UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 15, 2008
PULTE HOMES, INC.
(Exact name of registrant as specified in its charter)
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Michigan
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1-9804
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38-2766606
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(State or other jurisdiction of
incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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100 Bloomfield Hills Parkway, Suite 300, Bloomfield Hills, Michigan
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48304
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(Address of principal executive
offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
(248) 647-2750
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On May 15, 2008, the shareholders of Pulte Homes, Inc. (“Pulte”) approved the Pulte
Homes, Inc. 2008 Senior Management Incentive Plan (the “Incentive Plan”), which had been adopted by
Pulte’s Board of Directors subject to shareholder approval. All officers of Pulte and its
subsidiaries are eligible to be selected for participation in the Incentive Plan.
Under the Incentive Plan, payments of awards to participating officers is subject to the
attainment of specific performance goals established by the Compensation Committee of Pulte’s Board
of Directors (the “Committee”) for each performance period, and other terms and conditions that may
be established by the Committee. A participant may receive an award under the Incentive Plan based
upon the achievement of an objective performance goal or goals using one or more of the following
objective corporate-wide or subsidiary, division, operating unit or individual measures: earnings;
earnings per share; earnings before interest and taxes (“EBIT”); earnings before interest, taxes,
depreciation and amortization (“EBITDA”); financial return ratios; return on equity; return on
assets; total shareholder return; net income; pre-tax income; operating income; revenues; profit
margin; cash flow(s); expense management; economic profit; customer satisfaction; mortgage capture
rates; productivity; efficiency; employee retention; succession management; management of service
and warranty costs; management of the cost of insurance claims; achievement of energy performance
goals; measurable marketing effectiveness; or achievement of diversity goals. Each such goal may
be expressed on an absolute or relative basis, may include comparisons based on current internal
targets, the past performance of the Company (including the performance of one or more
subsidiaries, divisions or operating units) or the past or current performance of other companies
(or a combination of such past and current performance) and may include or exclude objectively
determinable components of any performance goal, including, without limitation, special charges
such as restructuring or impairment charges, gains on land sales below original basis, non-cash
amortization, or tax refunds or payments. In the case of earnings-based measures, in addition to
the ratios specifically enumerated above, performance goals may include comparisons relating to
capital (including, but not limited to, the cost of capital), shareholders’ equity, shares
outstanding, assets or net assets, or any combination thereof.
Upon attainment of the relevant performance goals, a participant will be eligible to receive
an award determined pursuant to an objective formula or standard established at the same time the
performance goals were established, unless the award is subject to other terms and conditions
established by the Committee, including, as a condition to vesting, the continued employment of the
participant for a specified period of time subsequent to the end of a performance period. The
formula or standard may be based on an employee’s base salary at the time or immediately before the
performance goals for such performance period were established or on other fixed and determinable
measures. The award may be paid in cash or in common shares of Pulte, or partly in cash and partly
in common shares. In all cases the Committee has the sole and absolute discretion to reduce the
amount of any payment under the Incentive Plan that would otherwise be made to any participant or
to decide that no payment shall be made. No participant will receive a payment under the Incentive
Plan with respect to any performance period in excess of $15 million, which maximum amount will be
prorated with respect to performance periods that are less than one year in duration.
The Committee adopted the 2008 Annual Incentive Program (the “Annual Program”) under the
Incentive Plan. Under the Annual Program, individual award opportunities were granted to
participants based on the attainment of performance goals for Pulte’s fiscal year ending on
December 31, 2008.
The Committee also adopted the Long-Term Incentive Program (the “LTI Program”) under the
Incentive Plan. Under the LTI Program, individual award opportunities are granted to participants
based
2
on the attainment of performance goals for the applicable performance period. The payment of
any award earned by a participant based on the attainment of performance goals for the performance
period consisting of Pulte’s fiscal year ending on December 31, 2008 is conditioned upon the
continued employment of the participant by Pulte until December 31, 2010, at which time the award
will vest and become payable. The award will vest and become payable at the target award level in
the event that, prior to December 31, 2010, there is a change in control of Pulte or there is a
termination of the participant’s employment due to the participant’s death or permanent disability.
Also under the LTI Program, the participant is entitled to a prorated award based on the
attainment of the financial performance measures and individual performance measures during the
performance period in the event that, prior to December 31, 2010, the participant is terminated by
the Company without cause.
The foregoing summaries of the Incentive Plan and the LTI Program are qualified in their
entirety by reference to the full text of the Incentive Plan and the LTI Program included as
Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated by
reference into this Item 5.02.
Item 9.01 Financial Statements and Exhibits.
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(c)
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Exhibits
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10.1
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Pulte Homes, Inc. 2008 Senior Management Incentive Plan
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10.2
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Pulte Homes, Inc. Long-Term Incentive Program
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10.3
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Form of Pulte Homes, Inc. Long-Term Incentive Award Agreement
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10.4
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Form of Pulte Homes, Inc. 2008-2010 Grant Acceptance Agreement –
Company Performance Measure
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10.5
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Form of Pulte Homes, Inc. 2008-2010 Grant Acceptance Agreement –
Individual Performance Measures
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3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PULTE HOMES, INC.
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Date: May 20, 2008
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By:
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/s/ Steven M. Cook
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Name:
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Steven M. Cook
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Title:
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Vice President, General Counsel and Secretary
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4
Exhibit 10.1
PULTE HOMES, INC.
2008 SENIOR MANAGEMENT INCENTIVE PLAN
1.
Purpose of Plan
.
