Del Webb Corporation
- --------------------------------------------------------------------------------
ROBERTSON C. JONES
Senior Vice President
General Counsel
March 15, 1999
Dear ___________:
The Board of Directors of Del Webb Corporation (the "Company") and the Human
Resources Committee (the "Committee") of the Board have determined that it is in
the best interest of the Company and its shareholders for the Company to agree,
as provided herein, to pay you termination compensation in the event you should
leave the employ of the Company or a Subsidiary under the circumstances
described below. Reference in this letter to your employment by or with the
Company 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 Company is unsettling to you and other senior executives of
the Company. Therefore, these arrangements are being made to help assure a
continuing dedication by you to your duties to the Company notwithstanding the
occurrence or potential occurrence of a change in control. In particular, the
Board and the Committee believe it important, should the Company 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 Company and its Subsidiaries that the Company 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 Company, the Company agrees with you as follows:
1. LIMITED RIGHT TO RECEIVE SEVERANCE BENEFITS. In the event that within
twenty-four (24) months after a "Change in Control" (as defined herein)
of the Company your employment with the Company is terminated, you
shall be entitled to the severance benefits provided in Section 3
hereof unless such termination is (i) because of your death, "Permanent
Disability" (as defined herein) or retirement, (ii) by the Company for
"Cause" (as defined herein) or (iii) by you, other than for "Good
Reason" (as defined herein).
May 15, 1999
Page 2
2. CERTAIN DEFINITIONS. For purposes of this Agreement:
(a) CHANGE IN CONTROL. A "Change in Control" of the Company shall
be deemed to have occurred in any or all of the following
instances:
(i) Any "person" as such term is used in Sections 13(d)
and 14(d) of the Exchange Act, other than a trustee
or other fiduciary holding securities under an
employee benefit plan of Company or a Company 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
the Exchange 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
(ii) 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
(iii) The stockholders of Company approve a merger or
consolidation of Company with any other Company,
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
(iv) 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.
(b) POTENTIAL CHANGE IN CONTROL. A "Potential Change in Control"
shall be deemed to have occurred in any or all of the
following instances:
May 15, 1999
Page 3
(i) Company enters into an agreement, the consummation of
which would result in the occurrence of an Actual
Change in Control;
(ii) Any person (including Company) publicly announces an
intention to take or to consider taking actions which
if consummated would constitute a Change in Control;
(iii) 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
(iv) 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 Sections 2(a) and 2(b) above, the term "Voting Securities" shall
mean and include any securities of the Company which vote generally for the
election of directors.
(c) RETIREMENT. Termination by the Company or you of your
employment based on "Retirement" shall mean (i) voluntary
retirement by you from active full- time employment with any
person or Company on and after the attainment of sixty-five
(65) years, (ii) voluntary separation because of retirement
from active employment in accordance with the Company'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 Company
for you with your written consent.
(d) PERMANENT DISABILITY. If, as a result of your incapacity
because of physical or mental illness, you shall have been
absent from your duties with the Company 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
Company's long-term disability plan, the Company may terminate
this Agreement for "Permanent Disability."
May 15, 1999
Page 4
Notwithstanding the foregoing, this Agreement may not be
terminated pursuant to this Section 2(d) 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(d) and such payment
shall not cease or diminish on account of your Permanent
Disability.
(e) CAUSE. The Company shall have "Cause" to terminate your
employment upon (i) the breach by you of any employment
contract between you and the Company, or (ii) 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).
(f) 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 the last of any of the events
specified in (i) - (v) 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 not reasonably
consistent with your positions, duties,
responsibilities and status with the Company
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 Company in your base salary as in
effect on the date hereof or as the same may be
increased from time to time;
(iii) (A) the failure by the Company 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 Company (or plans
providing you with substantially similar benefits),
(B) the taking of any action by the Company 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 (C) the failure by the Company to provide you with
the number of paid vacation days to which you are
then entitled
May 15, 1999
Page 5
on the basis of years of service with the Company in
accordance with the Company's normal vacation policy
in effect on the date hereof ;
(iv) you are assigned to, or the Company's office at which
you are principally employed immediately prior to the
date of the Change in Control of the Company is
relocated to, a location which would require a
round-trip commute to work from your residence of
more than one hundred (100) miles per day:
(v) the failure of the Company to obtain an agreement
satisfactory to you from any successor to the
business, or substantially all the assets, of the
Company to assume this Agreement or issue a
substantially similar agreement;
(g) Termination of your employment by you for "Good Reason," with
receipt of the benefits provided in Section 3, shall also
include:
(i) your termination by the Company, purportedly for
Cause, if it is thereafter determined that cause did
not exist under this Agreement with respect to your
termination.
