Execution Version
PulteGroup, Inc.
3350 Peachtree Road NE, Suite 150
Atlanta, Georgia 30326
September 8, 2016
William J. Pulte (grandson of founder)
William J. Pulte (founder)
William J. Pulte Trust dtd 01/26/90
Joan B. Pulte Trust dtd 01/26/90
Ladies and Gentlemen:
This letter agreement (this “
Agreement
”) constitutes the agreement between PulteGroup, Inc., a Michigan corporation (the “
Company
”) and the other Persons set forth on the signature pages hereto (the “
Pulte Parties
”, and each a “
Pulte Party
”), with respect to the matters set forth below. The Company and the Pulte Parties are referred to herein, each individually, as a “
Party
” and, collectively, as the “
Parties
.”
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1.
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Director Appointment
. Effective as of the date hereof, the size of the Board of Directors of the Company (the “
Board
”) shall increase to fourteen (14) directors and William J. Pulte (“
Mr. Pulte
”), the grandson of William J. Pulte, the founder of the Company, shall be appointed to fill the vacancy so created, with Mr. Pulte serving as a director until the next election of directors and until his successor is duly elected and qualified or until his earlier resignation or removal, subject to the terms of this Agreement. Subject to Paragraph 4, unless the Board determines in good faith that doing so would violate the Board’s fiduciary duties under applicable law or unless there has been a material breach of this Agreement by any of the Pulte Parties that either is incapable of being cured or if capable of being cured has not been cured within ten (10) business days after the Pulte Parties have received written notice from the Company of such material breach, (a) the Company shall include Mr. Pulte on its slate of nominees for the election of directors at its 2017 Annual Meeting of Shareholders in the proxy statement for such Annual Meeting of Shareholders and (b) with respect to such 2017 Annual Meeting of Shareholders, (i) the Board shall recommend (and shall not change such recommendation in a manner adverse to Mr. Pulte) that the Company’s shareholders vote in favor of the Board’s entire slate (including Mr. Pulte) and (ii) the Company shall solicit proxies for the Board’s entire slate (including Mr. Pulte) and otherwise support Mr. Pulte for election in a manner no less rigorous and favorable than the manner in which the Company supports its other director nominees. Notwithstanding anything to the contrary in this Agreement, the Company’s and Board’s obligations in this Paragraph 1 shall terminate prior to the Expiration Date at such time as the Pulte Parties’ aggregate beneficial ownership decrease to less than 3.0% of the Company common shares (excluding from such calculations any common shares issued by the Company after the date hereof). Subsequent to the 2017 Annual Meeting of Shareholders, for so long as Mr. Pulte remains a director of the Company, the Company shall provide written notice to Mr. Pulte whether, as of the date of such notice, the Company intends to include Mr. Pulte on its slate of nominees for election of directors for its next annual meeting of shareholders no later than the date that is thirty (30) days prior to the deadline for the submission of shareholder nominations for directors pursuant to the Bylaws for the applicable annual meeting of shareholders. The Pulte Parties acknowledge and agree that, for the
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avoidance of doubt, the Company shall not be in breach of this Agreement if subsequent to the date of such notice the Company’s intention changes as a result of any facts, circumstances or developments occurring after the date of such notice (or facts, circumstances or developments that existed prior to the date of such notice that the Board becomes aware of after such date) that results in the Board’s good faith determination that including Mr. Pulte on the Company’s slate of nominees for election of directors would violate the Board’s fiduciary duties under applicable law.
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2.
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Replacement Directors
. In the event that Mr. Pulte (or his replacement appointed pursuant to this Paragraph 2) is unable or unwilling to serve as a director of the Company (other than on account of failure to be elected or reelected) prior to the date that is thirty (30) days prior to the deadline for the submission of shareholder nominations for directors for the 2018 Annual Meeting of Shareholders pursuant to the Bylaws, subject to the last sentence of this Paragraph 2 and subject to the Company having received a certification from the Pulte Parties that at the time of such selection the Pulte Parties beneficially own 3.0% or more of the Company common shares, the Company agrees that the Pulte Parties may select a replacement candidate (a) who qualifies as “independent” under the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) and the New York Stock Exchange (the “NYSE”) and the applicable terms of the Company’s Corporate Governance Guidelines, and whose service as a director of the Company complies with applicable requirements of the Clayton Antitrust Act of 1914, as amended, and other applicable competition laws and regulations, and (b) who is acceptable to the Nominating and Governance Committee of the Board as a replacement candidate (it being understood that the Nominating and Governance Committee of the Board cannot unreasonably withhold its consent to such a replacement candidate). Subject to Paragraph 4 and such replacement candidate’s completion of customary director onboarding documentation and the last sentence of this Paragraph 2, the Company shall appoint any such replacement candidate who meets the foregoing criteria to the Board to replace Mr. Pulte, with such replacement candidate to serve as a director and as a member of those Board committees on which the Board determines such replacement candidate should serve, in each case, during the unexpired term, if any, of Mr. Pulte. The Pulte Parties’ right to select a qualified replacement candidate, and the Company’s obligation to appoint such candidate to the Board, shall terminate prior to the Expiration Date at such time as the Pulte Parties’ aggregate beneficial ownership decreases to less than 3.0% of the Company common shares (excluding from such calculations any common shares issued by the Company after the date hereof).
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3.
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Committees
. The Board shall, promptly following execution of this Agreement, determine on which committees of the Board Mr. Pulte (or any replacement contemplated by Paragraph 2) will serve and appoint Mr. Pulte (or any replacement contemplated by Paragraph 2) to serve on such committees; provided, however that at least until the Company’s 2017 Annual Meeting of Shareholders, neither Mr. Pulte nor any replacement contemplated by Paragraph 2 shall serve on the Audit Committee of the Board. From and after Mr. Pulte’s (or such replacement’s) appointment to such committees Mr. Pulte (or such replacement) shall serve as a member of at least two committees of the Board during such Person’s service as a director unless otherwise agreed by Mr. Pulte and the Board. The two or more committees of the Board on which Mr. Pulte (or such replacement) shall serve shall be determined from time to time by the Nominating and Governance Committee following the procedures it applies with respect to committee assignments for all directors. The Company’s and Board’s obligation to take the actions specified in this Paragraph 3 shall terminate prior to the Expiration Date at such time
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as the Pulte Parties’ aggregate beneficial ownership decreases to less than 3.0% of the Company common shares (excluding from such calculations any common shares issued by the Company after the date hereof).
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4.
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Nominee Information
. As a condition to the Company’s obligation to nominate Mr. Pulte (or any replacement contemplated by Paragraph 2) for election at the Company’s 2017 Annual Meeting of Shareholders, Mr. Pulte shall have provided any and all information required to be disclosed in a proxy statement or other filing under applicable law or that is otherwise consistent with the information that is required to be disclosed by all other Persons standing for election as a director of the Board, stock exchange rules or listing standards, along with any additional information reasonably requested by the Company in connection with assessing eligibility, independence and other criteria applicable to directors or satisfying compliance and legal obligations, and to consent to appropriate background checks. Mr. Pulte represents and warrants to the Company that all such written information that he has heretofore provided to the Company in accordance with this Paragraph 4 is and has been accurate and complete in all material respects.
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5.
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Company Policies
. The Parties acknowledge that Mr. Pulte (or his replacement contemplated by Paragraph 2), upon appointment or election to the Board, will be subject to the same protections and obligations regarding confidentiality, conflicts of interest, fiduciary duties, trading and disclosure and other governance guidelines and policies (collectively, “
Company Policies
”), and shall be required to preserve the confidentiality of the Company’s business and information, including discussions or matters considered in or for meetings of the Board or related thereto, and shall have the same rights and benefits, including with respect to insurance, indemnification, exculpation, compensation and fees, as are applicable to the independent directors of the Company. In furtherance of the foregoing, Mr. Pulte (or his replacement contemplated by Paragraph 2) shall not share any reports, meeting materials, notices, draft minutes or other materials or information received by him in his capacity as a member of the Board with any of the other Pulte Parties or any of their respective Affiliates. The Company agrees that: (i) as of the date hereof, all Company Policies currently in effect are publicly available on the Company’s website or described in its proxy statement filed with the SEC on April 4, 2016 or have otherwise been provided to the Pulte Parties, and such Company Policies will not be amended prior to the appointment of Mr. Pulte and (ii) during the Restricted Period, any changes to the Company Policies, or new Company Policies, will be adopted in good faith and not for the purpose of undermining or conflicting with the arrangements contemplated hereby.
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6.
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Voting of Pulte Shares
. With respect to each of the Company’s annual and special meetings of shareholders (and any adjournments or postponements thereof) held during the Restricted Period and any actions by written consent taken or proposed to be taken by the shareholders of the Company during the Restricted Period, the Pulte Parties shall (a) in the case of any such meeting, cause to be present for quorum purposes all the Company common shares beneficially owned by them or their controlling or controlled Affiliates and which they or such controlling or controlled Affiliates are entitled to vote at such annual or special meeting of shareholders and (b) vote or cause to be voted (or in the case of any proposed action by written consent, provide a written consent for) all such Company common shares (i) in favor of the election of Mr. Pulte as the director nominee nominated by the Board; (ii) against (or withhold votes in favor of) the election of any director nominees that are not nominated by the Board; and (iii) in accordance with the Board’s recommendation on all other proposals
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and business that comes before such annual or special meeting of shareholders (or is proposed as an action by written consent), other than with respect to (A) an Extraordinary Transaction, (B) any proposed issuance of Company common shares or any securities convertible into, or exercisable or exchangeable for, Company common shares, (C) approval of any compensatory plan or arrangement relating to the compensation of Company employees or the members of the Board that is submitted for shareholder approval (but, for the avoidance of doubt, excluding the Company’s “say on pay” proposal, with respect to which the Pulte Parties shall vote or cause to be voted all such Company common shares in accordance with the Board’s recommendation) or (D) any proposal by the Company to implement any takeover defense measures or any other proposal by the Company that would diminish or otherwise impair in any material respect the rights of Company shareholders.
