Exhibit 10.37
DEL WEBB CORPORATION
LEROY C. HANNEMAN
EMPLOYMENT AGREEMENT
TABLE OF CONTENTS
Page
1. DEFINITIONS............................................................ 1
2. TERM OF AGREEMENT; DUTIES.............................................. 1
(a) Initial Term; Renewal; Employment Period Defined.............. 1
(b) Duties........................................................ 1
(c) Employee Commitments.......................................... 2
(d) Other Programs................................................ 2
3. COMPENSATION........................................................... 2
(a) Base Salary................................................... 2
(b) Incentive and Benefit Plans................................... 2
(c) Supplemental Executive Retirement Plan........................ 3
4. CONFIDENTIALITY........................................................ 3
5. TERMINATION DUE TO DEATH OR DISABILITY................................. 4
(a) Death......................................................... 4
(b) Permanent Disability.......................................... 4
(c) Salary Continuation........................................... 4
(d) Lapse of Provisions........................................... 5
6. TERMINATION BY COMPANY................................................. 5
(a) Termination for Cause......................................... 5
(b) "Cause" Defined............................................... 5
(c) Termination Without Cause..................................... 5
7. TERMINATION BY EMPLOYEE................................................ 6
(a) General....................................................... 6
(b) Good Reason Defined........................................... 6
(c) Company May Cure Good Reason.................................. 7
(d) Effect of Good Reason Termination............................. 7
(e) Effect of Termination without Good Reason..................... 7
8. SEVERANCE BENEFITS..................................................... 8
(a) Eligibility................................................... 8
(b) Severance Benefits............................................ 8
(c) Severance Period.............................................. 10
(d) COBRA......................................................... 10
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Page
9. CHANGE IN CONTROL OF COMPANY........................................... 10
(a) General....................................................... 10
(b) Eligibility to Receive a Severance Benefit.................... 11
(c) Permanent Disability.......................................... 11
(d) Change in Control Defined..................................... 11
(e) Good Reason Defined........................................... 13
(f) Notice of Termination by Employee............................. 14
(g) Effect of Termination; Special Severance Benefits............. 14
(h) Other Agreements.............................................. 15
(i) Legal Expenses................................................ 16
10. CEILING ON CHANGE IN CONTROL BENEFITS.................................. 16
(a) General....................................................... 16
(b) Base Period Income............................................ 16
(c) Total Payments................................................ 16
(d) Procedural Matters............................................ 17
11. COMPETITION............................................................ 18
(a) Restrictive Covenant.......................................... 18
(b) Duration of Covenant ......................................... 19
(c) Remedies; Reasonablenes ...................................... 19
(d) Survival of Provision ........................................ 19
(e) Competing Business ........................................... 19
(f) Change in Control ............................................ 20
12. DISPUTE RESOLUTION .................................................... 20
(a) Mediation .................................................... 20
(b) Arbitration .................................................. 20
(c) Damages ...................................................... 21
(d) Selection of Mediator or Arbitrators ......................... 21
(e) Expenses ..................................................... 22
13. BENEFIT AND BINDING EFFECT ............................................ 22
14. NON-DISPARAGEMENT ..................................................... 22
15. OTHER AGREEMENTS OF EMPLOYEE .......................................... 22
16. NOTICES ............................................................... 22
17. ENTIRE AGREEMENT ...................................................... 23
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Page
18. GOVERNING LAW ......................................................... 23
19. CAPTIONS .............................................................. 23
20. SEVERABILITY .......................................................... 23
21. MITIGATION ............................................................ 24
22. TERMINATION OF EMPLOYMENT ............................................. 24
23. NO CONSTRUCTION AGAINST COMPANY ....................................... 24
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EMPLOYMENT AGREEMENT
--------------------
This Employment Agreement (the "Agreement") is entered into as of the
11th day of April, 1997 between DEL WEBB CORPORATION, a Delaware corporation
(the "Company"), and LEROY C. HANNEMAN (the "Employee").
1. DEFINITIONS
-----------
Throughout this Agreement, certain defined terms will be identified by
the capitalization of the first letter of the defined word or the first letter
of each substantive word in a defined phrase. Whenever used, these terms will be
given the indicated meaning.
2. TERM OF AGREEMENT; DUTIES
-------------------------
(a) Initial Term; Renewal; Employment Period Defined
------------------------------------------------
Employee shall be employed by Company for the duties set forth below
for the period beginning on April 11, 1997 and ending on June 30, 1998 (the
"Initial Term"), unless sooner terminated in accordance with the provisions of
this Agreement. This Agreement shall be automatically renewed at the end of the
Initial Term for additional one-year periods commencing on each July 1 and
ending on the next following June 30 ( a "Renewal Term"), unless either party
serves notice of desire to terminate or modify this Agreement on the other. Such
notice must be given at least 30 days before the end of the Initial Term or the
applicable Renewal Term.
The period of time commencing as of the first day of the Initial Term
and ending on the effective date of the termination of employment of Employee
under this or any successor agreement shall be referred to as the "Employment
Period".
(b) Duties
------
Employee shall be employed as an Executive Vice President of Company.
As Executive Vice President, Employee shall perform all of the duties and
responsibilities described in the Job Description on file as of the date hereof
with Company. Such duties and responsibilities include, but are not limited to,
Employee's duty to plan, organize, direct and control operational activities for
all Sun City communities. He shall direct activities of Sun City communities in
all functional areas including land planning, land use entitlements, product
design and control, construction, sales, marketing, customer service, human
resources and accounting. Employee shall further participate in major Company
decisions affecting profitability, cash flow, and establishment of
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short term and long range objectives, plans and policies. Employee also shall
perform such additional duties related to the business and affairs of Company
and its Subsidiaries as may be delegated to him from time to time by the Board
of Directors of Company (the "Board") or Company's Chief Executive Officer. Any
additional duties delegated to Employee shall be reasonably consistent with
Employee's position. For purposes of this Agreement, the term "Subsidiary" shall
mean any corporation, partnership, joint venture, or other entity in which
Company directly or indirectly has a 20% or greater equity interest.
(c) Employee Commitments
--------------------
Employee agrees that he will faithfully, industriously, and to the best
of his ability, experience, and talents, perform all of the duties that may be
required of and from him and fulfill all of his responsibilities hereunder
pursuant to the express and explicit terms hereof, to the reasonable
satisfaction of the Board and the Chief Executive Officer of Company. Employee
also agrees that he will devote substantially all of his undivided time,
attention, knowledge, and skills, during customary business hours, to the
business and interests of Company, subject to such reasonable vacations and sick
leave as are provided under the general policies of Company, as they may exist
from time to time, and consistent with past practice.
