<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 2)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
Del Webb Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[DEL WEBB LOGO]
PHOENIX, ARIZONA
------------------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
------------------------------------------------------------------------
NOVEMBER 4, 1998
------------------------------------------------------------------------
NOTICE AND PROXY STATEMENT
------------------------------------------------------------------------
<PAGE> 3
[DEL WEBB LOGO]
------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
NOVEMBER 4, 1998
------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders (the
"Annual Meeting") of DEL WEBB CORPORATION, a Delaware corporation (the
"Company"), will be held at the Ocala/Silver Springs Hilton, 3600 S.W. 36th
Avenue, Ocala, Florida 34474, on Wednesday, November 4, 1998, at 9:00 a.m.,
Eastern Standard Time, for the purposes of:
1. Electing three Class II Directors for three-year terms expiring at
the Annual Meeting of Shareholders to be held in 2001 or until their
successors have been duly elected and qualified;
2. Approving the Del Webb Corporation 1998 Director Stock Plan;
3. Approving the Del Webb Corporation 1998 Executive Long-Term Incentive
Plan;
4. Ratifying the appointment of KPMG Peat Marwick LLP as the principal
independent public accounting firm of the Company for the year ending
June 30, 1999; and
5. Transacting such other business as may properly come before the
Annual Meeting.
The Board of Directors has fixed the close of business on September 14,
1998 as the Record Date for shareholders entitled to notice of and to vote at
the Annual Meeting and any adjournments thereof.
IN ORDER THAT ADEQUATE PREPARATIONS MAY BE MADE FOR THE ANNUAL MEETING,
PLEASE MARK YOUR PROXY IF YOU WISH TO ATTEND. A MEETING ATTENDANCE CARD WILL BE
MAILED TO YOU PROMPTLY TO FACILITATE YOUR ATTENDANCE.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING, PLEASE MARK,
SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT IN THE ACCOMPANYING ENVELOPE OR
VOTE YOUR PROXY BY TELEPHONE AS DESCRIBED IN THE INSTRUCTIONS ON THE PROXY CARD.
THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE ANNUAL MEETING BY WRITTEN
NOTICE TO THE SECRETARY OF THE COMPANY, BY VOTING IN PERSON AT THE ANNUAL
MEETING, OR BY SUBMITTING A LATER DATED PROXY BY MAIL OR USING THE TELEPHONE
VOTING PROCEDURES.
On Behalf of the Board of Directors
DONALD V. MICKUS
Vice President,
Secretary and Treasurer
Phoenix, Arizona
Dated: September 28, 1998
<PAGE> 4
[DEL WEBB LOGO]
6001 NORTH 24TH STREET
PHOENIX, ARIZONA 85016
602-808-8000
------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 4, 1998
------------------------------
SOLICITATION OF PROXY
This Proxy Statement has been prepared in connection with the Board of
Directors' solicitation of the enclosed proxy for the 1998 Annual Meeting of
Shareholders of Del Webb Corporation, a Delaware corporation (the "Company"), to
be held on November 4, 1998, at 9:00 a.m., Eastern Standard Time, at the
Ocala/Silver Springs Hilton, 3600 S.W. 36th Avenue, Ocala, Florida 34474. The
solicitation of the enclosed form of proxy is made by the Board of Directors of
the Company and the cost of the solicitation will be borne by the Company. The
Proxy Statement has been furnished to the record holders of shares of common
stock, $.001 par value, of the Company (the "Common Stock") at the close of
business on September 14, 1998 (the "Record Date"). The accompanying Notice of
Annual Meeting, this Proxy Statement, and the enclosed proxy are being mailed on
or about September 28, 1998 to holders of shares of Company Common Stock on the
Record Date.
The Annual Meeting is for the purposes of:
1. Electing three Class II Directors for three-year terms expiring at
the Annual Meeting of Shareholders to be held in 2001 or until their
successors have been duly elected and qualified;
2. Approving the Del Webb Corporation 1998 Director Stock Plan;
3. Approving the Del Webb Corporation 1998 Executive Long-Term Incentive
Plan;
4. Ratifying the appointment of KPMG Peat Marwick LLP as the principal
independent public accounting firm of the Company for the year ending
June 30, 1999; and
5. Transacting such other business as may properly come before the
Annual Meeting.
INFORMATION AS TO VOTING SECURITIES
As of the Record Date, the outstanding securities of the Company entitled
to a vote at the meeting consisted of 18,106,536 shares of Common Stock, each
share being entitled to one vote. A majority of the outstanding shares entitled
to vote shall constitute a quorum for the conduct of business.
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ACTION TO BE TAKEN UNDER THE PROXIES
If the enclosed proxy is properly returned by dating, signing, and mailing,
or the proxy is voted properly using the telephone voting procedures, and
choices are specified, the shares represented thereby will be voted at the
Annual Meeting in accordance with those instructions. If no instructions are
given with respect to the matters to be acted on, the persons acting under the
proxies will vote the shares represented thereby in favor of the election of the
nominees for directors named herein; in favor of the Del Webb Corporation 1998
Director Stock Plan; in favor of the Del Webb Corporation 1998 Executive
Long-Term Incentive Plan; in favor of ratification of the appointment of KPMG
Peat Marwick LLP as the principal independent public accounting firm of the
Company for the year ending June 30, 1999; and at their discretion as to such
other business as may come before the meeting or any adjournment thereof. The
Board of Directors is not aware of any other business to be brought before the
meeting. If other proper matters or matters of which the Board is not aware a
reasonable time prior to the meeting are introduced, then, to the extent
permissible by law, the persons named in the enclosed proxy will vote the shares
they represent in accordance with their judgment.
The presence at the Annual Meeting, in person or by proxy, of holders of a
majority of the outstanding shares of Common Stock entitled to vote will
constitute a quorum for the transaction of business. Abstentions will be treated
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum, but as unvoted for purposes of determining the approval of
any matter submitted to the shareholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be considered present and
entitled to vote with respect to that matter, but will be considered present and
entitled to vote for determining the presence of a quorum. As used herein,
"uninstructed shares" means shares held by a broker who has not received
instructions from its customers on such matters and the broker has so notified
the Company on a proxy form in accordance with industry practice or has
otherwise advised the Company that it lacks voting authority. As used herein,
"broker non-votes" means the votes that could have been cast on the matter in
question by brokers with respect to uninstructed shares if the brokers had
received their customers' instructions. Although there are no controlling
precedents under Delaware law regarding the treatment of such broker votes in
certain circumstances, the Company intends to apply the principles set forth
herein.
Election of Directors: Directors are elected by a plurality and the three
nominees who receive the most votes will be elected. Abstentions and broker
non-votes will not be taken into account in determining the outcome of the
election.
Approval of the Del Webb Corporation 1998 Director Stock Plan: To be
adopted, the Director Stock Plan must receive the affirmative vote of the
majority of the shares of Common Stock present in person or by proxy at the
meeting and entitled to vote. Uninstructed shares are not entitled to vote on
this matter, and therefore broker non-votes do not affect the outcome.
Abstentions have the effect of negative votes.
Approval of the Del Webb Corporation 1998 Executive Long-Term Incentive
Plan: To be adopted, the Executive Long-Term Incentive Plan must receive the
affirmative vote of the majority of the shares of Common Stock present in person
or by proxy at the meeting and entitled to vote. Uninstructed shares are not
entitled to vote on this matter, and therefore broker non-votes do not affect
the outcome. Abstentions have the effect of negative votes.
Ratification of Appointment of KPMG Peat Marwick LLP: To be ratified, this
matter must receive the affirmative vote of the majority of the shares of Common
Stock present in person or by
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proxy at the meeting and entitled to vote. Uninstructed shares are entitled to
vote on this matter. Therefore, abstentions and broker non-votes have the effect
of negative votes.
All shareholders with valid meeting attendance cards will be admitted to
the Annual Meeting. Shareholders who have beneficial ownership of Common Stock
that is held by a bank or broker (often referred to as "holding in street name")
should bring account statements or letters from their banks or brokers
indicating that they owned Company Common Stock as of the Record Date.
Accordingly, if you plan to attend the meeting, please mark the box provided on
your proxy card so that we may send you an attendance card. If you vote by
telephone, you can request an attendance card when you vote. Shareholders also
may obtain an attendance card by submitting a written request to the Secretary
of the Company.
A shareholder executing and returning a proxy has the power to revoke it at
any time prior to the Annual Meeting by giving written notice of revocation to
the Secretary of the Company, by voting in person at the meeting, or by
submitting a later dated proxy by mail or using the telephone voting procedures
as described on the proxy card.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board has nominated the three directors named below to serve three-year
terms as Class II Directors. The election of the nominees requires a plurality
of the votes cast with a quorum present.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" ELECTION OF THE CLASS II DIRECTORS.
DIRECTORS AND NOMINEES
The Board of Directors currently has ten members, three members in Class I,
three members in Class II, and four members in Class III. At the Annual Meeting
of Shareholders on November 4, 1998, three directors in Class II will be elected
to serve until the Annual Meeting of Shareholders in 2001, or until their
successors are elected and qualified. Hugh F. Culverhouse, Jr., a director since
1990, retired from the Company's Board of Directors in April 1998. Kenny C.
Guinn, a director of the Company since 1994, retired from the Company's Board of
Directors in December 1997. Additionally, in May 1998, LeRoy C. Hanneman, Jr.
was appointed by the Board to Class I.
It is not anticipated that any nominee for election as a director will
become unable to accept nomination but, if such an event should occur, the
person or persons acting under the proxies will vote for a substitute nominee
designated by the Board of Directors or the remaining nominees if no substitute
is nominated.