The purposes of the Pulte Homes, Inc. 2008 Senior Management
Incentive Plan are to retain and motivate the officers of Pulte Homes, Inc. and its subsidiaries
who have been designated by the Committee to participate in the Plan for a specified Performance
Period by providing them with the opportunity to earn incentive payments based upon the extent to
which specified performance goals have been achieved or exceeded for the Performance Period. It is
intended that all amounts payable to Participants who are “covered employees” within the meaning of
Section 162(m) of the Code will constitute “qualified performance-based compensation” within the
meaning of U.S. Treasury regulations promulgated thereunder, and the Plan and the terms of any
awards hereunder shall be so interpreted and construed to the maximum extent possible.
2.
Certain Definitions
.
“
Annual Base Salary
”
shall mean for any Participant an amount equal to the rate of
annual base salary in effect or approved by the Committee or other authorized person at the time or
immediately before performance goals are established for a Performance Period, including any base
salary that otherwise would be payable to the Participant during the Performance Period but for his
or her election to defer receipt thereof.
“
Applicable Period
”
shall mean, with respect to any Performance Period, a period
commencing on or before the first day of the Performance Period and ending not later than the
earlier of (a) 90 days after the commencement of the Performance Period and (b) the date on which
twenty-five percent (25%) of the Performance Period has been completed. Any action required to be
taken within an Applicable Period may be taken at a later date if permissible under Section 162(m)
of the Code or regulations promulgated thereunder, as they may be amended from time to time.
“
Board
”
shall mean the Board of Directors of the Company.
“
Code
”
shall mean the Internal Revenue Code of 1986, as amended.
“
Committee
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shall mean the Compensation Committee of the Board or such other committee
designated by the Board that satisfies any then applicable requirements of the principal national
stock exchange on which the common stock of the Company is then traded to constitute a compensation
committee, and which consists of three or more members of the Board, each of whom is intended to be
an “outside director” within the meaning of Section 162(m) of the Code.
“
Company
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shall mean Pulte Homes, Inc., a Michigan corporation, and any successor
thereto.
“
Individual Award Opportunity
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shall mean the potential of a Participant to receive an
incentive payment if the performance goals for a Performance Period shall
have been satisfied. An Individual Award Opportunity may be expressed in U.S. dollars, in
Shares or pursuant to a formula that is consistent with the provisions of the Plan.
“
Participant
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shall mean an officer of the Company or any of its subsidiaries who is
designated by the Company to participate in the Plan for a Performance Period, in accordance with
Section 3 hereof.
“
Performance Period
”
shall mean any period commencing on or after January 1, 2008 for
which performance goals are established pursuant to Section 4 hereof. A Performance Period may be
coincident with one or more fiscal years of the Company or a portion of any fiscal year of the
Company.
“
Plan
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shall mean the Pulte Homes, Inc. 2008 Senior Management Incentive Plan as set
forth herein, as it may be amended from time to time.
“
Shares
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shall mean shares of common stock, par value $.01 per share, of the Company,
or restricted shares of such common stock, in each case that are available for grant in accordance
with the terms of a stock plan of the Company, the eligible participants in which include
Participants.
3.
Administration
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3.1
General
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The Plan shall be administered by the Committee, which shall have the
full power and authority to interpret, construe and administer the Plan and any Individual Award
Opportunity granted hereunder (including reconciling any inconsistencies, correcting any defaults
and addressing any omissions). The Committee’s interpretation, construction and administration of
the Plan and all its determinations hereunder shall be final, conclusive and binding on all persons
for all purposes.
3.2
Powers and Responsibilities
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The Committee shall have the following discretionary
powers, rights and responsibilities in addition to those described in Section 3.1 hereof.
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(a)
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to designate within the Applicable Period the Participants for a Performance
Period;
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(b)
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to establish within the Applicable Period the performance goals and other
terms and conditions that are to apply to each Participant’s Individual Award
Opportunity, including, without limitation, (i) whether, and the extent to which, a
Participant’s Individual Award Opportunity shall have, as a condition to vesting, the
continued employment of the Participant for a specified period of time subsequent to
the end of a Performance Period, and (ii) the extent to which any payment shall be
made to a Participant in the event of (A) the Participant’s termination of employment
with or service to the Company due to disability, retirement, death or any other
reason or (B) a change in control of the Company;
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(c)
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to determine in writing prior to the payment with respect to any Individual
Award Opportunity that the performance goals for a Performance Period and other
material terms applicable to the Individual Award Opportunity have been satisfied;
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(d)
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to determine whether, and under what circumstances and subject to what terms,
an Individual Award Opportunity is to be paid in cash or in Shares, or partly in cash
and partly in Shares;
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(e)
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to determine whether, and under what circumstances and subject to what terms,
an Individual Award Opportunity is to be paid on a deferred basis, including whether
such a deferred payment shall be made solely at the Committee’s discretion or whether
a Participant may elect deferred payment; and
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(f)
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to adopt, revise, suspend, waive or repeal, when and as appropriate, in its
sole and absolute discretion, such administrative rules, guidelines and procedures for
the Plan as it deems necessary or advisable to implement the terms and conditions of
the Plan.
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3.3
Delegation of Power
.
The Committee may delegate some or all of its power and
authority hereunder to the Chief Executive Officer or other executive officer of the Company as the
Committee deems appropriate;
provided
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however
, that with respect to any person who
is a “covered employee” within the meaning of Section 162(m) of the Code or who, in the Committee’s
judgment, is likely to be a covered employee at any time during the applicable Performance Period
or during any period in which an Individual Award Opportunity may be paid following a Performance
Period, only the Committee shall be permitted to (a) designate such person to participate in the
Plan for such Performance Period, (b) establish performance goals and Individual Award
Opportunities for such person, and (c) certify the achievement of such performance goals.
4.
Performance Goals
.
4.1
Establishing Performance Goals
.