(d) Other Programs
--------------
As a general rule, this Agreement is intended to supplement and enhance
the rights and benefits available to Employee as a senior executive officer of
the Company. Accordingly, unless this Agreement or any other agreement or plan
of Company specifically indicates otherwise, none of the rights and benefits
provided to Employee pursuant to this Agreement are intended to replace the
rights and benefits made available generally to other senior executive officers
of the Company.
3. COMPENSATION
------------
Employee shall receive the following compensation for services:
(a) Base Salary
-----------
Employee shall receive "Base Salary" at the rate of $300,000 per year.
Base Salary shall be payable as nearly as possible in equal bi-weekly
installments (or in such other installments as the Company shall determine). The
Base Salary may be adjusted from time to time in accordance with the procedures
established by Company for salary adjustments for executive officers.
(b) Incentive and Benefit Plans
---------------------------
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Employee shall participate in any incentive compensation plans
maintained by the Company for "Senior Executive Officers", as such term is
defined below. For the 1996-1997 fiscal year, Employee's "Target Bonus", as that
term is customarily used in conjunction with the Company's Annual Management
Incentive Plan (the "MIP"), shall be 75% of Employee's Base Salary, with the
actual amount of the bonus payment to be determined in accordance with all of
the terms and provisions of the MIP, as it may be amended from time to time. The
Employee's Target Bonus, and all other terms and conditions of Employee's
participation in the MIP (including other bonus levels and performance goals)
may be changed from time to time by the Company's Board of Directors or a
Committee thereof in the exercise of its discretion. Employee also shall have
the right to participate in any and all pension or profit sharing plans, stock
purchase plans, executive retirement plans, any annuity or group benefit plans
and any medical plans and other benefit plans that are now or in the future may
be maintained by Company for its Senior Executive Officers, all in accordance
with the terms and conditions of the plans. Company will provide Employee with
an automobile and an active membership in a country club of Employee's choice in
accordance with the policies and practices applicable to Senior Executive
Officers. The automobile and country club policies for Senior Executive Officers
may be modified from time to time. For purposes of this Agreement, the term
"Senior Executive Officer" includes any Del Webb Corporation Executive Vice
President, Senior Vice President or Vice President.
(c) Supplemental Executive Retirement Plan
--------------------------------------
Employee is a participant in the Company's Supplemental Executive
Retirement Plan No. 2 (the "SERP"). A new SERP Participation Agreement shall be
entered into between Employee and Company pursuant to which Employee shall
receive enhanced treatment for purposes of the SERP.
4. CONFIDENTIALITY
---------------
Employee covenants and agrees to hold in strictest confidence, and not
disclose to any person, firm or corporation, without the express written consent
of Company, any and all of Company's or any Subsidiary's "Confidential
Information". The term "Confidential Information" includes, but is not limited
to, information and documents concerning Company's or any Subsidiary's business,
customers, and suppliers, market methods, files, trade secrets, or other
"know-how" or techniques or information not of a published nature which shall
come into his possession, knowledge, or custody concerning the business of
Company or any Subsidiary, except as such disclosure may be required by law or
in connection with Employee's employment hereunder. The term "Confidential
Information" does not include any material that Company has already disclosed to
the public and is in the public domain. This covenant and agreement of Employee
shall survive this Agreement and continue to be binding upon Employee after the
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expiration or termination of this Agreement, whether by passage of time or
otherwise so long as such information and data shall remain confidential.
Employee acknowledges that, in the event of his breach of the
confidentiality provisions of this Section 4, money damages will not
sufficiently compensate Company or the applicable Subsidiary for its injury.
Employee accordingly agrees that in addition to such money damages, Employee may
be restrained and enjoined from continuing breach of the provisions of this
Section 4 without any bond or other security. Employee also acknowledges that
any breach of this Section 4 would result in irreparable damage to Company or
the applicable Subsidiary.
5. TERMINATION DUE TO DEATH OR DISABILITY
--------------------------------------
(a) Death
-----
This Agreement shall terminate upon Employee's death. Employee's estate
shall be entitled to receive the Base Salary due through the date of his death.
In addition, Employee's Base Salary (as determined pursuant to Section 3) as in
effect at the time of his death will be continued for a period of 12 calendar
months following the date of his death. The continued salary payments will be
made to Employee's spouse, if Employee is married and living with Employee's
spouse on the date of death. If Employee is not married and living with
Employee's spouse on the date of death, the continued salary payments will be
made to Employee's estate. Payments under this paragraph may be made to a
designated beneficiary, in lieu of Employee's estate, where Employee has made a
written request to Company designating a beneficiary, and the Company, in its
discretion, has approved the requested designation made by Employee. The death
benefit provided pursuant to this Section 5 is intended to be in addition to any
other death benefit provided pursuant to any other plan or program sponsored by
the Company except the Executive Spouse Benefit authorized by the Human
Resources Committee of the Board for Senior Executive Officers of the Company,
which is replaced by this Agreement.
(b) Permanent Disability
--------------------
At Company's option, this Agreement also shall terminate in the event
of Employee's "Permanent Disability" upon notice in writing to Employee to that
effect. For purposes of this Agreement, "Permanent Disability" shall mean that
because of physical or mental illness or disability, with or without
accommodation, Employee shall have been continuously unable to perform his
duties hereunder for a consecutive period of 180 days.
If this Agreement is terminated due to Employee's Permanent Disability,
Employee shall receive the Severance Benefits provided by Section 8.
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(c) Salary Continuation
-------------------
If Employee is absent from work and unable to perform his duties due to
a physical or mental illness or disability, Employee shall continue to receive
Base Salary until such time as this Agreement is terminated. Company may not
terminate this Agreement without Cause pursuant to Section 6(c) during the
period of absence. Rather, Company may only terminate this Agreement because of
Permanent Disability pursuant to Section 5(b) or for Cause pursuant to Section
6(a). The period of time during which Employee's Base Salary is continued
pursuant to this Section 5(c) shall be charged against Employee's available sick
leave and then against Employee's available vacation.
(d) Lapse of Provisions
-------------------
This Section 5 shall cease to apply following the termination of
Employee's employment pursuant to Sections 6, 7, or 9.