NOMINEES FOR ELECTION
FOR TERM EXPIRING AT 2001 ANNUAL MEETING
CLASS II
D. KENT ANDERSON, 57, a director of the Company since 1994, has served as
Executive Banking Officer of Compass Bank since 1996. He served as Chairman of
the Board and Chief Executive Officer of Post Oak Bank from 1991 until 1996. Mr.
Anderson is an advisory director of Compass Bank and a director of Sam Houston
Race Park.
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<PAGE> 7
MICHAEL E. ROSSI, 54, a director of the Company since 1994, was Vice
Chairman of BankAmerica Corporation from 1991 until his retirement in 1997. Mr.
Rossi is a director of United Pacific Resources.
SAM YELLEN, 67, a director of the Company since 1991, was a partner with
KPMG Peat Marwick LLP from 1968 until his retirement in 1990. Mr. Yellen is a
director of Downey Financial Corporation and LTC Properties, Inc.
CONTINUING DIRECTORS
FOR TERM EXPIRING AT 1999 ANNUAL MEETING
CLASS III
PHILIP J. DION, 53, has been the Company's Chairman of the Board and Chief
Executive Officer since 1987. Mr. Dion joined the Company in 1982 and held
various positions in the Company until his appointment as Chairman of the Board
and Chief Executive Officer. Mr. Dion is a director of Boyd Gaming Corporation.
MICHAEL O. MAFFIE, 50, a director of the Company since 1997, has served as
President and Chief Executive Officer of Southwest Gas Corporation since 1993
and is also a member of its Board of Directors. Mr. Maffie has held various
executive positions with Southwest Gas since 1978, including President and Chief
Operating Officer from 1988 to 1993. Mr. Maffie is a director of Boyd Gaming
Corporation.
J. RUSSELL NELSON, 68, a director of the Company since 1983, was Dean of
Business and Administration of the University of Colorado from 1989 until his
retirement in 1992 and was President of Arizona State University from 1981 to
1989.
PETER A. NELSON, 66, a director since 1984, was Senior Vice President of
Marketing of McDonald's Corporation from 1984 until his retirement in 1990.
CONTINUING DIRECTORS
FOR TERM EXPIRING AT 2000 ANNUAL MEETING
CLASS I
LEROY C. HANNEMAN, JR., 51, a director since May 1998, was named the
Company's President and Chief Operating Officer in May 1998. Mr. Hanneman joined
the Company in 1972 and held various positions in the Company, including
Executive Vice President from 1996 to 1998, until his appointment as President
and Chief Operating Officer.
GLENN W. SCHAEFFER, 44, a director of the Company since 1997, has served as
President and Chief Financial Officer of Circus Circus Enterprises, Inc. since
1995 and served as President, CFO and Treasurer from 1984 until his departure in
1993. Prior to returning to Circus Circus in 1995, Mr. Schaeffer was a principal
with Goldstrike Resorts from 1993 to 1995. Mr. Schaeffer is also a director of
Circus Circus Enterprises, Inc. and Weider Nutrition International, Inc.
C. ANTHONY WAINWRIGHT, 65, a director of the Company since 1988, has been
Vice Chairman of McKinney and Silver since 1997. From 1995 until 1997, Mr.
Wainwright was Chairman of the advertising agency of Harris, Drury, Cohen, Inc.
From 1989 until 1995, Mr. Wainwright was Vice Chairman of the advertising agency
of Campbell-Mithun-Esty. Mr. Wainwright is a director of American Woodmark
Corporation, Gibson Greetings, Inc., Caribiner International, Advanced Polymer
Systems, Inc., and Marketing Services Group, Inc.
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<PAGE> 8
MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ending June 30, 1998, the Board of Directors held
four regular meetings and one special meeting. All members of the Board attended
more than 75% of the meetings of the Board and the committees on which they
serve.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors appoints an Audit Committee, Executive Committee,
Finance Committee, Human Resources Committee, and Nominating Committee.
Audit Committee. None of the members of the Audit Committee is an employee
of the Company. The Audit Committee makes recommendations to the Board
concerning the selection of independent auditors, reviews the scope and results
of independent and internal audits, and monitors the sufficiency of internal
auditing, accounting and financial controls. In addition, the Audit Committee
monitors the Company's Code of Conduct, which is administered by the Company's
Ethics Committee. The Audit Committee held three regular meetings during the
year ended June 30, 1998.
Executive Committee. The Executive Committee acts on Board matters that
arise between meetings of the full Board of Directors. The Executive Committee
held one special meeting during the year ended June 30, 1998.
Finance Committee. The Finance Committee is responsible for oversight of
all corporate financial matters including the following: the Company's capital
structure; the Company's financial performance; management's expenditure limits;
annual operating budgets; financial arrangements with respect to mergers and
acquisitions of business units; the Company's dividend policy; policies of
short-term investments; external relationships with bankers and other financial
third parties; financial covenants; and insurance and bonding programs. The
Finance Committee held three regular meetings during the year ended June 30,
1998.
Human Resources Committee. The Human Resources Committee functions as the
Company's compensation committee and is responsible for reviewing and
recommending for approval by the Board of Directors the compensation of
executives with a base pay in excess of $200,000, including such employees'
participation in stock option and restricted stock plans and incentive plans.
The Human Resources Committee also reviews the compensation, benefits (including
executive perquisites), management development, organizational development, and
affirmative action policies and programs of the Company. Certain employee
benefit plans may also be submitted by the Human Resources Committee to the
Board for its approval, review, and final determination. The Human Resources
Committee held two regular meetings and two special meetings during the year
ended June 30, 1998.
Nominating Committee. The Nominating Committee reviews and recommends
changes in the size and composition of the Board of Directors and evaluates and
recommends candidates for election to the Board of Directors and appointment to
Board committees. The Nominating Committee will consider proposals for
nomination from shareholders that are made in writing to the Secretary, that are
timely and that contain sufficient background information concerning the nominee
to enable proper judgment to be made as to his or her qualifications. The
Nominating Committee held two meetings during the year ended June 30, 1998.
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The composition of each committee currently is as follows:
<TABLE>
<S> <C> <C>
AUDIT COMMITTEE EXECUTIVE COMMITTEE
- ------------------------ ------------------------
Sam Yellen* Peter A. Nelson*
Michael E. Rossi Philip J. Dion
HUMAN RESOURCES
COMMITTEE FINANCE COMMITTEE NOMINATING COMMITTEE
- ------------------------ ------------------------ ------------------------
Peter A. Nelson* J. Russell Nelson* J. Russell Nelson*
Michael O. Maffie D. Kent Anderson C. Anthony Wainwright
C. Anthony Wainwright LeRoy C. Hanneman, Jr. Sam Yellen
Philip J. Dion,
Glenn W. Schaeffer Ex-Officio
</TABLE>
----------------------
* Chair.
COMPENSATION OF DIRECTORS
Directors who are not officers of the Company receive an annual retainer of
$24,000, a meeting fee of $2,000 for each meeting of the Board and a meeting fee
of $1,000 for each meeting of a committee thereof. A director who serves as
Chair of the Audit, Finance or Human Resources Committee receives an additional
$5,000 annually, and a director who serves as Chair of the Nominating Committee
or the Executive Committee receives an additional $2,500 annually. Directors who
are not officers and who devote time to committee-related activities other than
attendance at meetings may be paid a per diem fee equal to the meeting fee for
such additional service.
Nonemployee directors of the Company are eligible to participate in both
the Del Webb Corporation Director Stock Plan and the Del Webb Corporation 1995
Director Stock Plan. These plans provide for the aggregate automatic annual
grant of options for 2,000 shares of Common Stock to eligible nonemployee
directors and provide the opportunity for nonemployee directors to defer all or
a portion of their annual retainer into stock options and/or restricted stock.
The automatic annual grants are made at the fair market value on the date of
grant, November 20 of each calendar year. Each option granted under this feature
will expire on the tenth anniversary of the date of grant. Participants are
entitled to exercise the options at any time after the options vest and before
the options expire. One-third of the options vest on each of the first, second
and third anniversaries of the date of grant.
On or before December 31 of each year, each nonemployee director has the
ability to elect to exchange any portion or all of his or her annual retainer
for the fiscal year commencing on July 1 of the next calendar year for stock
options or restricted stock. The election is irrevocable for the period made.
Each director may also elect to defer up to 100% of his or her annual retainer
and meeting fees under the Del Webb Corporation Deferred Compensation Plan.
Under this plan, the irrevocable deferral election must be made on or before
December 15 each year in order to be in effect for the following calendar year.
Additionally, if approved by the Company's shareholders at the Annual
Meeting, the Del Webb Corporation 1998 Director Stock Plan (the "1998 Director
Stock Plan") will be available to eligible nonemployee directors. The 1998
Director Stock Plan contains substantially the same terms and provides similar
benefits as the Del Webb Corporation Director Stock Plans discussed above,
except that the 1998 Director Stock Plan also permits discretionary option
grants to be made to nonemployee directors, and provides for the automatic grant
of options to purchase 6,000 shares of Common Stock when a nonemployee director
is newly appointed. The 1998 Director Stock Plan
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also provides for an automatic one time grant to recent nonemployee director
appointees of options to purchase Common Stock in an amount equal to the
difference between 6,000 and the number of options that have been previously
granted to such director under any Company stock plan. See "Proposal
2 -- Approval of the Del Webb Corporation 1998 Director Stock Plan."