The Committee shall establish within the
Applicable Period of each Performance Period one or more objective performance goals for each
Participant or for any group of Participants (or both), provided that the outcome of each goal is
substantially uncertain at the time the Committee establishes such goal. Performance goals shall
be based exclusively on one or more of the following objective corporate-wide or subsidiary,
division, operating unit or individual measures: earnings; earnings per share; earnings before
interest and taxes (“EBIT”); earnings before interest, taxes, depreciation and amortization
(“EBITDA”); financial return ratios; return on equity; return on assets; total shareholder return;
net income; pre-tax income; operating income; revenues; profit margin; cash flow(s); expense
management; economic profit; customer satisfaction; mortgage capture rates; productivity;
efficiency; employee retention; succession management; management of service and warranty costs;
management of the cost of insurance claims; achievement of energy performance goals; measurable
marketing effectiveness; or achievement of diversity goals. Each such goal
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may be expressed on an absolute or relative basis, may include comparisons based on current
internal targets, the past performance of the Company (including the performance of one or more
subsidiaries, divisions or operating units) or the past or current performance of other companies
(or a combination of such past and current performance) and may include or exclude objectively
determinable components of any performance goal, including, without limitation, special charges
such as restructuring or impairment charges, gains on land sales below original basis, non-cash
amortization, or tax refunds or payments. In the case of earnings-based measures, in addition to
the ratios specifically enumerated above, performance goals may include comparisons relating to
capital (including, but not limited to, the cost of capital), shareholders’ equity, shares
outstanding, assets or net assets, or any combination thereof. With respect to Participants who
are not “covered employees” within the meaning of Section 162(m) of the Code and who, in the
Committee’s judgment, are not likely to be covered employees at any time during the applicable
Performance Period or during any period in which an Individual Award Opportunity may be paid
following a Performance Period, the performance goals established for the Performance Period may
consist of any objective or subjective corporate-wide or subsidiary, division, operating unit or
individual measures, whether or not listed herein. Performance goals shall be subject to such
other special rules and conditions as the Committee may establish at any time within the Applicable
Period.
4.2
Impact of Extraordinary Items, Changes in Accounting or Other Adjustments.
The
measures utilized in establishing performance goals under the Plan for any given Performance Period
shall be determined in accordance with generally accepted accounting principles (“GAAP”) and in a
manner consistent with the methods used in the Company’s audited consolidated financial statements,
to the extent applicable, without regard to (a) extraordinary or other nonrecurring or unusual
items, as determined by the Company’s independent public accountants in accordance with GAAP, (b)
changes in accounting, as determined by the Company’s independent public accountants in accordance
with GAAP, or (c) pre-acquisition costs, unless, in each case, the Committee decides otherwise
within the Applicable Period or as otherwise required under Section 162(m) of the Code.
5.
Individual Award Opportunities
.
5.1
Terms
.
At the time performance goals are established for a Performance Period,
the Committee also shall establish an Individual Award Opportunity for each Participant or group of
Participants, which shall be based on the achievement of one or more specified targets of
performance goals. The targets shall be expressed in terms of an objective formula or standard
which may be based upon the Participant’s Annual Base Salary or a multiple thereof. In all cases
the Committee shall have the sole and absolute discretion to reduce the amount of any payment with
respect to any Individual Award Opportunity that would otherwise be made to any Participant or to
decide that no payment shall be made. No Participant shall receive a payment, whether in cash or
in Shares, under the Plan with respect to any Performance Period having a value in excess of $15
million, which maximum amount shall be prorated with respect to Performance Periods that are less
than one year in duration.
4
5.2
Payments
.
Payments with respect to Individual Award Opportunities shall be made
in cash or in Shares, or partly in cash and partly in Shares, and shall be made at the time
determined by the Committee after the end of the Performance Period for which the Individual Award
Opportunities are payable, provided that no such payment shall be made unless and until the
Committee has certified in writing the extent to which the applicable performance goals for such
Performance Period have been satisfied and provided further that any Individual Award Opportunity
which is paid on a deferred basis shall be paid pursuant to an arrangement that is intended to be
exempt from, or comply with an exception to, Section 409A of the Code.
6.
General
.
6.1
Effective Date and Term of Plan
.
The Plan shall be submitted to the shareholders
of the Company for approval at the 2008 annual meeting of shareholders and, if approved by the
affirmative vote of a majority of the votes cast on the issue of such approval at such meeting,
shall become effective for Performance Periods beginning as of and after January 1, 2008. The Plan
shall terminate as of December 31, 2012, unless terminated earlier by the Board. In the event that
the Plan is not approved by the shareholders of the Company, the Plan shall be null and void with
respect to Participants who are “covered employees” within the meaning of Section 162(m) of the
Code.
6.2
Amendments
.
The Board may amend the Plan as it shall deem advisable, subject to
any requirement of shareholder approval required by applicable law, rule or regulation, including
Section 162(m) of the Code.
6.3
Non-Transferability of Awards
.
No award under the Plan shall be transferable
other than by will, the laws of descent and distribution or pursuant to beneficiary designation
procedures approved by the Company. Except to the extent permitted by the foregoing sentence, no
award may be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution, attachment or similar
process. Upon any attempt to sell, transfer, assign, pledge, hypothecate, encumber or otherwise
dispose of any such award, such award and all rights thereunder shall immediately become null and
void.
6.4
Tax Withholding
.
The Company shall have the right to require, prior to the
payment of any amount pursuant to an award made hereunder, payment by the Participant of any
Federal, state, local or other taxes which may be required to be withheld or paid in connection
with such award.
6.5
No Right of Participation or Employment
.
No person shall have any right to
participate in the Plan. Neither the Plan nor any award made hereunder shall confer upon any
person any right to continued employment by the Company or any subsidiary or affiliate of the
Company or affect in any manner the right of the Company or any subsidiary or affiliate of the
Company to terminate the employment of any person at any time without liability hereunder.
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6.6
Designation of Beneficiary
.
