or any Affiliate may have against the Employee or others.
4.5 CERTAIN ADDITIONAL PAYMENTS BY THE EMPLOYER.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
or distribution by the Employer to or for the benefit of the Employee
(whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement, the Options or otherwise, but determined
without regard to any additional payments required under this Section
4.5) (a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code or any interest or penalties
are incurred by the Employee with respect to such excise tax (such
excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the
Employee shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the
Employee of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes
(and any interest or penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
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(b) Subject to the provisions of Section 4.5(c), all
determinations required to be made under this Section 4.5, including
whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by the Employer's independent certified
accountant or such other certified public accounting firm as may be
designated by the Employee (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Employer and the Employee
within fifteen (15) Business Days of the receipt of notice from the
Employee that there has been a Payment, or such earlier time as is
requested by the Employer. In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group
effecting a change of control, the Employee shall appoint another
nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as
the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Employer. Any Gross-Up Payment, as
determined pursuant to this Section 4.5, shall be paid by the Employer
to the Employee within five (5) Business Days of the receipt of the
Accounting Firm's determination. Any determination by the Accounting
Firm shall be binding upon the Employer and the Employee. As a result
of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder,
it is possible that Gross-Up Payments which will not have been made by
the Employer should have been made ("Underpayment"), consistent with
the calculations required to be made hereunder. In the event that the
Employer exhausts its remedies pursuant to Section 4.5(c) and the
Employee thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment shall be promptly paid by the
Employer to or for the benefit of the Employee.
(c) The Employee shall notify the Employer in writing of
any claim by the Internal Revenue Service, that, if successful, would
require the payment by the Employer of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than
ten (10) Business Days after the Employee is informed in writing of
such claim and shall apprise the Employer of the nature of such claim
and the date on which such claim is requested to be paid. The Employer
shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Employer (or
such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Employer notifies the Employee in
writing prior to the expiration of such period that it desires to
contest such claim, the Employee shall:
(i) give the Employer any information reasonably
requested by the Employer relating to such claim;
(ii) take such action in connection with
contesting such claim as the Employer shall reasonably request
in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by
an attorney reasonably selected by the Employer;
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(iii) cooperate with the Employer in good faith in
order effectively to contest such claim; and
(iv) permit the Employer to participate in any
proceedings relating to such claim;
provided, however, that the Employer shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Employee harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limitation of the foregoing provisions of this
Section 4.5(c), the Employer shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may,
at its sole option, either direct the Employee to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner,
and the Employee agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as the Employer shall determine;
provided, however, that if the Employer directs the Employee to pay
such claim and sue for a refund, the Employer shall, to the extent
permitted by law, advance the amount of such payment to the Employee on
an interest-free basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for the taxable
year of the Employee with respect to which such contested amount is
claimed to be due is limited solely to such contested amount.
Furthermore, the Employer's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable
hereunder and the Employee shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service
or any other taxing authority.
(d) If, after the receipt by the Employee of an amount
advanced by the Employer pursuant to Section 4.5(c), the Employee
becomes entitled to receive any refund with respect to such claim, the
Employee shall (subject to the Employer's complying with the
requirements of Section 4.5(c)) promptly pay to the Employer the amount
of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Employee
of an amount advanced by the Employer pursuant to Section 4.5(c), a
determination is made that the Employee shall not be entitled to any
refund with respect to such claim and the Employer does not notify the
Employee in writing of its intent to contest such denial of refund
prior to the expiration of thirty (30) days after such determination,
then such advance shall be forgiven and shall not be required to be
repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
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5. NON-COMPETITION AND NON-INTERFERENCE.
5.1 ACKNOWLEDGMENTS. The Employer acknowledges that it is
providing the Employee with Confidential Information in order for the
Employee to perform his duties under this Agreement. The Employee
acknowledges that (a) the services to be performed by him under this
Agreement are of a special, unique, unusual, extraordinary, and
intellectual character, and (b) the provisions of this Section 5 are
reasonable and necessary to protect the Confidential Information,
goodwill and other business interests of the Employer.
5.2 COVENANTS OF THE EMPLOYEE. The Employee covenants
that he will not, directly or indirectly:
(a) during the Noncompete Period, without the express
prior written consent of the Board of Directors, as owner, officer,
director, employee, stockholder, principal, consultant, agent, lender,
guarantor, cosigner, investor or trustee of any corporation,
partnership, proprietorship, joint venture, association or any other
entity of any nature, engage, directly or indirectly, in the Business
in (i) any county in any state, or any county contiguous with a county,
in which the Employer or any of its Affiliates is conducting Business
activities or has conducted such Business activities during the prior
twelve (12) months, and (ii) any county in which the Employer or any of
its Affiliates is conducting other business; provided, however, that
the Employee may purchase or otherwise acquire for passive investment
up to 3% of any class of securities of any such enterprise if such
securities are listed on any national or regional securities exchange
or have been registered under Section 12(g) of the Securities Exchange
Act of 1934;
(b) whether for the Employee's own account or for the
account of any other person, at any time during his employment with the
Employer or its Affiliates (except for the account of the Employer and
its Affiliates) and the Non-Compete Period, solicit Business of the
same or similar type being carried on by the Employer or its
Affiliates, from any person known by the Employee to be a customer of
the Employer or its Affiliates, whether or not the Employee had
personal contact with such person during the Employee's employment with
the Employer;
(c) whether for the Employee's own account or the account
of any other person and at any time during his employment with the
Employer or its Affiliates and the Non-Compete Period, (i) solicit,
employ, or otherwise engage as an employee, independent contractor, or
otherwise, any person who is an employee of the Employer or an
Affiliate, or in any manner induce, or attempt to induce, any employee
of the Employer or its Affiliate to terminate his employment with the
Employer or its Affiliate; or (ii) interfere with the Employer's or its
Affiliate's relationship with any person who at any time during the
Employment Period, was an employee, contractor, supplier, or customer
of the Employer or its Affiliate; or
(d) at any time after the termination of his employment,
disparage the Employer or its Affiliates or any shareholders,
directors, officers, employees, or agents of the Employer or any of its
Affiliates, so long as the Employer does not disparage the
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Employee; provided, however, that notwithstanding the foregoing,
paragraphs (a) and (b) above shall not apply if the Employee's
employment is terminated by the Employer without Cause, by the Employee
for Good Reason or upon a Change of Control. If any covenant in this
Section 5.2 is held to be unreasonable, arbitrary, or against public
policy, such covenant will be considered to be divisible with respect
to scope, time, and geographic area, and such lesser scope, time, or
geographic area, or all of them, as a court of competent jurisdiction
may determine to be reasonable, not arbitrary, and not against public
policy, will be effective, binding, and enforceable against the
Employee. The Employee hereby agrees that this covenant is a material
and substantial part of this Agreement and that: (i) the geographic
limitations are reasonable; (ii) the term of the covenant is
reasonable; and (iii) the covenant is not made for the purpose of
limiting competition per se and is reasonably related to a protectable
business interest of the Employer. The period of time applicable to any
covenant in this Section 5.2 will be extended by the duration of any
violation by the Employee of such covenant.
