1
Translation from French
UNILATERAL PROMISE TO PURCHASE SHARES
BETWEEN THE UNDERSIGNED
- - Kaufman & Broad France, a societe anonyme with a capital of FF
19,414,200, whose registered office is at 44 rue Washington, 75008
Paris, identified under the number 702 022 724 RCS Paris,
represented by its Chairman
Mr. Guy Nafilyan
ON THE ONE HAND
Hereinafter referred to as
THE "PROMISOR"
AND
- - Mr./Mrs./Miss [name]
residing at [address]
ON THE OTHER HAND
Hereinafter referred to as
THE "BENEFICIARY"
WITNESSETH:
Kaufman & Broad France is a societe anonyme with a capital of FF 19,414,200
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divided into 194,142 shares of 100 francs each, whose registered office is at 44
rue Washington, 75008 Paris, identified under the number 702 022 724 RCS Paris.
The extraordinary general meeting of the shareholders of Kaufman & Broad France
of October 30, 1997 authorized the Board of Directors to grant options to
purchase shares of the company to managers and/or employees of the company and
of companies or other entities of its group.
In accordance with the provisions of Article 217-1 of the Law of June 24, 1966
on commercial companies, which permits a derogation from the prohibition - set
forth in Article 217 of such law for a company to acquire its own shares, the
extraordinary general meeting authorized the Board to purchase the necessary
shares from the shareholders to allow the employees to exercise options.
Making use of this authorization, the Board, during its October 30, 1997
meeting, awarded part of the stock options.
The Board of Directors therefore has the possibility of acquiring shares of
Kaufman & Broad France to allow the award of the balance of the options.
Mr./Mrs./Miss [name] holds [number] shares out of the 194,142 shares composing
the capital stock of Kaufman & Broad France.
IT HAS BEEN AGREED BETWEEN THE PARTIES AS FOLLOWS:
I. The Promisor hereby irrevocably promises to the Beneficiary to purchase, or
to cause to be purchased, by any individuals or legal entities it might
substitute for itself, and at the Beneficiary's first request, according to the
conditions defined below, all or part, as the latter may choose, of the [number]
shares representing all of the shares held as of this day by Mr./Mrs./Miss
[name].
The Beneficiary accepts such promise as a promise and reserves the right to make
use thereof according to the conditions defined below.
The Beneficiary shall have the option of exercising this promise to purchase, at
one or more times as he/she may choose, for all or the part that he/she may
consider appropriate, between February 1 and March 31 inclusive of each calendar
year as from 2002 and until 2012 inclusive.
Thereafter, if the Beneficiary has not notified his/her acceptance, the Promisor
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shall cease to be bound and this promise to purchase shall lapse without
indemnity on either side because the option has not been exercised.
The Beneficiary's exercise of this promise to purchase shall be notified by
registered letter indicating the number of shares covered by the exercise of the
option, the postmark attesting to the date.
The parties expressly agree that this promise shall not have any effect in the
event of a sale by the majority shareholder of Kaufman & Broad France of all or
part of such latter company's shares. In such an event, and once it shall become
aware of the proposed sale, the Promisor shall notify the Beneficiary thereof in
writing. This promise shall lapse upon the Beneficiary's receipt of such
notification.
II. If the promise hereunder is exercised within the period stipulated above,
the sale of the shares shall occur for a price determined by dividing the
consolidated equity (US GAAP standards) of Kaufman & Broad France at November 30
of the last fiscal year ended by the number of issued shares outstanding at such
date.
The sale price of the shares shall be payable by the Promisor or its substitutes
within 30 days of the exercise in return for the Beneficiary's delivery of the
transfer orders corresponding to the shares which are the subject of the promise
to purchase and, if required, any corresponding certificates of recording in an
account which the Beneficiary might hold.
III. The shares acquired will be delivered to the Promisor, with ownership and
acquisition of rights effective as from their acquisition, therefore with right
to dividends and interim dividends distributed as from such date.
