EXHIBIT 99.1
AGREEMENT
This Agreement ("Agreement") is made on October 6, 2004 by and between Xxx
X. Xxxxxx ("Executive") and Pulte Homes, Inc., a Michigan corporation (together
with its successors, assigns, parents, subsidiaries, divisions and/or affiliates
(whether incorporated or unincorporated), and all of its past and present
directors, officers, trustees, employees and agents (in their individual and
representative capacities) and any persons acting by, through, or in concert
with any of them, "Pulte").
RECITALS
A. Executive has worked in the employ of Pulte since 1994; his most
recent position was Executive Vice President-Human Resources.
B. On September 11, 2004, Executive resigned from his employment,
effective September 13, 2004 (the "Termination Date").
C. Executive desires to receive from Pulte, and Pulte desires to
provide to Executive, assistance in his transition to new employment.
D. Employer desires the availability of Executive's services for
human-resource matters, and Executive desires to provide such services.
AGREEMENT
Therefore, Executive and Pulte agree as follows:
1. Executive's employment by Pulte terminated effective on the
Termination Date.
2. The following will be Executive's sole and exclusive payments and
benefits with respect to the termination of Executive's employment with Pulte
and in return for Executive's obligations under this Agreement:
(a) Executive will receive:
(1) 26 bi-weekly payments of $16,153.85 each, payable
beginning on October 1, 2004;
(2) a payment in the amount of $30,000 on October 15,
2004;
(3) a payment in the amount of $450,000 on February 1,
2005;
(4) a payment in the amount of $300,000 on February 1,
2006; and
(5) a payment in the amount of $107,000 on April 1,
2006.
Applicable withholdings for taxes and as otherwise required by law and/or
authorized by Executive will be deducted from these payments. The payments under
paragraphs 2(a) (3), (4)
and (5) will be attributable to Executive's obligations under paragraphs 3 and 6
of this Agreement.
(b) Pulte will pay the cost of any COBRA premium applicable to the
continuation of medical and dental benefit coverage for Executive, his spouse,
and his dependent children. Upon any exhaustion of his COBRA rights (i.e., after
18 months): (1) Executive will, in accordance with Employer's current agreement
with Blue Cross for employee medical coverage, be entitled to convert to a Blue
Cross family coverage policy; and (2) until June 30, 2010, Pulte will reimburse
Executive for the premiums for such policy (on an annual basis).
Executive will be responsible for, and will indemnify Pulte for, any taxes,
interest and penalties payable or claimed by appropriate authorities to be
payable in respect of the payments and benefits described in this paragraph 2
that result from Executive's failure to pay or timely pay such taxes, interest
and/or penalties.
3. (a) From the date of this Agreement through September 12, 2006,
Executive will, upon reasonable notice from Pulte, provide reasonable consulting
services (the "Services") to Pulte in connection with the human resources
aspects of Pulte's business. Executive will not be required to work more than 12
hours per month on Services. Executive will not be required to travel away from
his Michigan residence, except to assist Pulte in testimony or preparation for
any litigation or proceedings relating to matters or events which arose or took
place during his employment with Pulte and then only with reasonable advance
notice from Pulte; Pulte will pay all reasonable expenses in connection with
such travel.
(b) The Services will be rendered at such times as Executive and
Pulte mutually agree in good faith. Reasonable efforts will be made by Pulte to
accommodate Executive's full time occupation when scheduling the time and place
for the delivery of the Services. Executive will be free to engage in any other
activities, subject to paragraph 6 of this Agreement.
(c) In performing Services, Executive will be an independent
contractor of Pulte, and will not be considered as having "executive" or
"employee" status with Pulte for any purpose.
(d) Executive will not have any authority to enter into any contract
or agreement on behalf of Pulte or to bind or commit Pulte orally or in writing.
4. (a) All of Executive's stock options which were vested on the
Termination Date, as identified in the attached Stock Option Schedule, will
continue in full force and effect in accordance with the option agreements
pursuant to which they were granted (the "Option Agreements").
(b) Executive forfeited all of his right and interest in and to:
(1) All of the stock options which were granted to him under
the Option Agreements which were not vested on the Termination
Date, as identified in the Stock Option Schedule; and
(2) all restricted shares which were granted to him on
December 11, 2003.
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5. (a) For the consideration described in this Agreement, Executive fully
and forever releases, acquits and discharges Pulte from and for all manner of
claims, counterclaims, causes of action, bonds, bills, debts, sums of money,
commissions, compensation for purported personal services rendered, damages and
rights whatsoever, in law or in equity, now existing in his favor by reason of
any facts, known or unknown, including (1) under Pulte's Long-Term Incentive
Plans for Key Executives and (2) the non-vested options and restricted shares
which were forfeited under paragraph 4(b) above. This release does not cover any
breach of this Agreement (including Pulte's obligations under paragraphs 2 above
and 10 below) or the Option Agreements.