6. NON-DISCLOSURE COVENANT.
6.1 ACKNOWLEDGMENTS BY THE EMPLOYEE. The Employee
acknowledges that (a) during the Employment Period, the Employee will
be afforded access to Confidential Information; (b) public disclosure
of such Confidential Information could have an adverse effect on the
Employer and its business; and (c) the provisions of this Section 6 are
reasonable and necessary to prevent the improper use or disclosure of
Confidential Information.
6.2 COVENANTS OF THE EMPLOYEE. The Employee covenants as
follows:
(a) CONFIDENTIALITY. During and after his employment with
the Employer and its Affiliates, the Employee will hold in confidence
the Confidential Information and will not disclose it to any person
other than in connection with the performance of his duties and
obligations hereunder, except with the specific prior written consent
of the Board of Directors or the Chief Executive Officer; provided,
however, that the parties agree that this Agreement does not prohibit
the disclosure of Confidential Information where applicable law
requires, including, but not limited to, in response of subpoenas
and/or orders of a governmental agency or court of competent
jurisdiction. In the event that the Employee is requested or becomes
legally compelled under the terms of a subpoena or order issued by a
court of competent jurisdiction or by a governmental body to make any
disclosure of Confidential Information, the Employee agrees that he
will (i) immediately provide the Employer with written notice of the
existence, terms and circumstances, surrounding such request(s) so that
the Employer may seek an appropriate protective order or other
appropriate remedy, (ii) cooperate with the Employer in its efforts to
decline, resist or narrow such requests and (iii) if disclosure of such
Confidential Information is required in the opinion of counsel,
exercise reasonable efforts to obtain an order or other reliable
assurance that confidential treatment will be accorded to such
disclosed information.
(b) TRADE SECRETS. Any trade secrets of the Employer will
be entitled to all of the protections and benefits under the federal
and state trade secret and intellectual
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property laws and any other applicable law. If any information that the
Employer deems to be a trade secret is found by a court of competent
jurisdiction not to be a trade secret for purposes of this Agreement,
such information will, nevertheless, be considered Confidential
Information for purposes of this Agreement, so long as it otherwise
meets the definition of Confidential Information. The Employee hereby
waives any requirement that the Employer submit proof of the economic
value of any trade secret or post a bond or other security.
(c) REMOVAL. The Employee will not remove from the
Employer's premises (except to the extent such removal is for purposes
of the performance of the Employee's duties at home or while traveling,
or except as otherwise specifically authorized by the Employer) any
document, record, notebook, plan, model, component, device, or computer
software or code, whether embodied in a disk or in any other form
belonging to the Employer or used in the Employer's business
(collectively, the "Proprietary Items"). All of the Proprietary Items,
whether or not developed by the Employee, are the exclusive property of
the Employer. Upon termination of his employment, or upon the request
of the Employer during the Employment Period, the Employee will return
to the Employer all of the Proprietary Items and Confidential
Information in the Employee's possession or subject to the Employee's
control, and the Employee shall not retain any copies, abstracts,
sketches, or other physical embodiment, including electronic or
otherwise, of any of the Proprietary Items or Confidential Information.
7. GENERAL PROVISIONS OF SECTION 5 AND 6.
7.1 INJUNCTIVE RELIEF AND ADDITIONAL REMEDY. The Employee
acknowledges that the injury that would be suffered by the Employer as
a result of a breach of the provisions of Sections 5 and 6 of this
Agreement would be irreparable and that an award of monetary damages to
the Employer for such a breach would be an inadequate remedy.
Consequently, the Employer will have the right, in addition to any
other rights it may have, to obtain a temporary restraining order
and/or injunctive relief to restrain any breach or threatened breach or
otherwise to specifically enforce any provision of this Agreement. The
Employee waives any requirement for the Employer's securing or posting
of any bond in conjunction with any such remedies. The Employee further
agrees to and hereby does submit to in personam jurisdiction before
each and every court for that purpose.
7.2 COVENANTS OF SECTIONS 5 AND 6 ARE ESSENTIAL AND
INDEPENDENT COVENANTS. The covenants of the Employee in Sections 5 and
6 are essential elements of this Agreement, and without the Employee's
agreement to comply with such covenants, the Employer would not have
entered into this Agreement or continued the employment of the
Employee. The Employer and the Employee have independently consulted
their respective counsel and have been advised in all respects
concerning the reasonableness and propriety of such covenants, with
specific regard to the nature of the business conducted by the
Employer. In addition, the Employee's covenants in Sections 5 and 6
are independent covenants and the existence of any claim by the
Employee against the Employer under this Agreement or otherwise will
not excuse the Employee's breach of any covenant in Sections 5 or 6.
Notwithstanding anything in the Agreement to the
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contrary, (i) the covenants and agreements of the Employee in Sections
5 and 6 shall survive the termination of the Agreement, except as
provided below, and (ii) the covenants and agreements in Section 5.2(a)
shall be effective as of the Effective Date.
8. GENERAL PROVISIONS.
8.1 INDEMNIFICATION. The Employer shall indemnify and
hold harmless the Employee to the fullest extent permitted by
applicable law against all costs (including reasonable attorneys' fees
and costs), judgments, penalties, fines, amounts paid in settlements,
interest and all other liabilities incurred or paid by the Employee in
connection or in any way associated with the investigation, defense,
prosecution, settlement or appeal of any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative and to which the Employee was or is a
party or is threatened to be made a party by reason of the fact that
the Employee is or was an officer, employee or agent of the Employer,
or any of its subsidiaries or Affiliates, including any property owner
or condominium association that the Employee has been asked to serve on
by the Employer, or by reason of anything done or not done by the
Employee in any such capacity or capacities, provided that the Employee
acted in good faith, and in a manner the Employee reasonably believed
to be in or not opposed to the best interests of the Employer, and,
with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The Employer also shall pay
any and all expenses (including attorney's fees) incurred by the
Employee as a result of the Employee being called as a witness in
connection with any matter involving the Employer and/or any of its
officers or directors. Nothing herein shall limit or reduce any rights
of indemnification to which the Employee might be entitled under the
organizational documents of the Employer or as allowed by applicable
law.