They must be free of any charge, pledge or other impediment to their sale, the
Beneficiary being required to have full ownership thereof without any
restriction.
IV. This promise to purchase is binding on both the Promisor and all its assigns
jointly between them, without the benefit of discussion or division.
a) In the event of the merger acquisition of Kaufman & Broad France by another
company, the promise hereunder would be carried over to the shares of the
absorbing company which had been delivered to the Beneficiary in exchange for
the shares of Kaufman & Broad France which it owns.
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b) In the event of a capital increase by the capitalization of reserves, profits
or premiums and by the issuance of new shares, the free shares awarded to the
Beneficiary for the shares belonging to him/her would be added to those referred
to herein, without any modification of the price referred to above.
c) In the event of a capital increase by subscription in cash, this promise
would also apply to new shares which might be subscribed for by the Beneficiary
before exercising this promise, for a price which will be equal to the price
paid by the Beneficiary for the subscription.
d) In the event of the transformation of the legal form of Kaufman & Broad
France, the benefit of this promise would be extended to the equity interests
delivered by such transformed company in exchange for the shares which are the
subject matter of this promise, whatever their form and nature.
VI. Each of the undersigned parties shall bear the cost, which so undertakes, of
counsel's fees and the fees of any other person having respectively given them
opinions, advice and assistance.
VII. For the performance hereof, and any consequences, the undersigned elect
domicile respectively in their above-designated domiciles where all
notifications may be made to them in performance hereof.
Executed in Paris
In two originals
On
THE PROMISOR(1) THE BENEFICIARY(2)
- --------
(1) Signature preceded by the handwritten words "Good for promise to
purchase (number written in full and in figures) shares of Kaufman &
Broad France".
(2) Signature preceded by the handwritten words "Good for acceptance of
this promise to
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Kaufman & Broad France [name]
Guy Nafilyan
- ----------
purchase shares as a promise".
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Translation from French
KAUFMAN & BROAD FRANCE
A societe anonyme with a capital of FF 19,414,200
Registered office: 44 rue de Washington 75008 Paris
702 022 724 RCS Paris
- --------------------------------------------------------------------------------
REGULATIONS OF THE STOCK OPTION PLAN
- --------------------------------------------------------------------------------
The extraordinary general meeting of the shareholders of Kaufman & Broad France
held on October 30, 1997 authorized the creation of a stock option plan of the
company in favor of certain employees and/or managers of the company or its
French subsidiaries, such options entitling their holders to acquire shares
within the limit of a maximum of 19,414 shares, i.e., practically 10% of the
capital stock of Kaufman & Broad France.
This stock option plan is governed by the provisions of Articles 208-1 to 208-8
of the Law of June 24, 1966 on commercial companies and by Articles 174-8 to
174-21 of the Decree of March 23, 1967.
The Board of Directors, in its October 30, 1997 meeting, making use of the
authorization granted to it by the extraordinary general meeting referred to
above, defined the terms and conditions of the stock option plan and designated
the beneficiaries of the options and the number of options awarded to them.
I. CONDITIONS FOR THE AWARD AND CHARACTERISTICS OF THE OPTIONS
1. DEFINITION OF THE BENEFICIARIES
The Board of Directors decided to award options to
Mr. Pierre Beauchef
Mr. Patrick Zamo
Mrs. Beatrice Terray
Mr. Daniel Raze
Mr. Christian Delapierre
Mr. David Holland
Mr. Guy Carrie
Mr. Erick Bonnard
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Mr. Eric Gerlach
Mr. Jean-Pierre Farion
Mr. Alain Morvan
Mrs. Anne Cohendy
Mr. Claude Maitre
Mr. Olivier Perrin
Mr. Gerard Belorgey
employees of G.I.E. Kaufman & Broad.
Mr. Guy Nafilyan
Mr. Joel Monribot
Mr. Hugues le Masne
directors of Kaufman & Broad France
As of today's date, each of the beneficiaries named above holds less
than 10% of the capital stock.