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7.
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Standstill
. From the date of this Agreement until the Expiration Date or until such earlier time as the restrictions in this Paragraph 7 terminate as provided herein (such period, the “
Restricted Period
”), the Pulte Parties shall not, and shall use their reasonable efforts to cause their respective Affiliates and their respective principals, directors, general partners, managing members, managers, officers, employees, agents and representatives acting on their behalf, and any successor owner of any Company common shares held by the Pulte Parties as of the date hereof (and any Affiliate of such successor), except to the extent such successor purchases such Company common shares on the open market (collectively, the “
Restricted Persons
”) not to, directly or indirectly, absent prior express written invitation or authorization by the Board:
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(a)
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engage in any “solicitation” (as such term is defined pursuant to the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), and used in the rules and regulations of the SEC, but without regard to the exclusions set forth in Rules 14a-l(l)(2)(iv) and 14a-2 under the Exchange Act) of proxies or consents with respect to the election or removal of directors of the Company or any other matter or proposal involving the Company or become a “participant” (as such term is defined pursuant to the Exchange Act and used in the rules and regulations of the SEC) in any such solicitation of proxies or consents;
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(b)
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knowingly encourage or advise any Person or knowingly assist any other Person in so encouraging or advising any Person with respect to the giving or withholding of any proxy, consent or other authority to vote Company common shares or in conducting any type of referendum or the voting of Company common shares (other than such encouragement or advice that is consistent with the Board’s recommendation in connection with such matter);
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(c)
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form, join or participate in any way in any “group” with respect to any Company common shares or the beneficial ownership thereof, other than solely with other Pulte Parties or their Affiliates with respect to the Company common shares now or hereafter beneficially owned by them;
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(d)
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acquire, or offer, seek or agree to acquire, by purchase or otherwise, or direct any Third Party in the potential acquisition of, by purchase, agreement, Extraordinary Transaction or otherwise, any Company common shares or beneficial ownership thereof or assets of the Company or any direct or indirect subsidiary thereof, or rights or options to acquire any Company common shares or beneficial ownership thereof
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or assets of the Company or any direct or indirect subsidiary thereof or engage in any swap or hedging transactions or other derivative agreements of any nature with respect to Company common shares; provided, however, that the foregoing shall not restrict Mr. Pulte from purchasing up to 1.0% of the outstanding Company common shares while serving as a director of the Company or receiving any securities that may be granted or awarded to directors of the Company;
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(e)
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sell, or offer, seek or agree to sell, all or substantially all, directly or indirectly, through swap or hedging transactions or otherwise, voting rights decoupled from the underlying Company common shares held by the Pulte Parties; provided, however, that notwithstanding anything to the contrary in Paragraph 7(d), nothing in this Agreement shall restrict any of the Pulte Parties, other than Mr. Pulte, from entering certain loan/collar transactions of the same or a similar nature as those previously described and disclosed in the Schedule 13D, as amended, filed by William J. Pulte with the SEC so long as such transactions do not result in an (i) increase in economic exposure of the Pulte Parties with respect to Company common shares, (ii) increase in voting power of the Pulte Parties with respect to Company common shares or (iii) increase in beneficial ownership by the Pulte Parties of Company common shares;
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(f)
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initiate, make or in any way participate, directly or indirectly, in any Extraordinary Transaction (it being understood that the foregoing shall not restrict the Pulte Parties from tendering shares, receiving payment for shares or otherwise participating in any such transaction on the same basis as other shareholders of the Company or from participating in any such transaction that has been approved by the Board, subject to the other terms of this Agreement) or make, directly or indirectly, any proposal, either alone or in concert with others, to the Company or the Board that would reasonably be expected to require a public announcement or disclosure regarding any such matter;
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(g)
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enter into a voting trust, arrangement or agreement or subject any Company common shares or beneficial ownership thereof to any voting trust, arrangement or agreement, in each case other than solely with other Pulte Parties or their Affiliates;
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(h)
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(i) propose or seek, alone or in concert with others, election or appointment to, or representation on, the Board or nominate or propose the nomination of, or recommend the nomination of, any candidate to the Board, except as specifically permitted in Paragraph 2 or (ii) propose or seek, alone or in concert with others, the removal of any member of the Board;
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(i)
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(A) initiate, make or be the proponent of any proposal (pursuant to Rule 14a-8 under the Exchange Act or otherwise) for consideration by the Company’s shareholders
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or (B) conduct any referendum for consideration by the Company’s shareholders;
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(j)
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initiate or seek the convening of (or assist any other Person in the convening of) any meeting of the Company’s shareholders;
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(k)
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make any request for stock ledger or shareholder list materials or other books and records of the Company under any statutory or regulatory provisions providing for shareholder access to materials, books and records of the Company; provided,
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however, that this provision shall not apply to Mr. Pulte in his capacity as a director of the Company;
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(l)
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(i) make any public or private proposal with respect to or (ii) in a manner adverse to the Company, make any public statement or otherwise seek to encourage or advise or assist any Person in so encouraging or advising with respect to: (A) any change in the identity, number or term of directors serving on the Board or the filling of any vacancies on the Board, (B) any change in the capitalization or dividend policy of the Company, (C) any other change in the Company’s management, governance, corporate structure, affairs or policies, (D) any Extraordinary Transaction, (E) causing a class of securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange or (F) causing a class of equity securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;
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(m)
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institute, solicit, assist or join any litigation, arbitration or other proceeding against or involving the Company or any of its direct or indirect subsidiaries or any of their respective current or former directors or officers (including derivative actions) in order to effect, cause or take any of the actions expressly prohibited by this Paragraph 7;
provided
,
however
, that for the avoidance of doubt the foregoing shall not prevent any Restricted Person from (i) bringing litigation to enforce the provisions of this Agreement, (ii) making counterclaims with respect to any proceeding initiated by, or on behalf of, the Company against a Restricted Person, (iii) bringing bona fide commercial disputes that do not relate to the subject matter of this Agreement or the topics covered in the correspondence between the Company and the Restricted Persons prior to the date hereof or (iv) exercising statutory appraisal rights;
provided
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further
, that the foregoing shall also not prevent the Restricted Persons from responding to or complying with a validly issued legal process;
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(n)
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make any request or submit any public proposal or private proposal (if such private proposal is reasonably likely to require any public disclosure by the Company or by any Pulte Party) to amend, waive or grant consent with respect to the terms of this Agreement, or publicly refer to any desire or intention to do so or privately refer to any such desire or intention if such private reference is reasonably likely to require any public disclosure by the Company or by any Pulte Party; or
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(o)
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enter into any discussions, negotiations, agreements or understandings with any Third Party or assist, advise, act in concert with or participate with or encourage any Third Party, to take any action that the Pulte Parties are prohibited from taking pursuant to this Paragraph 7;
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(A) provided
, that the restrictions in this Paragraph 7 shall terminate automatically upon the earliest of (i) the Expiration Date; (ii) upon ten (10) business days’ prior written notice delivered by Mr. Pulte to the Company following a material breach of this Agreement by the Company (including, without limitation, any breach of the Company’s obligation to appoint or nominate Mr. Pulte in accordance with Paragraph 1 or replacements in accordance with Paragraph 2) if such breach has not been cured within such notice period,
provided
that no Pulte Party is then in material breach of this Agreement, if such breach, if curable, has not been cured within ten (10) business days after the Pulte Parties have received written notice from the Company of such
material breach; (iii) upon the announcement by the Company that it has entered into a definitive agreement with respect to any merger, consolidation, acquisition, business combination, sale of a division, sale of substantially all assets, recapitalization, restructuring, liquidation, dissolution or other similar extraordinary transaction that would, if consummated, result in the acquisition by any Person or group of Persons (other than any direct or indirect subsidiaries of the Company) of more than 50% of the Company common shares; (iv) the commencement of any tender or exchange offer (by a Person other than the Pulte Parties or their Affiliates) which, if consummated, would constitute an Extraordinary Transaction that would result in the acquisition by any person or group of more than 50% of the Company common shares, where the Company files a Schedule 14D-9 (or any amendment thereto), other than a “stop, look and listen” communication by the Company pursuant to Rule 14d-9(f) promulgated under the Exchange Act, that does not recommend that the Company’s shareholders reject such tender or exchange offer; (v) such time as the Company issues a preliminary proxy statement, definitive proxy statement or other proxy materials in connection with the Company’s 2017 Annual Meeting of Shareholders that are inconsistent with the Company’s obligations under this Agreement; and (vi) the adoption by the Board of any amendment to the Restated Certificate of Incorporation or Amended and Restated By-Laws of the Company that would reasonably be expected to substantially impair the ability of a shareholder to submit nominations for election to the Board or shareholder proposals in connection with any future Company Annual Meeting of Shareholders; and (B)
provided
,
further
, that that nothing contained herein shall prevent the Pulte Parties from making (i) any public or private statement or announcement with respect to an Extraordinary Transaction that is publicly announced by the Company or a Third Party, (ii) any private statements with respect to the Company’s business and operations that are not reasonably expected to become public, but in no event shall such private statements be negative with respect to the Company or the Board or (iii) any factual statement as required by applicable legal process, subpoena, or legal requirement or as part of a response to a request for information from any governmental authority with jurisdiction over the party from whom information is sought (so long as such request did not arise as a result of discretionary acts by the Pulte Parties or any of their Affiliates). The Pulte Parties covenant and agree that until the Expiration Date, prior to or concurrently with the transfer of any Company common shares by any Pulte Party to an Affiliate, such Pulte Party shall use its reasonable efforts to cause such Affiliate to sign a joinder to this Agreement in form and substance reasonably acceptable to the Company; provided, however, that in the case of any transfer directly or indirectly to Mark Pulte or Carolyn Pulte no such transfer shall be made without the execution and delivery by such transferee of such a joinder.