If permitted by the Company, a Participant may file
with the Company a written designation of one or more persons as such Participant’s beneficiary or
beneficiaries (both primary and contingent) in the event of the Participant’s death. Each
beneficiary designation shall become effective only when filed in writing with the Company during
the Participant’s lifetime on a form prescribed by the Committee. The spouse of a married
Participant domiciled in a community property jurisdiction shall join in any designation of a
beneficiary other than such spouse. The filing with the Company of a new beneficiary designation
shall cancel all previously filed beneficiary designations. If a Participant fails to designate a
beneficiary, or if all designated beneficiaries of a Participant predecease the Participant, then
each outstanding award shall be payable to the Participant’s executor, administrator, legal
representative or similar person.
6.7
Governing Law
.
The Plan and each award hereunder, and all determinations made and
actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Michigan and construed in accordance
therewith without giving effect to principles of conflicts of laws.
6.8
Other Plans
.
Payments pursuant to the Plan shall not be treated as compensation
for purposes of any other compensation or benefit plan, program or arrangement of the Company or
any of its subsidiaries, unless either (a) such other plan provides that compensation, such as
payments made pursuant to the Plan, are to be considered as compensation thereunder or (b) the
Board or the Committee so determines in writing. Neither the adoption of the Plan nor the
submission of the Plan to the Company’s shareholders for their approval shall be construed as
limiting the power of the Board or the Committee to adopt such other incentive arrangements as it
may otherwise deem appropriate.
6.9
Binding Effect
.
The Plan shall be binding upon the Company and its successors and
assigns and the Participants and their beneficiaries, personal representatives and heirs. If the
Company becomes a party to any merger, consolidation or reorganization, then the Plan shall remain
in full force and effect as an obligation of the Company or its successors in interest, unless the
Plan is amended or terminated pursuant to Section 6.2 hereof.
6.10
Unfunded Arrangement
.
The Plan shall at all times be entirely unfunded and no
provision shall at any time be made with respect to segregating assets of the Company for payment
of any benefit hereunder. No Participant shall have any interest in any particular assets of the
Company or any of its affiliates by reason of the right to receive a benefit under the Plan and any
such Participant shall have only the rights of an unsecured creditor of the Company with respect to
any rights under the Plan.
6
Exhibit 10.2
PULTE HOMES, INC.
Long-Term Incentive Program
I.
Introduction
1.1
Purposes
. The purposes of this Long-Term Incentive Program, as established by Pulte
Homes, Inc., a Michigan corporation (the “Company”), are (i) to provide incentive compensation to
officers of the Company and its subsidiaries based on the achievement of performance goals
designated by the Compensation Committee of the Board pursuant to the Company’s 2008 Senior
Management Incentive Plan, (ii) to advance the interests of the Company and its shareholders by
attracting and retaining highly competent officers and (iii) to motivate such persons to act in the
long-term best interests of the Company and its shareholders.
1.2
Certain Definitions
. For purposes of the Program, the following capitalized terms
shall have the respective meanings set forth below. Capitalized terms not defined herein shall
have the respective meanings specified in the Plan.
(a) “Affiliate” means a direct or indirect subsidiary of the Company.
(b) “Agreement” means a written agreement, consisting of a Grant Acceptance Agreement and a
Long-Term Incentive Award Agreement, between the Company and the recipient of a Long-Term Incentive
Award hereunder setting forth the terms and conditions of such Long-Term Incentive Award.
(c) “Beneficiary” means the person appointed by a Participant’s written designation to receive
payment with respect to any Long-Term Incentive Awards held by such Participant upon the death of
the Participant, subject to the following provisions. A Beneficiary designation shall become
effective only when filed in writing with the Company during the Participant’s lifetime on a form
prescribed by the Company. The spouse of a married Participant domiciled in a community property
jurisdiction shall join in any designation of a Beneficiary other than such spouse. The filing
with the Company of a new Beneficiary designation shall cancel all previously filed Beneficiary
designations. If a Participant fails to designate a Beneficiary, or if the designated Beneficiary
dies before the Participant, then the Participant’s administrator, legal representative or similar
person shall be deemed to be the Beneficiary of such Participant.
(d) “Cause” means a determination by the Company that the Participant has (i) willfully and
continuously failed to substantially perform the duties assigned by the Company or an Affiliate
(other than a failure resulting from the Participant’s disability), (ii) willfully engaged in
conduct which is demonstrably injurious to the Company or any Affiliate, monetarily or otherwise,
including conduct that, in the reasonable judgment of the Company, does not conform to the standard
of the Company’s executives, or (iii) engaged in any act of dishonesty, the commission of a felony,
or a significant violation of any statutory or common law duty of loyalty to the Company or any
Affiliate.
