CONSULTING AGREEMENT
Exhibit 10.1
THIS CONSULTING AGREEMENT (this “Agreement”), dated as of April 7, 2009, is entered
into by and between Pulte Homes, Inc, a Michigan corporation (the “Company”), and Xxxxxxx
X. Xxxxx (the “Consultant”) effective as of the Effective Time (as defined in the Agreement
and Plan of Merger, dated as of April 7, 2009, by and among the Company, Pi Nevada Building
Company, a Nevada corporation and a direct wholly owned subsidiary of the Company (“Merger
Sub”) and Centex Corporation, a Nevada corporation (“Centex”) (the “Merger
Agreement”)). If the Effective Time (as defined in the Merger Agreement) does not occur, this
Agreement will be void ab initio and of no force and effect.
WITNESSETH:
WHEREAS, the Consultant has invaluable knowledge and expertise regarding Centex and Centex’s
operations;
WHEREAS, pursuant to the Merger Agreement, Merger Sub will be merged with and into Centex, and
Centex will continue as a wholly owned subsidiary of the Company (the “Merger”);
WHEREAS, the Consultant is a participant in that certain Centex Corporation Plan Regarding
Severance After a Change in Control (the “Severance Plan”), which the Company will assume
as a result of the Merger;
WHEREAS, due to the Consultant’s knowledge and expertise, the Company wishes to have the
cooperation of, and access to, the Consultant; and
WHEREAS, the Company and the Consultant have mutually agreed that the Consultant shall serve
as a consultant to the Company on the terms and subject to the conditions hereinafter specified.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Consultant hereby agree as follows:
1. Termination of Employment. Effective as of the Effective Time (as defined in the
Merger Agreement), the Consultant will resign from his employment with Centex, from his position as
a member of the board of directors of Centex and, except as otherwise provided in this Agreement,
from all other positions the Consultant holds as an officer or member of the board of directors of
any of Centex’s subsidiaries or affiliates. For purposes of the Severance Plan, such termination
shall constitute a termination of the Consultant’s employment by the Consultant for “Good Reason”
within the meaning of the Severance Plan, and the Consultant will be entitled at the Effective Time
(as defined in the Merger Agreement) to all payments and benefits under Sections 4 and 5 of the
Severance Plan plus an additional cash lump sum payment of $293,000 (to be paid at the same time as
the time at which the payments under Section 4 of the Severance Plan are made), and, as of the
Effective Time, all equity compensation awards held by the Consultant and outstanding immediately
prior to the Effective Time shall immediately vest in full and any stock options held by the
Consultant and outstanding
immediately prior to the Effective Time shall continue to be exercisable for the remainder of
the originally scheduled full term. Nothing herein shall waive any rights that the Consultant may
have (or any obligations that the Company, Centex or any of their respective affiliates may have)
under the Severance Plan or any other compensation or benefit plan, program or arrangement in which
the Consultant is eligible to participate, including the Consultant’s right to payment under
Section 8 of the Centex Corporation 2003 Annual Incentive Compensation Plan or any successor
thereto, which payment shall be equal to the Full Bonus (as defined in Section 5.6(b)(v) of the
Merger Agreement).
2. Consulting Period. For the period beginning on the date on which the Effective
Time occurs (as defined in the Merger Agreement) (the “Effective Date”) and ending upon the
date that is twenty-four months after the Effective Date (the “Consulting Period”), the
Consultant shall render services to the Company on the terms and conditions set forth in this
Agreement.