REPORT OF HUMAN RESOURCES COMMITTEE
OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The executive compensation policies of the Company have been developed to
further the Company's strategic mission of being a leader in the industries in
which it participates and maximizing shareholder value. To meet these business
objectives, the Company maintains a policy that the compensation of all
executive officers should emphasize the relationship between pay and performance
by including variable, at-risk compensation that depends upon the financial
performance and the strategic positioning of the Company. To this end, the
Company provides compensation levels necessary to attract and retain
high-quality executives, to motivate key executives to achieve or exceed
corporate financial and operational goals, and to contribute to the short- and
long-term interests of shareholders.
The Human Resources Committee (for purposes of the Report of Human
Resources Committee only, the "Committee") of the Board of Directors oversees
the Company's executive compensation program for executives with a base pay in
excess of $200,000, evaluates the performance of corporate officers, and
considers management succession and related matters. The Committee reviews with
the Board all aspects of compensation for the Chief Executive Officer, Mr. Dion,
and the compensation of all other executives. The Committee currently is
comprised of three independent, nonemployee directors.
The Company's executive compensation program consists of two key elements:
(1) an annual cash component, which consists of base salary and an annual bonus;
(2) a long-term component, which consists of grants of stock options and shares
of restricted stock and participation in the Company's retirement programs,
including the Company's Supplemental Executive Retirement Plans described in
"Supplemental Retirement Plans" below. The policies with respect to each of
these elements, as well as the basis for determining the compensation of Mr.
Dion, are described below.
ANNUAL COMPONENT
BASE SALARY
The Committee reviews each executive's base salary. Base salaries for
executive officers are determined by evaluating each individual's performance,
experience, and level of responsibility in comparison to similar positions
within the Company and in the homebuilding industry. In establishing salaries
for fiscal 1998, the Committee considered each executive's contributions during
the past fiscal year and the competitive market for equally qualified
executives. In fiscal 1998, the Committee authorized increases in the base
salaries of the executive officers listed in the Summary Compensation Table on
page 10 other than Mr. Dion, in the range of 0% to 33.3%.
Mr. Dion's base salary for the year ended June 30, 1998, was established
under the terms of an Employment and Consulting Agreement dated July 10, 1996,
which provides for a base salary of
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$500,000. See "Compensation of Executive Officers -- Employment Agreements." Mr.
Dion's base salary was below the average of the base compensation of the chief
executive officers of the nine homebuilding companies included in the Composite
Index described on page 15 (the "Peer Group").
ANNUAL BONUS
The Company's annual bonus awards are a significant component of executive
compensation, reflecting the Company's belief that compensation should be linked
to performance. Under the Del Webb Corporation Executive Incentive Plan (the
"Management Incentive Plan"), annual bonuses paid to executives employed at the
corporate headquarters are based on the financial performance (consolidated net
earnings) of the entire Company. Executives assigned to operations are evaluated
upon both the financial performance (project cash flow and net earnings) of the
operating community or division to which the executives are assigned and the
financial performance of the entire Company. The Committee predetermines target
annual bonuses for each executive, and for fiscal 1998 these target bonuses for
the named executive officers, other than Mr. Dion, were set at from 60% to 75%
of the executive's annual base salary. In years in which the Company's financial
performance (including cash flow and net earnings) exceeds target performance,
an executive could earn an annual bonus of up to 200% of the target amount;
however, in the years in which the Company's financial performance does not meet
target performance, bonus payments can be reduced or eliminated. In fiscal 1998,
annual bonuses paid to the four highest paid executives, other than Mr. Dion,
represented 105% to 117% of their annual base salary.
Mr. Dion received an annual bonus under the Management Incentive Plan of
$1,400,000 which, together with his base salary, represented an increase of
11.8% in Mr. Dion's aggregate cash compensation for fiscal 1998 over fiscal
1997. The Management Incentive Plan, which was designed so that awards could be
tax-deductible for the Company under Section 162(m) of the Internal Revenue
Code, was adopted by the Board of Directors and approved by the Company's
shareholders in 1995.
The Committee established three criteria at the beginning of fiscal year
1998 to use in evaluating Mr. Dion's performance under the Management Incentive
Plan: (i) after-tax earnings of the Company; (ii) net margin percentage achieved
for the 1998 fiscal year financial results; and (iii) the Company's ranking
within the Peer Group for return on equity. Based upon these criteria, the
maximum performance award that could have been made to Mr. Dion was $1,589,000.
In setting the actual bonus award at $1,400,000, the Committee considered that
fiscal year 1998 was the best year in the history of the Company in terms of
sales, operating earnings, net earnings and earnings per share with home sales
for fiscal 1998 12% above those of the previous year. Excluding the SFAS 121
writedown in fiscal year 1996, fiscal year 1998 was the fourth consecutive year
of record earnings from continuing operations. The Committee also considered
certain qualitative factors, such as Mr. Dion's vision and long-term focus on
running the Company, his leadership in the development and growth of the Company
management team, and his accomplishment of major strategic objectives, such as
entering the Florida retirement market through the opportunistic acquisition of
Spruce Creek Communities and completing significant development activities at
the new large scale communities in Chicago, Las Vegas, Phoenix and northern
California.
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LONG-TERM COMPENSATION
STOCK OPTIONS AND RESTRICTED STOCK
Long-term compensation comprises a substantial portion of total executive
compensation in order to retain executives, motivate them to improve the
long-term value of the Company's stock, and to further the Company's objective
of linking compensation to performance. Long-term incentive compensation
includes both stock options and shares of restricted stock, which contain
vesting and restriction periods that are conditioned upon the executive's
continued employment. Consequently, the Company is able to maintain a cohesive
management team and to focus management's attention on the long-term interests
of the Company and the shareholders. When awarding long-term compensation, the
Committee examines the executive's level of responsibility, prior compensation,
previous long-term incentive awards, individual performance criteria, and
industry practices relating to similar compensation. Stock options directly link
executive rewards to the stock market's assessment of the Company's success,
while restricted stock provides a strong retention device as well as an
effective method for increasing executive stock ownership, thus encouraging a
personal proprietary interest, close identification with the Company and an
alignment of interests with those of the shareholders. All stock options granted
to the named executive officers during fiscal 1998 were granted at the
prevailing market price at the time of grant with vesting over five years and
will have value only if the price of the Company's Common Stock increases. All
shares of restricted stock granted to the named executive officers during fiscal
1998 have restrictions that lapse over five years. This incentive structure
focuses management attention on maximizing shareholder wealth in the long term.
Grants of stock options and restricted stock are made under various stock plans,
each of which has been approved by the Company's Board of Directors and
shareholders.
Both restricted share awards and stock option grants were determined as a
percentage of base salary, which varied with each executive's responsibilities
and relative position within the Company. Restricted shares awarded in fiscal
1998 represented approximately 34% to 109% of base salary for the named
executives other than Mr. Dion. Mr. Dion's award of restricted stock represented
approximately 58% of his base salary.
Section 162(m) of the Internal Revenue Code generally disallows deductions
to public companies for executive compensation in excess of $1 million to named
executive officers. This deduction limitation does not apply to
"performance-based" executive compensation. The Company's policy is to comply
with the requirements of Section 162(m) and maintain deductibility for all
executive compensation, except in circumstances where the Committee concludes on
an informed basis, in good faith, and with the honest belief that it is in the
best interest of the Company and the shareholders to take actions with regard to
the payment of executive compensation which do not qualify for tax
deductibility.
HUMAN RESOURCES COMMITTEE
Peter A. Nelson, Chair
Michael O. Maffie
C. Anthony Wainwright
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<PAGE> 13
COMPENSATION OF EXECUTIVE OFFICERS
The following tables set forth information concerning compensation of the
persons named for services in all capacities to the Company and its subsidiaries
for the periods indicated therein.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
----------------------
ANNUAL COMPENSATION RESTRICTED ALL OTHER
---------------------- STOCK OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS($)(1) (#) ($)(2)
- --------------------------- ---- --------- ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Philip J. Dion...................... 1998 $500,000 $1,400,000 $288,750 30,000 $10,825
Chairman of the Board and 1997 $500,000 $1,200,000 $216,969 29,400 $ 9,302
Chief Executive Officer 1996 $500,000 $1,200,000 $626,250 42,000 $ 8,356
LeRoy C. Hanneman, Jr............... 1998 $324,038 $ 454,300 $354,065 37,000 $ 8,566
President and Chief Operating
Officer 1997 $298,077 $ 362,300 $ 90,063 12,000 $ 8,403
1996 $190,385 $ 250,000 $135,688 15,000 $ 6,984
Frank D. Pankratz................... 1998 $245,000 $ 257,500 $ 82,500 8,500 $ 7,380
Senior Vice President and 1997 $245,000 $ 240,500 $ 65,500 7,500 $ 5,494
General Manager -- Sun City 1996 $241,154 $ 175,000 $135,688 15,000 $ 5,260
Summerlin and Sun City MacDonald
Ranch
Charles T. Roach.................... 1998 $206,154 $ 229,400 $ 82,500 8,500 $ 8,291
Senior Vice President and 1997 $193,654 $ 177,000 $ 65,500 7,500 $ 7,801
General Manager -- Sun City 1996 $181,154 $ 181,300 $135,688 15,000 $ 7,203
West and Sun City Grand
John A. Spencer..................... 1998 $199,231 $ 239,100 $ 82,500 8,500 $ 7,697
Senior Vice President and 1997 $187,885 $ 192,700 $ 65,500 7,500 $ 7,203
Chief Financial Officer 1996 $187,154 $ 191,500 $104,375 12,500 $ 6,939
</TABLE>
- ---------------
(1) At June 30, 1998, aggregate restricted shareholdings in shares (and dollars)
were 48,850 ($1,267,071) for Mr. Dion, 24,800 ($643,262) for Mr. Hanneman,
12,600 ($326,819) for Mr. Pankratz, 12,600 ($326,819) for Mr. Roach, and
11,700 ($303,475) for Mr. Spencer. Dividends subsequent to the acceptance
date of restricted stock awards are paid directly to the executives.