2. NUMBER OF SHARES SUBJECT TO OPTIONS
The number of shares covered by the purchase options is 19,414 shares,
of a par value of 100 francs each, of Kaufman & Broad France, and they
are awarded to the above-named beneficiaries in the following
proportions:
Mr. Guy Nafilyan 9,707 options
Mr. Joel Monribot 2,912 options
Mr. Hugues le Masne 388 options
directors of Kaufman & Broad France.
Mr. Pierre Beauchef 971 options
Mr. Patrick Zamo 582 options
Mrs. Beatrice Terray 388 options
Mr. Daniel Raze 388 options
Mr. Christian Delapierre 97 options
Mr. David Holland 97 options
Mr. Guy Carrie 97 options
Mr. Erick Bonnard 97 options
Mr. Eric Gerlach 194 options
Mr. Jean-Pierre Farion 97 options
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Mr. Alain Morvan 194 options
Mrs. Anne Cohendy 97 options
Mr. Claude Maitre 97 options
Mr. Olivier Perrin 97 options
Mr. Gerard Belorgey 97 options
employees of G.I.E. Kaufman & Broad.
Total 16,597 options
The options being irrevocable, this number may not be modified during
the term of the options, except in the case of an adjustment of the
number of shares and of the purchase price made necessary by the
completion of the financial operations referred to in paragraph 5
below.
3. CHARACTERISTICS OF THE OPTIONS
The granting of the options constitutes an irrevocable undertaking on
the part of the company in favor of the beneficiary.
The options may be exercised by the beneficiary personally. The options
and the rights resulting from the options granted are not assignable
and not attachable. However, in the event of the death of a
beneficiary, and in accordance with Article 208-7 of the Law on
commercial companies, such beneficiary's assigns may exercise the
option within six months of the death, as indicated below.
The exercise of the option is optional for the beneficiary.
4. ESTABLISHMENT OF THE PURCHASE PRICE OF THE SHARES
The purchase price of the shares by the beneficiaries at the time such
options are exercised has been determined on the basis of the
consolidated equity at November 30, 1996 (US GAAP standards), i.e., FF
279,739,000.
The price per share obtained therefrom is FF 1,440.90 (FF 279,739,000
divided by 194,412 shares).
The above-mentioned price was defined by the extraordinary general
meeting of October 30, 1997 in light of the report issued by the
statutory
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auditor.
The price as determined shall be paid as indicated in paragraph II-2
below.
5. ADJUSTMENT OF THE PURCHASE PRICE
In accordance with the law, the purchase price of the shares may not be
modified during the term of the option, i.e., until the term of the
plan.
However, if during such period the company carries out certain
financial transactions having an impact on the capital, the Board of
Directors will adjust the price of the shares subject to not as yet
exercised options, so that the total value of the current options of
the beneficiaries remains constant. The terms and conditions for the
calculation of these adjustments are defined by the law.
The financial transactions referred to above are the following:
- issuance of shares to be subscribed for in cash;
- issuance of bonds giving a right to shares (bonds with warrants,
convertible or exchangeable into shares);
- capitalization of reserves, profits or issuance premiums;
- distribution of reserves in cash or in portfolio shares;
- reduction of the capital because of losses.
6. FUTURE AWARDS
The 2,817 shares remaining to be awarded after the initial distribution
(i.e., the difference between the 19,414 authorized shares and the
16,597 shares awarded under paragraph I-2 above) may be awarded in the
coming years. These future awards will be made between March 1 and June
30 of each year - subject to modifications of the law or the
regulations limiting the periods during which the options may be
awarded - the exercise price being determined on the basis of the
consolidated equity of Kaufman & Broad France (US GAAP standards) at
the previous November 30.
II. TERMS AND CONDITIONS FOR THE EXERCISE OF THE OPTIONS
1. PERIOD OF VALIDITY OF THE OPTIONS
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1.1 The options may only be exercised by their beneficiaries if
they are employees and/or managers of the company or of one of
the companies and/or other entities of its group affiliated to
it within the meaning of the provisions of Article 208-4 of
the Law of June 24, 1966 on the day the option is exercised,
subject to the exceptions stipulated below.