(b) Except for actions or suits based upon breaches of this
Agreement, Executive will refrain from commencing any suit, claim or action, or
prosecuting any pending action, claim or suit, in law or in equity, against
Pulte on account of any employment related action or cause of action based upon
any facts, whether known or unknown, including all claims for wrongful
discharge, breach of contract, violation of the penal statutes, negligence of
any kind, intentional infliction of emotional distress, defamation and/or
discrimination on account of sex, age, race, disability or nationality which has
or could have been alleged under the common law or any federal, state or local
statute or ordinance, including: Title VII of the Civil Rights Act of 1964; the
Age Discrimination in Employment Act; the Rehabilitation Act of 1973; the Older
Workers Benefit Protection Act; the Americans With Disabilities Act; the Family
and Medical Leave Act of 1993; the Xxxxxxx-Xxxxxx Civil Rights Act; the Michigan
Persons With Disabilities Civil Rights Act; the Michigan Whistle Blowers
Protection Act; the Michigan Wage and Benefit Act; and any and all amendments to
any of the foregoing.
6. (a) Executive will forever maintain as confidential all confidential
information of Pulte. For purposes of this Agreement, confidential information
means all confidential and proprietary information of Pulte, including
confidential and proprietary data, know-how, schedules, processes, designs,
sketches, photographs, plans, drawings, specifications, samples, reports, vendor
information, pricing information, market definitions, inventions, ideas and
information obtained from Pulte as well as strategic information concerning
Pulte. Confidential information may be written or oral. Confidential information
will not include information which:
(1) is or becomes available to the public other than as a
result of Executive's disclosure; or
(2) becomes available to Executive on a non-confidential basis
from a source other than Pulte as long as such source is not
bound by a confidentiality agreement with or other obligation
of secrecy to Pulte which is known to Executive.
Executive will be allowed to disclose confidential information if required by
law to do so. However, if practicable, Executive will advise Pulte of such legal
requirements prior to making such disclosure, so that Pulte may attempt (at no
cost or penalty to Executive) to seek an appropriate protective order or legal
limitation on such disclosure.
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(b) From the date of this Agreement until September 12, 2006 (the
"Protected Period"), Executive will not, directly or indirectly:
(1) Except with Pulte's advance written consent, which
may be granted or withheld in Pulte's absolute
discretion, engage in, or have an interest in or be
associated with (whether as an officer, director,
stockholder, partner, member, associate, employee,
consultant, owner or otherwise), a "Competing Business",
which is any corporation, partnership, limited liability
company, firm or enterprise (including a sole
proprietorship) which is (A) engaged in any aspect of
the mortgage financing business anywhere in the United
States, Puerto Rico or Latin America, (B) ranked (or is
part of a builder which is ranked, e.g., a subsidiary)
in the May 2004 issue of Builder Magazine as one of the
50 largest builders in the United States (based upon
2003 gross revenue rankings) (the "Top 50 Builders"), or
(C) during the Protected Period acquired (through a sale
of assets, merger, sale of shares or otherwise) by a Top
50 Builder. Notwithstanding the foregoing, Executive may
invest in any publicly-held corporation engaged in a
Competing Business if (A) such investment does not
exceed 5% in value of the issued and outstanding capital
stock of such corporation and (B) Executive is not
otherwise affiliated with such corporation.
(2) Employ any person known by Executive to be an
employee of Pulte or induce or attempt to induce any
person known by Executive to be an employee of Pulte or
any of its affiliates to leave the employment of the
Pulte or such affiliate.
(3) Attempt to adversely affect the relationship between
Pulte and (A) any of its vendors, contractors,
subcontractors, shareholders, or customers, (B) the
financial community, or (C) the public.
(c) If Executive violates this paragraph 6 in any respect, Pulte
will be entitled to all remedies available to it under law or equity (including
specific performance and a claim for damages) and termination of any or all of
the remaining payments and benefits described under paragraph 2 above. Such
exercise of rights and remedies will not be considered a breach of this
Agreement by Pulte.
(d) The provisions of this paragraph 6 replace the
confidentiality, non-competition and non-solicitation agreement delivered by
Executive to Pulte on March 23, 2000.
7. Except as may be required by law or legal process requiring a response,
(a) Executive will not directly or indirectly assist or aid any other person,
corporation, firm, partnership or other entity, in or about any action, cause of
action, suit, claim, proceeding, litigation or other matter against Pulte
(collectively, "Covered Matters") and (b) Executive will not communicate with,
either orally or in writing, in any manner whatsoever, any other person,
corporation, firm, partnership or other entity, in or about any Covered Matter
other than communications with members of Executive's family, friends and
professional advisors as long as such communications are conducted in a fashion
which will not and could not reasonably be expected
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to adversely affect Pulte. In the event that Executive is required to respond to
legal process with request to Covered Matters, Executive shall provide the
Company with prompt notice of such event and an opportunity, with Executive's
cooperation, to challenge or dismiss the process and, if such process is not
dismissed, to participate in any necessary response.
8. Executive represents and warrants to Pulte that he has returned to
Pulte all materials, files and any other property which belong to Pulte
(including his security card, keys, cell phone, computer, any blackberry or
palm-pilot equipment paid for by the Company, and telephone credit card).