(2) Includes fiscal 1998 contributions by the Company to the retirement savings
plan of $5,000, $5,250, $4,712, $4,975, and $4,727 for Messrs. Dion,
Hanneman, Pankratz, Roach, and Spencer, respectively. This column also
includes the portion of fiscal 1998 premium payments attributable to term
coverage under the Key Executive Life Plans ("KELPs") in the amount of
$5,825, $3,316, $2,668, $3,316, and $2,970 for Messrs. Dion, Hanneman,
Pankratz, Roach, and Spencer, respectively. The KELPs are group life
insurance plans implemented in May 1991 ("KELP I" for 53 key executives),
April 1992 ("KELP II" for the same 53 key executives), and September 1995
("KELP +" for 57 key executives). The Company pays the annual premiums on
the policies; however, upon death or retirement, the aggregate of the annual
premiums is repaid to the Company. The coverage amounts under KELP I are
$1,503,630, $751,815, $751,815, $751,815 and $751,815 for Messrs. Dion,
Hanneman, Pankratz, Roach, and Spencer, respectively. The coverage amounts
under KELP II are $1,416,519, $709,260, $709,260, $709,260, and $709,260 for
Messrs. Dion, Hanneman, Pankratz, Roach, and Spencer, respectively. The
coverage amounts under KELP + are $1,191,016, $1,191,016, $1,191,016,
$1,191,016, and $1,191,016 for Messrs. Dion, Hanneman, Pankratz, Roach, and
Spencer, respectively.
10
<PAGE> 14
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED ANNUAL
SECURITIES PERCENT OF RATES OF STOCK
UNDERLYING TOTAL OPTIONS APPRECIATION OPTION
OPTIONS GRANTED TO EXERCISE TERM
GRANTED EMPLOYEES IN OR BASE EXPIRATION -----------------------
NAME (#)(1) FISCAL YEAR PRICE($/SH) DATE 5%($) 10%($)
- ---- --------------- ------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Philip J. Dion.......... 30,000 8.46% $20.625 11/06/07 $389,129 $986,128
LeRoy C. Hanneman,
Jr.................... 12,000 3.38% $20.625 11/06/07 $155,651 $394,451
25,000 7.05% $25.094 05/11/08 $394,537 $999,834
Frank D. Pankratz....... 8,500 2.40% $20.625 11/06/07 $110,253 $279,403
Charles T. Roach........ 8,500 2.40% $20.625 11/06/07 $110,253 $279,403
John A. Spencer......... 8,500 2.40% $20.625 11/06/07 $110,253 $279,403
</TABLE>
- ---------------
(1) All options granted during fiscal 1998 vest equally over a five-year period
commencing on the date of grant.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER VALUE OF
OF SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
SHARES UNEXERCISED OPTIONS AT OPTIONS AT
ACQUIRED ON VALUE JUNE 30, 1998(#) JUNE 30, 1998($)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Philip J. Dion................ 70,000 $1,141,930 310,280/78,720 $4,045,900/$511,899
LeRoy C. Hanneman, Jr......... 2,500 $ 48,503 61,000/55,600 $ 729,253/$222,228
Frank D. Pankratz............. 44,400 $ 707,244 44,000/23,500 $ 441,950/$148,106
Charles T. Roach.............. 0 $ 0 40,100/23,500 $ 401,261/$148,106
John A. Spencer............... 16,000 $ 250,195 59,600/22,000 $ 721,177/$140,511
</TABLE>
SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS
The Company has two Supplemental Executive Retirement Plans ("SERPs"):
"SERP I," effective January 1, 1986, and "SERP II," effective January 1, 1989.
Under the SERPs, executive officers of the Company and its subsidiaries, as
designated by the Company's Chief Executive Officer, or the Board in the case of
the Chief Executive Officer, are eligible to receive benefits upon their
retirement, death, disability, or termination of employment. Mr. Dion is a
participant of SERP I and Messrs. Hanneman, Pankratz, Roach, and Spencer are
participants of SERP II. Mr. Dion's benefit under SERP I is payable, without
actuarial reduction, at age 55. Mr. Hanneman's benefit under SERP II is payable,
without actuarial reduction, at age 62. The benefits of Messrs. Pankratz, Roach,
and Spencer under SERP II are payable at age 65 and are subject to a 3% per year
actuarial reduction if paid earlier. The following table sets forth estimated
annual retirement benefits for participants of SERP I and SERP II, respectively,
at a specified "average participating compensation" level (based on the
participant's highest average annual total
11
<PAGE> 15
of salary and bonuses during any five calendar years out of the seven
consecutive calendar years of employment with the Company that will produce the
highest amount, less certain offsets) and years of service classifications:
<TABLE>
<CAPTION>
SERP I SERP II
PARTICIPATING YEARS OF SERVICE YEARS OF SERVICE
COMPENSATION --------------------- ----------------------
LEVEL 10 20 OR MORE 10 20 OR MORE
- ------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C>
$ 150,000 $ 52,500 $ 105,000 $ 45,000 $ 90,000
250,000 87,500 175,000 75,000 150,000
350,000 122,500 245,000 105,000 210,000
450,000 157,500 315,000 135,000 270,000
550,000 192,500 385,000 165,000 330,000
650,000 227,500 455,000 195,000 390,000
850,000 297,500 595,000 255,000 510,000
1,050,000 367,500 735,000 315,000 630,000
1,250,000 437,500 875,000 375,000 750,000
1,450,000 507,500 1,015,000 435,000 870,000
1,650,000 577,500 1,155,000 495,000 990,000
</TABLE>
Offsets not reflected in the above table include reductions for the
equivalent of benefits received from employer contributions to the Retirement
Savings Plan and certain predecessor or successor plans and 50% of the
participant's maximum Social Security benefit at age 65. A participant becomes
vested in retirement benefits pursuant to the SERPs at the rate of 10% per year
in which the participant has been continuously employed with the Company since
January 1, 1981 or their date of hire, whichever is later. In addition, Mr. Dion
is credited with 1.5 years of service for each year of service with the Company
after January 1, 1989. The estimated credited years of service and "average
participating compensation level" at August 31, 1998 for each of the individuals
named in the Summary Compensation Table is as follows: under SERP I, Mr. Dion,
21 years and $1,200,000; and under SERP II, Mr. Hanneman, 17.5 years and
$445,000, Mr. Pankratz, 11.5 years and $370,000, Mr. Roach, 17.5 years and
$330,000, and Mr. Spencer, 17.5 years and $310,000.
Both SERPs contain a change of control provision that provides that if a
participant is terminated within three years after a Change in Control (as
defined), the participant would be fully vested, be credited with 20 years of
service (or the number of years of service the participant would have as of his
or her normal retirement date if less) and be deemed to be the greater of age 55
or the participant's actual age. Using these parameters, the benefit would be
calculated, discounted back to the participant's actual age, and paid in an
actuarial equivalent lump sum. Mr. Dion's benefit would not be discounted to his
actual age but would be paid assuming he is 55 years of age.
Benefits payable under the SERPs, other than those due to a Change of
Control, are paid as follows: If the actuarial lifetime equivalent lump sum
value is $200,000 or less, the benefit is paid in a lump sum. If the actuarial
lifetime equivalent lump sum value is greater than $200,000, the participant can
elect to be paid (i) a $100,000 lump sum payment with the remainder paid in a
ten-year and certain life annuity, (ii) the entire amount in a ten-year and
certain life annuity, or (iii) if requested at least two years prior to
retirement or termination, a different form of payment such as a joint and
survivor annuity. If Mr. Dion's employment is continued until he reaches age 55,
the actuarial equivalent of his lifetime benefit will be paid in one lump sum
within 30 days of his termination.
Both SERPs allow a participant or beneficiary to elect to receive a lump
sum distribution of all or a portion of the participant's unpaid benefits,
subject to a 10% penalty, following a Change of Control (as defined),
participant's death, or termination of employment ("Accelerated Distribu-
12
<PAGE> 16
tion"). The 10% penalty applicable to Accelerated Distributions does not apply
to distributions to Mr. Dion if his employment is continued until age 55 or if
his employment is terminated by the Company without Cause (as defined), or by
Mr. Dion for Good Reason (as defined), before age 55.
The interest rate and mortality table used for purposes of determining the
actuarial equivalent for the SERPs generally will be based on the tables and
rates used by the Pension Benefit Guaranty Corporation (the "PBGC"). The only
variation from the practice followed for the SERPs in general is that the
interest rate used for Mr. Dion will be the average PBGC rate for the 36 months
preceding the month in which the payments begin.
If Mr. Dion's employment is terminated by the Company without Cause or by
Mr. Dion for Good Reason before he reaches age 55, he will continue to earn
benefits under SERP I until age 55, at which time his benefits will be paid in
one lump sum.
EMPLOYMENT AGREEMENTS
The Company has entered into an Employment and Consulting Agreement with
Mr. Dion that provides for a minimum annual base salary of $500,000 and
participation in any Company incentive compensation plan, pension or profit
sharing plans, stock purchase plan or executive retirement plan. The Agreement
provides that Mr. Dion will continue to serve as the Company's Chief Executive
Officer and Chairman of the Board until November 30, 1999, at which time his
employment will be discontinued and he will become a consultant to the Company.
Mr. Dion will receive $200,000 per year during the two-year consulting period.