6. TERMINATION BY COMPANY
----------------------
(a) Termination for Cause
---------------------
Company may terminate this Agreement for "Cause" upon written notice to
Employee. If Company terminates this Agreement for "Cause", Employee shall be
entitled receive his Base Salary through the effective date of his termination.
Employee's entitlement to receive any other amount shall be determined in
accordance with the provisions of any incentive or benefit plans in which
Employee participates on the effective date of termination.
(b) "Cause" Defined
---------------
Termination of this Agreement for "Cause" shall mean (i) breach of any
material provision of this Agreement by Employee which is not cured within a
reasonable time after receipt by Employee of written notice of such breach from
Company, or (ii) conviction, by a court of competent jurisdiction, of Employee
of any felony or any other crime involving gross depravity or dishonesty.
(c) Termination Without Cause
-------------------------
Termination of this Agreement by Company for reasons other than (i)
death, (ii) Permanent Disability, (iii) Cause, or (iv) upon expiration of the
Initial Term or any Renewal Term shall be referred to as a termination "without
Cause". If this Agreement is terminated without Cause, Employee is entitled to
receive 30 days advance written notice. This Agreement shall continue
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during such notice period. The termination of this Agreement shall be effective
on the 30th day (the "Termination Date") following the day on which the notice
is given (the "Notice Date"). In the exercise of its discretion, the Company may
place Employee on a paid administrative leave during all or any part of the
30-day notice period. During such administrative leave, Company may bar Employee
from access to any Company facility or may allow such access on such terms as
Company deems appropriate. If this Agreement is terminated without Cause,
Employee shall be entitled to receive the Severance Benefits provided by Section
8.
7. TERMINATION BY EMPLOYEE
-----------------------
(a) General
-------
Employee may terminate this Agreement at any time, with or without
"Good Reason". If Employee terminates this Agreement without "Good Reason",
Employee shall provide Company with 60 days advance written notice. If Employee
terminates this Agreement with Good Reason, Employee shall provide Company with
30 days advance written notice, which notice shall clearly identify the action
or omission that Employee claims gives rise to Good Reason for termination of
this Agreement. In order to terminate this Agreement for Good Reason, the notice
of termination must be given to Company by Employee within 30 days of Employee's
receipt of notice, whether written or oral, or actual knowledge of the action or
omission that gave rise to Employee's Good Reason for termination. The
termination of this Agreement shall be effective on the last day of the required
notice period (the "Termination Date"). In the exercise of its discretion, the
Company may place Employee on a paid administrative leave during all or any part
of the 30-day or 60-day notice period. During such administrative leave, the
Company may bar Employee from access to any Company facility or may allow such
access on such terms as Company deems appropriate.
(b) Good Reason Defined
-------------------
For purposes of this Agreement, "Good Reason" shall mean and include
any of the following:
(1) Without Employee's express written consent, the
assignment to him of any duties that are not
reasonably consistent with his positions, duties,
responsibilities, and status with Company as in
effect on the "Relevant Date", or demotion, or a
change in his titles or offices as in effect on the
Relevant Date (except as specifically contemplated by
this Agreement), or any removal of him from or any
failure to re-appoint or re-elect him to any of such
positions, except in connection with the termination
of this Agreement for Cause, Permanent Disability, as
a result of his death, by
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him other than for Good Reason, or by Company upon
the expiration of the Initial Term or any applicable
Renewal Term.
(2) A reduction by Company in Employee's Base Salary as
in effect on the date hereof or as the same may be
increased from time to time, other than a reduction
of no more than 15% which applies to all Senior
Executive Officers of Company.
(3) The taking of any action by Company which would
adversely affect Employee's participation in or
materially reduce his benefits under any thrift,
incentive, or compensation plan, or any pension, life
insurance, health and accident or disability plan in
which Employee is participating on the Relevant Date,
whether such plan is qualified for favorable tax
treatment or otherwise, unless a comparable
replacement program is offered to Employee or unless
such action applies to all Senior Executive Officers.
(4) The termination of this Agreement by Company without
Cause or any attempted termination by Company
purportedly for Cause if it is thereafter determined
that Cause did not exist under this Agreement with
respect to the termination.
(5) Breach of any material provisions of this Agreement
by Company.
For purposes of this Section 7, the "Relevant Date" is the date of execution of
this Agreement. For purposes of Section 9, the "Relevant Date" is the date
specified in Section 9(e).
(c) Company May Cure Good Reason
----------------------------
Within the 30 day notice period called for by Section 7(a), Company may
rescind or otherwise cure any action or omission relied upon by Employee as
constituting Good Reason for termination. If Company rescinds or otherwise cures
such action or omission within this period, Employee's notice of termination
will be automatically withdrawn and this Agreement will continue.
(d) Effect of Good Reason Termination
---------------------------------
If Employee terminates this Agreement for Good Reason, Employee shall
be entitled to receive the Severance Benefits provided by Section 8 to the same
extent as if this Agreement had been terminated by Company without Cause.
(e) Effect of Termination without Good Reason
-----------------------------------------
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If Employee terminates this Agreement without Good Reason, Employee
shall be entitled to receive his Base Salary through the effective date of his
termination. Employee's entitlement to receive any other amount shall be
determined in accordance with the provisions of any incentive or benefit plans
in which Employee participates on the effective date of the termination.
8. SEVERANCE BENEFITS
------------------
(a) Eligibility
-----------
Employee shall be eligible and entitled to receive the Severance
Benefits provided by paragraph (b) if Employee's employment is terminated due to
Permanent Disability pursuant to Section 5(b), if this Agreement is terminated
by Company without Cause pursuant to Section 6(c), or if this Agreement is
terminated by Employee for Good Reason pursuant to Section 7. In addition,
Employee shall be eligible and entitled to receive the Severance Benefits
provided by paragraph (b) if the Company notifies Employee of its desire to
terminate this Agreement pursuant to Section 2(a) and at the time such notice is
given the Company does not have "Cause" to terminate Employee's employment
pursuant to Section 6. Similarly, if Company notifies Employee of its desire to
modify this Agreement and such modification provides Employee with "Good Reason"
to terminate this Agreement pursuant to Section 7 and Employee rejects such
modification, Employee shall be entitled to receive the Severance Benefits
called for by paragraph (b).
(b) Severance Benefits
------------------
The "Severance Benefits" to which an eligible Employee shall be
entitled pursuant to this section are limited to the following payments,
benefits and reimbursements, which will continue throughout the "Severance
Period" referred to in Section 8(c):
(1) Company will continue to pay Employee his Base Salary
as set forth in Section 3 (or as it may be adjusted
from time to time), in equal bi-weekly installments.