8.2 WAIVER. The rights and remedies of the parties to
this Agreement are cumulative and not alternative. Neither the failure
nor any delay by either party in exercising any right, power, or
privilege under this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right,
power, or privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no
waiver that may be given by a party will be applicable except in the
specific instance for which it is given; and (c) no notice to or demand
on one party will be deemed to be a waiver of any obligation of such
party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement.
8.3. SUCCESSORS.
(a) This Agreement is personal to the Employee and
without the prior written consent of the Employer shall not be
assignable by the Employee otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Employee's legal representatives.
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(b) This Agreement shall inure to the benefit of and be
binding upon the Employer and its successors and assigns.
(c) The Employer will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Employer
to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Employer would be required to
perform it if no such succession had taken place. As used in this
Agreement "Employer" shall mean the Employer as hereinbefore defined
and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or
otherwise.
8.4 NOTICES. All notices, consents, waivers, and other
communications required under this Agreement must be in writing and
will be deemed to have been duly given when (a) delivered by hand (with
written confirmation of receipt), (b) sent by facsimile (with written
confirmation of receipt), provided that a copy is mailed by certified
mail, return receipt requested, the same day or the next day, or (c)
when received by the addressee, if sent by a nationally recognized
overnight delivery service, in each case to the appropriate addresses
and facsimile numbers set forth below (or to such other addresses and
facsimile numbers as a party may designate by notice to the other
parties):
If to the Employer: With a copy to:
Technical Olympic USA, Inc. Technical Olympic USA, Inc.
4000 Hollywood Blvd., Suite 500-N ______________________________
Hollywood, Florida 33021 ______________________________
Attn: Antonio B. Mon, CEO Attn:_________________________
Facsimile No.: (954) 364-4020 Facsimile No.:
Facsimile No.: (281) 243-0116
And with a second copy to:
Technical Olympic USA, Inc.
20 Solomou Street
Ana Kalamaki
Athens 17456 Greece
Attn: [CONSTANTINE STENGOS]
Facsimile No.: 3010) 995-5586
If to the Employee: With a copy to:
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[--------------------] [--------------------]
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8.5 ENTIRE AGREEMENT; SUPERSEDURE. This Agreement
contains the entire agreement between the parties with respect to the
subject matter hereof and hereby expressly terminates, rescinds,
replaces and supersedes all prior and contemporaneous agreements and
understandings, oral or written, between the parties hereto with
respect to the subject matter hereof.
8.6 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF FLORIDA WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES. EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS
IN BROWARD COUNTY, FLORIDA, FOR THE PURPOSES OF ANY PROCEEDING ARISING
OUT OF THIS AGREEMENT.
8.7 SEVERABILITY. If any provision of this Agreement is
held invalid or unenforceable by any court of competent jurisdiction,
the other provisions of this Agreement will remain in full force and
effect. Any provision of this Agreement held invalid or unenforceable
only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
8.8 TAX WITHHOLDINGS. The Employer shall withhold from
all payments hereunder all applicable taxes that it is required to
withhold with respect to any payments and benefits provided under this
Agreement.
8.9 AMENDMENTS AND WAIVERS. No provision of this
Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the
Employee and a member of the Board of Directors authorized by the Board
of Directors to execute the same. No waiver by either party hereto at
any time of any breach by the other party hereto of, or in compliance
with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent
time.
8.10 SURVIVAL. The provisions of Sections 4, 5, 6, 7, and
8 shall survive the termination of this Agreement.
8.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, by original or facsimile signatures, each of
which shall constitute an original and all of which taken together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement effective for all purposes as of the Effective Date.
TECHNICAL OLYMPIC USA, INC. EMPLOYEE
By: /s/ Antonio B. Mon /s/ Yannis Delikanakis
-------------------------------- --------------------------------
Name: Antonio B. Mon Name: Yannis Delikanakis
Title: Chief Executive Officer
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EXHIBIT A
DEFINITIONS
"Accrued Obligations" means, at the relevant date, any unreimbursed business
expenses incurred by the Employee and payable pursuant to Section 3.3.
"Affiliate" means a person or entity who or which, (i) with respect to an
entity, directly, or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, such entity or (ii) with
respect to the Employee, is a parent, spouse or issue of the Employee, including
persons in an adopted or step relationship.
"Board of Directors" means the board of directors of the Employer.
"Business" means the business of developing land for, and the design and
construction of, and the promotion, marketing and sale of, single-family
residences, townhouses, and condominiums.
"Business Day" shall mean any day other than a Saturday, Sunday or bank holiday
recognized in Hollywood, Florida.
"Confidential Information" means any and all intellectual property of the
Employer (or any of its Affiliates), including but not limited to:
(a) trade secrets concerning the business and affairs of the Employer
(or any of its Affiliates), product specifications, data, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, past, current, and planned research and
development, current and planned manufacturing or distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer software and programs (including
object code and source code), computer software and database technologies,
systems, structures, and architectures (and related formulae, compositions,
processes, improvements, devices, know-how, inventions, discoveries, concepts,
ideas, designs, methods and information), and any other information, however
documented, that is a trade secret under federal, state or other applicable law;
and
(b) information concerning the business and affairs of the Employer (or
any of its Affiliates) (which includes historical financial statements,
financial projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of key personnel,
personnel training and techniques and materials), however documented; and notes,
analysis, compilations, studies, summaries, and other material prepared by or
for the Employer (or any of its Affiliates) containing or based, in whole or in
part, on any information included in the foregoing.
Notwithstanding the foregoing, Confidential Information shall not include
information otherwise lawfully known generally by or readily accessible to the
trade or general public other than by the improper disclosure by the Employee.
"Employment Period" means the term of the Employee's employment under this
Agreement.
-12-
"Noncompete Period" means the period beginning on the Effective Date and ending
on the first anniversary of the Employee's termination of employment with the
Employer.
-13-
EXHIBIT B
Summary of Duties and Responsibilities
At the direction of the Chief Executive Officer or the Board of Directors of the
Employer, Employee's duties and responsibilities as Executive Vice President
shall include, but would not be limited to, the following:
- Advise, counsel, and support the Employer in cultivating and
developing business, commercial, banking, and investor
relations in Europe.
- Advise, counsel, and support the Chief Executive Officer of
the Employer in the development of business plans and
financing options for company operations and expansions.
