Exhibit 10.1
Sample Change of Control Agreement
Date
Name
Address
Dear _____:
The Board of Directors of Del Webb Corporation (the "Corporation") and the Human
Resources Committee (the "Committee") of the Board have determined that it is in
the best interest of the Corporation and its shareholders for the Corporation to
agree, as provided herein, to pay you termination compensation in the event you
should leave the employ of the Corporation or a Subsidiary under the
circumstances described below. Reference in this letter to your employment by or
with the Corporation shall be deemed to include employment by or with a
Subsidiary.
The Board and Committee recognize that the continuing possibility of a change in
the control of the Corporation is unsettling to you and other senior executives
of the Corporation. Therefore, these arrangements are being made to help assure
a continuing dedication by you to your duties to the Corporation notwithstanding
the occurrence or potential occurrence of a change in control. In particular,
the Board and the Committee believe it important, should the Corporation receive
proposals from third parties with respect to its future, to enable you, without
being influenced by the uncertainties of your own situation, to assess and to
take such other action regarding such proposals as the Board might determine to
be appropriate. The Board and the Committee also wish to demonstrate to
executives of the Corporation and its Subsidiaries that the Corporation is
concerned with the welfare of its executives and intends to see that loyal
executives are provided with the benefits stated herein.
In view of the foregoing and in further consideration of your continued
employment with the Corporation, the Corporation agrees with you as follows:
1. Limited Right to Receive Severance Benefits. In the event that within
twenty-four (24) months after a change of control of the Corporation
(as defined herein) your employment with the Corporation is terminated,
you shall be entitled to the severance benefits provided in Section 3
hereof unless:
Name - 2 - Date
(a) at that time your employment is terminated by the Corporation,
you have a written employment contract with the Corporation
extending at least _______ months from the date written Notice
of Termination is given you and the Corporation acknowledges
its breach of that agreement and offers you, in cash, an
amount equal to all future payments called for thereunder,
plus all other damages suffered by you as a result of such
termination; or
(b) such termination is (i) because of your death or retirement,
(ii) by the Corporation for cause or your permanent
disability, or (iii) by you, other than for good reason in
accordance with Section 2(e) hereof.
2. Certain Definitions. For purposes of this Agreement:
(a) Change in Control. "Change in control of the Corporation"
shall mean a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended ("Exchange Act"); provided
that, without limitation, such a change in control shall be
deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or
becomes the beneficial owner, directly or indirectly, of
securities of the Corporation representing twenty-five percent
(25%) or more of the combined voting power of the
Corporation's then outstanding securities ordinarily (and
apart from rights accruing under special circumstances) having
the right to vote at elections of directors, or (ii) within
two (2) years of a tender offer or exchange offer for the
voting stock of the Corporation (other than by the
Corporation) or as a result of a merger, consolidation, sale
of assets or contested election or any combination of the
foregoing, the persons who were directors of the Corporation
immediately prior thereto shall cease to constitute a majority
of the Board of Directors of the Corporation or of its
successor by merger, consolidation or sale of assets.
(b) Retirement. Termination by the Corporation or you of your
employment based on "Retirement" shall mean (i) voluntary
retirement by you from active full-time employment with any
person or corporation on and after the attainment of
sixty-five (65) years, (ii) voluntary separation because of
retirement from active employment in accordance with the
Corporation's retirement policy in effect as of the date of
Change in Control (including early retirement at your option)
generally applicable to its salaried employees, or (iii) in
accordance with any written retirement policy established by
the Corporation for you with your written consent.
Name - 3 - Date
(c) Permanent Disability. If, as a result of your incapacity due
to physical or mental illness, you shall have been absent from
your duties with the Corporation or a Subsidiary on a
full-time basis for six (6) months or more and you apply for
and are approved for long-term disability payments under the
Corporation's long-term disability plan, the Corporation may
terminate this Agreement for "Permanent Disability".
Notwithstanding the foregoing, this Agreement may not be
terminated pursuant to this Section 2(c) unless the incapacity
giving rise to such Permanent Disability occurs prior to the
occurrence of an event which might cause amounts to be payable
to you under this Agreement. Once payments have begun pursuant
to any provision of this Agreement, this Agreement may not be
terminated pursuant to this Section 2(c) and such payment
shall not cease or diminish on account of your Permanent
Disability.