(2) Company also shall make a single "Incentive
Compensation Payment" to Employee. The "Incentive
Compensation Payment" shall equal the amount that
would have been payable to Employee pursuant to all
of the terms and provisions of the Company's MIP, as
it may be amended or replaced from time to time, had
Employee's employment continued until the end of the
fiscal year of the Company in which Employee's
Termination Date occurs. (This payment shall be in
addition to any payment for a prior fiscal year which
has not yet been paid.) For purposes of calculating
the amount that would have been due to Employee
pursuant to the MIP (i) any provision of
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the MIP requiring continued employment will be
disregarded; (ii) the Company shall assume that
Employee's Base Salary would continue throughout the
end of such fiscal year at the same rate in effect on
the Termination Date; (iii) the actual performance of
the Company shall be utilized; (iv) the Company shall
assume that any subjective performance criteria or
requirements were satisfied; and (v) all other
factors impacting the calculation of the amounts due
will be determined by the Company's Board of
Directors or a Committee thereof in the exercise of
its discretion. The Incentive Compensation Payment
will be paid at the same time as similar payments are
paid to active employees. The Employee shall not be
entitled to receive any compensation or grants
pursuant to the Company's Long Term Incentive Plan,
or any successor plan or program, following the
Termination Date.
(3) Company also intends that life, disability, accident
and group health benefits and coverages (each an
"Insurance Benefit" and collectively the "Insurance
Benefits") substantially similar to those which
Employee was receiving immediately prior to the
Notice Date be made available to Employee following
the Notice Date, but Company does not intend to
duplicate Insurance Benefits provided by a successor
employer. If and to the extent that and so long as
such Insurance Benefits (or an Insurance Benefit) is
not provided by a successor employer, Company will
arrange to provide such Insurance Benefit or
Insurance Benefits to Employee at a cost to Employee
of not more than the cost to Employee of similar
coverage immediately prior to the Notice Date. If an
Insurance Benefit is not provided by a successor
employer and Company, after a good faith effort, is
unable to provide continued coverage to Employee with
respect to one or more of such Insurance Benefits
because of restrictions imposed by any insurance
carrier that provides such Insurance Benefit or
Benefits, in lieu of the unavailable Insurance
Benefit or Benefits Company may pay Employee a
monthly amount equal to 150% of the Company's share
of the cost of providing such unavailable Insurance
Benefit or Benefits to comparable executives in
comparable circumstances. Such cost shall be
determined conclusively by Company. Employee shall
provide Company with such information concerning the
Insurance Benefits provided to Employee by a
successor employer as Company shall reasonably
request and Company may decline to provide any
Insurance Benefits to Employee unless and until
Employee provides such information. Whether a
particular Insurance Benefit provided by a successor
employer is "substantially similar" to a benefit
provided to Employee prior to the Notice Date shall
be determined by Company in the exercise of its
discretion.
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(4) Company will continue to provide Employee with an
automobile and an active membership in a country club
in accordance with Section 3(b) and the policies and
practices applicable to Senior Executive Officers, as
such policies may be modified from time to time.
(5) Any stock options to purchase Common Stock of Company
or stock appreciation rights relating to Common Stock
of Company held by Employee on the Notice Date, which
are not at the Notice Date currently exercisable but
which would become exercisable within 12 months from
the Termination Date if Employee's employment were
continued, shall on the Notice Date automatically
become exercisable and shall remain exercisable for
90 days thereafter.
(6) All shares of Common Stock of Company held by
Employee under any Restricted Stock Plan which are
subject to restrictions on the Notice Date shall, as
of the Notice Date, automatically become free of all
restrictions if and to the extent that such
restrictions would have lapsed within 12 months of
the Termination Date if Employee's employment were
continued.
(c) Severance Period
----------------
The Severance Benefits will continue throughout the "Severance Period".
Generally, the Severance Period will be the 12 month period beginning on the
Termination Date. If the Severance Benefits are due because this Agreement was
not renewed by the Company, the Severance Period will be the 12 month period
beginning on Employee's last day of active work.
(d) COBRA
-----
Employee has the right to continued health care coverage pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA"). The COBRA
continuation period shall commence on Employee's Termination Date, but Company
may be obligated to pay a portion of the cost of continued health care coverage
during the Severance Period pursuant to Section 8(b)(3).
9. CHANGE IN CONTROL OF COMPANY
----------------------------
(a) General
-------
The Board recognizes that the continuing possibility of a "Change in
Control" of Company is unsettling to Employee and other senior executives of
Company. Therefore, the arrangements
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set forth below are being made to help assure a continuing dedication by
Employee to his duties to Company, notwithstanding the occurrence or potential
occurrence of a "Change in Control." In particular, the Board believes it
important, should Company receive proposals from third parties with respect to
its future, to enable Employee, without being influenced by the uncertainties of
his own situation, to assess and advise the Board whether such proposals would
be in the best interests of Company and its stockholders and to take such other
action regarding such proposals as the Board might determine to be appropriate.
The Board also wishes to demonstrate to executives of Company that Company is
concerned with the welfare of its executives and intends to see that loyal
executives are treated fairly.
(b) Eligibility to Receive a Severance Benefit
------------------------------------------
In view of the foregoing and in further consideration of Employee's
continued employment with Company, Company agrees that if a Change in Control of
Company occurs during the Initial Term or any Renewal Term Employee shall be
entitled to the special severance benefits provided in subparagraph (g) of this
Section 9 if prior to the expiration of 24 months after the Change in Control of
Company Employee terminates his employment with Company for Good Reason or
Company terminates Employee's employment without Cause. If Employee triggers the
application of this Section by terminating employment for Good Reason, he must
do so within 120 days following Employee's actual knowledge or receipt of
notice, whether written or oral, of the occurrence of the last event that
constitutes Good Reason.
(c) Permanent Disability
--------------------
Any attempted termination of Employee's employment by Company for
reasons of Permanent Disability pursuant to Section 5(b) following a Change in
Control shall be treated as a termination by Company without Cause unless
Employee is approved for and receives long term disability payments under
Company's long term disability plan. In addition, following a Change in Control
this Agreement may not be terminated pursuant to Section 5(b) due to Employee's
Permanent Disability unless the incapacity giving rise to the Permanent
Disability occurs prior to the occurrence of an event that might cause amounts
to be payable to Employee pursuant to this Section 9. Once payments begin
pursuant to this Section 9, this Agreement may not be terminated by Company
pursuant to Section 5(b) due to Permanent Disability and any payments due
pursuant to this Section 9 shall not cease or diminish on account of Employee's
Permanent Disability.