(e) “Change in Control” means:
(i) the acquisition by any individual, entity or group (a “Person”), including any
“person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, of
beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of
40% or more of either (A) the then outstanding shares of common stock of the Company (the
“Outstanding Common Stock”) or (B) the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of directors (the
“Outstanding Voting Securities”); excluding, however, the following: (1) any acquisition
directly from the Company (excluding any acquisition resulting from the exercise of an
exercise, conversion or exchange privilege unless the security being so exercised, converted
or exchanged was acquired directly from the Company), (2) any acquisition by the Company,
(3) any acquisition by an employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company, (4) any acquisition by any
corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of
subparagraph (iii) of this definition or (5) any acquisition by any one or more of William
J. Pulte, his spouse, any trust or other entity established for the benefit of either or
both of such persons, or any charitable organization established by either or both of such
persons (“Exempt Persons”); provided further, that for purposes of clause (2), if any Person
(other than the Company, any one or more Exempt Persons or any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation controlled by the
Company) shall become the beneficial owner of 40% or more of the Outstanding Common Stock or
40% or more of the Outstanding Voting Securities by reason of an acquisition by the Company,
and such Person shall, after such acquisition by the Company, become the beneficial owner of
any additional shares of the Outstanding Common Stock or any additional Outstanding Voting
Securities and such beneficial ownership is publicly announced, such additional beneficial
ownership shall constitute a Change in Control;
(ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of such Board; provided that
any individual who becomes a director of the Company subsequent to the date hereof whose
election, or nomination for election by the Company’s shareholders, was approved by the vote
of at least a majority of the directors then comprising the Incumbent Board shall be deemed
a member of the Incumbent Board; and provided further, that any individual who was initially
elected as a director of the Company as a result of an actual or threatened solicitation by
a Person other than the Board for the purpose of opposing a solicitation by any other Person
with respect to the election or removal of directors, or any other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other than the Board shall
not be deemed a member of the Incumbent Board;
(iii) the consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a “Corporate
Transaction”); excluding, however, a Corporate Transaction pursuant to which (A) all or
substantially all of the individuals or entities who are the beneficial owners,
respectively, of the Outstanding Common Stock and the Outstanding Voting Securities
immediately prior to such Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding shares of common stock, and the
combined voting power of the outstanding securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting from such Corporate
2
Transaction (including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets either
directly or indirectly) in substantially the same proportions relative to each other as
their ownership, immediately prior to such Corporate Transaction, of the Outstanding Common
Stock and the Outstanding Voting Securities, as the case may be, (B) no Person (other than:
the Company; any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company; the corporation resulting from such
Corporate Transaction; and any Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 40% or more of the Outstanding Common Stock
or the Outstanding Voting Securities, as the case may be) will beneficially own, directly or
indirectly, 40% or more of, respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the combined voting power of the
outstanding securities of such corporation entitled to vote generally in the election of
directors and (C) individuals who were members of the Incumbent Board will constitute at
least a majority of the members of the board of directors of the corporation resulting from
such Corporate Transaction; or
(iv) the consummation of a plan of complete liquidation or dissolution of the Company.
(f) “Exchange Act” means the Securities Exchange Act of 1934, as then in effect, or any
successor federal statute of substantially similar effect.
(g) “Grant Acceptance Agreement” means the Grant Acceptance Agreement between the Company and
the recipient of a Long-Term Incentive Award hereunder which, together with its accompanying
Long-Term Incentive Award Agreement, constitutes an Agreement.
(h) “Long-Term Incentive Award” means an award conferring a right, contingent upon the
attainment of specified Performance Measures within a specified Performance Period, to receive
cash, as determined by the Committee or as evidenced in the Agreement relating to such Long-Term
Incentive Award.
(i) “Long-Term Incentive Award Agreement” means the Long-Term Incentive Award Agreement
between the Company and the recipient of a Long-Term Incentive Award hereunder which, together with
its accompanying Grant Acceptance Agreement, constitutes an Agreement.
(j) “Participant” means a person holding an outstanding Long-Term Incentive Award granted
under the Program.
(k) “Performance Measures” means the performance measure or measures designated by the
Committee pursuant to the terms of the Plan as a condition to the earning of a Long-Term Incentive
Award granted hereunder.
(l) “Performance Period” means the calendar year designated by the Committee with respect to
which the Performance Measures applicable to a Long-Term Incentive Award shall be measured.
3
(m) “Permanent Disability” means a sickness or disability extending for more than three (3)
consecutive months as a result of which the Participant is unable to perform his or her duties for
the Company or an Affiliate, as applicable, in the required and customary manner and that will
continue for not less than an additional three (3) months, as determined by the Company in its sole
discretion.
(n) “Program” means this Pulte Homes, Inc. Long-Term Incentive Program, as amended from time
to time.
(o) “Plan” means the Pulte Homes, Inc. 2008 Senior Management Incentive Plan, as amended from
time to time.
(p) “Vesting Date” means the date on which the Long-Term Incentive Award awarded to a
Participant ceases to be subject to a risk of forfeiture, as set forth in the Grant Acceptance
Agreement.
1.3
Administration
.
The Program shall be administered by the Committee. The Committee
shall, in its sole and absolute discretion and subject only to the terms of the Program and the
Plan, have the full power and authority to interpret the Program and the application thereof,
establish (and rescind) any rules and regulations it may deem necessary, appropriate or desirable
for the administration of the Program, establish the Performance Measures and other conditions to
the payment of all or a portion of each Long-Term Incentive Award and make adjustments to
applicable Performance Measures, subject to the terms of the Plan, to reflect extraordinary events,
and impose, incidental to the grant of a Long-Term Incentive Award, conditions with respect to the
Long-Term Incentive Award, such as (i) the continued employment of the Participant for a specified
period of time subsequent to the end of a Performance Period and (ii) limiting competitive
employment or other activities as set forth in the Agreement relating to such Long-Term Incentive
Award. The Committee shall also have the sole and absolute discretion to reduce the amount of any
payment with respect to any Individual Award Opportunity that would otherwise be made to any
Participant or to decide that no payment shall be made. All interpretations, rules, regulations,
conditions and other acts of the Committee shall be final, binding and conclusive on all parties.
The Committee may delegate some or all of its power and authority hereunder to the Chief
Executive Officer or other executive officer of the Company as the Committee deems appropriate;
provided
,
however
, that with respect to any person who is a “covered employee”
within the meaning of Section 162(m) of the Code or who, in the Committee’s judgment, is likely to
be a covered employee at any time during the applicable Performance Period, only the Committee
shall be permitted to (a) designate such person to participate in the Plan for such Performance
Period, (b) establish performance goals and Individual Award Opportunities for such person, and (c)
certify the achievement of such performance goals. The Committee may also delegate ministerial
administrative functions, such as receipt of notices, implementation of Program payments and
mathematical calculations, to one or more employees or consultants as the Committee may deem
necessary or desirable.