The options may be exercised as from the fifth anniversary of
the date of their award by the Board of Directors and until
the term of the plan.
The options will expire on the 15th anniversary of the date of
their award.
Any option not exercised on the expiration date of this period
will lapse.
The options may be exercised at any time during this period,
at one or more times, but without exceeding five times, within
the limits established in paragraph 2 below.
1.2 During the first five years of the plan, i.e., until October
30, 2002, the option may be exercised in advance by the
beneficiary at the time of the occurrence of one of the
following events and under the conditions set forth below:
- in the event of the death or invalidity of the
beneficiary corresponding to the classification in the
3rd or 4th category provided for in Article 310 of the
Social Security Code, during a period of six months as
from the day of the death or the acknowledgment of the
invalidity; at the end of this period, any unexercised
option will no longer be valid;
- in the event of taking retirement/being asked to retire,
during a one-month period as from the day on which he
stops work; at the end of this period, any unexercised
option will no longer be valid;
- in the event of resignation, during a one-month period
as from notification of the resignation; at the end of
this period, any
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unexercised option will no longer be valid;
- in the event of the sale of all the shares of Kaufman &
Broad France by Kaufman & Broad Home Corporation, during
a period starting as from the beneficiary's being
notified of the proposed sale of the shares of Kaufman &
Broad France and expiring one clear day preceding the
date scheduled for the completion of the sale of the
shares, as will be mentioned in the notification sent to
the beneficiary; upon expiration of this period, the
unexercised options will no longer be valid;
- in the event of the sale of a part of Kaufman & Broad
Home Corporation's shareholding in Kaufman & Broad
France, during a period starting as from the
beneficiary's being notified of the proposed sale of the
shares of Kaufman & Broad France and expiring one clear
day preceding the date scheduled for the completion of
the sale of the shares, as will be mentioned in the
notification sent to the beneficiary; upon expiration of
this period, the unexercised options will no longer be
valid; each beneficiary may exercise a part of his
options equal to the part of the capital of Kaufman &
Board France sold by Kaufman & Broad Home Corporation;
the balance of the exercisable options either in the
event of a further sale by Kaufman & Broad Home
Corporation of its shareholding in Kaufman & Broad
France according to the conditions indicated above, or
in the absence of a further sale, as from the tenth
anniversary of the award date of the balance of the
options.
1.3 As from October 31, 2002, the option will lose its validity in
advance at the time of the occurrence of one of the following
events and under the conditions set forth below:
- in the event of the death or invalidity of the
beneficiary corresponding to the classification in the
3rd or 4th category provided for in Article 310 of the
Social Security Code, at the end of a period of six
months as from the day of the death or of the
acknowledgment of the invalidity;
- in the event of taking retirement/being asked to retire,
at the end of a one-month period as from the day on
which he stops
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work;
- in the event of resignation, at the end of a one-month
period as from the day of notification of the
resignation;
- in the event of the sale of at least 50% of the shares
of Kaufman & Broad France by Kaufman & Broad Home
Corporation and/or in the event of a change of control
of Kaufman & Broad Home Corporation, at the end of a
period starting as from the beneficiary's being notified
of the proposed sale or change of control referred to in
this paragraph, and expiring one clear day preceding the
date scheduled for the completion of the sale or the
change of control referred to above, as mentioned in the
notification sent to the beneficiary;
1.4 The options granted to the beneficiary shall no longer be
valid:
- in the event of dismissal;
- in the event of removal from office or non-renewal of
his term of office.
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2. TERMS AND CONDITIONS FOR THE EXERCISE OF THE OPTIONS
The options may be exercised partially or totally.