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8.
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Private Communications; Outbound and Inbound Calls; Confidentiality
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(a)
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Notwithstanding anything to the contrary contained in Paragraph 7, during the Restricted Period, the Pulte Parties and their Affiliates may communicate privately with the Board so long as such statements would not reasonably be expected to require any of the Pulte Parties to file or amend any Schedule 13D with the SEC and would not reasonably be expected to require a public announcement or disclosure regarding any such matter. For the avoidance of doubt, nothing in Paragraph 7 or elsewhere in this Agreement shall prohibit Mr. Pulte, acting in his fiduciary capacity as a director of the Company, from (1) taking any action or making any statement at any meeting of the Board or of any committee thereof or (2) making any statement to the Chief Executive Officer, the Chief Financial Officer or any other director or executive officer of the Company in his capacity as a director.
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(b)
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The Pulte Parties shall not, and shall use their reasonable efforts to cause their respective Affiliates not to, make any outbound calls to any Third Party to discuss the business or affairs of the Company. To the extent that a shareholder of the Company (in his or her capacity as such) contacts any of the Pulte Parties or their respective Affiliates, (i) Mr. Pulte shall comply with his obligations under Paragraph 5 and (ii) the Pulte Parties shall, and shall use their reasonable efforts to cause their respective Affiliates to, comply with their obligations under Paragraphs 7, 9 and 10.
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(c)
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The Pulte Parties hereby agree that (i) any confidential or proprietary information of the Company that they or their Affiliates obtain in discussions with the Company, its Affiliates or any of their respective representatives shall be kept confidential, shall be used solely for the purpose of monitoring and evaluating their investments in the Company and shall not be used to make Disparaging Statements and (ii) they and their Affiliates shall not, and shall cause their respective principals, directors, general partners, managing members, managers, officers and employees not to, make any request of any director of the Company to engage in, or consider engaging in, conduct that is inconsistent with the policies, duties and requirements contemplated by Paragraph 5 (but without being limited by Company Policies to the extent they provide that management (rather than directors) shall be responsible for engaging in communications with external constituencies).
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9.
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Non-Disparagement
. During the Restricted Period, each of the Company and the Pulte Parties shall not make or cause to be made, and the Company shall cause its, and the Pulte Parties shall use their reasonable efforts to cause their, respective Affiliates and its and their respective principals, directors, general partners, members, managers, officers and employees not to make or cause to be made, any expression, statement or announcement (including in any document or report filed with or furnished to the SEC or any stock exchange or through the press, media, analysts, investors or other Persons), either in writing or orally, that constitutes an ad hominem attack on, or otherwise disparages, defames, slanders, or impugns or is reasonably likely to damage the reputation of: (a) in the case of statements or announcements by any of the Pulte Parties: (i) the Company or any of its Affiliates, direct or indirect subsidiaries or advisors or any of its or their respective current or former shareholders, principals, directors, general partners, members, managers, officers, employees, agents or representatives; and (ii) the Company’s and its direct and indirect subsidiaries’ strategies, operations, products, performance or services; and (b) in the case of statements or announcements by the Company, the Pulte Parties, their respective Affiliates, directors, officers, principals, partners, members, managers, current or former shareholders, agents, representatives, and employees, or any Person who has served as an employee of the Pulte Parties (any such statement, a “
Disparaging Statement
”). The foregoing shall not restrict the ability of any Person to comply with any subpoena or other legal process or respond to a request for information from any governmental authority with jurisdiction over the party from whom information is sought.
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10.
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Press Release
. Following the execution and delivery of this Agreement, the Company shall issue a press release in the form attached hereto as
Exhibit A
(the “
Press Release
”). No Party shall make any statement inconsistent with the Press Release in connection with the announcement of this Agreement;
provided
that the foregoing shall not prevent (a) the Company or any of the Pulte Parties from taking any action required by any governmental or regulatory authority or stock exchange that has jurisdiction over the Company or any of its direct or indirect subsidiaries or the Pulte Parties, respectively (except to the extent such
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requirement arose by discretionary acts by any of the Company or any of the Pulte Parties or any of their respective Affiliates, respectively), and (b) the Company or the Pulte Parties from making any factual statement that is required in any compelled testimony or production of information, either by legal process, by subpoena or as part of a response to a request for information from any governmental authority with jurisdiction over the Company or any of its direct or indirect subsidiaries or the Pulte Parties, respectively, by any applicable stock exchange rule or as otherwise legally required.
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11.
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SEC Disclosure
. Following the execution and delivery of this Agreement, the Company shall file a Current Report on Form 8-K and a William J. Pulte shall file an amendment to his Schedule 13D, each reporting entry into this Agreement. The relevant disclosure in such filings shall be consistent with the Press Release and the terms of this Agreement, and shall each be in form and substance reasonably acceptable to the Company and the Pulte Parties.
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12.
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Representations and Warranties of the Company
. The Company represents and warrants to the Pulte Parties that: (a) the Company has the requisite corporate power and authority to execute this Agreement and any other documents or agreements to be entered into in connection with this Agreement and to bind it hereto and thereto; (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles; and (c) the execution, delivery and performance of this Agreement by the Company does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to the Company or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound.
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13.
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Representations and Warranties of Pulte Parties
. Each of the Pulte Parties, severally but not jointly, represents and warrants to the Company that: (a) each Pulte Party and the authorized signatory of such Pulte Party set forth on the signature page hereto has the requisite power and authority to execute this Agreement and any other documents or agreements to be entered into in connection with this Agreement and to bind it hereto and thereto; (b) this Agreement has been duly authorized, executed and delivered by such Pulte Party, constitutes a valid and binding obligation and agreement of such Pulte Party and is enforceable against such Pulte Party in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles; (c) the execution, delivery and performance of this Agreement by such Pulte Party does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to Pulte or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such Pulte Party is a party or
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by which it is bound; and (d) as of the date of this Agreement, (i) the Pulte Parties beneficially own in the aggregate 30,740,239 Company common shares, (ii) except as disclosed in writing by the Pulte Parties to the Company immediately prior to the execution of this Agreement or has otherwise been publicly disclosed in the Schedule 13D, as amended, filed by William J. Pulte with the SEC prior to the date hereof, the Pulte Parties have no other equity interest in, or rights or securities to acquire through exercise, conversion or otherwise, any equity interest in the Company; (iii) except as disclosed in writing by the Pulte Parties to the Company immediately prior to the execution of this Agreement or has otherwise been publicly disclosed in the Schedule 13D, as amended, filed by William J. Pulte with the SEC prior to the date hereof, no Pulte Party is a party to any swap or hedging transactions or other derivative agreements of any nature with respect to any Company common shares and (iv) to the knowledge of the Pulte Parties, other than the Pulte Parties, Mark Pulte and possibly Carolyn Pulte, no member of the Family Unit of William J. Pulte, the founder of the Company, beneficially owns more than 1,000,000 Company common shares.
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14.
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Certain Defined Terms
. As used in this Agreement: (a) “
Person
” shall be interpreted broadly to include, without limitation, any individual, general or limited partnership, corporation, limited liability or unlimited liability company, joint venture, estate, trust, group,
association
or other entity of any kind or structure; (b) “
Affiliate
” shall have the meaning set forth in Rule 12b-2 under the Exchange Act, shall include Persons who are part of any “group” with such Person or who become Affiliates of any Person subsequent to the date of this Agreement and, if such Person is an individual, any member of the Family Unit of such individual and any trust whose principal beneficiary is such individual or one or more members of the Family Unit of such individual and any Person who is controlled by any such member or trust and any Persons who become Affiliates of any member of a Family Unit subsequent to the date of this Agreement and shall additionally include all members of the Family Unit of William J. Pulte, the founder of the Company; (c) “
beneficially own
,” “
beneficially owned
” and “
beneficial ownership
” shall each have the meaning set forth in Rules 13d-3 and 13d-5(b)(1) under the Exchange Act;
provided
that, with respect to Company common shares, a Person shall additionally be deemed to be the beneficial owner of (i) all Company common shares which such Person has the right to acquire (whether or not subject to the passage of time or other contingencies) pursuant to the exercise of any rights in connection with any securities or any agreement, arrangement or understanding, whether written or oral and (ii) any other economic exposure to the Company common shares, including through any swap or other derivative transaction that gives a Person the economic equivalent of ownership of Company common shares (including, without limitation, notional principal amount derivative agreements in the form of cash-settled swaps); (d) “
business day
” shall mean any day other than a Saturday, Sunday or a day on which the Federal Reserve Bank of New York is closed; (e) “
Expiration Date
” shall mean the later of (i) the date that is thirty (30) days prior to the deadline for the submission of shareholder nominations for directors for the 2018 Annual Meeting of Shareholders pursuant to the Bylaws and (ii) ten (10) business days following the date on which Mr. Pulte (or his replacement appointed pursuant to Paragraph 2) no longer serves as a member of the Board; (f) “
Extraordinary Transaction
” shall mean any tender offer, exchange offer, merger, consolidation, acquisition, business combination, sale of a division, sale of substantially all assets, recapitalization, restructuring, liquidation, dissolution or other similar extraordinary transaction, in each case outside the ordinary course of business and involving the Company or any of its direct or indirect subsidiaries or its or their securities or assets; (g) “
Family Unit
” means as to any individual, such individual’s descendants (whether natural or adopted), such individual’s spouse, such individual’s spouse’s descendants (whether
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natural or adopted), or any trust, limited partnership, limited liability company or other entity established for the primary benefit of any of the foregoing persons (whether natural or adopted) for estate planning purposes; (h) “
group
” shall have the meaning set forth in Section 13(d) of the Exchange Act; and (i) “
Third Party
” means any Person other than a Party.