(d) Cause. The Corporation shall have "Cause" to terminate your
employment upon (i) the breach by you of any employment
contract between you and the Corporation, or (ii) the
adjudication that you are bankrupt, or (iii) your conviction
of a felony or crime involving moral turpitude (meaning a
crime that necessarily includes the commission of an act of
gross depravity, dishonesty or bad morals).
(e) Good Reason. You may terminate your employment for Good
Reason, and receive the benefits provided in Section 3 hereof,
only if you do so within one hundred twenty (120) days
following the occurrence of any of the events specified in
(i)-(iv) below. Termination of your employment by you for
"Good Reason" shall mean:
(i) without your express written consent, the assignment to
you of any duties that are inconsistent with your
positions, duties, responsibilities and status with the
Corporation immediately prior to a Change in Control, or a
demotion, or a change in your titles or offices as in
effect immediately prior to a Change in Control, or any
removal of you from or any failure to re-elect you to any
of such positions, except in connection with the
termination of your employment for Cause, Permanent
Disability or as a result of your death or by other than
for Good Reason;
(ii) a reduction by the Corporation in your base salary as in
effect on the date hereof or as the same may be increased
from time to time;
Name - 4 - Date
(iii) the failure by the Corporation to continue in effect any
thrift, incentive or compensation plan, or any pension,
life insurance, health and accident or disability plan in
which you are participating at the time of a Change in
Control of the Corporation (or plans providing you with
substantially similar benefits), the taking of any action
by the Corporation which would adversely affect your
participation in or materially reduce your benefits under
any of such plans or deprive you of any material fringe
benefit enjoyed by you at the time of the change in
control, or the failure by the Corporation to provide you
with the number of paid vacation days to which you are
then entitled on the basis of years of service with the
Corporation in accordance with the Corporation's normal
vacation policy in effect on the date hereof;
(iv) you are assigned to, or the Corporation's office at which
you are principally employed immediately prior to the date
of the Change in Control of the Corporation are relocated
to, a location which would require a round-trip commute to
work from your present residence of more than one hundred
twenty (120) miles per day:
(v) the failure of the Corporation to obtain an agreement
satisfactory to you from any successor to the business, or
substantially all the assets, of the Corporation to assume
this Agreement or issue a substantially similar agreement;
(vi) your termination by the Corporation, purportedly for
Cause, if it is thereafter determined that cause did not
exist under this Agreement with respect to your
termination.
(f) Notice of Termination. Any termination by the Corporation or
you shall be communicated by written notice to the other party
("Notice of Termination"). With respect to any termination by
the Corporation for Cause, Retirement or Disability, or any
termination by you for Good Reason, the Notice of Termination
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for such termination.
(g) Subsidiary. "Subsidiary" shall mean any corporation,
partnership, joint venture or other entity in which the
Corporation has a twenty percent (20%) or greater equity
interest.
3. Effect of Termination. If you are entitled to receive severance
benefits pursuant to Section 1 hereof, such severance benefits shall be
as follows:
Name - 5 - Date
(a) you will be entitled to a cash payment in lump sum (or, if you
make an irrevocable election prior to a Change in Control,
payable in equal semi- monthly installments without interest)
equal to ___________ times the highest annual base salary in
effect at any time during the twelve (12) months prior to the
date the Notice of Termination is given ("Termination
Salary"), plus an amount equal to the greater of the value of
all bonuses paid to you during the twelve (12) month period
prior to the giving of such Notice of Termination, or
________________ of the Termination Salary;
(b) any stock options to purchase common stock of the Corporation
or stock appreciation rights held by you on the date the
Notice of Termination is given, which are not at that date
currently exercisable, shall on that date automatically become
exercisable; and be exercisable for three (3) months after
termination of employment;
(c) all shares of common stock of the Corporation held by you
under the Corporation's Restricted Stock Plans which are still
subject to restrictions on the date the Notice of Termination
is given shall, as of that date, automatically become free of
all restrictions;
(d) a payment of twenty percent (20%) of your Termination Salary
in lieu of fringe benefits.