Under his Employment and Consulting Agreement, Mr. Dion is entitled to
continued health insurance coverage following the termination of his employment
if his employment is continued until November 30, 1999 or if his employment is
terminated before then either by the Company without Cause (as defined) or by
Mr. Dion for Good Reason (as defined).
If the Company terminates Mr. Dion's employment without Cause, or if Mr.
Dion terminates his employment for Good Reason, prior to November 30, 1999, Mr.
Dion will be entitled to receive his base salary, plus 16 2/3% of his base
salary in lieu of employee fringe benefits. He also shall be entitled to receive
a bi-weekly incentive compensation payment based on his average incentive
compensation with respect to the five fiscal years prior to the fiscal year of
termination. These payments will continue until November 30, 1999, at which
point they will be replaced by the $200,000 annual consulting fee until November
30, 2001. If the termination occurs prior to November 30, 1999, Mr. Dion also
will receive certain additional benefits. In addition, all options and
restricted stock previously granted will become immediately exercisable and free
of all restrictions. If the termination occurs during the two-year consulting
period, Mr. Dion will receive his consulting fees and certain expense
reimbursements for the balance of the consulting period.
If, within 24 months after a Change in Control (as defined) of the Company,
Mr. Dion terminates his employment with the Company for Good Reason, or if the
Company terminates his employment without Cause, he shall be entitled to special
severance benefits in addition to the salary, fringe benefit and incentive
compensation severance benefit described above. The sum of the special severance
benefits and the benefits described above will equal the sum of (i) three times
his base salary as it may be increased from time to time, (ii) three times his
average incentive compensation for the five year period preceding the year of
termination, and (iii) three times the imputed value of his fringe benefits. Mr.
Dion also will be entitled to be reimbursed for any excise taxes imposed upon
the special severance benefits and any other payments or amounts that are deemed
to be contingent on a change in control, as well as any excise, income, or
employment taxes imposed on these reimbursements.
13
<PAGE> 17
In addition to the above mentioned agreement, the Company has also entered
into an employment agreement with LeRoy C. Hanneman, Jr. under which he receives
a minimum annual base salary of $400,000 and participates in any Company
incentive compensation plan, pension or profit sharing plans, stock purchase
plan or executive retirement plan maintained for senior executive officers. The
employment agreement with Mr. Hanneman provides for an initial one year term
extending through June 30, 1998 and automatic successive one-year renewal terms
to continue until one party provides the other party with written notice of
non-renewal.
Under his employment agreement, Mr. Hanneman is entitled to receive certain
severance benefits if the Company terminates his employment without "Cause" (as
defined), or if Mr. Hanneman terminates his employment for "Good Reason" (as
defined), or if his employment is terminated due to "Permanent Disability" (as
defined). Generally, the severance benefits consist of continued salary and
benefits for 12 months, an incentive compensation payment, and the vesting of
stock options, stock appreciation rights, and restricted stock that would
otherwise vest within 12 months.
The employment agreement with Mr. Hanneman contains change of control
provisions, which provide him with supplemental severance benefits if, within 24
months following a Change of Control (as defined) of the Company, Mr. Hanneman
terminates his employment for Good Reason (as defined) or the Company terminates
his employment without Cause (as defined). These special severance benefits
include a lump sum severance payment equal to (i) two and one-half times his
annual base salary, as it may be increased from time to time, plus (ii) two and
one-half times the greatest of (a) the average annual incentive compensation
paid to Mr. Hanneman pursuant to the Company's annual Management Incentive Plan
with respect to the five fiscal years preceding the fiscal year in which the
Change of Control occurs, or (b) an amount equal to 100% of the incentive
compensation paid to Mr. Hanneman pursuant to the Management Incentive Plan
during the twelve months prior to the effective date of his termination of
employment with the Company, or (c) an amount equal to Mr. Hanneman's base
salary, as it may be increased from time to time, multiplied by his current
target bonus percentage under the Management Incentive Plan then in effect;
minus (iii) the general base salary and incentive compensation severance
benefits, if any, payable pursuant to the agreement due to Mr. Hanneman's
termination of employment. Under Mr. Hanneman's employment agreement, certain
insurance benefits (life, disability, accident and group health) will be
continued for 30 months if his employment is terminated as described above
following a Change of Control and a lump sum payment equal to 20% of his base
salary, as it may be increased from time to time, will be paid in lieu of all
other fringe benefits. Mr. Hanneman also is entitled to be reimbursed for any
excise taxes imposed upon him due to these change of control benefits or any
other payments or amounts that are deemed to be contingent on a change in
control, as well as any excise, income, or employment taxes imposed on these
reimbursements. Furthermore, all options and restricted stock previously granted
will become immediately exercisable and free of all restrictions.
As of the date hereof, the Company also has change of control agreements
with Messrs. Pankratz, Roach and Spencer. Such change of control agreements
provide that, upon the termination of the officer's employment by the Company in
connection with a Change of Control (as defined) of the Company, the officer,
based upon position, will receive a lump sum payment equal to (i) one and
one-half or two times the annual base salary in effect at any time during the 12
months prior to termination; (ii) the greater of all bonuses paid during the 12
months prior to termination or 35 to 40% of the termination salary; and (iii)
20% of the termination salary in lieu of fringe benefits. In addition, all
options and restricted stock previously granted will become immediately
exercisable and free of all restrictions.
14
<PAGE> 18
PERFORMANCE GRAPH
The following graph compares the five-year cumulative total shareholder
return on the Company's Common Stock to total returns on the Standard & Poor's
500 Stock Index and a composite index of peer group corporations in the
homebuilding industry (the "Composite Index").
The Composite Index of peer group corporations includes Centex Corporation;
D.R. Horton, Inc.; Hovnanian Enterprises, Inc.; Kaufman & Broad Home
Corporation; Lennar Corporation; Pulte Corporation; The Ryland Group, Inc.;
Standard Pacific Corp.; and Toll Brothers, Inc. (collectively, the "New Peer
Group"). The Composite Index is consistent with the peer group used in the
Company's 1997 Proxy Statement, with the exception of D.R. Horton, Inc., which
replaced Continental Homes Holding Corp. as a result of the merger of
Continental Homes Holding Corp. with and into D.R. Horton, Inc.
The graph assumes that the value of the investment in the Company's Common
Stock, the S&P 500 Index, and the 1998 and 1997 peer group companies each was
$100 on June 30, 1993, and that all Continental Homes Holding Corp. dividends
were reinvested. The peer group is weighted by market capitalization.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG DEL WEBB CORPORATION, THE S&P 500 INDEX,
1998 PEER GROUP AND 1997 PEER GROUP
[DEL WEBB COMPARISON CHART]
<TABLE>
<CAPTION>
1998.00 AND
MEASUREMENT PERIOD DEL WEBB 1997 PEER
(FISCAL YEAR COVERED) CORPORATION GROUP S & P 500
<S> <C> <C> <C>
JUN-93 100.00 100.00 100.00
JUN-94 106.50 84.17 101.41
JUN-95 159.02 91.19 127.84
JUN-96 138.20 97.98 161.09
JUN-97 113.66 120.32 216.99
JUN-98 183.09 228.17 282.43
</TABLE>
* $100
INVESTED
ON
6/30/93
IN
STOCK
OR
INDEX-
INCLUDING
REINVESTMENT
OF
DIVIDENDS.
FISCAL
YEAR
ENDING
JUNE
30.
15
<PAGE> 19
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by each person who is known
to the Company to own beneficially more than 5% of the outstanding Common Stock.
In preparing the table below, the Company has relied, without further
investigation, on information filed by the following reporting persons with the
Securities and Exchange Commission under the Securities Act of 1934. The Company
makes no representations as to the accuracy or completeness of the information
reported.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENTAGE
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS(5)
------------------- -------------------- -----------
<S> <C> <C>
Barclays Global Investors, N.A.(1)...... 1,181,211 6.52%
45 Fremont Street
San Francisco, California 94105
Dimensional Fund Advisors, Inc.(2)...... 938,988 5.19%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Travelers Group, Inc.(3)................ 3,132,463 17.30%
388 Greenwich Street
New York, New York 10013
The Prudential Insurance Company of
America(4).............................. 944,392 5.22%
751 Broad Street
Newark, New Jersey 07102
</TABLE>
- ---------------
(1) Based on a Schedule 13G dated February 13, 1998, filed by Barclays Global
Investors, N.A. and certain affiliated entities. Barclays Global Investors,
N.A. and its affiliates have sole dispositive power with respect to all such
shares, sole voting power with respect to 1,153,711 of such shares and
shared voting power with respect to none of such shares.
(2) Based on a Schedule 13G dated February 6, 1998, filed by Dimensional Fund
Advisors, Inc., which has sole dispositive power with respect to all such
shares, sole voting power with respect to 610,400 of such shares and shared
voting power with respect to none of such shares.
(3) Based on Amendment No. 4 to Schedule 13G dated January 15, 1998, filed by
Travelers Group, Inc. and certain affiliated entities. Travelers Group and
its affiliates have shared voting and investment power with respect to all
such 3,132,463 shares.
(4) Based on a Schedule 13G dated February 10, 1998, filed by The Prudential
Insurance Company of America. Prudential has shared voting and dispositive
power with respect to 940,992 of such shares, and sole voting and
dispositive power with respect to 3,400 of such shares.
(5) The percentage of Common Stock beneficially owned is based on the number of
shares of Common Stock outstanding on September 14, 1998.