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15.
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Affiliates
. Each of the Pulte Parties agrees that it (a) shall use its reasonable efforts to cause its respective Affiliates to comply with the terms of this Agreement and (b) shall not cause or direct, or attempt to cause or direct, any Person, including any of its Affiliates and its and their respective principals, directors, general partners, managing members, managers, officers, employees, agents and representatives, to take any action that would be in breach or deemed breach of this Agreement if taken by such Pulte Party or any of its Affiliates. The Company agrees that it (a) shall cause its subsidiaries to comply with the terms of this Agreement and (b) shall not cause or direct, or attempt to cause or direct, any Person, including any of its Affiliates and its and their respective principals, directors, general partners, managing members, managers, officers, employees, agents and representatives, to take any action that would be in breach or deemed breach of this Agreement if taken by such the Company or any of its Affiliates.
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16.
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Specific Performance
. Each of the Pulte Parties, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other Party may occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that such injury would not be adequately compensable by the remedies available at law (including the payment of money damages). It is accordingly agreed that Pulte, on the one hand, and the Company, on the other hand (as applicable, the “
Moving Party
”), shall each be entitled to specific enforcement of, and injunctive relief to prevent any violation of, the terms hereof, and the other Party shall not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity. This Paragraph 16 is not the exclusive remedy for any violation of this Agreement.
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17.
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Expenses
. Each Party shall be responsible for its own fees and expenses incurred in connection with the negotiation, execution, delivery and effectuation of this Agreement and the transactions contemplated hereby.
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18.
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Severability
. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the other provisions of this Agreement shall remain in full force and effect. The Parties further agree to use their best efforts to agree upon and replace such invalid, void or unenforceable provision with a valid and enforceable provision that will achieve, to the extent possible, the purposes of such invalid, void or unenforceable provision.
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19.
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Notices
. Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement shall be in writing and shall be deemed to have been delivered: (a) upon delivery, when delivered personally; (b) upon sending, when sent by facsimile or electronic mail (provided confirmation of transmission is mechanically or electronically generated and retained by the sending party); or (c) one business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the Party to receive the same as follows:
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If to the Company:
PulteGroup, Inc.
3350 Peachtree Road NE, Suite 150
Atlanta, Georgia 30326
Facsimile No: (404) 978-6774
Email Address: Steve.Cook@PulteGroup.com
Attention: Steven M. Cook, Executive Vice President, Chief Legal Officer and Corporate Secretary
with a copy (which shall not constitute notice) to:
Sidley Austin LLP
One South Dearborn
Chicago, Illinois 60603
Facsimile No: (312) 853-7036
Email Address: tcole@sidley.com
swilliams@sidley.com
Attention: Thomas A. Cole
Scott R. Williams
If to the Pulte Parties:
William J. Pulte (Mr. Pulte, as defined herein)
[REDACTED]
Email Address: [REDACTED]
William J. Pulte (the founder of the Company)
[REDACTED]
with a copy (which shall not constitute notice) to:
Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, NY 10019
Facsimile No: (212) 451-2222
Email Address: SWolosky@olshanlaw.com
ACrawford@olshanlaw.com
Attention: Steven Wolosky
Aneliya Crawford
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20.
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Governing Law
. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Michigan without reference to the conflict of laws principles thereof that would result in the application of the laws of another jurisdiction. Each
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of the Parties irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by any of the other Parties or its successors or assigns, shall be brought and determined exclusively in any Court in the State of Michigan and any appellate court therefrom. Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction and venue of the aforesaid courts and agrees that it will not bring any action relating to this Agreement in any court other than the aforesaid courts. Each of the Parties hereby irrevocably waives, and agrees not to assert in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the aforesaid courts for any reason, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by applicable legal requirements, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
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21.
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Counterparts: Headings
. This Agreement may be executed in two or more counterparts, each of which shall be considered one and the same agreement and shall become effective when counterparts have been executed by each of the Parties and delivered to the other Party (including by means of electronic delivery or facsimile). The paragraph headings contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.
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22.
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Entire Agreement; Amendment and Waiver; Cumulative Remedies; Successors and Assigns; Third Party Beneficiaries; Waiver of Jury Trial
. This Agreement is the only agreement and contains the entire understanding of the Parties with respect to its subject matter and supersedes any prior agreements (including any confidentiality agreements previously entered into by the Parties), understandings, negotiations and discussions, whether oral or written, with respect thereto. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings between the Parties with respect to the subject matter of this Agreement other than those expressly set forth herein. No amendments, modifications, supplements or waivers of any provisions of this Agreement can be made except in writing signed by an authorized representative of each the Parties affected thereby. Any waiver by any Party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. No failure on the part of any Party to exercise or enforce, and no delay in exercising or enforcing, any right, obligation, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise or enforcement of such right, obligation, power or remedy by such Party preclude any other or further exercise or enforcement thereof or the exercise or enforcement of any other right, obligation, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law. The terms and conditions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors, heirs, executors, legal representatives and permitted assigns. No Party shall assign this Agreement or any rights or obligations hereunder without, with respect to any Pulte Party, the prior written consent of
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the Company, and, with respect to the Company, the prior written consent of the Pulte Parties. Any purported assignment of this Agreement or any rights or obligations hereunder without such respective consent shall be void. This Agreement is solely for the benefit of the Parties and is not enforceable by any other Persons. Each of the Parties, after consulting or having had the opportunity to consult with counsel, knowingly, voluntarily and intentionally waives any right that such Party may have had or have to a trial by jury in any litigation based on or arising out of this Agreement or any related instrument or agreement, or any of the transactions contemplated thereby, or any related course of conduct, dealing, statements (whether oral or written) or actions of any of them. No Party shall seek to consolidate, by counterclaim or otherwise, any action in which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived.
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23.
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Interpretation
. Each of the Parties acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution and delivery of this Agreement and that it has executed this Agreement with the advice of such counsel. Each Party and its counsel cooperated and participated in the drafting and preparation of this Agreement, and any and all drafts relating thereto exchanged among the Parties shall be deemed the work product of all of the Parties and may not be construed against any Party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any Party that drafted or prepared it is of no application and is hereby expressly waived by each of the Parties, and any controversy over interpretations of this Agreement shall be decided without regard to events of drafting or preparation.
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[
Signature page follows
.]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the Parties as of the date hereof.
PULTEGROUP, INC.
By:
/s/ Richard J. Dugas, Jr.
Name: Richard J. Dugas, Jr.
Title: Chairman and Chief Executive Officer
WILLIAM J. PULTE (Mr. Pulte, as defined herein)
/s/ William J. Pulte
WILLIAM J. PULTE (the founder of the Company)
/s/ William J. Pulte
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WILLIAM J. PULTE TRUST DTD 01/26/90
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By:
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/s/ William J. Pulte
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Name:
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William J. Pulte
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Title:
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Trustee
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JOAN B. PULTE TRUST DTD 01/26/90
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By:
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/s/ William J. Pulte
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Name:
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William J. Pulte
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Title:
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Trustee
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Exhibit A
Press Release
See attached.
TRANSITION AGREEMENT
This Transition Agreement (the “
Agreement
”) is entered into on this 8
th
day of September, 2016, by and between PulteGroup, Inc., a Michigan corporation, and Richard J. Dugas, Jr. (the “
Executive
”). Unless the context indicates otherwise, the term “
Company
” means and includes PulteGroup, Inc., its successors, assigns, parents, subsidiaries, divisions and/or affiliates (whether incorporated or unincorporated), all of its related entities, and all of the past and present directors, officers, trustees, agents and employees of each.
WHEREAS,
the Executive currently serves as the Chairman and Chief Executive Officer of the Company and a member of its Board of Directors (the “
Board
”) and as a director and officer of certain subsidiaries and affiliates of the Company; and
WHEREAS,
the Company and the Executive desire to set forth herein their mutual agreement with respect to all matters relating to Executive’s retirement from the position of Chief Executive Officer of the Company and the Executive’s continued service as Executive Chairman of the Company.
NOW, THEREFORE,
in consideration of the mutual promises and agreements contained herein, the adequacy and sufficiency of which are hereby acknowledged, the Company and the Executive hereby agree as follows:
1.
Transition
.
(a)
Transition Period
. The Executive shall continue in his current positions of Chairman and Chief Executive Officer of the Company and as a director and officer of certain subsidiaries and affiliates of the Company through the appointment of the Executive’s successor to the position of Chief Executive Officer
(the “
Transition Date
”). On the Transition Date, the Executive shall relinquish the duties of Chief Executive Officer of the Company and any positions held by the Executive in any subsidiaries or affiliates of the Company other than his position as a director of the Company. Executive shall serve as the Company’s Executive Chairman and as a director of the Company until the Company’s 2017 annual meeting of shareholders (the “
Separation Date
”). The Company and Executive agree that, while serving as the Company’s Executive Chairman, the Executive shall remain an employee of the Company.
(b)
Transition Services
. During the period between the Transition Date and the Separation Date, the Executive shall hold the position of Executive Chairman and shall perform such duties as are customarily associated with such position and shall also perform such other duties as may be reasonably requested by the Company’s Chief Executive Officer and/or Board, which other duties may include, but not be limited to consulting with, and providing transition advice to, Executive’s successor upon request of Executive’s successor.