The exercise of the option shall be notified by its beneficiary (or in
the case of death, by his assigns) by registered letter with return
receipt requested sent to the company (or to the body instructed by the
latter) in a form stipulated by the company with the assistance of the
option exercise form attached hereto. This form will be completed,
dated and signed when the option is exercised.
The form will be accompanied by the payment by check of the amount of
the purchase price of the shares.
However, to enable the accomplishment of the financial transactions
reserved to shareholders, the company may reserve the option of
suspending the exercise of the stock options granted during a maximum
of three months.
In this case, the beneficiaries will be informed of the dates of the
suspension and resumption of the exercise of the options by letter sent
at least fifteen days in advance.
If an option is exercised partially, the balance will remain
exercisable according to the same conditions.
III. CHARACTERISTICS OF THE SHARES ACQUIRED
1. FORM - ACQUISITION OF RIGHTS
The shares will obligatorily be in registered form, thus fulfilling all
the conditions required to be able to benefit from the favorable tax
regime granted to stock options.
The shares acquired will acquire their rights as from the first day of
the fiscal year during which the options are exercised, the date of the
option exercise form attesting thereto. They will be entitled to the
whole amount of the dividend paid for such fiscal year.
They will be subject to all the provisions of the by-laws.
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2. AVAILABILITY OF THE SHARES
The shares acquired will be immediately transferable.
IV. TAX AND SOCIAL SECURITY REGIME
1. The benefit gained by the beneficiary at the time the option is
exercised (difference between the value of the shares when the option
is exercised and the purchase price, hereinafter referred to as the
"capital gain on the acquisition") is not taxed immediately and will
only be subject to taxation at the time of the sale of the shares by
the beneficiary of the purchase option.
At this time, the "capital gain on the sale" equal to the difference
between the actual selling price and the value of the share on the date
the option is exercised will be subject to the regime governing capital
gains on securities.
In the current state of the legislation and in accordance with the
combined provisions of Articles 92-B and B bis of the French Tax Code
(CGI), this capital gain will only be subject to income tax (at the
proportional rate of 16% increased by the social deduction of 2%, the
CSG at the current rate of 7.5% and the CRDS at the current rate of
0.5%, i.e., a total deduction of 26%), in the event that the amount of
the sales made by the beneficiary of the option plan exceeds an annual
ceiling (fixed at FF 100,000 for 1997).
To assess this taxation threshold, all of the sales of shares, whether
they are listed or unlisted (other than those of partnerships and
companies in which the transferor holds more than 25% of the shares)
made by the tax household during the year concerned must be taken into
account.
The "capital gain on the acquisition" which had not been taxed at the
time the option was exercised is, subject to reaching the capital gains
taxation threshold, taxed at the time of the sale of the shares at the
rate of 30% (increased by the social deduction of 2%, the CSG at the
current rate of 7.5% and the CRDS at the current rate of 0.5%, i.e., a
total deduction of 40%), if, in accordance with the provisions of
Article 163-bis C of the CGI, the two following conditions have been
met:
- the shares acquired upon exercise of the option remained in
registered form,
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- the period between the award date of the options and the date of
sale of the shares is more than five years.
The beneficiary may also, in this case, opt to have the "capital gain
on the acquisition" taxed for income tax for the year of the sale of
the shares, in the category of wages and salaries (without applying the
system of the quotient).
If the beneficiary does not respect one of the two above-mentioned
conditions, the "capital gain on the acquisition", reduced however, by
the amount of any capital loss on the sale constitutes for the
beneficiary an additional compensation to be added to his taxable
salary of the year of the sale.
However, adding back is carried out by a system of quotients which
takes into account the number of years that have elapsed between the
offering and the sale.
As an exception to the rule of unavailability, the shares may be sold
before the expiration of the five-year period fixed by Article 163-bis
C of the CGI without losing the benefit of the favorable tax regime
provided for in such article in the following four cases:
- dismissal of the holder provided that such shares have been
acquired at least three months prior to the notification of
dismissal;
- the holder's being asked to retire provided that such shares
have been acquired at least three months prior to his stopping
work;
- the holder's invalidity corresponding to the classification in
the 2nd or 3rd category provided for in Article L 341-1 of the
Social Security Code;
- death of the holder.