16
<PAGE> 20
SHARE OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth, as of September 14, 1998, certain
information regarding beneficial ownership of the Company's Common Stock by each
director, the Company's five most highly compensated executive officers, and the
directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
---------------- ----------------------- --------
<S> <C> <C>
D. Kent Anderson............................... 6,418 *
Philip J. Dion................................. 409,090(2) 2.22%
LeRoy C. Hanneman, Jr.......................... 113,970 *
Michael O. Maffie.............................. 1,000 *
J. Russell Nelson.............................. 6,484 *
Peter A. Nelson................................ 13,002 *
Frank D. Pankratz.............................. 93,613 *
Charles T. Roach............................... 76,828 *
Michael E. Rossi............................... 3,002 *
Glenn W. Schaeffer............................. 1,000 *
John A. Spencer................................ 92,627 *
C. Anthony Wainwright.......................... 6,818 *
Sam Yellen..................................... 14,246 *
Directors and executive officers as a group (17
persons)..................................... 1,082,984 5.74%
</TABLE>
- ---------------
* Less than 1% of the issued and outstanding shares of Common Stock of the
Company.
(1) Lists voting securities, including restricted stock held by directors and
officers over which the officers have voting power but no investment power.
Otherwise, each director or officer has sole voting power and investment
power over the shares reported, except as noted. This column also includes
the following shares that may be acquired pursuant to options exercisable
within 60 days: 6,418 shares for Mr. Anderson; 330,560 shares for Mr. Dion;
68,800 shares for Mr. Hanneman; 6,384 shares for Dr. J. R. Nelson; 6,002
shares for Mr. P. Nelson; 50,200 shares for Mr. Pankratz; 46,300 shares for
Mr. Roach; 3,002 shares for Mr. Rossi; 65,300 shares for Mr. Spencer; 6,002
shares for Mr. Wainwright; 14,246 shares for Mr. Yellen; and 764,264 shares
for directors and executive officers as a group.
(2) Includes 20,000 shares and 48,850 restricted shares held in a trust for the
benefit of Mr. Dion and his wife, and 9,680 shares held by PDJ Investments
Limited Partnership, an Arizona limited partnership, which is owned by Mr.
Dion, his wife, and children.
PROPOSAL 2
APPROVAL OF THE
DEL WEBB CORPORATION 1998 DIRECTOR STOCK PLAN
GENERAL
The Board of Directors of the Company has adopted a new stock plan entitled
the "Del Webb Corporation 1998 Director Stock Plan" (the "1998 Director Stock
Plan") for nonemployee directors of the Company. The 1998 Director Stock Plan
shall become effective as of July 23, 1998, subject to approval by the
affirmative vote of the holders of the majority of Company Common Stock present
or represented and entitled to vote thereon, at the Annual Meeting of
Shareholders.
The Board of Directors believes that the 1998 Director Stock Plan will
promote the achievement of long-term objectives of the Company and its
subsidiaries by linking the personal interests of nonemployee directors to those
of Company shareholders and by aiding the Company in attracting, obtaining, and
retaining directors of outstanding competence.
17
<PAGE> 21
There are several components of the 1998 Director Stock Plan: (1) the
automatic annual and one time granting of stock options to nonemployee
directors; (2) the opportunity of nonemployee directors to defer into stock
options or restricted stock all or a portion of their annual retainers and (3)
the discretionary granting of stock options to nonemployee directors. A summary
of the principal provisions of the 1998 Director Stock Plan and each of these
components of the 1998 Director Stock Plan is set forth below. The summary is
qualified by reference to the full text of the 1998 Director Stock Plan, which
is attached as Appendix A to this Proxy Statement.
ELIGIBILITY
Only nonemployee directors of the Company are eligible to participate.
Currently, the Company's Board of Directors is composed of eight (8)
non-employee directors.
ADMINISTRATION
The 1998 Director Stock Plan will be administered by the Board of Directors
and the Human Resources Committee of the Board of Directors, or any other
committee appointed by the Board of Directors (for purposes of the 1998 Director
Stock Plan only, the "Committee"). The Committee and the Board have the full
power, discretion, and authority to interpret and administer the 1998 Director
Stock Plan.
SHARES AVAILABLE
An aggregate of 75,000 shares of Company Common Stock are available for
grant under the 1998 Director Stock Plan. If any option or share of restricted
stock granted under the 1998 Director Stock Plan terminates, expires, or lapses
for any reason, the shares subject to purchase pursuant to such option and any
such shares of restricted stock again shall be available for grant under the
1998 Director Stock Plan.
AMENDMENT AND TERMINATION
The Board may terminate, amend or modify the 1998 Director Stock Plan at
any time; provided, however, that shareholder approval will be obtained for any
amendment to the extent necessary and desirable to comply with any applicable
law, regulation or stock exchange rule.
The 1998 Director Stock Plan shall remain in effect until all shares
subject to it have been either purchased or acquired in accordance with the
terms; however, in no event may an award be granted under the 1998 Director
Stock Plan on or after July 22, 2008.
CHANGE IN CONTROL
In the event of a change in control of the Company, all awards granted
under the 1998 Director Stock Plan that are outstanding and not vested shall
immediately become vested. Under the 1998 Director Stock Plan, a change in
control occurs upon any of the following events: (i) any person becoming the
beneficial owner of 20% or more of the Company's Common Stock; (ii) during any
two consecutive year period, the persons who are on the Company's Board of
Directors at the beginning of such period and any new person elected by
two-thirds of such directors cease to constitute a majority of the persons
serving on the Board of Directors; or (iii) the Company's shareholders approve
(a) a merger or consolidation of the Company with another corporation (other
than a merger in which 80% of the current shareholders remain as shareholders of
the new corporation), (b) a plan of complete liquidation, or (c) a sale of all
or substantially all of the Company's assets.
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<PAGE> 22
AUTOMATIC OPTION GRANT COMPONENT
Initial Grant
Each individual who first becomes a nonemployee director on or after July
23, 1998, shall be granted an option to purchase 6,000 shares. In addition, each
other nonemployee director shall be granted an option to purchase shares equal
to the nonemployee directors' "shortfall". A nonemployee director's shortfall
shall equal the difference between 6,000 shares and the number of shares subject
to options granted to the director prior to July 23, 1998 under any Company
plan.
Annual Grant
Subject to shareholder approval of the 1998 Director Stock Plan, each
nonemployee director shall be automatically granted an option to purchase 2,000
shares of Company Common Stock on November 20 of each calendar year (less the
number of shares granted to the director under any other plan, excluding the
1998 Director Stock Plan, during each such calendar year). Because each
non-employee director will receive option grants under other existing plans on
November 20, 1998, no grants will be made under this feature during fiscal 1999.
General Option Grant Provisions
The option exercise price of all options shall be the fair market value of
the Company's Common Stock on the date of grant. Each option will expire on the
tenth anniversary date of its grant. Participants will be entitled to exercise
the options at any time after the options vest and before the options expire.
One-third of the options vest on the first anniversary of the date of grant, and
one-third vest on each of the second and third anniversaries of the date of
grant.
Exercise
Upon exercise of a stock option, the purchase price must be paid in full
either: (i) in cash or its equivalent, (ii) by tendering previously acquired
shares of Company Common Stock with a fair market value at the time of exercise
equal to the exercise price (provided such shares have been held for at least
six months prior to tender), (iii) subject to the approval of the Board of
Directors where a discretionary grant has been made, or subject to the approval
of the Committee in all other cases, pursuant to a cashless exercise
arrangement, as permitted under applicable law, or (iv) by a combination of (i),
(ii) and (iii).
Federal Tax Consequences
A director who is granted an option will not recognize taxable income upon
the grant of the option. Upon exercise of the option, the director will
recognize compensation taxable as ordinary income in an amount equal to the
difference between the fair market value of the shares of Company Common Stock
at the time of exercise and the option price. The Company will generally be
entitled to a corresponding tax deduction at the time that the director
recognizes compensation income.
DISCRETIONARY OPTION GRANT COMPONENT
Awards
The 1998 Director Stock Plan provides for option grants on a discretionary
basis. No determination has been made as to the types or amounts of awards that
would be granted to specific individuals under the discretionary grant
provisions of the 1998 Director Stock Plan. The expiration per a vesting
schedule is the same as described under "Automatic Option Grant Component"
above.
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<PAGE> 23
Exercise
Options granted on a discretionary basis may be exercised in the same
manner as set forth under "Automatic Option Grant Component" above.
Federal Tax Consequences
Under the Discretionary Option Grant Component, a director and the Company
will be subject to the same Federal tax consequences as set forth under
"Automatic Option Grant Component" above.
RETAINER DEFERRAL COMPONENT
Deferrals
On or before December 31 of each year, each nonemployee director will have
the ability to elect to defer any portion or all of his or her annual retainer
for the fiscal year commencing on July 1 of the next calendar year. Deferrals
may, at the discretion of each director, be made in the form of stock options or
restricted stock. Any deferral election is irrevocable for the period made.
Restricted Stock
Any shares of restricted stock issued to a director under the deferral
component are issued in the name of the director but may be held by the Company
during the restricted period.
The number of shares of restricted stock that will be granted pursuant to a
retainer deferral shall be equal to the amount of the retainer deferred divided
by the fair market value of one share of the Company's Common Stock on the Grant
Date. The "Grant Date" is the tenth day following the public release of the
Company's year end financial information. The restrictions on the restricted
stock will lapse six months from the Grant Date. During the restricted period,
the director is entitled to receive all dividends and exercise all voting rights
with respect to such restricted stock. All shares of restricted stock issued
under the 1998 Director Stock Plan may not be sold, transferred, pledged,
assigned, or otherwise disposed of until the restrictions lapse.
