The Howard Hughes Corporation (HHC) has announced a series of amendments to the employment agreement with David R. O’Reilly, effective as of April 1, 2025. The amendments include changes to the definition of "Good Reason" for the agreement, an increase in the Executive’s Target LTIP Award Amount, and the addition of a new definition for "Transaction."
The amendments to the definition of "Good Reason" include the addition of circumstances that constitute a material breach by the Company and the Executive ceasing to serve as an executive officer of the Company within twenty-four months after a Change in Control or Transaction. Additionally, a requirement for the Executive to relocate more than fifty miles from Houston, Texas has been added to the definition.
The Executive’s Target LTIP Award Amount has been increased, effective as of January 1, 2025. The Annual LTIP Award now has an aggregate targeted grant value of $4,500,000, with fifty percent providing for pro rata time vesting over three years and the other fifty percent providing for performance-based vesting.
A new definition for "Transaction" has been added, defining it as any event resulting in a Person having Beneficial Ownership of capital stock representing forty percent or more of the equity of the Company, or any other transaction or event determined by the Board to constitute a Transaction.
Other changes include the replacement of "Change in Control" with "Change in Control or Transaction" where applicable in the agreement, an extension of the cure period for events constituting "Good Reason" from 30 to 60 days, and an extension of the period for which the Company is obligated to provide the Executive with certain benefits following termination from twelve to twenty-four months.
The amendments also include changes to the date of the fifth anniversary of the Effective Date in the agreement, which has been replaced with December 31, 2028.
These amendments are aimed at modifying and clarifying certain terms and conditions of the employment agreement, as well as adjusting the Executive’s compensation and benefits in line with the Company's evolving needs and objectives. As a result of these announcements, the company's shares have moved -4.5% on the market, and are now trading at a price of $67.4. Check out the company's full 8-K submission here.