9. Executive has suffered no work related injury or illness in connection
with his employment by Pulte and/or the termination of such employment, and has
no disability recognized under the Workers' Compensation Act or otherwise.
Executive will not claim or collect state unemployment benefits in connection
with the termination of his employment with Pulte. Executive will not in the
future apply for, or seek employment with, Pulte. If Executive violates this
covenant or if Executive claims or collects any workers' compensation and/or
unemployment benefits with respect to his employment by Pulte, he will
immediately forfeit or refund that portion of the consideration paid or payable
by Pulte to Executive under this Agreement which is equal to the unemployment or
workers' compensation benefits, as applicable, received by Executive.
10. Pulte will indemnify Executive, in accordance with Pulte's bylaws and
applicable law, from any claims, demands or complaints made by any third party,
which arise out of or relate to Executive's performance of his job duties during
the term of his employment by Pulte. Executive will advise Pulte of any such
claim immediately upon becoming aware of it.
11. (a) This Agreement, which will be effective and irrevocable
immediately upon the time limits described in this Agreement, reflects the
entire agreement of Executive and Pulte relative to its subject matter, and
supersedes all prior or contemporaneous oral or written understandings,
statements, representations or promises with respect to Executive's employment
with Pulte or the termination of Executive's employment, except for the Option
Agreements.
(b) This Agreement may not be amended except by a written
instrument signed by Executive and an authorized representative of Pulte.
(c) This Agreement will be construed in accordance with and
governed by Michigan law. The sole forum for any dispute under this Agreement
will be the Oakland County (Michigan) Circuit Court; the parties consent to the
exclusive jurisdiction of such court.
12. Executive will maintain, and will instruct his attorneys, accountants
and tax and financial advisors and consultants to maintain, the confidentiality
of the existence and terms of this Agreement, and any underlying conversations,
discussions, documents, correspondence or agreements in furtherance of, or in
connection or leading to, this Agreement. However, Executive will be entitled to
disclose (a) information to the extent required by law, (b) information which
becomes a matter of public record (other than as a result of Executive's
disclosure thereof), (c) information to his immediate family and the advisors
identified above, but only after instructing them to keep such information
confidential and (d) the existence of his
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non-disclosure obligation or other obligations under this Agreement to any
person who requests that Executive disclose information in violation of this
paragraph 12 or otherwise requests that Executive take action in violation of
this Agreement.
13. Pulte will provide, on behalf of Executive, a reference to prospective
employers and others doing business with Executive in form acceptable to Pulte
and Executive.
14. EXECUTIVE UNDERSTANDS THAT BY THIS AGREEMENT HE IS WAIVING ANY RIGHTS
HE MAY PRESENTLY HAVE UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT, AS
AMENDED. EXECUTIVE ENTERS INTO THIS AGREEMENT FREELY AND VOLUNTARILY WITHOUT ANY
DURESS OR COERCION, AND AFTER HE HAS CAREFULLY AND COMPLETELY READ ALL OF THE
TERMS AND PROVISIONS OF THIS AGREEMENT. HE HAS BEEN ADVISED TO CONSULT WITH
LEGAL COUNSEL AND UNDERSTANDS HE WILL BE ALLOWED TO CONSIDER THIS AGREEMENT FOR
21 DAYS PRIOR TO SIGNING IT. EXECUTIVE UNDERSTANDS THAT THIS AGREEMENT SHALL NOT
BECOME EFFECTIVE FOR SEVEN DAYS FOLLOWING THE DATE IT IS SIGNED, DURING WHICH
TIME HE MAY REVOKE THIS AGREEMENT BY WRITTEN NOTICE TO PULTE, IN CARE OF XXXX X.
XXXXXXX, SENIOR VICE PRESIDENT AND GENERAL COUNSEL. EXECUTIVE UNDERSTANDS THAT
PAYMENTS TO BE MADE TO HIM AS PROVIDED IN THIS AGREEMENT WILL NOT COMMENCE UNTIL
THE EXPIRATION OF SUCH DAYS.
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Date: October 6, 2004 /s/ Xxx X. Xxxxxx
----------------------------------------------
Xxx X. Xxxxxx
Pulte Homes, Inc. (on behalf of itself and all
entities which constitute "Pulte" under this
Agreement)
Date: October 6, 2004 By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President and Chief
Financial Officer
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STOCK OPTION SCHEDULE
Vested Stock Options [per paragraph 4(a)]
Grant Date Expiration Date Number of Shares Xxxxx Xxxxx
---------- --------------- ---------------- -----------
12/14/2000 12/14/2010 30,000 $ 20.9219
12/13/2001 12/13/2011 20,000 $ 21.825
Unvested Stock Options [per paragraph 4(b)]
Grant Date Expiration Date Number of Shares Xxxxx Xxxxx
---------- --------------- ---------------- -----------
12/14/2000 12/14/2010 10,000 $20.9219
12/13/2001 12/13/2011 20,000 $ 21.825
12/12/2002 12/12/2012 50,000 $ 22.805
12/11/2003 12/11/2013 70,000 $ 43.27
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