Federal Income Tax Consequences -- Restricted Stock
A director who elects to receive restricted stock will generally not
recognize taxable income upon the receipt of the restricted stock, unless the
director elects under Section 83(b) of the Internal Revenue Code of 1986, as
amended from time to time ("Code"), to include the fair market value of the
restricted stock in income. In the absence of such an election, the directors
will include the fair market value of the restricted stock in income when the
restricted stock is no longer subject to a substantial risk of forfeiture or the
restricted stock becomes transferrable. The Company will generally be entitled
to a corresponding tax deduction at the time the director recognizes taxable
income.
If the director does not make an 83(b) election, dividends on the
restricted stock will be includible in the director's taxable income as
compensation income and the Company will be entitled to a corresponding tax
deduction. If the director does make an 83(b) election, dividends on the
restricted stock will be includible in the director's taxable income as dividend
income, but the Company will not be entitled to a corresponding tax deduction.
Deferral Options
The number of shares that may be subject to options received in connection
with a retainer deferral shall be equal to the amount of the retainer deferred
divided by twenty-five percent of the
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<PAGE> 24
fair market value of one share of the Company's Common Stock on the Grant Date.
Deferral options so granted shall vest immediately. The option exercise prices
will be equal to 75% of the fair market value on the Grant Date. Options are
issued using these formulas to give the director who is deferring his or her
cash retainer an equivalent economic value.
Each option granted under this component shall expire on the tenth
anniversary date of the Grant Date.
Exercise
Options received in connection with a retainer deferral shall be exercised
in the same manner as set forth for options granted automatically.
Federal Tax Consequences -- Deferral Options
Under the Retainer Deferral Component, a director and the Company generally
will be subject to the same Federal tax consequences as set forth for options
granted automatically.
NEW PLAN BENEFITS
The following table shows the grants that will be made during fiscal year
1999 under the 1998 Director Stock Plan assuming that the plan is approved by
the shareholders and that the current composition of the Board does not change.
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF UNITS
- ----------------- ---------------
<S> <C>
Philip J. Dion.............................................. 0(1)
Chairman of the Board and Chief Executive Officer
LeRoy C. Hanneman, Jr....................................... 0(1)
President and Chief Operating Officer
Frank D. Pankratz........................................... 0(1)
Senior Vice President and General Manager --
Sun City Summerlin and Sun City MacDonald Ranch
Charles T. Roach............................................ 0(1)
Senior Vice President and General Manager --
Sun City West and Sun City Grand
John A. Spencer............................................. 0(1)
Senior Vice President and Chief Financial Officer
Executive Group (7 persons)................................. 0(1)
Non-Employee Director Group (8 persons)..................... 8,000(2)
Non-Executive Officer Employee Group........................ 0(1)
</TABLE>
- ---------------
(1) These individuals and groups would not be participants in the 1998 Director
Stock Plan, but are required by Securities and Exchange Commission rules to
be listed in this table.
(2) Reflecting 4,000 options automatically granted to Michael O. Maffie and
4,000 options automatically granted Glenn W. Schaeffer.
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<PAGE> 25
VOTE REQUIRED
Adoption of the 1998 Director Stock Plan requires approval by holders of a
majority of the outstanding shares of Company Common Stock who are present, or
represented, and entitled to vote thereon, at the Annual Meeting of
Shareholders.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" APPROVAL OF PROPOSAL 2.
PROPOSAL 3
APPROVAL OF
DEL WEBB CORPORATION 1998 EXECUTIVE LONG-TERM INCENTIVE PLAN
GENERAL
The Board of Directors has adopted a new stock plan entitled the "Del Webb
Corporation 1998 Executive Long-Term Incentive Plan" (the "1998 Executive
Long-Term Incentive Plan") for key employees of the Company. The 1998 Executive
Long-Term Incentive Plan will become effective as of November 4, 1998, subject
to approval by the affirmative vote of the holders of the majority of Company
Common Stock present, or represented, and entitled to vote thereon, at the
Annual Meeting of Shareholders.
The Board of Directors believes that the 1998 Executive Long-Term Incentive
Plan will promote the success, and enhance the value, of the Company by linking
the personal interest of participants to those of Company shareholders and by
providing participants with an incentive for outstanding performance.
The 1998 Executive Long-Term Incentive Plan provides for the granting of
stock options, both incentive stock options and nonqualified stock options,
restricted stock, performance units, and performance-based awards to eligible
key employees. The summary of the principal provisions of the 1998 Executive
Long-Term Incentive Plan is set forth below. The summary is qualified by
reference to the full text of the 1998 Executive Long-Term Incentive Plan, which
is attached as Appendix B to this Proxy Statement.
ADMINISTRATION
The 1998 Executive Long-Term Incentive Plan shall be administered by the
Human Resources Committee of the Board, or by any other committee appointed by
the Board and, unless specifically provided by the Board, such committee shall
consist of at least two directors each of whom qualifies as a non-employee
director and an "outside director" under Section 162(m) of the Internal Revenue
Code, as amended, and the regulations thereunder (for purposes of the 1998
Executive Long-Term Incentive Plan only, the "Committee").
The Committee may delegate to any officer of the Company, or any Committee
of officers, the authority to take all actions with regard to grants to
employees other than officers. The delegation must specify the aggregate number
of shares that may be awarded pursuant to the delegation and also may involve
any other limitations that the Committee deems appropriate.
ELIGIBILITY
Persons eligible to participate in the 1998 Executive Long-Term Incentive
Plan include all officers and key employees of the Company and its subsidiaries,
as determined by the Committee,
22
<PAGE> 26
including employees who are members of the Board, but excluding directors who
are not employees. As of June 30, 1998, there were approximately 100 officers
and key employees of the Company and its subsidiaries.
LIMITATION ON AWARDS AND SHARES AVAILABLE
An aggregate of 1,000,000 shares of Company Common Stock are available for
grant under the 1998 Executive Long-Term Incentive Plan. Of such 1,000,000
shares, no more than 100,000 shares of restricted stock that include only time
based restrictions, and an additional 100,000 shares of restricted stock that
include performance based restrictions, may be granted under the 1998 Executive
Long-Term Incentive Plan. The maximum number of shares of Company Common Stock
that may be subject to one or more awards to a participant under the 1998
Executive Long-Term Incentive Plan is 300,000. The maximum number of shares of
Company Common Stock payable in the form of performance-based awards for a
performance period is 75,000. As of September 14, 1998, the closing price of the
Company's Common Stock on The New York Stock Exchange was $21.50 per share.
AWARDS
The 1998 Executive Long-Term Incentive Plan provides for the grant of
incentive stock options, nonqualified stock options, restricted stock,
performance units, or performance-based awards. No determination has been made
as to the types or amounts of awards that will be granted to specific
individuals under the 1998 Executive Long-Term Incentive Plan. See "Summary
Compensation Table" and "Option Grants in Last Fiscal Year" on pages 10 and 11,
respectively, for information on prior awards to named executive officers.
Stock options may be granted under the 1998 Executive Long-Term Incentive
Plan, including incentive stock options, as defined under Section 422 of the
Code, and nonqualified stock options. The option exercise price of all stock
options granted under the 1998 Executive Long-Term Incentive Plan shall not be
less than 100% of the fair market value of the Company's Common Stock on the
date of grant. Stock options may be exercised as determined by the Committee,
but in no event after the tenth anniversary date of grant.
Upon exercise of a stock option, the purchase price must be paid in full in
either cash or its equivalent or by tendering previously acquired shares of
Company Common Stock with a fair market value at the time of exercise equal to
the exercise price (provided such shares have been held for at least six months
prior to tender). The Committee may also allow cashless exercise or by any other
means that the Committee determines to be consistent with the purpose of the
1998 Executive Long-Term Incentive Plan and as permitted under applicable law.
As discussed above, restricted stock may be granted under the 1998
Executive Long-Term Incentive Plan. A restricted stock award is the grant of
shares of Common Stock at a price determined by the Committee (including zero),
which is nontransferable and subject to substantial risk of forfeiture until
specific conditions are met. Conditions may be based on continuing employment or
achievement of performance goals. Certificates evidencing restricted stock
awards will bear a legend making reference to the restrictions. During the
period of restriction, participants holding shares of restricted stock shall
have full voting and dividend rights with respect to such shares. The
restrictions will lapse in accordance with a schedule or other conditions
determined by the Committee.
A performance unit is a contingent right to receive a pre-determined amount
if certain performance goals are met. The value of performance units will depend
on the degree to which the
23
<PAGE> 27
specified performance goals are achieved. Payment of earned performance units
will be made in a single lump sum within 45 days after the end of the
measurement period for the performance unit. The Committee may, in its
discretion, pay earned performance units in cash, or stock, or a combination of
both.
The amount of payments made to a participant will be the value of the
performance unit for the level of performance achieved multiplied by the number
of performance units earned by the participant. Prior to the beginning of each
measurement period for the performance unit, participants may elect to defer the
receipt of the performance unit payout on terms acceptable to the Committee.
Grants of performance-based awards under the 1998 Executive Long-Term
Incentive Plan enable the Committee to treat restricted stock and performance
unit awards granted under the Plan as "performance-based compensation" under
Section 162(m) of the Code and preserve the deductibility of these awards for
federal income tax purposes. Because Section 162(m) of the Code only applies to
those employees who are "covered employees," as defined in Section 162(m) of the
Code, only covered employees are eligible to receive performance-based awards.
Participants are only entitled to receive payment for a performance-based
award for any given performance period to the extent that pre-established
performance goals set by the Committee for the period are satisfied. These
pre-established performance goals must be based on one or more of the following
performance criteria: pre- or after- tax net earnings, revenue growth, operating
income, operating cash flow, return on net assets, return on shareholders'
equity, return on assets, return on capital, share price growth, shareholder
returns, gross or net profit margin, earnings per share, price per share, and
market share. These performance criteria may be measured in absolute terms or as
compared to any incremental increase or as compared to results of a peer group.