(ii) the taking of any action by the Company at the
request of or on behalf of any person, after the
occurrence of a Potential Change in Control, but
prior to a Change in Control, terminating this
Agreement or terminating your employment with the
Company, other than for Cause: PROVIDED THAT, for
purposes of this subparagraph only, Cause shall
include willful and gross misconduct on your part
that is materially and demonstratively detrimental to
the Company.
(h) NOTICE OF TERMINATION. Any termination by the Company or you
shall be communicated by written notice to the other party
("Notice of Termination"). With respect to any termination by
the Company 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.
(i) SUBSIDIARY. "Subsidiary" means any corporation in which the
Company owns, directly, or indirectly through subsidiaries, at
least fifty percent (50%) of the total combined voting power
of all classes of stock, or any other entity (including, but
not limited to, partnerships and joint ventures) in which the
Company owns at least fifty percent (50%) of the combined
equity thereof.
May 6, 1999
Page 6
3. EFFECT OF TERMINATION. If you are entitled to receive severance
benefits pursuant to this agreement, such severance benefits shall be
as follows:
(a) within five (5) days following your termination, 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 biweekly installments without interest) equal to the sum
of two (2) times (I) 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 (ii) 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 your current
target bonus under the management incentive program then in
effect;
(b) any stock options to purchase common stock of the Company 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 Company held by you under
the Company's long-term incentive 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 other than those provided
separately in Section 5.
4. EXCISE AND INCOME TAX GROSS-UP. The Internal Revenue Code of 1986 (the
"Code") imposes significant tax burdens on you and Company if the total
amounts received by you pursuant to this agreement exceed prescribed
limits. These tax burdens include a requirement that you pay a 20%
excise tax on certain amounts received in excess of the prescribed
limits and a loss of deduction for Company. If, as a result of these
Code provisions, you are required to pay such excise tax, then upon
written notice from you to Company, Company shall pay you an amount
equal to the total excise tax imposed on you (including the excise tax
reimbursements due pursuant to this sentence and the excise taxes on
any federal and state tax reimbursements due pursuant to the next
sentence). If Company is obligated to pay you pursuant to the preceding
sentence, Company also shall pay you an amount equal to the "total
presumed federal and state taxes" that could be imposed on you with
respect to the excise tax reimbursements due to you pursuant to the
preceding sentence and the federal and state tax reimbursements due to
you pursuant to this sentence. For purposes of the preceding sentence,
the "total presumed federal and state taxes" that could be imposed on
you shall be
May 15, 1999
Page 7
conclusively calculated using a combined tax rate equal to the sum of
(a) the highest individual income tax rate in effect under (i) Federal
tax law and (ii) the tax laws of the state in which you reside on the
date that the payment under this Section 4 is computed and (b) the
hospital insurance portion of FICA. No adjustments will be made in this
combined rate for the deduction of state taxes on the federal return,
the loss of itemized deductions or exemptions, or for any other
purpose. You will be responsible for paying the actual taxes. The
amounts payable to you pursuant to this or any other agreement or
arrangement with Company will not be limited in any way by the amount
that may be paid pursuant to the Code without the imposition of an
excise tax or the loss of Company deductions. Either you or Company may
elect to challenge any excise taxes imposed by the Internal Revenue
Service and you and Company agree to cooperate with each other in
prosecuting such challenges. If you elect to litigate or otherwise
challenge the imposition of such excise tax, however, Company will join
you in such litigation or challenge only if Company's General Counsel
determines in good faith that your position has substantial merit and
that the issues should be litigated from the standpoint of Company's
best interest.
5. 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 Company 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 because of your termination shall be paid to you
by the Company 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
Company is terminated (and provided you are entitled to benefits) you
are provided or are entitled to the use of an automobile under the
Company'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 Company 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").
May 15, 1999
Page 8
6. CONTINUATION OF EMPLOYMENT. This Agreement shall not be construed to
confer upon you any right to continue in the employ of the Company or a
Subsidiary, and shall not limit any right of the Company or a
Subsidiary to in its sole discretion terminate your employment.