The Corporation shall be obligated to amend, if necessary, its
Restricted Stock Plans and its plans pursuant to which you have been or
may be granted stock options or stock appreciation rights, or grant
instruments, to be consistent with Section 3(b) and 3(c) of this
Agreement.
Should you, at any time, take legal action, including arbitration,
against the Corporation for breach of this Agreement, the Corporation
shall reimburse you for all amounts spent by you to pursue such legal
action, regardless of the outcome, unless a court of competent
jurisdiction finds your action to have been frivolous and without
merit.
4. Effect on Other Benefits. Except to the extent specified in Section 3
hereof, this Agreement shall not affect your participation in,
distributions from and vested rights under any pension, profit sharing
or other employee benefit plan of the Corporation or any of its
Subsidiaries, which will be governed by the terms of those respective
plans. Any forfeitures you experience under any pension, profit sharing
or stock bonus plans due to your termination shall be paid to you by
the Corporation in cash in the event any payment is made to you
pursuant to Section 3. In the event that
Name - 6 - Date
on the date your employment with the Corporation is terminated (and
provided you are entitled to severance benefits pursuant to Section 3
hereof) you are provided or are entitled to the use of an automobile
under the Corporation's executive automobile policy, you shall have the
use of such automobile for one (1) year after the date of such
termination of employment, on terms no less favorable than those
contained in such policy prior to such termination of employment. In
addition, for a twelve (12) month period after any termination
entitling you to benefits under Section 3 hereof, the Corporation shall
arrange to provide you with life, disability, accident and group health
benefits and coverages substantially similar to those which you were
receiving immediately prior to the Notice of Termination. The cost to
you of such coverage shall be not more than the cost to you of similar
coverage immediately prior to the Notice of Termination. Your right to
continued life, disability, accident and health benefits shall be in
addition to and not in lieu of your rights under the Consolidated
Omnibus Reconciliation Act of 1986 ("COBRA").
5. Continuation of Employment. This Agreement shall not be construed to
confer upon you any right to continue in the employ of the Corporation
or the Operating Company, and shall not limit any right of the
Corporation or the Operating Company to terminate your employment at
any time in its sole discretion.
6. Entire Agreement. This Agreement supersedes all other agreements and
understandings between us with respect to benefits due to you in
connection with a Change in Control. In the event of the termination of
your employment under circumstances entitling you to the termination
payments hereunder, the arrangements provided for by this Agreement,
together with any written employment contract between you and the
Corporation and any applicable benefit plan of the Corporation or any
of its subsidiaries in effect at the time (as modified by this
Agreement), would constitute the entire obligation of the Corporation
to you and performance thereof would constitute full settlement of any
claim that you might otherwise assert against the Corporation on
account of such termination.
7. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of you, your estate and the Corporation and any
successor of the Corporation, but neither this Agreement nor any rights
arising hereunder may be assigned or pledged by you.
8. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed
to in writing, signed by you and such officer as may be specifically
designated by the Board of Directors of the Corporation.
Name - 7 - Date
No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same time or
at any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not set forth expressly
in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the
State of Arizona.
9. Termination of this Agreement. Prior to a Change in Control of the
Corporation, this Agreement may be unilaterally terminated by the
Corporation upon twelve (12) months prior written notice to you.
10. Arbitration and Litigation. In the event that following a Change in
Control of the Corporation, the Corporation terminates you by reason of
your Permanent Disability or for Cause and you dispute the accuracy of
such assertion of Permanent Disability or Cause, or in the event you
terminate your employment for Good Reason, and the Corporation disputes
the accuracy of such assertion of Good Reason, the accuracy of such
assertion shall be submitted to arbitration in accordance with the then
current commercial arbitration rules of the American Arbitration
Association ("Association") or its successor, provided you or the
Corporation file a written demand for arbitration at a regional office
of the Association within thirty (30) calendar days following the date
of termination. The Corporation shall continue to pay all benefits due
to you under this Agreement during arbitration until a final, binding
determination has been entered relieving the Corporation of its duty to
provide benefits hereunder. In the event the Corporation shall elect to
insure all or part of its liability for providing health and long-term
disability benefits under this paragraph, you shall submit to such
reasonable physical examination as the Company may request. Arbitration
shall be the sole remedy hereunder and the decision of the arbitrator
shall be final and binding.