(d) Change in Control Defined
-------------------------
For purposes of this Agreement, a "Change in Control" shall include
both an "Actual Change in Control" and a "Potential Change in Control".
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An "Actual Change in Control" shall be deemed to have occurred in any
or all of the following instances:
(1) Any "person" as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as
amended, other than a trustee or other fiduciary
holding securities under an employee benefit plan of
Company or a corporation owned directly or indirectly
by the stockholders of Company in substantially the
same proportions as their ownership of stock of
Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of Company representing 20%
or more of the total voting power represented by
Company's then outstanding Voting Securities (as
defined below); or
(2) During any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board of Directors of Company and any
new director whose election by the Board of Directors
or nomination for election by Company's stockholders
was approved by a vote of at least two-thirds of the
directors then still in office who either were
directors at the beginning of the period or whose
election or nomination for election was previously so
approved, cease for any reason to constitute a
majority thereof; or
(3) The stockholders of Company approve a merger or
consolidation of Company with any other corporation,
other than a merger or consolidation which would
result in the Voting Securities of Company
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by
being converted into Voting Securities of the
surviving entity) at least 80% of the total voting
power represented by the Voting Securities of Company
or such surviving entity outstanding immediately
after such merger or consolidation; or
(4) The stockholders of Company approve a plan of
complete liquidation of Company or an agreement for
the sale or disposition by Company of (in one
transaction or a series of transactions) all or
substantially all Company's assets.
A "Potential Change in Control" shall be deemed to have occurred in any
or all of the following instances:
(1) Company enters into an agreement, the consummation of
which would result in the occurrence of an Actual
Change in Control;
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(2) Any person (including Company) publicly announces an
intention to take or to consider taking actions which
if consummated would constitute a Change in Control;
(3) Any person other than a trustee or other fiduciary
holding securities under an employee benefit plan of
Company or a corporation owned, directly or
indirectly, by the stockholders of Company in
substantially the same proportions as their ownership
of stock of Company who is or becomes the beneficial
owner, directly or indirectly, of securities of
Company representing 10% or more of the combined
voting power of the Company's then outstanding Voting
Securities, increases such person's beneficial
ownership of such securities by five percentage
points (5%) or more over the percentage so owned by
such person; or
(4) The Board of Directors adopts a resolution to the
effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
For purposes of this Section, the term "Voting Securities" shall mean
and include any securities of the Company which vote generally for the election
of directors.
(e) Good Reason Defined
-------------------
For purposes of this Section, "Good Reason" shall have the meaning
assigned to it in Section 7, with the following modifications:
(1) The "Relevant Date" shall be the day prior to the
Change in Control.
(2) Paragraph (2) of Section 7(b) shall read as follows:
A reduction by Company in Employee's Base
Salary as in effect on the date hereof or as
the same may be increased from time to time.
(3) Paragraph (3) of Section 7(b) shall read as follows:
The failure by Company to continue in effect
any thrift, incentive, or compensation plan,
or any pension, life insurance, health and
accident or disability plan in which
Employee is participating on the Relevant
Date, whether such plan is qualified for
favorable tax treatment or otherwise, (or
plans providing Employee with substantially
- 13 -
similar benefits), the taking of any action
by Company which would adversely affect
Employee's participation in or materially
reduce his benefits under any of such plans
or deprive him of any material fringe
benefit enjoyed by him as of the Relevant
Date or any later date, or the failure of
the Company to provide Employee with the
number of paid vacation days to which
Employee is then entitled on the basis of
his years of service with the Company in
accordance with the Company's normal
vacation policy as in effect on the Relevant
Date;
(4) Two additional elements of Good Reason shall be added as
follows:
(6) Employee is assigned to, or Company's office
at which Employee is principally employed on
the Relevant Date is relocated to, a
location which would require a round-trip
commute to work from Employee's principal
residence on the Relevant Date of more than
100 miles per day.
(7) Failure of Company to obtain an agreement
satisfactory to Employee from any successor
to the business, or substantially all the
assets, of Company to assume this Agreement
or issue a substantially similar agreement.
(f) Notice of Termination by Employee
---------------------------------
Any termination by Employee under this Section 9 shall be communicated
by written notice to Company which shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for such termination.
(g) Effect of Termination; Special Severance Benefits
-------------------------------------------------
If Employee is entitled to receive a special severance benefit pursuant
to Section 9(b) hereof, Company will provide Employee with the following special
severance benefits in addition to the Severance Benefits to which Employee is
entitled pursuant to Section 8:
(1) Within five days following Employee's termination, a
lump sum severance payment will be made to Employee.
The lump sum severance payment shall be in an amount
equal to: (i) 2.5 times Employee's yearly Base Salary
as set forth in Section 3 or as it may be increased
from time to time; plus (ii) the greatest of (a) 2.5
times the average annual incentive compensation
- 14 -
paid to Employee pursuant to the MIP (or any
predecessor or successor plan) during the five fiscal
years preceding the fiscal year in which the Change
in Control occurs, or (b) an amount equal to 100% of
the incentive compensation paid to Employee pursuant
to the MIP (or any predecessor or successor plan)
during the 12 month period prior to the Termination
Date, or (c) an amount equal to 35% of Employee's
Base Salary as set forth in Section 3 or as it may be
increased from time to time; minus (iii) the total
amounts due to Employee, if any, pursuant to Sections
8(b)(1) and (2).
(2) The amounts due to Employee pursuant to Sections
8(b)(1) and (2) will be accelerated and paid to
Employee in one lump sum within five days following
Employee's termination without any discount for early
payment. For purposes of calculating the amounts due
to Employee pursuant to Section 8(b)(2) the Company
shall assume that the Company's performance and all
other relevant factors for all future fiscal years
will be the same as for the fiscal year prior to the
fiscal year in which the Change in Control occurs.
(3) The benefits provided by Sections 8(b)(3) and 8(b)(4)
shall be provided for 30 months following Employee's
Termination Date rather than for the period specified
in Section 8(c). In lieu of all fringe benefits other
than those referred to in Sections 8(b)(3) and (4),
Employee shall receive a lump sum payment equal to
20% of Employee's Base Salary as set forth in Section
3 as it may be increased from time to time.