2.
Compensation and Benefits
.
(a)
General
. Subject to the Executive’s execution, non-revocation and compliance with this Agreement and Executive’s continued employment from the date of this Agreement through the Separation Date, the Executive shall continue to receive through the Separation Date compensation and benefits at the levels he receives as of the date of this Agreement provided that it is understood that (i)
Executive’s annual base salary for this period shall be $1,200,000, (ii) Executive shall remain eligible to receive the amount earned, if any, for the 2014-2016 performance cycle granted pursuant to the Company’s Long-Term Incentive Program (“
LTI Program
”) under the Company’s 2013 Senior Management Incentive Plan (“
Incentive Plan
”), with such amount determined based on the Company’s actual performance during the 2014-2016 performance cycle, and (iii) to the extent that the Compensation Committee of the Board (the “
Compensation Committee
”) grants restricted shares or restricted share units to the Company’s “named executive officers” (as determined based on the Company’s definitive proxy statement filed in connection with the Company’s 2016 annual meeting of shareholders), the Executive shall be entitled to a grant of restricted shares or restricted share units having a grant date fair market value consistent with the Company’s past practices, with the form of award consistent with the Company’s standard form of award agreement but cliff-vesting in February 2020 notwithstanding the continued service-based vesting requirements set forth in the Company’s standard form of award agreement.
(b)
Benefits Subject to Supplemental Release
. Subject to the terms of this Agreement, the Executive’s continued employment from the date of this Agreement through the Separation Date and provided that Executive signs and returns this Agreement to the Company within
21 days after Executive’s receipt thereof and signs and returns to the Company the Supplemental Release attached as Exhibit A to this Agreement (the
“Supplemental Release
”) within 21 days after (but not before) the Separation Date, and does not revoke this Agreement or the Supplemental Release in accordance with
Section 9
below or
Section 1
of the Supplemental Release, Executive shall receive (i) Executive’s 2016 annual bonus, if any, granted under the Incentive Plan, the payment of which shall be dependent on the attainment of the performance goals established by the Compensation Committee for 2016 and payable no later than March 15, 2017, (ii) Executive’s 2017 annual bonus, if any, granted under the Incentive Plan, which shall be granted with a target opportunity consistent with the 2016 bonus opportunity granted to Executive and prorated for the period of service during 2017 in which Executive serves as Chairman, with the payment, if any, dependent on the attainment of the performance goals established by the Compensation Committee for 2017 and payable no later than March 15, 2018, (iii) Executive shall remain eligible to receive the prorated amounts earned, if any, for the 2015-2017 and 2016-2018 performance cycles granted pursuant to the LTIP Program under the Incentive Plan, with such amounts determined based on the Company’s actual performance during the applicable performance cycles and prorated for the period of service during the performance period in which Executive was employed by the Company, and (iv) any restricted share or restricted share unit awards that remain outstanding as of the Separation Date shall continue to vest in accordance with the service-based vesting schedule set forth in the award agreements. Notwithstanding the foregoing, if the Supplemental Release does not become effective, the Executive shall promptly return (but in any event no later than 60 days following the Separation Date), the gross amount of the 2016 annual bonus to the Company and the Executive hereby agrees that the Company may deduct any portion of the 2016 annual bonus that remains unpaid from any amounts due from the Company to the Executive to the maximum extent permitted by applicable law.
(c)
No Other Compensation or Benefits
. Other than the amounts specifically described in this Agreement, Executive agrees that Executive shall receive no other compensation for services to the Company. For the avoidance of doubt, Executive shall not be eligible to receive a 2017-2019 performance cycle grant under the LTI Program or be eligible to receive benefits under the PulteGroup, Inc. Executive Severance Policy or the PulteGroup, Inc. Retirement Policy.
3.
Company Property; Expenses
. From the Transition Date through the Separation Date, the Company will provide an office and secretarial support for Executive as needed. On or prior to the Separation Date, Executive shall return to the Company all documents and other property belonging to the Company, including items such as keys, phone, credit cards, and computers or other devices which
have not already been returned by Executive and receipt acknowledged by the Company. Executive agrees not to make or retain any copies, electronic or otherwise, of the Company’s confidential information, as defined below. Executive also agrees to complete the Protection of Electronic Company Information Certification Form (attached) within five days of the Separation Date.
The parties agree that the Company’s obligation to pay the benefits set forth in
Section 2
is contingent upon Executive timely returning all property and signing the Protection of Electronic Company Information Certification Form (attached). Executive agrees to submit any claim for reimbursable expenses within five days of the Separation Date or Executive waives any claim for expenses.
4.
Cooperation in Investigations and Litigation
. In the event the Company becomes involved in investigations, audits or inquiries, tax examinations or legal proceedings of any nature, related directly or indirectly to events which occurred during Executive’s employment and about which Executive has personal knowledge, Executive agrees that Executive shall, at any future time, be available upon reasonable notice from the Company, with or without subpoena, to answer discovery requests, give depositions, or testify, with respect to matters of which Executive has or may have knowledge as a result of or in connection with Executive’s employment relationship with the Company. In performing Executive’s obligations under this
Section 4
to testify or otherwise provide information, Executive agrees that Executive shall truthfully, forthrightly, and completely provide the information requested. Executive further agrees that Executive shall not be compensated in any way by the Company for Executive’s cooperation with the Company in connection with any litigation or other activity covered by this
Section 4
except that Executive shall be reimbursed as permitted by law for any reasonable expenses that Executive incurs in providing testimony or other assistance to the Company under this
Section 4
. If Executive is (i) specifically made aware of any non-public proceedings or non-public matters related to the Company, (ii) requested in writing by a third party to provide non-public information regarding the Company, or (iii) called by a third party as a witness to testify in any matter related to the Company, Executive shall promptly notify the Company to give it a reasonable opportunity to respond;
provided
,
however
, that nothing in this section
is intended, or shall be construed, to limit Executive’s ability to initiate communications directly with, or to respond to any inquiry from, or provide testimony before, the SEC, FINRA, any other self-regulatory organization or any other state or federal regulatory authority.
5.
Non-Competition and Non-Solicitation
. Executive acknowledges and agrees that during Executive’s employment by the Company and for two (2) years after the Separation Date, Executive will not accept employment with, or become an independent contractor to, or consult or perform services for, any person or entity that engages in new home construction (directly or indirectly) in competition with the Company without prior written consent of the Company. Executive further agrees that for two (2) years after the Separation Date, Executive will not, directly or indirectly, at any time: (i) solicit, attempt to hire, or facilitate in any way the hiring of any person who is then employed by or is a consultant to Company, or who was employed by or was a consultant to Company at any time during the twelve months before the Separation Date; (ii) encourage any such person to terminate his or her employment or consultation with Company; or (iii) solicit any person or entity that within the year before the date of such solicitation, was a customer of Company, or whose identity Executive learned by virtue of Executive’s employment with Company, to perform or provide home-building services or products for such customer of a substantially similar nature to those services performed or products provided by Company to its customers during the term of Executive’s employment.
Executive agrees that these post-employment covenants are reasonable and will not unreasonably interfere with Executive’s ability to earn a living. The parties desire to give effect to the provisions set forth in the Non-Competition, Non-Solicitation and confidentiality sections set forth herein to the full extent allowed by law and in the event any court or arbitrator determines that the above-stated restrictions are unlawful or
unenforceable, said court or arbitrator shall be requested by Executive and the Company to recast such restrictions to the maximum extent enforceable. The parties agree that a violation of these provisions shall result in irreparable harm and that should Executive violate them, the Company shall be entitled to immediate and permanent injunctive relief in Oakland County Circuit Court or the United States District Court for the Eastern District of Michigan without needing to post a bond. Additionally, the provisions of this Agreement shall be binding upon Executive and Executive’s heirs, executors, administrators and other legal representatives.
6.
Non-disparagement
. Executive shall not disparage the Company, its agents or employees in any manner during or following Executive’s employment with the Company. Executive shall not publish, communicate, post or blog disparaging or confidential information about the Company.
7.
Indemnification
. Nothing in this Agreement is intended to affect any obligation the Company may have under applicable law or its governing documents to indemnify Executive.
8.
Confidentiality
. Executive shall maintain for all time as confidential, and shall not directly or indirectly use and/or disclose in any manner, any of the following types of information of the Company: any information that is not generally known in the trade and industry and that the Company considers to be of a confidential or proprietary nature including but not limited to all research and work related to the execution of treasury and financial strategies, reporting and planning, compliance, financial analysis and associated financial information, value creation and other initiatives such as business methodologies, business plans (including land), pricing, customers, marketing, sales methods, information systems, consultants, vendors, products, personnel information, attorney/client communication and/or trade secrets;
provided
,
however
, nothing contained in this Agreement shall be construed, to limit Executive’s ability to initiate communications directly with, or to respond to any inquiry from, or provide testimony before, the SEC, FINRA, any other self-regulatory organization or any other state or federal regulatory authority.
Executive agrees that, upon request by the Company, for a period of two years following the termination of Executive’s employment, Executive shall promptly and fully respond to reasonable inquiries about the identity of Executive’s subsequent employer or consulting relationship, including the identity of the employer or contractor, description of job duties, work location, reporting relationships, and any other information necessary to assess Executive’s compliance with the Non-Competition, Non-Solicitation and confidentiality provisions in this Agreement, as well as reasonably cooperate in any investigations regarding Executive’s possession and/or use of confidential information or trade secrets. The Company shall maintain for all time any information provided by Executive as confidential, and shall not directly or indirectly use and/or disclose in any manner the information obtained from Executive to satisfy Company’s request.