7. ENTIRE AGREEMENT. This Agreement supersedes the change in control
agreement between the Company and you entered into on N/A, 19 ,
respecting certain termination benefits which might become payable 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 Company and any applicable benefit plan of the Company or any
of its Subsidiaries in effect at the time (including but not limited to
the plans referred to in Section 5), would constitute the entire
obligation of the Company to you and performance thereof would
constitute full settlement of any claim that you might otherwise assert
against the Company on account of such termination.
8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of you, your estate and the Company and any successor of
the Company, but neither this Agreement nor any rights arising
hereunder may be assigned or pledged by you.
9. 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 Company.
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.
10. TERMINATION OF THIS AGREEMENT. This Agreement may be unilaterally
terminated by the Company upon twelve (12) months prior written notice
to you; PROVIDED THAT (subject to the provisions of Section 2(f)
relating to a Potential Change in Control) after the occurrence of a
Potential Change in Control the foregoing provision shall not apply.
May 15, 1999
Page 9
11. MEDIATION AND ARBITRATION.
(a) MEDIATION. Any and all disputes arising under, pertaining to
or touching upon this Agreement or the statutory rights or
obligations of either you or the Company hereto, shall, if not
settled by negotiation, be subject to non- binding mediation.
Excepted from this Section 11 is the right of Company or you
to seek preliminary judicial relief with respect to a dispute
should such action be necessary to avoid immediate,
irreparable harm or damage pending the proceedings provided
for in this Section 11. Mediation shall be before an
independent mediator selected by the you or the Company
pursuant to Section 11(e). Any demand for mediation shall be
made in writing. 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, you shall then proceed to binding
arbitration before a panel of three independent arbitrators
selected pursuant to Section 11(e). 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
PARAGRAPH (b) AND THERE SHALL BE NO RECOURSE TO COURT, WITH OR
WITHOUT A JURY TRIAL. The arbitration hearing shall occur at a
time and place convenient to you and Company 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 current arbitration rules
of the American Arbitration Association or its successor (the
"Association"). 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 42
May 15, 1999
Page 10
U.S.C.ss. 1981(a) and the Civil Rights Act of 1991. 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. 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 your termination was for Good Reason, you
shall only be entitled to the severance benefits provided by
Section 3 and payment of your 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 you all amounts to which you
would be entitled under Section 3, calculated on the
assumption that your employment had been terminated without
Cause.
(d) SELECTION OF MEDIATOR OR ARBITRATORS. You and Company shall
elect the mediator from a panel list made available by the
Association. If you or Company 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. You shall have the first strike. You and Company
shall also select the arbitrators from a panel list made
available by the Association. Company and you each shall
select one arbitrator from such panel list within ten days of
receipt of such list. After Company and you 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. Should you or Company, at any time, initiate
arbitration for breach of this Agreement, Company shall
reimburse you for all amounts spent by you to pursue such
arbitration, unless the arbitrator finds your action to have
been frivolous and without merit.
12. 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.
May 15, 1999
Page 11
13. 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 Company the enclosed copy of this letter,
whereupon this letter shall constitute a binding agreement between you
and the Company in accordance with its terms.
14. GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware.
Sincerely yours,
/s/ Robertson C. Jones
Robertson C. Jones
RCJ/cjk
Enclosure
AGREED:
May 15, 1999
Page 12
ELECTION FOR RECEIPT OF INSTALLMENT PAYMENTS
--------------------------------------------
Pursuant to the terms of the Change in Control Agreement dated March , 1999
between Del Webb Company and the undersigned, I elect to have the payments due
me under Section 3(a) of this letter agreement paid to me in equal biweekly
installments over a period of twenty-four (24) months.
--------------------------------------
Date:
--------------------------------
State of Arizona )
) ss.
County of Maricopa )
The foregoing instrument was acknowledged before me this day of ________, ____,
by Mary S. Alexander.
My Commission Expires________________ ._____________________ .
Notary
EXHIBIT
DEL WEBB CORPORATION
CHANGE IN CONTROL AGREEMENT
LIST OF RECIPIENTS
Mary S. Alexander
Larry W. Beckner
Kimball Bannister, III
John H. Gleason
LeRoy C. Hanneman, Jr.
Robertson C. Jones
Anne L. Mariucci
Helen M. McEnerney
Donald V. Mickus
Frank D. Pankratz
Scott J. Peterson
David E. Rau
Charles T. Roach
David G. Schreiner
M. Lynn Schuttenberg
John A. Spencer
Robert R. Wagoner