- Arrange and participate in road shows, presentations, trade
conferences, investor meetings, and other events anywhere in
the USA or Europe, and handle all matters relating to the
logistical details of same when such events take place in
Europe.
- Act as primary liaison between the Chief Executive Officer of
the Employer (and other senior officers and managers) and the
representatives of Employer's majority shareholder, including
but not limited to regular participation in conference calls,
meetings, and working sessions.
- Manage communications from representatives of Employer's
majority shareholder (located in Greece) and the Employer,
including but not limited to ensuring accuracy in language
translation and interpretation.
- Advise the Chief Executive Officer of the Employer on any and
all matters relating to shareholder relations.
-14-
EXHIBIT C
Stock Option Agreements
-15-
TECHNICAL OLYMPIC USA, INC.
ANNUAL AND LONG-TERM INCENTIVE PLAN
PERFORMANCE ACCELERATED VESTING NONQUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made as of January 1, 2003, between Technical Olympic USA,
Inc., a Delaware corporation (the "Company"), and Yannis Delikanakis (the
"Employee").
To carry out the purposes of the Technical Olympic USA, Inc. Annual
and Long-Term Incentive Plan (the "Plan"), by affording Employee the
opportunity to purchase shares of common stock, par value $.01, ("Stock") of
Technical Olympic USA, Inc. (the "Company") in recognition of Employee's
significant duties and responsibilities as the Executive Vice-President of the
Company, the Company and Employee hereby agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants to
Employee the right and option ("Option") to purchase all or any part of an
aggregate of 243,000 shares of Stock, in three separate tranches of 81,000
shares of Stock ("Tranche 1"), 81,000 shares of Stock ("Tranche 2"), and 81,000
shares of Stock ("Tranche 3"), on the terms and conditions set forth herein and
in the Plan, which Plan is incorporated herein by reference as a part of this
Agreement. In the event of any conflict between the terms of this Agreement and
the Plan, the Plan shall control. Capitalized terms used but not defined in
this Agreement shall have the meaning attributed to such terms under the Plan,
unless the context requires otherwise.
2. PURCHASE PRICE. The purchase price per share of Stock
purchased pursuant to the exercise of this Option shall be $17.17.
3. EXERCISE OF OPTION. This Option shall become fully vested on
the seventh anniversary of the date of grant hereof and may be immediately
exercised at any time and from time to time after the seventh anniversary of
the date of grant hereof, by written notice to the Company at its principal
executive office addressed to the attention of its Secretary (or such other
officer or employee of the Company as the Company may designate from time to
time); provided, however, that a portion or all of this Option may become
vested earlier and become exercisable as provided in Attachment B hereto or as
provided below:
(a) If Employee's employment with the Company terminates
by reason of Disability (as defined in Attachment A hereto), this
Option, to the extent vested on the date of termination, may be
exercised, at any time during the one-year period following such
termination, by Employee or by Employee's guardian or legal
representative (or by Employee's estate or the person who acquires
this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Employee if Employee dies during
such one-year period), but only as to the vested number of shares of
Stock, if any, that Employee was entitled to purchase hereunder as of
the date Employee's employment so terminates.
(b) If Employee dies an employee of the Company,
Employee's estate (or the person who acquires this Option by will or
the laws of descent and distribution or
otherwise by reason of the death of Employee) may exercise this
Option, to the extent vested on the date of termination, at any time
during the one-year period following the date of Employee's death, but
only as to the vested number of shares of Stock, if any, that Employee
was entitled to purchase hereunder as of the date Employee's
employment so terminates.
(c) If Employee's employment with the Company is
terminated by the Company for any reason other than due to his
Disability or for Cause (as defined in Attachment A hereto), this
Option shall be fully vested and may be exercised, at any time during
the three-year period following such termination, by Employee or by
Employee's guardian or legal representative (or by Employee's estate
or the person who acquires this Option by will or the laws of descent
and distribution or otherwise by reason of the death of Employee if
Employee dies during such period).
(d) If Employee terminates his employment with the
Company for any reason other than a Good Reason (as defined in
Attachment A hereto), or the Company terminates his employment with
the Company for Cause, this Option, to the extent vested on the date
of termination, may be exercised, at any time during the 90-day period
following such termination, by Employee or by Employee's guardian or
legal representative (or by Employee's estate or the person who
acquires this Option by will or the laws of descent and distribution
or otherwise by reason of the death of Employee if Employee dies
during such 90-day period), but in each case only as to the vested
number of shares of Stock, if any, that Employee was entitled to
purchase hereunder as of the date Employee's employment so terminates.
(e) If Employee's employment with the Company is
terminated by Employee for Good Reason prior to a Change of Control,
this Option shall be fully vested and may be exercised, at any time
during the one-year period following such termination, by Employee or
by Employee's estate (or the person who acquires this Option by will
or the laws of descent and distribution or otherwise by reason of the
death of Employee) if Employee dies during such period.
(f) If Employee's employment with the Company is
terminated by Employee on or following a Change of Control (as defined
in Attachment A hereto), this Option shall be fully vested and may be
exercised, at any time during the three-year period following such
termination, by Employee or by Employee's guardian or legal
representative (or by Employee's estate or the person who acquires
this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Employee if Employee dies during
such period).
(g) Notwithstanding the foregoing, there is no minimum
or maximum number of shares of Stock that must be purchased by
Employee upon exercise of this Option. Instead, Employee may, at any
time and from time to time, purchase any number of shares of Stock
that are then vested and exercisable according to the provisions of
this Agreement.
-2-
(h) Notwithstanding the foregoing, this Option shall not
be exercisable in any event after the expiration of 10 years from the
date of grant hereof.
The purchase price of the shares of Stock as to which this Option is
exercised shall be paid in full at the time of exercise (a) in cash (including
by check acceptable to the Company), (b) if the shares are readily tradable on
a national securities market or exchange, through a "cashless broker exercise"
procedure in accordance with a program established by the Company, or (c) any
combination of the foregoing. No fraction of a share shall be issued by the
Company upon exercise of an Option. Unless and until a certificate or
certificates representing such shares shall have been issued by the Company to
Employee, Employee (or the person permitted to exercise this Option in the
event of Employee's death) shall not be or have any of the rights or privileges
of a shareholder of the Company with respect to shares acquirable upon an
exercise of this Option.
4. WITHHOLDING OF TAX. To the extent that the exercise of this
Option or the disposition of shares acquired by exercise of this Option results
in wages to Employee for federal, state or local tax purposes, Employee shall
deliver to the Company at the time of such exercise or disposition such amount
of money, if any, as the Company may require to meet its minimum withholding
obligations under applicable tax laws or regulations. No exercise of this
Option shall be effective until Employee (or the person entitled to exercise
this Option, as applicable) has made arrangements approved by the Company to
satisfy all applicable minimum tax withholding requirements of the Company.