(4) Any stock options to purchase Common Stock of Company
or stock appreciation rights relating to Common Stock
of Company held by Employee on the Notice Date, which
are not at the Notice Date currently exercisable and
which do not become exercisable pursuant to Section
8(b)(5), shall on the Notice Date automatically
become exercisable and shall remain exercisable for
90 days thereafter.
(5) All shares of Common Stock of Company held by
Employee under any Restricted Stock Plan which on the
Notice Date are subject to restrictions which do not
lapse pursuant to Section 8(b)(6) shall, as of that
date, automatically become free of all restrictions.
Company shall amend, if necessary, any option or restricted stock agreements
entered into between Company and Employee to be consistent with paragraphs (4)
and (5).
(h) Other Agreements
----------------
- 15 -
On execution of this Agreement, the letter agreement between Employee
and Company concerning change in control benefits dated May 17, 1989, shall be
null and void and of no further force or effect. Nothing in this Agreement is
intended to modify any change of control provisions or protections provided to
Employee by the SERP.
(i) Legal Expenses
--------------
If Employee, at any time, takes any legal action against Company for
breach of this Section 9 or Section 10, Company shall reimburse Employee for all
costs and expenses incurred by Employee to pursue such legal action, regardless
of the outcome, unless the arbitrators appointed pursuant to Section 12(d) find
Employee's action to have been frivolous and without merit. Although the dispute
resolution provisions of Section 12 shall apply to any legal action involving a
breach of this Section 9 and Section 10, the provisions of this Section 9(i)
shall supersede conflicting provisions of Section 12(e).
10. CEILING ON CHANGE IN CONTROL BENEFITS
-------------------------------------
(a) General
-------
The Internal Revenue Code (the "Code") places significant tax burdens
on Employee and Company if the total payments made to Employee due to a Change
in Control exceed prescribed limits. In order to avoid this excise tax and the
related adverse tax consequences for Company, by signing this Agreement Employee
agrees that the present value of his "Total Payments" (as defined below) under
this Agreement or any other agreement or arrangement with Company will not
exceed an amount equal to two and ninety-nine hundredths (2.99) times his "Base
Period Income" (as defined below). This is the maximum amount which Employee may
receive without becoming subject to the excise tax imposed by Section 4999 of
the Code or which Company may pay without loss of deduction under Section 280G
of the Code.
(b) Base Period Income
------------------
"Base Period Income" is an amount equal to Employee's "annualized
includible compensation" for the "base period" as defined in Sections 280G(d)(1)
and (2) of the Code and the regulations adopted thereunder. Generally,
Employee's "annualized includible compensation" is the average of his annual
taxable income from Company for the "base period", which is the five calendar
years prior to the year in which the Change in Control occurs. All of the rules
set forth in the applicable regulations apply for purposes of determining
Employee's Base Period Income, his "annualized includible compensation", and his
"base period".
- 16 -
(c) Total Payments
--------------
The "Total Payments" include the amount payable pursuant to Section
9(g) and any other "payments in the nature of compensation" (as defined in
Section 280G of the Code and the regulations adopted thereunder) to or for
Employee's benefit, the receipt of which is contingent on a Change of Control
and to which Section 280G of the Code applies.
(d) Procedural Matters
------------------
If Company believes that these rules will result in a reduction of the
payments to which Employee is entitled under this Agreement, it will so notify
Employee within 60 days following the Termination Date. Employee and Company
will then, at Company's expense, retain legal counsel, certified public
accountants, and/or a firm of recognized executive compensation consultants to
provide an opinion or opinions concerning whether the Total Payments exceed the
limit discussed above.
Company will select the legal counsel, certified public accountants and
executive compensation consultants. If Employee does not accept one or more of
the parties selected by Company, Employee may provide Company with the names of
legal counsel, certified public accountants and/or executive compensation
consultants acceptable to Employee. If Company does not accept the party or
parties selected by Employee, the legal counsel, certified public accountants
and/or executive compensation consultants selected by Employee and Company,
respectively, will select the legal counsel, certified public accountants and/or
executive compensation consultants to provide the opinions required. At a
minimum, the opinions required by this Section must set forth (1) the amount of
Employee's Base Period Income, (2) the present value of the Total Payments and
(3) the amount and present value of any excess parachute payments.
If the opinions state that there would be an excess parachute payment,
Employee's payments under this Agreement will be reduced to the extent necessary
to eliminate the excess. Employee will be allowed to choose the payment that
should be reduced or eliminated, but the payment Employee chooses to reduce or
eliminate must be a payment determined by such counsel to be includible in Total
Payments. Employee will make his decision in writing and deliver it to Company
within 30 days of receipt of such opinions. If Employees fails to so notify
Company, Company will decide which payments to reduce or eliminate.
If the legal counsel or certified public accountants selected to
provide the opinions referred to above so requests in connection with the
opinion required by this Section, a firm of recognized executive compensation
consultants, selected by Employee and Company pursuant to the procedures set
forth above, shall provide an opinion, upon which such legal counsel or
certified
- 17 -
public accountants may rely, as to the reasonableness of any item of
compensation as reasonable compensation for services rendered before or after
the Change in Control.
If Company believes that Employee's Total Payments will exceed the
limitations of this Section, Company shall provide Employee with a detailed
explanation of the basis for its conclusion. Company then shall make payments to
Employee, at the times stated above, in the maximum amount that it believes may
be paid without exceeding such limitations. The balance, if any, will then be
paid after the opinions called for above have been received.
If the Internal Revenue Service concludes in a final determination that
the amounts paid to Employee exceed the limitations of this Section, as a
general rule, the excess will be treated as a loan to Employee by Company, and
shall be repayable on the 90th day following demand by Company, together with
interest at the "applicable federal rate" provided in Section 1274(d) of the
Code.
In the event that the provisions of Section 280G and 4999 of the Code
are repealed without succession, this Section shall be of no further force or
effect.
11. COMPETITION
-----------
(a) Restrictive Covenant
--------------------
In consideration of Company's agreements contained herein and the
payments to be made by it to Employee pursuant hereto, Employee agrees that,
during the duration of this restrictive covenant he will not:
(1) Without the prior written consent of the Board of
Directors of Company, engage in a Competing Business
within 100 miles of the outer boundaries of any
Standard Metropolitan Statistical Area (or such
lesser geographical area as may be set by a court of
competent jurisdiction or an arbitrator) in which any
of the businesses of Company are being conducted on
the date of termination of this Agreement or within
100 miles of the outer boundaries of any Standard
Metropolitan Statistical Area (or such lesser
geographical area as may be set by a court of
competent jurisdiction or an arbitrator) in which the
Company's strategic plan or any replacement plan (the
"Strategic Plan"), as in effect on the earlier of the
date of the competitive activity by Employee or the
date of termination of this Agreement, discusses the
possibility of Company conducting business within two
years following the date of termination of this
Agreement; or
- 18 -
(2) Directly or indirectly, for himself, or on behalf of,
or in conjunction with, any other person or entity,
seek to hire and/or hire any individual who was
employed by Company or any Subsidiary immediately
prior to such hiring or solicitation or during the
prior one-year period.