Executive agrees that the Company shall be entitled to an immediate temporary restraining order or injunction for a violation of the Non-Competition, Non-Solicitation or the confidentiality provisions set forth herein.
Nothing in this Agreement is intended to discourage Executive from reporting any theft of trade secrets to the appropriate government official pursuant to the Defend Trade Secrets Act of 2016 (“DTSA”) or other applicable state or federal law. Additionally, under the DTSA,
a trade secret may be disclosed to report a suspected violation of law and/or in an anti-retaliation lawsuit, as follows : (1) An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that: (A) is made (i) in confidence to a Federal, State, or local government
official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. (2) An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual: (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.
Nothing in this Agreement shall limit, curtail or diminish the Company’s statutory rights under the DTSA, any applicable state law regarding trade secrets or common law
9.
Release
. Except as specifically set forth above, in consideration of the benefits set forth in
Section 2
, Executive waives all rights and claims Executive may have for any personal or monetary relief including salary, bonus, deferred compensation, severance pay, equity, commissions or other employee benefits or compensation arising from Executive’s employment with the Company, or the termination of Executive’s employment with the Company. Nothing in this Agreement shall be construed as an admission of any liability by the Company.
In exchange for and in consideration of all the benefits set forth in
Section 2
, Executive hereby fully and forever releases the Company from any and all actions or claims for personal or monetary relief by Executive, known or unknown, foreseen or unforeseen, arising out of Executive’s employment with the Company or the termination of Executive’s employment with the Company, including, but not limited to, any claims and actions for or in tort, contract, discrimination, wrongful discharge, and/or arising under Title VII of the Civil Rights Act of 1964, the Older Workers Benefits Protection Act, the Age Discrimination in Employment Act of 1967 (as amended), the Americans with Disabilities Act, the Worker Adjustment and Retraining Notification Act, and any other federal, state, or local statutes, law or rules, or any types of damages, wages, costs, or relief otherwise available to Executive. Executive agrees that, except as set forth herein, Executive is giving up the right to pursue any administrative and legal claims against the Company. This provision does not release claims for: (a) compensation for illness or injury or medical expenses under any workers’ compensation statute; (b) health benefits under any law or policy or plan currently maintained by the Company that provides for health insurance continuation or conversion rights; or (c) any claim that cannot be waived or released by private agreement.
Nothing in this Agreement shall be construed to prohibit Executive from filing a charge with or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission, National Labor Relations Board, or comparable state or local agency. Notwithstanding the foregoing paragraph, Executive agrees to waive any right to recover monetary damages in any charge, complaint or lawsuit against the Company filed by Executive or by anyone else on Executive’s behalf.
In exchange for and in consideration of all the benefits set forth in
Section 2(b)
, Executive hereby fully and forever releases the Company (as well as the fiduciaries and administrators of any employee benefit plans (the “
Plans
”) sponsored by the Company), from any and all actions or claims for personal or monetary relief by Executive, known or unknown, foreseen or unforeseen, that stem from or are related to the administration of the Plans and arising under ERISA, 29 U.S.C. §§ 1001-1461. Executive agrees that this release of claims specifically includes any and all claims that might be brought in an individual or derivative capacity on behalf of the Plans under 29 U.S.C. §§ 1132(a)(2), as well as any claims for “other appropriate equitable relief” under 29 U.S.C. §§ 1132(a)(3). This release does not apply to any claims under 29 U.S.C. §§ 1132(a)(1)(B) for benefits accrued under any Plan but unpaid as
of the date of this Agreement, which remain subject to and governed by the terms and conditions of the Plans.
Executive also agrees that: (a) Executive has been properly paid for all hours worked; (b) Executive has not suffered any on the job injury for which Executive has not already filed a claim; and (c) Executive has been properly provided any leaves of absence because of Executive’s health condition or a family member’s health condition.
Executive has twenty-one (21) days from the date Executive receives this Agreement to consider whether to sign this Agreement. In the event Executive signs this Agreement, Executive has an additional period of seven (7) days from the execution date in which to revoke this Agreement in writing. This Agreement does not become effective or enforceable until this revocation period has expired. No payments will be made to Executive or on Executive’s behalf under this Agreement until this revocation period has expired or, if applicable, the revocation period set forth in the Supplemental Release has expired. Executive is advised to consult an attorney prior to executing this Agreement or the Supplemental Release. Except as provided for in the Supplemental Release, Executive understands that Executive is not waiving any claims that arise in the future. Executive acknowledges that the consideration paid pursuant to this Agreement is more than Executive would have otherwise been legally entitled to receive and that such consideration is adequate consideration for the agreements and covenants contained herein.
Executive understands that nothing in this Agreement is intended to interfere with or deter (i) Executive’s right to challenge the above waiver of an Age Discrimination in Employment Act of 1967 (as amended) (“
ADEA
”) claim or state law age discrimination claim as not knowing or voluntary, or (ii) Executive’s right to file an ADEA charge or ADEA complaint or state law age discrimination complaint or charge with the Equal Employment Opportunity Commission or any state discrimination agency or commission as a result of the above release not being knowing or voluntary, or (iii) Executive’s right to participate in any investigation or proceeding conducted by those agencies. Further, Executive understands that (x) nothing in this Agreement would require Executive to tender back the money received under this Agreement if Executive seeks to challenge the validity of the above ADEA or state law age discrimination waiver, (y) Executive does not agree to ratify any ADEA or state law age discrimination waiver that fails to comply with the Older Workers Benefit Protection Act (“
OWBPA
”) by retaining the money received under this Agreement, and (z) nothing in this Agreement is intended to require the payment of damages, attorneys’ fees or costs to the Company should Executive challenge the waiver of an ADEA or state law age discrimination claim or file an ADEA or state law age discrimination claim, except as authorized by federal or state law.
10.
Miscellaneous
.
(a)
Assignment
. Neither the Company nor the Executive may assign this Agreement, except that the Company’s obligations hereunder shall be binding legal obligations of any successor to all or substantially all of the Company’s business by purchase, merger, consolidation, or otherwise, and the Company will require any such successor to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
(b)
Executive Assignment
. Executive represents and warrants that Executive has the sole right and exclusive authority to execute this Agreement and the Supplemental Release; that Executive has not sold, signed, transferred, conveyed or otherwise disposed of any claim or demand relating to any matter covered in this Agreement; that the provisions of this Agreement shall be binding upon Executive
and Executive’s heirs, executors, administrators and other legal representatives; that Executive has not relied upon any promise or representation that is not contained within this Agreement; and that the obligations imposed upon Executive in this Agreement shall not prevent Executive from earning a satisfactory livelihood. If any provision of this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall be carried out as if any such invalid or unenforceable provision were not contained herein.
(c)
Entire Agreement
. This Agreement contains the entire understanding between the Company and Executive relating to the subject matter hereof and supersedes any contrary provision in any other document, including any prior employment agreement, offer letter or memorandum of understanding between Executive and the Company, whether written or oral.
(d)
Applicable Law
. This Agreement shall be construed and interpreted pursuant to the internal laws of the State of Michigan, without regard to principles of conflicts of laws. The terms and exclusions of the Company’s Alternative Dispute Resolution Policy apply to any and all disputes under this Agreement.
(e)
Benefits Unfunded
. All rights of Executive and his spouse or any other beneficiary under this Agreement shall at all times be entirely unfunded and no provision shall at any time be made with respect to segregating any assets of the Executive for payment of any amounts due hereunder, and neither the Executive nor his spouse or any other beneficiary shall have any interest in or rights against any specific assets of the Company, and the Executive and his spouse or any other beneficiary shall have only the rights of a general unsecured creditor of the Company.
(f)
Waiver
. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of any other provisions or conditions at the same time or at any prior or subsequent time.
(g)
Section 409A Compliance
. This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “
Code
”), and shall be interpreted and construed consistently with such intent. The payments to Executive pursuant to this Agreement are also intended to be exempt from Section 409A of the Code to the maximum extent possible, under either the separation pay exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii) or as short-term deferrals pursuant to Treasury regulation §1.409A-1(b)(4), and for this purpose each payment shall be considered a separate payment. Any payment hereunder that is treated as deferred compensation subject to Section 409A shall be paid in compliance with Section 409A and shall not be deferred or accelerated in violation of Section 409A. In the event that the terms of this Agreement would subject Executive to taxes or penalties under Section 409A of the Code (“
409A Penalties
”), the Company and Executive shall cooperate diligently to amend the terms of this Agreement to avoid such 409A Penalties, to the extent possible; provided that in no event shall the Company be responsible for any 409A Penalties that arise in connection with any amounts payable under this Agreement. Notwithstanding anything herein to the contrary, the Company and Executive agree that the services to be provided by Executive pursuant to this Agreement are expected to exceed more than 20% of the average level of services performed by the Executive for the Company and its affiliated “service recipients” (within the meaning of Treasury regulation §1.409A-1(h)(3)) over the immediately preceding 36-month period. Notwithstanding any other provision in this Agreement, if Executive is a “specified employee,” as defined in Section 409A of the Code, as of the date of Executive’s separation from service (within the meaning of Section 409A of the Code), then to the extent any amount payable under this Agreement (i) constitutes the
payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, (ii) is payable upon Executive’s separation from service and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of Executive’s separation from service, such payment shall not be made to Executive until the earlier of the six month anniversary of Executive’s separation from service or Executive’s death and will be accumulated and paid on the first day of the seventh month following the date of separation from service. In addition, each payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, which is conditioned upon Executive’s execution of a release and which is to be paid or provided during a designated period that begins in one taxable year and ends in a second taxable year, shall be paid or provided in the later of the two taxable years. Any reimbursement payable to Executive pursuant to this Agreement or otherwise shall be conditioned on the submission by Executive of all expense reports reasonably required by the Company under any applicable expense reimbursement policy, and shall be paid to Executive within 30 days following receipt of such expense reports, but in no event later than the last day of the calendar year following the calendar year in which Executive incurred the reimbursable expense. Any amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be provided, during any other calendar year. The right to any reimbursement or in-kind benefit pursuant to this Agreement or otherwise shall not be subject to liquidation or exchange for any other benefit.