Employee agrees that the shares which Employee may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable federal or state
securities laws. Employee also agrees that (i) the certificates representing
the shares purchased under this Option may bear such legend or legends as the
Committee deems appropriate in order to assure compliance with applicable
securities laws, (ii) the Company may refuse to register the transfer of the
shares purchased under this Option on the stock transfer records of the Company
if such proposed transfer would in the opinion of counsel satisfactory to the
Company constitute a violation of any applicable securities law, and (iii) the
Company may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the shares purchased under this Option.
5. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons lawfully
claiming under Employee.
6. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties with regard to the subject matter hereof, and contains
all the covenants, promises, representations, warranties and agreements between
the parties with respect to the Option granted hereby. Without limiting the
scope of the preceding sentence, all prior understandings and agreements, if
any, among the parties hereto relating to the subject matter hereof are hereby
null and void and of no further force and effect. Any modification of this
Agreement shall be effective only if it is in writing and signed by both
Employee and an authorized officer of the Company.
-3-
7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
8. ADVERSE ACTIONS OR DECISIONS. Notwithstanding any provision
of this Agreement or the Plan to the contrary, in no event shall the Company or
the Committee make any change to the Plan or take any action authorized
pursuant to the Plan which degrades or adversely affects in any manner the
rights of Employee hereunder, unless Employee consents thereto in writing.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Employee has executed this
Agreement, all effective as of the day and year first above written.
TECHNICAL OLYMPIC USA, INC.
By:
-------------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
EMPLOYEE
----------------------------------------------------
Yannis Delikanakis
-4-
ATTACHMENT A
DEFINITIONS
1. "Cause" means:
(a) Employee's conviction of, or plea of nolo contendere to, a
felony or a misdemeanor involving moral turpitude;
(b) any act of fraud, misappropriation or personal dishonesty by
Employee intended to result in his substantial personal enrichment at the
expense of the Company or an affiliate; or
(c) Employee's a material violation of any express direction of
the Chairman of the Board or a material violation of any rule, regulation,
policy or plan established by the Board from time to time regarding the conduct
of members of the Company's management.
2. "Change of Control" means Constantine Stengos and/or one or more
members of the "Stengos Family" ceases to "Control" the Company (or, in the
case of any merger or combination in which Company is not the surviving entity,
ceases to Control such successor entity). For purposes of this Agreement, the
term (a) "Stengos Family" shall mean Constantine Stengos, his spouse, sons,
daughters, sons-in-law, daughters-in-law, and the lineal descendants of any of
the foregoing and (b) "Control" shall mean (i) the power to elect the majority
of the board of directors or comparable governing body of an entity, or, if
there is no such body, the power to direct the management of such entity; or
(ii) the direct and/or indirect beneficial ownership of 40% or more of the
combined voting power of the then outstanding voting securities of such entity
entitled to vote in the election of directors (or comparable governing body or
management) of such entity.
3. "Disability" means Employee's inability, for a period of six
consecutive months, or a cumulative period of 120 business days out of a period
of 12 consecutive months, to perform the essential duties of Employee's
position of Executive Vice-President of the Company, due to a mental or
physical impairment. The determination of whether Employee is suffering from a
Disability shall be made by three independent physicians, one chosen by a
representative of Employee, one chosen by the Company and one chosen by the
physicians chosen by Employee and the Company.
4. "Good Reason" means that, without Employee's prior written consent,
the Company removes Employee from the position of Executive Vice-President of
the Company or substantially adversely changes Employee's duties as Executive
Vice-President (excluding any such removal for Cause or as a result of
Employee's death, Disability or Employee's resignation not based on the
existence of Good Reason) and within 60 business days of learning of the
occurrence of any such event, and in the absence of any circumstance that
constitutes Cause, Employee terminates his employment by written notice to the
Chairman of the Board.
A-1
ATTACHMENT B
TECHNICAL OLYMPIC, INC.
PERFORMANCE ACCELERATED VESTING
NONQUALIFIED STOCK OPTION GRANT
ACCELERATED VESTING CRITERIA
I. Total Return to Shareholders ("TRS")
The vesting of an Option Tranche shall become accelerated based on the
comparison of (i) the TRS (as defined below) of the Company's common
stock at the end of the Performance Period applicable to such Tranche
to (ii) the TRS of each of the various common stocks of the Peer Group
for such Performance Period.
"TRS" means the appreciation/depreciation in the average price of the
applicable common stock at the end of the Performance Period, with any
dividends paid on such stock during such Performance Period being
deemed reinvested, over the average price of the applicable common
stock at the beginning of the Performance Period.
The "average price" of the Company's common stock and of the common
stock of each of the members of the Peer Group (i) at the beginning of
the Performance Period shall mean the average of the closing prices of
such stock during the calendar quarter immediately preceding the
beginning of such Performance Period and (ii) at the end of the
Performance Period shall mean the average of the closing prices of
such stock during the last calendar quarter of such Performance
Period.
II. Performance Periods
Separate Performance Periods shall apply to each Option Tranche as
follows:
Option Tranche Performance Period
1 January 1, 2002 - December 31, 2004
2 January 1, 2003 - December 31, 2005
3 January 1, 2004 - December 31, 2006
III. Accelerated Vesting
The number of shares of Stock with respect to an Option Tranche that
shall become vested, if any, at the end of the applicable Performance
Period shall be determined by the percentile ranking of the Company's
TRS for such Performance Period vs. the TRS for the Peer Group
companies for the Performance Period, as follows:
B-1
1 2 3 4 5 6
Company TRS Percentile Rank vs. <25th 25th 37.5th 50th 62.5th >75th
Peer Group Members' TRS - -
Vested Percentage 0% 10% 35% 60% 85% 100%
For results between columns 2 and 3, 3 and 4, 4 and 5, and 5 and 6,
the Vested Percentage earned shall be determined by linear
interpolation between the two applicable vesting standards.
IV. Peer Group
The Peer Group shall consist of the following companies:
Beazer Homes USA, Inc.
Centex Corporation
D.R. Horton, INC.
Hovnanian Enterprises, Inc.
KB Home (Formerly Kaufman and Broad Home Corporation)
Lennar Corporation
M.D.C. Holdings, INC.
NVR, Inc.
Pulte Corporation
The Ryland Group, INC.
Standard Pacific Corp.
Toll Brothers, INC.