No member of the Board or Committee, and neither the President and Chief Executive Officer nor
any other person to whom the Committee delegates any of its power and authority hereunder, shall be
liable for any act, omission, interpretation, construction or determination
4
made in connection with this Program in good faith, and each such person shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense
(including attorneys’ fees) arising therefrom to the full extent permitted by law (except as
otherwise may be provided in the Company’s Articles of Incorporation and/or By-laws) and under any
directors’ and officers’ liability insurance that may be in effect from time to time.
II.
Terms Of Long-Term Incentive Awards
2.1
Eligibility
. Participants in the Program shall consist of such officers of the Company
and its Affiliates as the Committee in its sole discretion may select from time to time. For
purposes of the Program, references to employment by the Company shall also mean employment by an
Affiliate. A grant of a Long-Term Incentive Award to any person shall not entitle such person to
an additional grant of Long-Term Incentive Awards at any subsequent time.
2.2
Terms of Long-Term Incentive Awards
.
(a)
In General
. Long-Term Incentive
Awards shall be subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Program and the Plan, as the Committee
shall deem advisable.
(b)
Amount of Long-Term Incentive Award and Performance Measures
. The Agreement shall
set forth the amount of the Long-Term Incentive Award and a description of the Performance Measures
and the Performance Period applicable to such Long-Term Incentive Award, as determined by the
Committee in its discretion.
(c)
Vesting and Forfeiture
.
(i)
General
. Except as otherwise provided in the Agreement and subject to all
other requirements of the Program, any Long-Term Incentive Award that is earned pursuant to
the terms of the Agreement shall become vested as of the Vesting Date set forth in the Grant
Acceptance Agreement, provided that the Participant holding such Long-Term Incentive Award
remains continuously employed by the Company through the Vesting Date.
(ii)
Termination by Reason of Death or Permanent Disability
. Except as
otherwise provided in the Agreement, if the Participant’s employment with the Company
terminates by reason of death or Permanent Disability, (i) in the case of a Long-Term
Incentive Award relating to a completed Performance Period, the Long-Term Incentive Award
shall be paid, to the extent earned, to the Participant or the Participant’s Beneficiary, as
the case may be, as if the Participant had remained employed with the Company through the
Vesting Date, (ii) in the case of a Long-Term Incentive Award relating to a pending
Performance Period, the Participant or the Participant’s Beneficiary, as the case may be,
shall be entitled to a prorated award. Such prorated award shall be equal to the value of
the target award set forth in the Agreement multiplied by a fraction, the numerator of which
shall equal the number of days such Participant was employed with the Company during the
Performance Period and the denominator of which shall equal the number of days in the
Performance Period. Notwithstanding anything herein to the contrary, if a Participant or a
Participant’s Beneficiary, as the case may be, shall be entitled to receive payment of a
Long-Term Incentive Award or a prorated award,
5
pursuant to this Section 2.2(c)(ii), such Participant or such Participant’s Beneficiary, as
the case may be, shall receive such payment in a lump sum cash amount no later than the
March 15
th
occurring immediately after the year in which the Participant’s
employment terminates.
(iii)
Termination by Reason Other Than Voluntary Termination by Participant, Death,
Permanent Disability or Cause
. Except as otherwise provided in the Agreement, if the
Participant’s employment with the Company terminates for any reason, other than voluntary
termination by Participant, death, Permanent Disability or Cause, (i) in the case of a
Long-Term Incentive Award relating to a completed Performance Period, the Long-Term
Incentive Award shall be paid, to the extent earned, to the Participant as if the
Participant had remained employed with the Company through the Vesting Date, (ii) in the
case of a Long-Term Incentive Award relating to a pending Performance Period, the
Performance Period shall continue through the last day thereof and the Participant shall be
entitled to a prorated award. Such prorated award shall be equal to the value of the award
at the end of the Performance Period based on the actual performance during the Performance
Period multiplied by a fraction, the numerator of which shall equal the number of days such
Participant was employed with the Company during the Performance Period and the denominator
of which shall equal the number of days in the Performance Period. Notwithstanding
anything herein to the contrary, if a Participant shall be entitled to receive payment of a
Long-Term Incentive Award or a prorated award, pursuant to this Section 2.2(c)(iii), such
Participant shall receive such payment in a lump sum cash amount no later than the March
15
th
occurring immediately after the year in which the Participant’s employment
terminates.
(iv)
Termination by Reason of Voluntary Termination by Participant or Cause
.
Except as otherwise provided in the Agreement, if the Participant’s employment with the
Company is terminated voluntarily by Participant or is terminated by the Company for Cause,
the Participant’s Long-Term Incentive Awards that are unvested as of the date of
termination, shall be immediately forfeited.
(d)
Payment
. A Participant holding a Long-Term Incentive Award which shall have
vested shall receive, no later than the March 15th occurring immediately after the year in which
the Vesting Date occurs, a lump sum cash payment from the Company in an amount equal, as determined
by the Committee, to the Long-Term Incentive Award which became vested as of such Vesting Date,
subject to the deduction of taxes and other amounts pursuant to Section 3.4 of the Program. All
payments under this Program are intended to be exempt from Section 409A of the Code as “short-term
deferrals,” within the meaning of Treasury regulations promulgated under Section 409A of the Code.
(e)
Committee Discretion
. Notwithstanding the attainment of the Performance Measures
with respect to a Long-Term Incentive Award or anything herein to the contrary, in all cases, the
Committee shall have the sole and absolute discretion to reduce the amount of any payment with
respect to any Long-Term Incentive Award that would otherwise be made to any Participant or to
decide that no payment shall be made.
6
III.
General
3.1
Effective Date and Term of Program
.
The Program shall be effective as of January 1,
2008, and shall continue until such time as it is terminated by the Board.
3.2
Amendments
.
The Board may amend the Program and any Agreement as it shall deem
advisable in the exercise of its sole and absolute discretion;
provided
,
however
that no such amendment may adversely affect the rights granted to a Participant with respect to an
outstanding Long-Term Incentive Award pursuant to its related Agreement without the consent of such
Participant.