(h)
Amendment
. No amendment or modification of the terms of this Agreement shall be binding upon either of the parties hereto unless reduced to writing and signed by each of the parties hereto.
(i)
Counterparts
. This Agreement may be executed in counterparts, each of which shall be deemed an original.
(j)
Successors
. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, representatives and successors.
(k)
Notices
. Notices required under this Agreement shall be in writing and sent by registered U.S. mail, return receipt requested, and email to the following addresses or to such other address as the party being notified may have previously furnished to the other by written notice:
If to the Company:
PulteGroup, Inc.
Attention: Executive Vice President, Chief Legal Officer
3350 Peachtree Road NE, Suite 150
Atlanta, Georgia 30326
If to Executive:
At the most recent address on file with the Company
(l)
Headings
. The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement.
IN WITNESS WHEREOF
, Executive has hereunto set his hand, and the Company has caused these presents to be executed in its name on its behalf, all as of the date first above written.
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PulteGroup, Inc.
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By:
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/s/ Patrick J. O’Leary
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Patrick J. O’Leary
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Title:
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Chairman of the Compensation and Management Development
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Committee of the Board of Directors
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/s/ Richard J. Dugas, Jr.
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Richard J. Dugas, Jr.
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EXHIBIT A
SUPPLEMENTAL RELEASE
Richard J. Dugas, Jr. (“
Executive
”) and PulteGroup, Inc., a Michigan corporation, hereby enter into this Supplemental Release (“
Release
”) in accordance with the Transition Agreement between PulteGroup, Inc. and the Executive, dated as of September 8, 2016 (the “
Agreement
”). The term “
Company
” means and includes PulteGroup, Inc., its successors, assigns, parents, subsidiaries, divisions and/or affiliates (whether incorporated or unincorporated), all of its related entities, and all of the past and present directors, officers, trustees, agents and employees of each.
Capitalized terms not expressly defined in this Release shall have the meanings set forth in the Agreement:
1.
In exchange for and in consideration of all the benefits set forth in
Section 2(b)
, Executive hereby fully and forever releases the Company from any and all actions or claims for personal or monetary relief by Executive, known or unknown, foreseen or unforeseen, arising out of Executive’s employment with the Company or the termination of Executive’s employment with the Company, including, but not limited to, any claims and actions for or in tort, contract, discrimination, wrongful discharge, and/or arising under Title VII of the Civil Rights Act of 1964, the Older Workers Benefits Protection Act, the Age Discrimination in Employment Act of 1967 (as amended), the Americans with Disabilities Act, the Worker Adjustment and Retraining Notification Act, and any other federal, state, or local statutes, law or rules, or any types of damages, wages, costs, or relief otherwise available to Executive. Executive agrees that, except as set forth herein, Executive is giving up the right to pursue any administrative and legal claims against the Company. This provision does not release claims for: a) compensation for illness or injury or medical expenses under any workers’ compensation statute; b) health benefits under any law or policy or plan currently maintained by the Company that provides for health insurance continuation or conversion rights; or c) any claim that cannot be waived or released by private agreement.
Nothing in this Release shall be construed to prohibit Executive from filing a charge with or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission, National Labor Relations Board, or comparable state or local agency. Notwithstanding the foregoing paragraph, Executive agrees to waive any right to recover monetary damages in any charge, complaint or lawsuit against the Company filed by Executive or by anyone else on Executive’s behalf.
In exchange for and in consideration of all the benefits set forth in
Section 2(b)
, Executive hereby fully and forever releases the Company (as well as the fiduciaries and administrators of any employee benefit plans (the “
Plans
”) sponsored by the Company), from any and all actions or claims for personal or monetary relief by Executive, known or unknown, foreseen or unforeseen, that stem from or are related to the administration of the Plans and arising under ERISA, 29 U.S.C. §§ 1001-1461. Executive agrees that this release of claims specifically includes any and all claims that might be brought in an individual or derivative capacity on behalf of the Plans under 29 U.S.C. §§ 1132(a)(2), as well as any claims for “other appropriate equitable relief” under 29 U.S.C. §§ 1132(a)(3). This release does not apply to any claims under 29 U.S.C. §§ 1132(a)(1)(B) for benefits accrued under any Plan but unpaid as of the date of this Agreement, which remain subject to and governed by the terms and conditions of the Plans.
Executive also agrees that: (a) Executive has been properly paid for all hours worked; (b) Executive has not suffered any on the job injury for which Executive have not already filed a claim; and
(c) Executive has been properly provided any leaves of absence because of Executive’s health condition or a family member’s health condition.
Executive has twenty-one (21) days from the Separation Date to consider whether to sign this Release. In the event Executive signs this Release, Executive has an additional period of seven (7) days from the execution date in which to revoke this Release in writing. This Release does not become effective or enforceable until this revocation period has expired. Except with respect to the payment, if any, of the 2016 annual bonus, no payments will be made to Executive or on Executive’s behalf under
Section 2(b)
of the Agreement until this revocation period has expired. If the Supplemental Release does not become effective, the Executive shall promptly return (but in any event no later than 60 days following the Separation Date), the gross amount of the 2016 annual bonus to the Company and the Executive hereby agrees that the Company may deduct any portion of the 2016 annual bonus that remains unpaid from any amounts due from the Company to the Executive to the maximum extent permitted by applicable law. Executive is advised to consult an attorney prior to executing this Release. Executive understands that Executive is not waiving any claims that arise in the future. Executive acknowledges that the consideration paid pursuant to the Agreement is more than Executive would have otherwise been legally entitled to receive and that such consideration is adequate consideration for the agreements and covenants contained herein.
Executive understands that nothing in this Release is intended to interfere with or deter (i) Executive’s right to challenge the above waiver of an Age Discrimination in Employment Act of 1967 (as amended) (“
ADEA
”) claim or state law age discrimination claim as not knowing or voluntary, or (ii) Executive’s right to file an ADEA charge or ADEA complaint or state law age discrimination complaint or charge with the Equal Employment Opportunity Commission or any state discrimination agency or commission as a result of the above release not being knowing or voluntary, or (iii) Executive’s right to participate in any investigation or proceeding conducted by those agencies. Further, Executive understands that (x) nothing in this Release would require Executive to tender back the money received under the Agreement if Executive seeks to challenge the validity of the above ADEA or state law age discrimination waiver, (y) Executive does not agree to ratify any ADEA or state law age discrimination waiver that fails to comply with the Older Workers Benefit Protection Act (“
OWBPA
”) by retaining the money received under the Agreement, and (z) nothing in this Release is intended to require the payment of damages, attorneys’ fees or costs to the Company should Executive challenge the waiver of an ADEA or state law age discrimination claim or file an ADEA or state law age discrimination claim, except as authorized by federal or state law.
2.
Executive represents and warrants that Executive has the sole right and exclusive authority to execute this Release; that Executive has not sold, signed, transferred, conveyed or otherwise disposed of any claim or demand relating to any matter covered in the Agreement or this Release; that the provisions of this Release shall be binding upon Executive and Executive’s heirs, executors, administrators and other legal representatives; that Executive has not relied upon any promise or representation that is not contained within the Agreement or this Release; and that the obligations imposed upon Executive in this Release shall not prevent Executive from earning a satisfactory livelihood. If any provision of this Release shall be held invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render invalid or unenforceable any other provision of the Agreement or this Release and the Agreement and this Release shall be carried out as if any such invalid or unenforceable provision were not contained herein.
THE PARTIES STATE THAT THEY HAVE READ THE FOREGOING, THAT THEY UNDERSTAND EACH OF ITS TERMS, AND THAT THEY SIGN BELOW INTENDING TO BE BOUND HERETO.
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PulteGroup, Inc.
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By:
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Patrick J. O’Leary
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Title:
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Chairman of the Compensation and Management Development
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Committee of the Board of Directors
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Richard J. Dugas, Jr.
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PULTEGROUP APPOINTS BILL PULTE, GRANDSON OF COMPANY’S FOUNDER, TO ITS BOARD OF DIRECTORS
ATLANTA, September 08, 2016 - PulteGroup, Inc. (NYSE:PHM), one of America’s largest homebuilding companies, said today that William J. (Bill) Pulte has been appointed to its Board of Directors. Mr. Pulte is the grandson of the Company’s founder, William J. Pulte
.
PulteGroup also reported that it has entered into an agreement with Company founder
William J. Pulte and certain related parties. The agreement provides, among other things, that the signatories will vote in favor of any Board nominees and against any nominees not nominated by the Board, so long as Bill Pulte serves on the Company’s Board of Directors. The signatories to the agreement own an aggregate of 30.7 million, or approximately 9.0%, of the currently outstanding shares of the Company.
“We are pleased to have a member of PulteGroup’s founding family join our Board to contribute to the ongoing success of the Company,” said James J. Postl, Lead Independent Director of PulteGroup’s Board of Directors. “Bill has a broad background in the industry and is committed to working constructively with the Board and management for the benefit of all PulteGroup shareholders, as the Company continues to implement its Value Creation strategy.”
Mr. Pulte said, “I am pleased with the constructive discussions that I have had with the PulteGroup Board and management team. My grandfather and I fully support the Company’s Value Creation strategy, and we are pleased with the Company’s ongoing actions to enhance shareholder value. We also welcome today’s announcement that the Board has named Ryan Marshall as the Company’s new CEO. I look forward to working with him and the other Board members as the Company continues to build long-term shareholder value.”