OBLIGATIONS OF THE COMPANY
- For the year in which the option is exercised, the company will
be required to deliver to the beneficiary, no later than
February 15 of the following year, an individual statement
mentioning its corporate name, the place of its principal place
of business and the place of its registered office, if
different, the dates of the award and exercise of
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the options, the number of shares acquired and their unit
purchase price. Moreover, the company will send within the same
period (no later than February 15) a duplicate of such statement
to the local tax authorities on which it depends.
- For the year in which the shares are sold, if this occurs prior
to the end of the period of unavailability, the company must
send, no later than February 15 of the following year, to the
beneficiary and to the local tax authorities of the
beneficiary's domicile, an individual statement mentioning the
date of the sale (or the conversion into bearer shares) of the
shares and the dates of the award and exercise of the option,
the number of shares concerned, their purchase price and their
value on the date on which the option is exercised.
In the event of an exchange without a cash distribution (soulte)
resulting from a public offering, merger, split-off, division or
regrouping of shares carried out in accordance with the applicable
regulations, the declaration obligations referred to above will be
transferred to the company whose shares have been delivered in exchange
for those acquired under the option and will henceforth cover these new
shares.
OBLIGATIONS OF THE BENEFICIARY
For the year in which the option is exercised, the beneficiary must
send with his tax declaration the individual statement delivered to him
by the company.
For the year in which the shares are sold, the beneficiary is required
to indicate on his tax declaration of the year of the sale on the one
hand the difference between the value of the shares on the date the
option is exercised and their purchase price(1) and on the other hand
the capital gain recorded on the date of the sale, equal to the
difference between the sale price and the value of the shares on the
date on which the option is exercised, if the conditions for taxation
of this capital gain are met.
The failure, both by the company and the beneficiary, to respect the
declaration obligations mentioned above shall result in the forfeiture
of the favorable tax regime of Article 163 bis C of the CGI and the
taxation under
- --------
(1) This capital gains being taxable either in the category of wages and
salaries (sale before the expiration of the period of unavailability)
or at the current rate of 40% (sale after the expiration of the period
of unavailability).
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ordinary law conditions of the benefit obtained at the time the option
is exercised. Moreover the company, with regard to the obligations it
has not respected, is liable for the fiscal fines provided for in
Articles 1725 and 1726 of the CGI.
2. THE SOCIAL SECURITY REGIME APPLICABLE TO THE BENEFIT OBTAINED FROM THE
EXERCISE OF THE OPTION IS THE FOLLOWING:
The benefit obtained from exercising the option (i.e., the difference
between the value of the share on the date the option is exercised and
the option price) is exempt from social security contributions, with
the exception of the part of the discount exceeding 5% of the price of
the share at the time the option is granted.
However, pursuant to Article L 242-1 paragraph 2 of the Social Security
Code, social security contributions are due in the event that the
holder of the option sells the shares subscribed for or acquired
pursuant to his right insofar as the conditions provided for in Article
163 bis C-I of the CGI are not met, i.e., in particular before the
expiration of a five-year period which started on the award date of the
option. Such benefit will then be considered as additional salary and
will be subject as such to social security contributions when the
conditions of form and time provided for in Article 163 bis C-I
referred to above are not satisfied, i.e., when the shares are not in
registered form or when, except for a special event concerning the
beneficiary (dismissal, being asked to retire, invalidity or death),
they are sold before the expiration of a five-year period as from the
date of the award of the option, the principle of being subject to such
contributions being applicable to both the employer and the employee
share of the contributions, and extending to deductions whose base is
aligned on that of the social security contributions, it being
specified that the benefit obtained from the exercise of the option
will in these cases be subject to the CSG and the CRDS as salaries and
no longer as income from assets.
Made in Paris, on October 25, 1997
The Board of Directors
Guy Nafilyan, Chairman