The Company shall engage Compustat (or other similar firm) to annually
rank the above peer companies for purposes of determining the
Company's percentile ranking.
V. Calculations
All TRS calculations under this Agreement shall be made by an independent
accounting firm or consulting expert selected by the Company. In performing
such calculations, appropriate adjustments shall be made for any change in
accounting standards required by the FASB after the beginning of a Performance
Period.
B-2
TECHNICAL OLYMPIC USA, INC.
ANNUAL AND LONG-TERM INCENTIVE PLAN
FRONT END NONQUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made as of January 1, 2003, between Technical Olympic USA,
Inc., a Delaware corporation (the "Company"), and Yannis Delikanakis (the
"Employee").
To carry out the purposes of the Technical Olympic USA, Inc. Annual
and Long-Term Incentive Plan (the "Plan"), by affording Employee the
opportunity to purchase shares of common stock, par value $.01, ("Stock") of
Technical Olympic USA, Inc. (the "Company") in recognition of Employee's
significant duties and responsibilities as the Executive Vice-President of the
Company, the Company and Employee hereby agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants to
Employee the right and option ("Option") to purchase all or any part of an
aggregate of 540,000 shares of Stock on the terms and conditions set forth
herein and in the Plan, which Plan is incorporated herein by reference as a
part of this Agreement. In the event of any conflict between the terms of this
Agreement and the Plan, the Plan shall control. Capitalized terms used but not
defined in this Agreement shall have the meaning attributed to such terms under
the Plan, unless the context requires otherwise.
2. PURCHASE PRICE. The purchase price per share of Stock
purchased pursuant to the exercise of this Option shall be as follows: (i) with
respect to the first 180,000 shares of Stock (Tranche 1), $18.89; (ii) with
respect to the next 180,000 shares of Stock (Tranche 2), $20.78; and (iii) with
respect to the remaining 180,000 shares of Stock (Tranche 3), $22.86.
3. EXERCISE OF OPTION. This Option shall become vested and may
be exercised in accordance with the following schedule, by written notice to
the Company at its principal executive office addressed to the attention of its
Secretary (or such other officer or employee of the Company as the Company may
designate from time to time):
(i) with respect to Tranche 1, at any time and from time to time
on and after January 1, 2003;
(ii) with respect to Tranche 2, at any time and from time to time
on and after January 1, 2004; and
(iii) with respect to Tranche 3, at any time and from time to time
on and after January 1, 2005.
Notwithstanding the above schedule, upon the occurrence of the following
events, this Option shall vest and become exercisable as provided below:
(a) If Employee's employment with the Company terminates
by reason of Disability (as defined in Attachment A hereto), this
Option, to the extent vested on the date of termination, may be
exercised, at any time during the one-year period following
such termination, by Employee or by Employee's guardian or legal
representative (or by Employee's estate or the person who acquires
this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Employee if Employee dies during
such one-year period), but only as to the vested number of shares of
Stock, if any, that Employee was entitled to purchase hereunder as of
the date Employee's employment so terminates.
(b) If Employee dies an employee of the Company,
Employee's estate (or the person who acquires this Option by will or
the laws of descent and distribution or otherwise by reason of the
death of Employee) may exercise this Option, to the extent vested on
the date of termination, at any time during the one-year period
following the date of Employee's death, but only as to the vested
number of shares of Stock, if any, that Employee was entitled to
purchase hereunder as of the date Employee's employment so terminates.
(c) If Employee's employment with the Company is
terminated by the Company for any reason other than due to his
Disability or for Cause (as defined in Attachment A hereto), this
Option shall be fully vested and may be exercised, at any time during
the three-year period following such termination, by Employee or by
Employee's guardian or legal representative (or by Employee's estate
or the person who acquires this Option by will or the laws of descent
and distribution or otherwise by reason of the death of Employee if
Employee dies during such period).
(d) If Employee terminates employment with the Company
for any reason other than a Good Reason (as defined in Attachment A
hereto), or the Company terminates his employment with the Company for
Cause, this Option, to the extent vested on the date of termination,
may be exercised, at any time during the 90-day period following such
termination, by Employee or by Employee's guardian or legal
representative (or by Employee's estate or the person who acquires
this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Employee if Employee dies during
such 90-day period), but in each case only as to the vested number of
shares of Stock, if any, that Employee was entitled to purchase
hereunder as of the date Employee's employment so terminates.
(e) If Employee's employment with the Company is
terminated by Employee for Good Reason prior to a Change of Control,
this Option shall be fully vested and may be exercised, at any time
during the one-year period following such termination, by Employee or
by Employee's estate (or the person who acquires this Option by will
or the laws of descent and distribution or otherwise by reason of the
death of Employee) if Employee dies during such period.
(f) If Employee's employment with the Company is
terminated by Employee on or following a Change of Control (as defined
in Attachment A hereto), this Option shall be fully vested and may be
exercised, at any time during the three-year period following such
termination, by Employee or by Employee's guardian or legal
representative (or by Employee's estate or the person who acquires
this Option by will or
-2-
the laws of descent and distribution or otherwise by reason of the
death of Employee if Employee dies during such period).
(g) Notwithstanding the foregoing, there is no minimum
or maximum number of shares of Stock that must be purchased by
Employee upon exercise of this Option. Instead, Employee may, at any
time and from time to time, purchase any number of shares of Stock
that are then vested and exercisable according to the provisions of
this Agreement.
(h) Notwithstanding the foregoing, this Option shall not
be exercisable in any event after the expiration of 10 years from the
date of grant hereof.
The purchase price of the shares of Stock as to which this Option is
exercised shall be paid in full at the time of exercise (a) in cash (including
by check acceptable to the Company), (b) if the shares are readily tradable on
a national securities market or exchange, through a "cashless broker exercise"
procedure in accordance with a program established by the Company, or (c) any
combination of the foregoing. No fraction of a share shall be issued by the
Company upon exercise of an Option. Unless and until a certificate or
certificates representing such shares shall have been issued by the Company to
Employee, Employee (or the person permitted to exercise this Option in the
event of Employee's death) shall not be or have any of the rights or privileges
of a shareholder of the Company with respect to shares acquirable upon an
exercise of this Option.
4. WITHHOLDING OF TAX. To the extent that the exercise of this
Option or the disposition of shares acquired by exercise of this Option results
in wages to Employee for federal, state or local tax purposes, Employee shall
deliver to the Company at the time of such exercise or disposition such amount
of money, if any, as the Company may require to meet its minimum withholding
obligations under applicable tax laws or regulations. No exercise of this
Option shall be effective until Employee (or the person entitled to exercise
this Option, as applicable) has made arrangements approved by the Company to
satisfy all applicable minimum tax withholding requirements of the Company.