3.3
Non-Transferability
.
No Long-Term Incentive Award or any rights thereunder shall be
transferable other than by will or the laws of descent and distribution or pursuant to any
Beneficiary designation procedures as may approved by the Committee for such purpose. Except as
permitted by the preceding sentence, no Long-Term Incentive Award hereunder shall be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by
operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any
attempt by the holder of a Long-Term Incentive Award to so sell, transfer, assign, pledge,
hypothecate, encumber or otherwise dispose of such Long-Term Incentive Award, such Long-Term
Incentive Award and all rights thereunder shall immediately become null and void.
3.4
Tax and Other Withholding
.
The Company shall have the right to deduct from any amounts
paid pursuant to the Program (or from other compensation payable by the Company to the Participant)
all Federal, state, local and other taxes and any other amounts which may be required under law or
elected by the Participant to be withheld or paid in connection with the settlement of a Long-Term
Incentive Award or any other payment made hereunder.
3.5
Change in Control
.
Upon the occurrence of a Change in Control, (i) in the case of a
Long-Term Incentive Award relating to a completed Performance Period, the Long-Term Incentive Award
shall be paid, to the extent earned, to the Participant as if the Participant had remained
employed with the Company through the Vesting Date, (ii) in the case of a Long-Term Incentive Award
relating to a pending Performance Period, the Participant shall be entitled to a prorated award.
Such prorated award shall be equal to the value of the target award set forth in the Agreement
multiplied by a fraction, the numerator of which shall equal the number of days prior to the Change
in Control during the Performance Period and the denominator of which shall equal the number of
days in the Performance Period. Such award shall be paid as soon as practicable, and in no event
more than sixty (60) days, after the date of the Change in Control.
3.6
No Right of Participation or Employment
.
No person shall have any right to participate
in the Program or to be granted Long-Term Incentive Awards under the Program. Neither the Program
nor any Agreement relating to a Long-Term Incentive Award granted hereunder shall confer upon any
person any right to be employed, reemployed or continue employment by the Company or any Affiliate
of the Company or affect in any manner the right of the Company or any Affiliate of the Company to
terminate the employment of any person with or without notice at any time for any reason without
liability hereunder. Nothing herein shall confer any right or benefit or any entitlement to any
benefit on any Participant unless and until a benefit is actually vested pursuant to the Program.
The adoption and maintenance of the
7
Program shall not be deemed to constitute a contract of employment or otherwise between the Company
or any of its Affiliates and any Participant, or to be a consideration for or an inducement or
condition of any employment. Neither the provisions of the Program nor any action taken by the
Company or the Board or the Committee pursuant to the provisions of the Program shall be deemed to
create any trust, express or implied, or any fiduciary relationship between or among the Company,
the Board or Committee, any member of the Board or Committee, or any employee, former employee or
beneficiary thereof.
3.7
Unfunded Arrangement
.
The Program shall at all times be entirely unfunded and no
provision shall at any time be made with respect to segregating assets of the Company for payment
of any benefit hereunder. No holder of a Long-Term Incentive Award shall have any interest in any
particular assets of the Company or any of its Affiliates by reason of the right to receive a
benefit under the Program and any such holder shall have only the rights of an unsecured creditor
of the Company with respect to any rights under the Program.
3.8
Governing Law
.
This Program, each Long-Term Incentive Award granted hereunder and its
related Agreement, and all determinations made and actions taken pursuant thereto, to the extent
not otherwise governed by the laws of the United States, shall be governed by the laws of the State
of Michigan and construed in accordance therewith without giving effect to principles of conflicts
of laws.
8
Exhibit 10.3
Form of
PULTE HOMES, INC.
Long-Term Incentive Award Agreement
Pulte Homes, Inc., a Michigan corporation (the “Company”), hereby grants to
(the “Participant”) as of
, 20___, pursuant to the
provisions of the Company’s Long-Term Incentive Program, as amended (the “Program”), a Long-Term
Incentive Award (the “Award”), upon and subject to the restrictions, terms and conditions set forth
in the Program and below. Capitalized terms not defined herein shall have the meanings specified
in the Program or in the Pulte Homes, Inc. 2008 Senior Management Incentive Plan (the “Plan”).
1.
Award Subject to Acceptance of Agreement
. The Award shall be null and void unless
the Participant shall accept this Agreement by executing the Grant Acceptance Agreement and
returning it to the Company at such time as shall be satisfactory to the Company.
2.
Vesting and Forfeiture
.
2.1.
Service Vesting Requirement
. Subject to the satisfaction of the performance
vesting requirement set forth in the Grant Acceptance Agreement and subject to the provisions
governing the treatment of the Award upon a Change in Control as set forth in Section 3.5 of the
Program, the Award shall vest and become payable pursuant to the terms of the Program if the
Participant remains in continuous employment with the Company through the date set forth in the
Grant Acceptance Agreement (the “Vesting Date”). Except as otherwise provided herein, if the
Participant’s employment by the Company terminates prior to the Vesting Date, the Participant shall
forfeit all rights with respect to the Award and the Award shall be cancelled by the Company.
2.2.
Termination by Reason of Death or Permanent Disability
. If the Participant’s
employment with the Company terminates by reason of death or Permanent Disability, (i) in the case
of an Award relating to a completed Performance Period, the Award shall be paid, to the extent
earned, to the Participant or the Participant’s Beneficiary, as the case may be, as if the
Participant had remained employed with the Company through the Vesting Date, (ii) in the case of an
Award relating to a pending Performance Period, the Participant or the Participant’s Beneficiary,
as the case may be, shall be entitled to a prorated award. Such prorated award shall be equal to
the value of the target award set forth in the Grant Acceptance Agreement multiplied by a fraction,
the numerator of which shall equal the number of days such Participant was employed with the
Company during the Performance Period and the denominator of which shall equal the number of days
in the Performance Period. Notwithstanding anything herein to the contrary, if a Participant or a
Participant’s Beneficiary, as the case may be, shall be entitled to receive payment of an Award or
a prorated Award, pursuant to this Section 2.2, such Participant or such Participant’s Beneficiary,
as the case may be, shall receive such payment in a lump sum cash amount no later than the March
15
th
occurring immediately after the year in which the Participant’s employment
terminates.