(b) Duration of Covenant
--------------------
Generally, this restrictive covenant shall apply during the Initial
Term and any Renewal Term and for the one-year period following the date of
termination of this Agreement and any renewals thereof (or such lesser period as
may be set by a court of competent jurisdiction or an arbitrator). If the
Competing Business in which Employee engages or intends to engage is a business
involving the development or management of an age-restricted community, however,
the limitations of Section 11(a)(1) shall apply during the Initial Term, any
Renewal Term and for the two-year period following the date of the termination
of this Agreement and any renewals thereof (or such lesser period as may be set
by a court of competent jurisdiction or an arbitrator). This Restrictive
Covenant shall not apply should the Agreement terminate on or after the date on
which Employee attains age 65.
(c) Remedies; Reasonableness
------------------------
Employee acknowledges and agrees that a breach by Employee of the
provisions of this Section will constitute such damage as will be irreparable
and the exact amount of which will be impossible to ascertain and, for that
reason, agrees that Company will be entitled to an injunction restraining and
enjoining Employee from violating the provisions of this Section. The right to
an injunction shall be in addition to and not in lieu of any other remedy
available to Company for such breach or threatened breach, including the
recovery of damages from Employee.
Employee expressly acknowledges and agrees that (i) this Restrictive
Covenant is reasonable as to time and geographical area and does not place any
unreasonable burden upon him; (ii) the general public will not be harmed as a
result of enforcement of this restrictive covenant; and (iii) Employee
understands and hereby agrees to each and every term and condition of this
Restrictive Covenant.
(d) Survival of Provision
---------------------
Termination of this Agreement, whether by passage of time or any other
cause, shall not constitute a waiver of Company's rights under this Section 11,
nor a release of Employee from his obligations thereunder.
- 19 -
(e) Competing Business
------------------
For purposes of this Agreement, Employee shall be deemed to be engaged
in a "Competing Business" if, in any capacity, including but not limited to
proprietor, partner, officer, director, or employee, he engages or participates,
directly or indirectly, in the operation, ownership, or management of any
proprietorship, partnership, corporation, or other business entity which
competes, in whole or in part, with the then actual business of Company or any
business contemplated by Company's Strategic Plan as in effect on the earlier of
the date of the competitive activity by Employee or the date of termination of
this Agreement. Indirect participation in the operation or ownership of any such
entity shall include any investment by Employee in any such entity, by way of
loan, guaranty, or stock ownership (other than ownership of 1% or less of any
class of equity or other securities of a company which is listed and regularly
traded on any national securities exchange or which is regularly traded
over-the-counter). Employee shall not be deemed to be engaged in a "Competing
Business" if, in any capacity enumerated above, he engages or participates,
directly or indirectly, in the operation, ownership, or management of any
proprietorship, partnership, corporation, or other business entity where
Employee or the business entity in which he may be involved, either directly or
indirectly, and together with any related individuals or entities, builds fewer
than 25 homes per calendar year (with the number of homes to be determined by
the number of permits pulled for such homes). At the written request of Employee
from time to time, Company shall furnish Employee with a written description of
the business or businesses in which Company is then actively engaged.
(f) Change in Control
-----------------
The provisions of this Section shall lapse and be of no further force
or effect if Employee's employment is terminated by Company without Cause, or by
Employee for Good Reason, following a Change in Control, or if Company gives
notice that it is involved in voluntary liquidation proceedings pursuant to
Chapter 7 of the United States Bankruptcy Code (11 U.S.C. ss.701 et seq.) or
that the trustee has been ordered by the United States Bankruptcy Court,
pursuant to a final and non-appealable order, to cease Company's operations
pursuant to 11 U.S.C. ss.1174 of the United States Bankruptcy Code.
12. DISPUTE RESOLUTION
------------------
(a) Mediation
---------
Any and all disputes arising under, pertaining to or touching
upon this Agreement or the statutory rights or obligations of either party
hereto, shall, if not settled by negotiation, be subject to non-binding
mediation. Excepted from this Section 12 is the right of Company or Employee to
seek preliminary judicial relief with respect to a dispute should such action be
- 20 -
necessary to avoid immediate, irreparable harm or damage pending the proceedings
provided for in this Section 12. Mediation shall be before an independent
mediator selected by the parties pursuant to Section 12(d). Any demand for
mediation shall be made in writing and served upon the other party to the
dispute, by certified mail, return receipt requested, at the address specified
in Section 16. The demand shall set forth with reasonable specificity the basis
of the dispute and the relief sought. The mediation hearing will occur at a time
and place convenient to the parties in Maricopa County, Arizona, within 30 days
of the date of selection or appointment of the mediator.
(b) Arbitration
-----------
In the event that the dispute is not settled through mediation, the
parties shall then proceed to binding arbitration before a panel of three
independent arbitrators selected pursuant to Section 12(d). The mediator shall
not serve as an arbitrator. ALL DISPUTES INVOLVING ALLEGED UNLAWFUL EMPLOYMENT
DISCRIMINATION, TERMINATION BY ALLEGED BREACH OF CONTRACT OR POLICY, OR ALLEGED
EMPLOYMENT TORT COMMITTED BY COMPANY OR A REPRESENTATIVE OF COMPANY, INCLUDING
CLAIMS OF VIOLATIONS OF FEDERAL OR STATE DISCRIMINATION STATUTES OR PUBLIC
POLICY, SHALL BE RESOLVED PURSUANT TO THIS SECTION 12 AND THERE SHALL BE NO
RECOURSE TO COURT, WITH OR WITHOUT A JURY TRIAL, EXCEPT AS PROVIDED IN SECTION
12(a). The arbitration hearing shall occur at a time and place convenient to the
parties in Maricopa County, Arizona, within 30 days of selection or appointment
of the last of the three arbitrators. If Company has adopted a policy that is
applicable to arbitrations with executives, the arbitration shall be conducted
in accordance with said policy to the extent that the policy is consistent with
this Agreement and the Federal Arbitration Act, 9 U.S.C. ss.ss. 1-16. If no such
policy has been adopted, the arbitration shall be governed by the then current
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association or its successor. Notwithstanding any provisions in such
rules to the contrary, the arbitrators shall issue findings of fact and
conclusions of law, and an award, within 15 days of the date of the hearing
unless the parties otherwise agree.