11. Severability. If any one (1) 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
enforceability 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 our mutual intentions.
Name - 8 - Date
12. Mitigation. In the event that your employment is terminated and
payments become due pursuant to this Agreement, you shall have no duty
to mitigate damages or to become re-employed by another employer.
If you are in agreement with the foregoing, please so indicate by signing and
returning to the Corporation the enclosed copy of this letter, whereupon this
letter shall constitute a binding agreement between you and the Corporation in
accordance with its terms.
Very truly yours,
PJD/sd
Enclosure
AGREED:
-----------------------------------
Name
Date: ____________________________
ELECTION FOR RECEIPT OF INSTALLMENT PAYMENTS
--------------------------------------------
Pursuant to the terms of the Change in Control Agreement dated ________, 19__
between Del Webb Corporation and the undersigned, I elect to have the payments
due me under Section 3(a) of this letter agreement paid to me in equal
semi-monthly installments over a period of eighteen (18) months.
-----------------------------------
Name
Date: ____________________________
State of Arizona )
) ss.
County of Maricopa )
The foregoing instrument was acknowledged before me this _______ day of
____________________, 19___, by [Name].
My Commission Expires ________________. ___________________________________
Notary
Exhibit 10.1 Sample Change of Control Agreements for certain officers.
Schedule of differences:
1. Limited Right to Receive Severance Benefits. In the event that within
twenty-four (24) months after a change of control of the Corporation
(as defined herein) your employment with the Corporation in terminated,
you shall be entitled to the severance benefits provided in Section 3
hereof unless:
(a) at that time your employment is terminated by the
Corporation,you have a written employment contract with the
Corporation extending at least ________ months (see
differences attached hereto as #1) from the date written
Notice of Termination is given you and the Corporation
acknowledges it s breach of that agreement and offers you, in
cash, an amount equal to all future payments called for
thereunder, plus all other damages suffered by you as a result
of such termination;
3. Effect of Termination. If you are entitled to receive severance
benefits pursuant to Section 1 hereof, such severance benefits shall be
as follows:
(a) you will be entitled to a cash payment in lump sum (or, if you
make an irrevocable election prior to a Change in Control,
payable in equal semi- monthly installments without interest)
equal to __________ times (see differences attached hereto as
#2) the highest annual base salary in effect at any time
during the twelve (12) months prior to the date the Notice of
Termination is given ("Termination Salary"), plus an amount
equal to the greater of the value of all bonuses paid to you
during the twelve (12) month period prior to the giving of
such Notice of Termination, or __________ percent (see
differences attached hereto as #3)of the Termination Salary;
Contract OR PLUS
Date of Extension Base Salary Bonus
Name Agreement in Months (1) in Years (2) Computation (3)
- ---- --------- ------------- ------------ ---------------
John
Spencer 5-20-88 24 2 35%
Don
Mickus 5-20-88 24 2 35%
Frank
Pankratz 5-20-88 18 1.5 40%
LeRoy
Hanneman 5-17-89 18 1.5 35%
Anne
Mariucci 5-20-88 18 1.5 35%
Dave
Rau 5-20-88 18 1.5 35%
Chuck
Roach 5-17-89 18 1.5 35%
Jack
Gleason 2-01-90 18 1.5 35%
Joe
Contadino 10-20-92 18 1.5 35%
Rob
Jones 11-16-92 18 1.5 35%
Dave
Schreiner 12-21-92 18 1.5 35%
Lynn
Schuttenberg 4-29-93 18 1.5 35%
Bob
Wagoner 1-26-94 18 1.5 35%
John
Murray 9-25-95 18 1.5 35%
Larry
Beckner 11-1-95 18 1.5 35%
Rich
Vandermeer 11-4-96 18 1.5 35%