2.3.
Termination by Reason Other Than Voluntary Termination by Participant, Death,
Permanent Disability or Cause
. If the Participant’s employment with the Company
terminates for any reason, other than voluntary termination by Participant, death, Permanent
Disability or Cause, (i) in the case of an Award relating to a completed Performance Period, the
Award shall be paid, to the extent earned, to the Participant as if the Participant had remained
employed with the Company through the Vesting Date, (ii) in the case of an Award relating to a
pending Performance Period, the Performance Period shall continue through the last day thereof and
the Participant shall be entitled to a prorated award. Such prorated award shall be equal to the
value of the award at the end of the Performance Period based on the actual performance during the
Performance Period multiplied by a fraction, the numerator of which shall equal the number of days
such Participant was employed with the Company during the Performance Period and the denominator of
which shall equal the number of days in the Performance Period. Notwithstanding anything herein
to the contrary, if a Participant shall be entitled to receive payment of an Award or a prorated
Award, pursuant to this Section 2.3, such Participant shall receive such payment in a lump sum cash
amount no later than the March 15
th
occurring immediately after the year in which the
Participant’s employment terminates.
2.4.
Termination by Reason of Voluntary Termination by Participant or Cause
. If the
Participant’s employment with the Company is terminated voluntarily by Participant or is terminated
by the Company for Cause, the Participant’s Award that is unvested as of the date of termination,
shall be immediately forfeited.
2.5.
Payment
. If an Award shall have vested, the Participant shall receive, no later
than the March 15th occurring immediately after the year in which the Vesting Date occurs, a lump
sum cash payment from the Company in an amount equal, as determined by the Committee, to the amount
of the Award which shall have vested as of such Vesting Date, subject to the deduction of taxes and
other amounts pursuant to the Program. All payments under this Agreement are intended to be exempt
from Section 409A of the Code as “short-term deferrals,” within the meaning of Treasury regulations
promulgated under Section 409A of the Code.
2.6.
Committee Discretion
. Notwithstanding the attainment of the Performance Measures
with respect to the Award or anything herein to the contrary, in all cases, the Committee shall
have the sole and absolute discretion to reduce the amount of any payment with respect to any
portion of the Award that would otherwise be made to any Participant or to decide that no payment
shall be made.
3.
Additional Terms and Conditions of Award
.
3.1.
Nontransferability of Award
. The Award and any rights thereunder shall not be
transferable other than by will or the laws of descent and distribution or pursuant to any
Beneficiary designation procedures as may approved by the Committee for such purpose. Except as
permitted by the preceding sentence, the Award shall not be sold, transferred, assigned, pledged,
hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be
subject to execution, attachment or similar process. Upon any attempt by the Participant to so
sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Award, the Award
and all rights thereunder shall immediately become null and void.
2
3.2.
Award Confers No Rights to Continued Employment
. In no event shall the granting
of the Award or its acceptance by the Participant give or be deemed to give the Participant any
right to continued employment by the Company or any Affiliate of the Company.
3.3.
Decisions of Committee
. The Committee shall have the right to resolve all
questions which may arise in connection with the Award. Any interpretation, determination or other
action made or taken by the Committee regarding the Program or this Agreement shall be final,
binding and conclusive.
3.4.
Agreement Subject to the Program and the Plan
. This Agreement is subject to the
provisions of the Program and the Plan and shall be interpreted in accordance therewith. The
Participant hereby acknowledges receipt of a copy of the Program and the Plan.
4.
Miscellaneous Provisions
.
4.1.
Meaning of Certain Terms
. As used herein, employment by the Company shall
include employment by an Affiliate of the Company.
4.2.
Successors
. This Agreement shall be binding upon and inure to the benefit of any
successor or successors of the Company and any person or persons who shall, upon the death of the
Participant, acquire any rights hereunder in accordance with this Agreement or the Program.
4.3.
Notices
. All notices, requests or other communications provided for in this
Agreement shall be made, if to the Company, to Pulte Homes, Inc., Attention Executive Vice
President, Human Resources, 100 Bloomfield Hills Parkway, Suite 300, Bloomfield Hills, Michigan
48304, and if to the Participant, to the last known address contained in the records of the
Company. All notices, requests or other communications provided for in this Agreement shall be
made in writing either (a) by personal delivery to the party entitled thereto, (b) by electronic
mail or facsimile with confirmation of receipt, (c) by mailing in the United States mails to the
last known address of the party entitled thereto or (d) by express courier service. The notice,
request or other communication shall be deemed to be received upon personal delivery, upon
confirmation of receipt of electronic mail or facsimile transmission, or upon receipt by the party
entitled thereto if by United States mail or express courier service; provided, however, that if a
notice, request or other communication is not received during regular business hours, it shall be
deemed to be received on the next succeeding business day of the Company.
4.4.
Governing Law
. This Agreement, the Award and all determinations made and actions
taken pursuant hereto and thereto, to the extent not otherwise governed by the laws of the United
States, shall be governed by the laws of the State of Michigan and construed in accordance
therewith without giving effect to conflicts of laws principles.
4.5.
Statute of Limitations
. Any action, claim or lawsuit relating to this Agreement must
be filed no more than six (6) months after the date of the employment action that is the subject of
the action, claim or lawsuit. The Participant voluntarily waives any statute of limitations to the
contrary.
3