(c) Damages
-------
In case of breach of contract or policy, damages shall be limited to
contract damages. In cases of intentional discrimination claims prohibited by
statute, the arbitrators may direct payment consistent with the applicable
statute. In cases of employment tort, the arbitrators may award punitive damages
if proved by clear and convincing evidence. Issues of procedure, arbitrability,
or confirmation of award shall be governed by the Federal Arbitration Act, 9
U.S.C. ss.ss. 1-16, except that Court review of the arbitrators' award shall be
that of an appellate court reviewing a decision of a trial judge sitting without
a jury.
- 21 -
The arbitrators may not award reinstatement. Instead, if the
arbitrators find that the termination by Company was not for Permanent
Disability or not for Cause or that the termination by Employee was for Good
Reason, Employee shall only be entitled to the Severance Benefits provided by
Section 8 (or the special Change in Control severance benefits provided by
Section 9 in the event of a Change in Control), and, in either case, payment of
his reasonable legal expenses in such arbitration. Until a final, binding
determination has been entered relieving Company of its duty to provide payments
hereunder, Company shall pay Employee all amounts to which he would be entitled
under Section 8 if a Change in Control has not occurred or Section 9 if a Change
in Control has occurred, calculated in either case on the assumption that
Employee's employment had been terminated without Cause.
(d) Selection of Mediator or Arbitrators
------------------------------------
The parties shall select the mediator from a panel list made available
by the Association. If the parties are unable to agree to a mediator within ten
days of receipt of a demand for mediation, the mediator will be chosen by
alternatively striking from a list of five mediators obtained by Company from
the Association. Employee shall have the first strike.
The parties also shall select the arbitrators from a panel list made
available by the Association. Company and Employee each shall select one
arbitrator from such panel list within ten days of receipt of such list. After
Company and Employee have each selected an arbitrator, the two arbitrators so
selected shall select the third arbitrator from such list within the next ten
days.
(e) Expenses
--------
The costs and expenses of any mediator shall be borne by Company. The
costs and expenses of any arbitration shall be borne by the losing party, unless
the arbitrator allocates such costs and expenses in a different manner in the
arbitration award.
13. BENEFIT AND BINDING EFFECT
--------------------------
This Agreement shall inure to the benefit of and be binding upon
Company, its successors and assigns, including but not limited to any
corporation, person, or other entity which may acquire all or substantially all
of the assets and business of Company or any corporation with or into which
Company may be consolidated or merged, and Employee, his heirs, executors,
administrators, and legal representatives, provided that the obligations of
Employee may not be delegated.
- 22 -
14. NON-DISPARAGEMENT
-----------------
Employee will not publicly disparage Company or its officers,
directors, employees, or agents and will refrain from any action which would
reasonably be expected to cause material adverse public relations or
embarrassment to Company or to any of such persons. Similarly, Company
(including its officers, directors, employees, and agents) will not disparage
Employee and will refrain from any action which would reasonably be expected to
result in embarrassment to Employee or to materially and adversely affect his
opportunities for employment. The preceding two sentences shall not apply to
statements or allegations made in any pleading filed in connection with any
legal proceeding or to disclosures required by applicable law, regulation, or
order of court or governmental agency.
15. OTHER AGREEMENTS OF EMPLOYEE
----------------------------
Employee represents that the execution and performance of this
Agreement will not result in a breach of any of the terms and conditions of any
employment or other agreement between Employee and any third party.
16. NOTICES
-------
All notices hereunder shall be in writing and delivered personally or
sent by registered or certified mail, postage prepaid:
If to Company, to: Del Webb Corporation
6001 North 24th Street
Phoenix, Arizona 85016
Attention: General Counsel
If to Employee, to: LeRoy C. Hanneman
9643 E. Laurel Lane
Scottsdale, AZ 85260
Either party may change the address to which notices are to be sent to it by
giving 10 days' written notice of such change of address to the other party in
the manner above provided for giving notice. Notices will be considered
delivered on personal delivery or on the date of deposit in the United States
mail in the manner provided for giving notice by mail.
- 23 -
17. ENTIRE AGREEMENT
----------------
The entire understanding and agreement between the parties has been
incorporated into this Agreement, and this Agreement supersedes all other
agreements and understandings between Employee and Company with respect to the
relationship of Employee with Company.
18. GOVERNING LAW
-------------
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Arizona.
19. CAPTIONS
--------
The captions included herein are for convenience and shall not
constitute a part of this Agreement.
20. SEVERABILITY
------------
If any one or more of the provisions or parts of a provision contained
in this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity or unenforceability shall not
affect any other provision or part of a provision of this Agreement, but this
Agreement shall be reformed and construed as if such invalid or illegal or
unenforceable provision or part of a provision had never been contained herein
and such provisions or part thereof shall be reformed so that it would be valid,
legal and enforceable to the maximum extent permitted by law. Any such
reformation shall be read as narrowly as possible to give the maximum effect to
the mutual intentions of Employee and Company.
21. MITIGATION
----------
In the event that Employee's employment is terminated and payments
become due to Employee pursuant to this Agreement, Employee shall have no duty
to mitigate damages or to become re-employed by another employer.
22. TERMINATION OF EMPLOYMENT
-------------------------
The termination of this Agreement by either party also shall result in
the termination of Employee's employment relationship with Company in the
absence of an express written agreement providing to the contrary. Neither party
intends that any oral employment relationship continue after the termination of
this Agreement.
- 24 -
23. NO CONSTRUCTION AGAINST COMPANY
-------------------------------
This Agreement is the result of negotiation between Company and
Employee and both have had the opportunity to have this Agreement reviewed by
their legal counsel and other advisors. Accordingly, this Agreement shall not be
construed for or against Company or Employee, regardless of which party drafted
the provision at issue.
DEL WEBB CORPORATION
By: /s/ Robertson C. Jones
---------------------------------------
Its: V.P. & Gen'l Counsel
--------------------------------------
COMPANY
/s/ LEROY C. HANNEMAN
------------------------------------------
LEROY C. HANNEMAN
EMPLOYEE
- 25 -