3. Services. During the Consulting Period, (a) the Consultant shall serve as a member
of the board of directors of the Company (the “Board”) and (b) the Consultant shall serve
as Vice Chairman of the Board reporting to the Company’s Chief Executive Officer, with the
following duties: (i) assisting the Company in communicating the merits of the Merger to investors,
employees, customers and other constituents of the Company, (ii) serving on the Company’s
Integration Governance Committee and (iii) consulting with the Chief Executive Officer and General
Counsel of the Company with respect to integration following the Merger, including with respect to
integration of field roles, operating systems and processes (e.g., scheduling, purchasing,
construction, sales, service and customer relations), personnel, use of brands, Centex’s public
company functions (e.g., legal, tax, treasury and accounting), human resources, compensation and
employee benefits (each of the foregoing, together, the “Services”). Such services shall
be performed at such place or places as shall be mutually agreed by the Consultant and the Company.
In no event shall the Consultant be required to provide services for a number of hours greater
than 33% of the average number of hours the Consultant worked for Centex during the 36-month period
preceding the Effective Date. The Consultant shall resign from the Board upon a termination of the
Consulting Period for any reason, unless otherwise requested by the Board and agreed to by the
Consultant.
4. Consideration. In consideration of the Consultant’s agreement to provide the
services described in Section 3:
(a) During the Consulting Period, the Company shall pay to the Consultant fees for service on
the Board (the “Board Fees”) in amount and kind equal to the fees paid to other
non-Chairman members of the Board during the Consulting Period.
(b) The Company shall pay to the Consultant an annual consulting fee of $750,000, payable
monthly, commencing on the Effective Date and thereafter on the first day of each month during the
Consulting Period (the “Consulting Fees”).
(c) On each of the first and second anniversary of the Effective Date, the Company shall pay
to the Consultant a cash performance bonus of $300,000 (the “Cash Bonuses”), subject to the
Consultant’s continued availability to provide the Services through the applicable anniversary of
the Effective Date.
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(d) On the Effective Date, the Company shall grant to the Consultant 650,000 options to
purchase shares of common stock (the “Common Stock”), $0.01 par value, of the Company (the
“Stock Options”), under the Pulte Homes, Inc. 2004 Stock Incentive Plan (the
“Plan”) with an exercise price per share equal to the fair market value (as defined in the
Plan) of the Common Stock as of the Effective Date and a ten year term. Fifty percent of the Stock
Options shall become fully vested and exercisable on the first anniversary of the Effective Date
and the remaining fifty percent of the Stock Options shall become fully vested and exercisable on
the second anniversary of the Effective Date, in each case, subject to the Consultant’s continued
availability to provide the Services through the applicable anniversary of the Effective Date.
Except as otherwise provided in this Agreement, the Stock Options shall be subject to the terms and
conditions of the Plan.
(e) During the Consulting Period, the Company shall provide the Consultant with an office and
administrative assistance in the Company’s Dallas home office extension.
5. Payments Upon Termination of Consulting Period. Upon a termination of the
Consulting Period for any reason, including by reason of expiration of the term (except by the
Company for “Cause” (as defined in the Severance Plan as of the date hereof) or by the Consultant
without Good Reason (as defined below)):
(a) The Company shall pay to the Consultant, in a lump sum within 10 days following such
termination, any Consulting Fees and Cash Bonuses which would otherwise have been paid to him
through the end of the scheduled Consulting Period.
(b) The Company shall grant to the Consultant, within 10 days following such termination, any
equity awards that would have been granted to him with respect to Board Fees through the end of the
scheduled Consulting Period.
(c) Notwithstanding any provision of any plan, practice, policy or agreement, all equity
awards granted to the Consultant shall immediately vest, become exercisable and be free of
restrictions, as the case may be and all stock options granted to the Consultant, including without
limitation the Stock Options, shall remain exercisable for the remainder of the originally
scheduled full term.
“Good Reason” shall mean a material breach of this Agreement by the Company (x) within 60 days of
which the Consultant has provided the Company with written notice of such breach and (y) within 90
days of which the Company has failed to cure such breach.
6. Restrictive Covenants. The sole restrictive covenant to which the Consultant shall
be subject shall be a standard non-competition and non-solicitation covenant provided by senior
executive officers of the Company, which shall apply to the Consultant no longer than the duration
of the period that the Consultant renders services under this Agreement.