Employee agrees that the shares which Employee may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable federal or state
securities laws. Employee also agrees that (i) the certificates representing
the shares purchased under this Option may bear such legend or legends as the
Committee deems appropriate in order to assure compliance with applicable
securities laws, (ii) the Company may refuse to register the transfer of the
shares purchased under this Option on the stock transfer records of the Company
if such proposed transfer would in the opinion of counsel satisfactory to the
Company constitute a violation of any applicable securities law, and (iii) the
Company may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the shares purchased under this Option.
5. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons lawfully
claiming under Employee.
-3-
6. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties with regard to the subject matter hereof, and contains
all the covenants, promises, representations, warranties and agreements between
the parties with respect to the Option granted hereby. Without limiting the
scope of the preceding sentence, all prior understandings and agreements, if
any, among the parties hereto relating to the subject matter hereof are hereby
null and void and of no further force and effect. Any modification of this
Agreement shall be effective only if it is in writing and signed by both
Employee and an authorized officer of the Company.
7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
8. ADVERSE ACTIONS OR DECISIONS. Notwithstanding any provision
of this Agreement or the Plan to the contrary, in no event shall the Company or
the Committee make any change to the Plan or take any action authorized
pursuant to the Plan which degrades or adversely affects in any manner the
rights of Employee hereunder, unless Employee consents thereto in writing.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Employee has executed this
Agreement, all effective as of the day and year first above written.
TECHNICAL OLYMPIC USA, INC.
By:
-------------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
EMPLOYEE
----------------------------------------------------
Yannis Delikanakis
-4-
ATTACHMENT A
DEFINITIONS
1. "Cause" means:
(a) Employee's conviction of, or plea of nolo contendere to, a
felony or a misdemeanor involving moral turpitude;
(b) any act of fraud, misappropriation or personal dishonesty by
Employee intended to result in his substantial personal enrichment at the
expense of the Company or an affiliate; or
(c) Employee's a material violation of any express direction of
the Chairman of the Board or a material violation of any rule, regulation,
policy or plan established by the Board from time to time regarding the conduct
of members of the Company's management.
2. "Change of Control" means Constantine Stengos and/or one or more
members of the "Stengos Family" ceases to "Control" the Company (or, in the
case of any merger or combination in which Company is not the surviving entity,
ceases to Control such successor entity). For purposes of this Agreement, the
term (a) "Stengos Family" shall mean Constantine Stengos, his spouse, sons,
daughters, sons-in-law, daughters-in-law, and the lineal descendants of any of
the foregoing and (b) "Control" shall mean (i) the power to elect the majority
of the board of directors or comparable governing body of an entity, or, if
there is no such body, the power to direct the management of such entity; or
(ii) the direct and/or indirect beneficial ownership of 40% or more of the
combined voting power of the then outstanding voting securities of such entity
entitled to vote in the election of directors (or comparable governing body or
management) of such entity.
3. "Disability" means Employee's inability, for a period of six
consecutive months, or a cumulative period of 120 business days out of a period
of 12 consecutive months, to perform the essential duties of Employee's
position of Executive Vice-President of the Company, due to a mental or
physical impairment. The determination of whether Employee is suffering from a
Disability shall be made by three independent physicians, one chosen by a
representative of Employee, one chosen by the Company and one chosen by the
physicians chosen by Employee and the Company.
4. "Good Reason" means that, without Employee's prior written consent,
the Company removes Employee from the position of Executive Vice-President of
the Company or substantially adversely changes Employee's duties as Executive
Vice-President (excluding any such removal for Cause or as a result of
Employee's death, Disability or Employee's resignation not based on the
existence of Good Reason) and within 60 business days of learning of the
occurrence of any such event, and in the absence of any circumstance that
constitutes Cause, Employee terminates his employment by written notice to the
Chairman of the Board.
A-1
TECHNICAL OLYMPIC USA, INC.
ANNUAL AND LONG-TERM INCENTIVE PLAN
SIGN ON STOCK OPTION AGREEMENT
AGREEMENT made as of January 1, 2003, between Technical Olympic USA,
Inc., a Delaware corporation (the "Company"), and Yannis Delikanakis (the
"Employee").
To carry out the purposes of the Technical Olympic USA, Inc. Annual
and Long-Term Incentive Plan (the "Plan"), by affording Employee the
opportunity to purchase shares of common stock, par value $.01, ("Stock") of
Technical Olympic USA, Inc. (the "Company") in recognition of Employee's
significant duties and responsibilities as the Executive Vice-President of the
Company, the Company and Employee hereby agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants to
Employee the right and option ("Option") to purchase all or any part of an
aggregate of 117,000 shares of Stock on the terms and conditions set forth
herein and in the Plan, which Plan is incorporated herein by reference as a
part of this Agreement. In the event of any conflict between the terms of this
Agreement and the Plan, the Plan shall control. Capitalized terms used but not
defined in this Agreement shall have the meaning attributed to such terms under
the Plan, unless the context requires otherwise.
2. PURCHASE PRICE. The purchase price per share of Stock
purchased pursuant to the exercise of this Option shall be $17.17.
3. EXERCISE OF OPTION. This Option is immediately and fully
vested on the date hereof. This Option may be exercised, by written notice to
the Company at its principal executive office addressed to the attention of its
Secretary (or such other officer or employee of the Company as the Company may
designate from time to time), at any time and from time to time after the date
of grant hereof, subject, however, to the following provisions:
(a) If Employee's employment with the Company terminates
by reason of Disability (as defined in Attachment A hereto), this
Option may be exercised, at any time during the one-year period
following such termination, by Employee or by Employee's guardian or
legal representative (or by Employee's estate or the person who
acquires this Option by will or the laws of descent and distribution
or otherwise by reason of the death of Employee if Employee dies
during such one-year period).
(b) If Employee dies while an employee of the Company,
Employee's estate (or the person who acquires this Option by will or
the laws of descent and distribution or otherwise by reason of the
death of Employee) may exercise this Option at any time during the
one-year period following the date of Employee's death.
(c) If Employee's employment with the Company is
terminated by the Company for any reason other than due to his
Disability or for Cause (as defined in Attachment A hereto), this
Option may be exercised, at any time during the three-year
period following such termination, by Employee or by Employee's
guardian or legal representative (or by Employee's estate or the
person who acquires this Option by will or the laws of descent and
distribution or otherwise by reason of the death of Employee if
Employee dies during such period).
