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:
(a) at that time your employment is terminated by the Corporation, you
have a written employment contract with the Corporation extending at
least _______
Name - 2 - Date
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.
(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
Name - 3 - Date
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;
(iii) the failure by the Corporation to continue in effect any thrift,
incentive or compensation plan, or any pension, life insurance,
health and accident
Name - 4 - Date
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:
(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
Name - 5 - Date
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 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,
Name - 6 - Date
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.
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
Name - 7 - Date
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.
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.
Name - 8 - Date
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:
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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:
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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%
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%
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%