7. Expenses. The Company shall reimburse the Consultant for any reasonable business
expenses incurred by the Consultant in connection with the performance of services described in
Section 3. The last two sentences of Section 5 of the Severance Plan as in effect as
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of the date hereof shall apply mutatis mutandis with respect to the reimbursement of such
reasonable business expenses.
8. Full Settlement; Legal Fees. The provisions of Section 5 of the Severance Plan as
in effect as of the date hereof shall apply to this Agreement mutatis mutandis.
9. Sole Consideration. Except as specifically provided herein, the Consultant shall
be entitled to no compensation or benefits from the Company with respect to services described in
Section 3 and will, with respect to such services, not be credited with service or age credit for
purposes of eligibility, vesting or benefit accrual under any Company employee benefit plan.
10. Status as an Independent Contractor. The Company and the Consultant acknowledge
and agree that the Company shall not exercise general supervision or control over the time, place
or manner in which the Consultant provides services hereunder, and that in performing services
pursuant to this Agreement the Consultant shall be acting and shall act at all times as an
independent contractor only and not as an employee, agent, partner or joint venturer of or with the
Company or any entity for which the Company provides services. The Consultant acknowledges that he
is solely responsible for the payment of all Federal, state, local and foreign taxes that are
required by applicable laws or regulations to be paid with respect to the Consulting Fees and any
other amounts payable hereunder.
11. Notice. All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
if to the Consultant:
At the address most recently on the books and records of the Company; and
if to the Company:
Pulte Homes, Inc.
000 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000,
000 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000,
or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.
12. Entire Agreement. This Agreement contains the entire agreement of the Consultant
and the Company with respect to the services described in Section 3. Notwithstanding the
foregoing, the parties understand and agree that any agreements between the Consultant and Centex,
including without limitation that certain agreement between the Consultant and Centex with respect
to certain payments in the event of the imposition of excise taxes pursuant to Section 4999 of the
Code, shall remain in full force and effect. This Agreement shall, as of the Effective Time,
constitute an amendment to any agreement relating to equity compensation awards held by the
Consultant and outstanding immediately prior to the Effective Time.
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13. Survivorship. Upon the expiration or other termination of this Agreement, the
respective rights and obligations of the parties hereto shall survive to the extent necessary to
carry out the intentions of the parties under this Agreement.
14. Miscellaneous. This Agreement will be binding upon, inure to the benefit of and
be enforceable by, as applicable, the Company and the Consultant and their respective personal or
legal representatives, executors, administrators, successors, assigns, heirs, distributees and
legatees. The Company shall require any person who is the successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or a substantial portion of the business or
assets of the Company to expressly assume the obligations of the Company hereunder. This Agreement
is personal in nature and the Consultant shall not, without the written consent of the Company,
assign, transfer or delegate this Agreement or any rights or obligations hereunder. This Agreement
shall be governed by and construed in accordance with the laws of the State of Texas without giving
effect to such state’s laws and principles regarding the conflict of laws. Any dispute or claim
arising out of or relating to the Agreement or claim of breach hereof shall be brought exclusively
in the federal court in the State of Texas. By execution of the Agreement, the Consultant and the
Company hereby consent to the exclusive jurisdiction of such courts, and waive any right to
challenge jurisdiction or venue in such courts with regard to any suit, action, or proceeding under
or in connection with the Agreement. No provision of this Agreement may be amended, modified,
waived or discharged unless such amendment, waiver, modification or discharge is agreed to in
writing and such writing is signed by the Consultant and the Company. The headings of this
Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together will constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered
as of the date first above written.
| PULTE HOMES, INC. |
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| By: | /s/ Xxxxxxx X. Xxxxx, Xx. | |||
| Name: | Xxxxxxx X. Xxxxx, Xx. | |||
| Title: | President and Chief Executive Officer | |||
| CONSULTANT |
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| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Xxxxxxx X. Xxxxx | ||||
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