(d) If Employee terminates his employment with the
Company for any reason other than a Good Reason (as defined in
Attachment A hereto), or the Company terminates the Employee for
Cause, this Option may be exercised, at any time during the 90-day
period following such termination, by Employee or by Employee's
guardian or legal representative (or by Employee's estate or the
person who acquires this Option by will or the laws of descent and
distribution or otherwise by reason of the death of Employee if
Employee dies during such 90-day period).
(e) If Employee's employment with the Company is
terminated by Employee for Good Reason prior to a Change of Control,
this Option may be exercised, at any time during the one-year period
following such termination, by Employee or by Employee's estate (or
the person who acquires this Option by will or the laws of descent and
distribution or otherwise by reason of the death of Employee) if
Employee dies during such period.
(f) If Employee's employment with the Company is
terminated by Employee on or following a Change of Control (as defined
in Attachment A hereto), this Option may be exercised, at any time
during the three-year period following such termination, by Employee
or by Employee's guardian or legal representative (or by Employee's
estate or the person who acquires this Option by will or the laws of
descent and distribution or otherwise by reason of the death of
Employee if Employee dies during such period).
(g) Notwithstanding the foregoing, there is no minimum
or maximum number of shares of Stock that must be purchased by
Employee upon exercise of this Option. Instead, Employee may, at any
time and from time to time, purchase any number of shares of Stock
that are then vested and exercisable according to the provisions of
this Agreement.
(h) Notwithstanding the foregoing, this Option shall not
be exercisable in any event after the expiration of 10 years from the
date of grant hereof.
The purchase price of the shares of Stock as to which this Option is
exercised shall be paid in full at the time of exercise (a) in cash (including
by check acceptable to the Company), (b) if the shares are readily tradable on
a national securities market or exchange, through a "cashless broker exercise"
procedure in accordance with a program established by the Company, or (c) any
combination of the foregoing. No fraction of a share shall be issued by the
Company upon exercise of an Option. Unless and until a certificate or
certificates representing such shares shall have been issued by the Company to
Employee, Employee (or the person permitted to exercise this Option in the
event of Employee's death) shall not be or have any of the rights or privileges
of a shareholder of the Company with respect to shares acquirable upon an
exercise of this Option.
-2-
4. WITHHOLDING OF TAX. To the extent that the exercise of this
Option or the disposition of shares acquired by exercise of this Option results
in wages to Employee for federal, state or local tax purposes, Employee shall
deliver to the Company at the time of such exercise or disposition such amount
of money, if any, as the Company may require to meet its minimum withholding
obligations under applicable tax laws or regulations. No exercise of this
Option shall be effective until Employee (or the person entitled to exercise
this Option, as applicable) has made arrangements approved by the Company to
satisfy all applicable minimum tax withholding requirements of the Company.
Employee agrees that the shares which Employee may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable federal or state
securities laws. Employee also agrees that (i) the certificates representing
the shares purchased under this Option may bear such legend or legends as the
Committee deems appropriate in order to assure compliance with applicable
securities laws, (ii) the Company may refuse to register the transfer of the
shares purchased under this Option on the stock transfer records of the Company
if such proposed transfer would in the opinion of counsel satisfactory to the
Company constitute a violation of any applicable securities law, and (iii) the
Company may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the shares purchased under this Option.
5. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons lawfully
claiming under Employee.
6. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties with regard to the subject matter hereof, and contains
all the covenants, promises, representations, warranties and agreements between
the parties with respect to the Option granted hereby. Without limiting the
scope of the preceding sentence, all prior understandings and agreements, if
any, among the parties hereto relating to the subject matter hereof are hereby
null and void and of no further force and effect. Any modification of this
Agreement shall be effective only if it is in writing and signed by both
Employee and an authorized officer of the Company.
7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
8. ADVERSE ACTIONS OR DECISIONS. Notwithstanding any provision
of this Agreement or the Plan to the contrary, in no event shall the Company or
the Committee make any change to the Plan or take any action authorized
pursuant to the Plan which degrades or adversely affects in any manner the
rights of Employee hereunder, unless Employee consents thereto in writing.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Employee has executed this
Agreement, all effective as of the day and year first above written.
-3-
TECHNICAL OLYMPIC USA, INC.
By:
-------------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
EMPLOYEE
----------------------------------------------------
Yannis Delikanakis
-4-
ATTACHMENT A
DEFINITIONS
1. "Cause" means:
(a) Employee's conviction of, or plea of nolo contendere to, a
felony or a misdemeanor involving moral turpitude;
(b) any act of fraud, misappropriation or personal dishonesty by
Employee intended to result in his substantial personal enrichment at the
expense of the Company or an affiliate; or
(c) Employee's a material violation of any express direction of
the Chairman of the Board or a material violation of any rule, regulation,
policy or plan established by the Board from time to time regarding the conduct
of members of the Company's management.
2. "Change of Control" means Constantine Stengos and/or one or more
members of the "Stengos Family" ceases to "Control" the Company (or, in the
case of any merger or combination in which Company is not the surviving entity,
ceases to Control such successor entity). For purposes of this Agreement, the
term (a) "Stengos Family" shall mean Constantine Stengos, his spouse, sons,
daughters, sons-in-law, daughters-in-law, and the lineal descendants of any of
the foregoing and (b) "Control" shall mean (i) the power to elect the majority
of the board of directors or comparable governing body of an entity, or, if
there is no such body, the power to direct the management of such entity; or
(ii) the direct and/or indirect beneficial ownership of 40% or more of the
combined voting power of the then outstanding voting securities of such entity
entitled to vote in the election of directors (or comparable governing body or
management) of such entity.
3. "Disability" means Employee's inability, for a period of six
consecutive months, or a cumulative period of 120 business days out of a period
of 12 consecutive months, to perform the essential duties of Employee's
position of Executive Vice-President of the Company, due to a mental or
physical impairment. The determination of whether Employee is suffering from a
Disability shall be made by three independent physicians, one chosen by a
representative of Employee, one chosen by the Company and one chosen by the
physicians chosen by Employee and the Company.
4. "Good Reason" means that, without Employee's prior written consent,
the Company removes Employee from the position of Executive Vice-President of
the Company or substantially adversely changes Employee's duties as Executive
Vice-President (excluding any such removal for Cause or as a result of
Employee's death, Disability or Employee's resignation not based on the
existence of Good Reason) and within 60 business days of learning of the
occurrence of any such event, and in the absence of any circumstance that
constitutes Cause, Employee terminates his employment by written notice to the
Chairman of the Board.
A-1