Since 2011, Mr. Pulte has served as CEO of Pulte Capital Partners LLC, an investment firm with no affiliation with PulteGroup that is focused on investing in housing supply, building products, and related service companies. Mr. Pulte also currently serves as CEO and Chairman of Carstin Brands LLC, a leading residential countertop manufacturer, and as a director of Olon Group Inc., a leading manufacturer for the cabinet industry. Prior to its sale in May 2016, Mr. Pulte built Southern Air & Heat LLC into one of the leading residential heating and air conditioning platforms in the United States. Mr. Pulte is a graduate of Northwestern University.
Debra Kelly-Ennis to Retire from PulteGroup Board
PulteGroup also announced that, after two decades of service, Debra Kelly-Ennis will resign from the Board effective immediately. “We have benefitted from Debra’s insights and counsel for 20 years,” said Mr. Postl. “On behalf of the entire Board of Directors, I thank Debra for the numerous contributions she has provided during her time with the Company.”
Forward-Looking Statements
This press release includes "forward-looking statements." These statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or implied by, these statements. You can identify these statements by the fact that they do not relate to matters of a strictly factual or historical nature and generally discuss or relate to forecasts, estimates or other expectations regarding future events. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "may," "can," "could," "might," "will" and similar expressions identify forward-looking statements, including statements related to expected operating and performing results, planned transactions, planned objectives of management, future developments or conditions in the industries in which we participate and other trends, developments and uncertainties that may affect our business in the future.
Such risks, uncertainties and other factors include, among other things: interest rate changes and the availability of mortgage financing; continued volatility in the debt and equity markets; competition within the industries in which PulteGroup operates; the availability and cost of land and other raw materials used by PulteGroup in its homebuilding operations; the impact of any changes to our strategy in responding to the cyclical nature of the industry, including any changes regarding our land positions and the rate of growth in land spend; the availability and cost of insurance covering risks associated with PulteGroup's businesses; shortages and the cost of labor; weather related slowdowns; slow growth initiatives and/or local building moratoria; governmental regulation directed at or affecting the housing market, the homebuilding industry or construction activities; uncertainty in the mortgage lending industry, including revisions to underwriting standards and repurchase requirements associated with the sale of mortgage loans; the interpretation of or changes to tax, labor and environmental laws; economic changes nationally or in PulteGroup's local markets, including inflation, deflation, changes in consumer confidence and preferences and the state of the market for homes in general; legal or regulatory proceedings or claims; our ability to generate sufficient cash flow in order to successfully implement our capital allocation priorities; required accounting changes; terrorist acts and other acts of war; and other factors of national, regional and global scale, including those of a political, economic, business and competitive nature. See PulteGroup's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and other public filings with the Securities and Exchange Commission (the "SEC") for a further discussion of these and other risks and uncertainties applicable to our businesses. PulteGroup undertakes no duty to update any forward-looking statement, whether as a result of new information, future events or changes
in PulteGroup's expectations.
About PulteGroup
PulteGroup, Inc. (NYSE: PHM), based in Atlanta, Georgia, is one of America's largest homebuilding companies with operations in approximately 50 markets throughout the country. Through its brand portfolio that includes Centex, Pulte Homes, Del Webb, DiVosta Homes and John Wieland Homes and Neighborhoods, the Company is one of the industry's most versatile homebuilders able to meet the needs of multiple buyer groups and respond to changing consumer demand. PulteGroup conducts extensive research to provide homebuyers with innovative solutions and consumer inspired homes and communities to make lives better.
For more information about PulteGroup, Inc. and PulteGroup brands, go to: www.pultegroupinc.com;
www.pulte.com
;
www.centex.com
;
www.delwebb.com
;
www.divosta.com
and
www.jwhomes.com
.
Investor Contact:
Jim Zeumer
404-978-6434
jim.zeumer@pultegroup.com
Media Contact:
Ruth Pachman 212-521-4891
ruth.pachman@kekst.com
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PULTEGROUP NAMES RYAN MARSHALL CHIEF EXECUTIVE OFFICER
ATLANTA, September 08, 2016 - PulteGroup, Inc. (NYSE: PHM), one of America’s largest homebuilding companies, today announced that its Board of Directors has unanimously named Ryan Marshall, PulteGroup’s President, as Chief Executive Officer effective immediately. Mr.
Marshall, who has also become a member of the Board, succeeds Richard J. Dugas, Jr. who earlier this year announced his intent to retire. Mr. Dugas will continue as Executive Chairman of the Board through the Company’s 2017 annual meeting of shareholders.
“After a thorough evaluation of internal and external candidates, the Board determined that Ryan was clearly the best-qualified person to lead PulteGroup as it continues to implement its Value Creation strategy,” said Patrick J. O’Leary, leader of the independent five member CEO search committee of the PulteGroup Board. “Over his more than 15 year career at PulteGroup, Ryan has proven to be an outstanding leader with demonstrated success in managing homebuilding operations through all stages of the housing cycle.”
Mr. Marshall said, “I am honored to lead this great organization and excited about the tremendous opportunities PulteGroup has for ongoing success. Our diversified geographic footprint and broad product portfolio provide distinct competitive advantages that we will continue to leverage. Reflecting on the significant operating and financial progress we have achieved over the past few years pursuing our Value Creation strategy, I am confident that we have the resources and the capabilities to further expand our share of the U.S. housing market while continuing to realize high returns on invested capital.”
Lead Independent Director James J. Postl added, “On behalf of the Board, I would like to thank Richard Dugas for his significant accomplishments as our Chief Executive Officer over the past 13 years, highlighted by the Value Creation strategy he helped launch in 2011. His passionate leadership and clear vision have positioned the Company to move ahead with new leadership from a position of strength.”
“Ryan is a skilled operating executive who thinks strategically about long-term initiatives in the context of housing industry cycles, and I am delighted by his selection as PulteGroup's next CEO,” said Mr. Dugas. “I am confident that PulteGroup will continue to make strides under Ryan’s leadership, and I look forward to working with him through a seamless transition.”
Having managed many of the Company’s largest operations during his tenure, Mr. Marshall has a deep understanding of the homebuilding business. Mr. Marshall most recently served as PulteGroup’s President with responsibility for the Company’s homebuilding operations and its marketing and strategy departments. Prior to being named President, Mr. Marshall was Executive Vice President of Homebuilding Operations. Other previous roles included Area President for the Company’s Southeast Area, Area President for Florida, Division President in both South Florida and Orlando, and Area Vice President of Finance. In those roles, he has managed various financial and operating functions including financial reporting, land acquisition, and strategic market risk and opportunity analysis.
Mr. Marshall received a Bachelor of Arts in accounting from the University of Utah and a Master of Business Administration from Arizona State University. He is also a Certified Public Accountant.
Forward-Looking Statements
This press release includes "forward-looking statements." These statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or implied by, these statements. You can identify these statements by the fact that they do not relate to matters of a strictly factual or historical nature and generally discuss or relate to forecasts, estimates or other expectations regarding future events. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "may," "can," "could," "might," "will" and similar expressions identify forward-looking statements, including statements related to expected operating and performing results, planned transactions, planned objectives of management, future developments or conditions in the industries in which we participate and other trends, developments and uncertainties that may affect our business in the future.
Such risks, uncertainties and other factors include, among other things: interest rate changes and the availability of mortgage financing; continued volatility in the debt and equity markets; competition within the industries in which PulteGroup operates; the availability and cost of land and other raw materials used by PulteGroup in its homebuilding operations; the impact of any changes to our strategy in responding to the cyclical nature of the industry, including any changes regarding our land positions and the rate of growth in land spend; the availability and cost of insurance covering risks associated with PulteGroup's businesses; shortages and the cost of labor; weather related slowdowns; slow growth initiatives and/or local building moratoria; governmental regulation directed at or affecting the housing market, the homebuilding industry or construction activities; uncertainty in the mortgage lending industry, including revisions to underwriting standards and repurchase requirements associated with the sale of mortgage loans; the interpretation of or changes to tax, labor and environmental laws; economic changes nationally or in PulteGroup's local markets, including inflation, deflation, changes in consumer confidence and preferences and the state of the market for homes in general; legal or regulatory proceedings or claims; our ability to generate sufficient cash flow in order to successfully implement our capital allocation priorities; required accounting changes; terrorist acts and other acts of war; and other factors of national, regional and global scale, including those of a political, economic, business and competitive nature. See PulteGroup's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and other public filings with the Securities and Exchange Commission (the "SEC") for a further discussion of these and other risks and uncertainties applicable to our businesses. PulteGroup undertakes no duty to update any forward-looking statement, whether as a result of new information, future events or changes in PulteGroup's expectations.
About PulteGroup
PulteGroup, Inc. (NYSE: PHM), based in Atlanta, Georgia, is one of America's largest homebuilding companies with operations in approximately 50 markets throughout the country. Through its brand portfolio that includes Centex, Pulte Homes, Del Webb, DiVosta Homes and John Wieland Homes and Neighborhoods, the Company is one of the industry's most versatile homebuilders able to meet the needs of multiple buyer groups and respond to changing consumer demand. PulteGroup conducts extensive research to provide homebuyers with innovative solutions and consumer inspired homes and communities to make lives better.
For more information about PulteGroup, Inc. and PulteGroup brands, go to: pultegroupinc.com; www.pulte.com; www.centex.com; www.delwebb.com; www.divosta.com and www.jwhomes.com.
Investor Contact:
Jim Zeumer
404-978-6434
jim.zeumer@pultegroup.com
Media Contact:
Ruth Pachman
212-521-4891
ruth.pachman@kekst.com
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