With regard to a particular performance period, the Committee shall have the
discretion to select the length of the performance period, the type of
performance-based awards to be granted, and the goals that will be used to
measure the performance for the period. In determining the actual size of an
individual performance-based award for a performance period, the Committee may
reduce or eliminate (but not increase) the award. Generally, a participant will
have to be employed on the last day of the performance period in order to be
eligible for a performance-based award for that period.
AMENDMENT AND TERMINATION
The Committee, subject to approval of the Board, may terminate, amend, or
modify the 1998 Executive Long-Term Incentive Plan at any time; provided,
however, that shareholder approval will be obtained for any amendment to the
extent necessary and desirable to comply with any applicable law, regulation or
stock exchange rule.
In no event may an award be granted under the 1998 Executive Long-Term
Incentive Plan on or after November 3, 2008.
FEDERAL INCOME TAX CONSEQUENCES
A participant receiving incentive stock options, nonqualified stock
options, restricted stock, or performance-based awards will not recognize
taxable income at the time of grant. At the time the nonqualified stock option
is exercised, the restrictions lapse on restricted stock, or performance units
or performance-based awards are paid, as the case may be, the participant will
recognize ordinary taxable income in an amount equal to the difference between
the amount paid for such award and fair market value of the Company's Common
Stock or amount received on the date of exercise or
24
<PAGE> 28
lapse of restriction. The Company will be entitled to a concurrent deduction
equal to the ordinary income recognized by the participant.
If applicable holding period requirements are met, a participant granted an
incentive stock option will not recognize taxable income at the time of
exercise. However, the excess of the fair market value of the Common Stock
received over the option price is an item of tax preference income potentially
subject to the alternative minimum tax. If stock acquired upon exercise of an
incentive stock option is held for a minimum of two years from the date of grant
and one year from the date of exercise, the gain or loss (in an amount equal to
the difference between the sales price and the exercise price) upon disposition
of the stock will be treated as a mid- or long-term capital gain or loss, and
the Company will not be entitled to any deduction. If the holding period
requirement is not met, the incentive stock option will be treated as one which
does not meet the requirements of the Internal Revenue Code for incentive stock
options and the tax consequences described for nonqualified stock options will
apply in the year of the disqualifying disposition.
CHANGE IN CONTROL
In the event of a Change in Control (as defined) of the Company: (i) all
options granted under the 1998 Executive Long-Term Incentive Plan shall become
immediately exercisable; (ii) any restriction periods and restrictions imposed
on restricted stock shall lapse; (iii) the value of all performance units and
the time and manner of payment for all performance units will be governed by the
terms of the performance unit award agreement; and (iv) the Committee may make
any modifications to awards that may be deemed to be appropriate before the
effective date of the Change in Control subject to any applicable shareholder or
participant approval requirements. Under the Plan, a Change in Control occurs
upon any of the following events: (i) any person becoming the beneficial owner
of 20% or more of the Company's Common Stock; (ii) during any two consecutive
year period, the persons who are on the Company's Board of Directors at the
beginning of such period and any new person elected by two-thirds of such
directors cease to constitute a majority of the persons serving on the Board of
Directors; or (iii) the Company's shareholders approve (a) a merger or
consolidation of the Company with another corporation (other than a merger in
which 80% of the current shareholders remain as shareholders of the new
corporation), (b) a plan of complete liquidation, or (c) a sale of substantially
all of the Company's assets.
NEW PLAN BENEFITS
No awards will be granted under the 1998 Executive Long-Term Incentive Plan
until it is approved by the Company's shareholders. Therefore, it is not
possible to determine the benefits that will be received in the future by
participants in the 1998 Executive Long-Term Incentive Plan or the benefits that
would have been received by such participants if the 1998 Executive Long-Term
Incentive Plan had been in effect in the year ended June 30, 1998.
VOTE REQUIRED
Adoption of the 1998 Executive Long-Term Incentive Plan requires approval
by holders of a majority of the outstanding shares of Company Common Stock who
are present, or represented, and entitled to vote thereon, at the Annual Meeting
of Shareholders.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" APPROVAL OF PROPOSAL 3.
25
<PAGE> 29
PROPOSAL 4
RATIFICATION OF APPOINTMENT OF PRINCIPAL INDEPENDENT
PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING JUNE 30, 1999
The Board of Directors, on the recommendation of the Audit Committee, has
appointed KPMG Peat Marwick LLP as the firm of independent certified public
accountants to audit the books and accounts of the Company and its consolidated
subsidiaries for the year ending June 30, 1999, subject to ratification by
shareholders.
A representative of KPMG Peat Marwick LLP is expected to be present at the
Annual Meeting, will have an opportunity to make a statement if such
representative desires to do so, and will be available to respond to appropriate
questions by shareholders.
Shareholder ratification of the selection of KPMG Peat Marwick LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of KPMG Peat Marwick
LLP to the shareholders for ratification as a matter of good corporate practice.
If the shareholders fail to ratify the election, the Audit Committee and the
Board of Directors will reconsider whether or not to retain that firm. Even if
the selection is ratified, the Audit Committee and the Board of Directors in
their discretion may direct the appointment of different independent auditors at
any time during the year if they determine that such an appointment would be in
the best interest of the Company and its shareholders.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" RATIFICATION OF PROPOSAL 4.
OTHER MATTERS
The proxies are being solicited by order of the Board of Directors of the
Company, and the cost of such solicitation will be borne by the Company.
Directors, officers or employees of the Company may solicit proxies by telephone
or in person without additional compensation. Arrangements may be made with
brokerage firms and nominees to mail proxy material to beneficial owners, and
the Company may reimburse brokers for their expenses and postage on the scale
established by the New York Stock Exchange. The Company has arranged for Beacon
Hill Partners, Inc. to assist in the solicitation of proxies, at an anticipated
cost of approximately $3,000 plus reasonable out-of-pocket expenses.
The Company's Annual Report for the fiscal year ended June 30, 1998, which
includes financial statements, is being mailed concurrently to all shareholders
of record as of September 14, 1998. It is not to be regarded as proxy soliciting
material.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes of ownership with the Securities and Exchange Commission
and the New York Stock Exchange. During fiscal 1998, a Form 4 for LeRoy C.
Hanneman, Jr., a director and named executive officer, was inadvertently filed
11 days late.
26
<PAGE> 30
SHAREHOLDER NOMINATIONS AND PROPOSALS
Subject to certain requirements contained in the Company's Bylaws, a
shareholder of record may propose the nomination of someone for director by
written notice to the Secretary of the Company. Such notice must contain certain
information concerning the nominee and the shareholder making the nomination and
must be timely given, as described in the Company's Bylaws. A nomination that
does not comply with the above procedure will be disregarded.
Shareholder proposals for the 1999 Annual Meeting must be received at the
principal executive offices of the Company, 6001 North 24th Street, Phoenix,
Arizona 85016, not later than May 31, 1999, to be considered for inclusion in
the 1999 Proxy Statement. Proposals to be presented at the Annual Meeting that
are not intended for inclusion in the Proxy Statement must be submitted in
accordance with applicable provisions of the Company's Bylaws.
Shareholders are urged to mark, sign, date, and mail the proxy in the
enclosed envelope, postage for which has been provided for mailing in the United
States. Or, if possible, vote your proxy by telephone using the toll-free number
on your proxy card. Your prompt response is appreciated.
DONALD V. MICKUS
Vice President, Secretary
and Treasurer
Dated: September 28, 1998
27
<PAGE> 31
APPENDIX A
DEL WEBB CORPORATION
1998 DIRECTOR STOCK PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 Establishment of the Plan. Del Webb Corporation, a Delaware
corporation (the "Company"), hereby establishes a stock plan for Nonemployee
Directors, to be known as the "Del Webb Corporation 1998 Director Stock Plan"
(the "Plan"), as set forth in this document. The Plan permits the deferral of
Directors' Annual Retainers into grants of Nonqualified Stock Options and
Restricted Stock, and sets forth the terms of annual grants of Stock Options to
Nonemployee Directors.
Upon approval by the Board of Directors of Company, and conditioned upon
subsequent approval of the Plan by the shareholders of Company, the Plan shall
become effective as of July 23, 1998 (the "Effective Date"), and shall remain in
effect as provided in Section 1.3. Any Awards made in accordance with the
provisions of the Plan prior to shareholder approval are effective when made,
but no Award may be exercised or settled and no restrictions relating to any
Award may lapse before shareholder approval. If the shareholders fail to approve
the Plan at the 1998 annual shareholders meeting or any adjournment thereof, the
Plan and any Award made under the Plan shall be void ab initio and of no force
or effect.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
achievement of long-term objectives of Company by linking the personal interests
of Nonemployee Directors to those of Company shareholders and to attract and
retain Nonemployee Directors of outstanding competence.
1.3 Duration of the Plan. The Plan shall commence on the Effective Date,
as described in Section 1.1, and shall remain in effect, subject to the right of
the Board of Directors to terminate the Plan at any time pursuant to Article 9,
until all Shares subject to it shall have been purchased or acquired according
to the Plan's provisions. However, in no event may an Award be granted under the
Plan on or after July 22, 2008.
ARTICLE 2. DEFINITIONS AND CONSTRUCTION
2.1 Definitions. Whenever used in the Plan, the following terms shall
have the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:
(a) "Annual Retainer" means the annual fee payable by Company to a
Director, including amounts payable for service as a chairperson of a
committee of the Board, but excluding meeting fees.
(b) "Award" means, individually or collectively, a grant of
Nonqualified Stock Options or Restricted Stock under this Plan.
(c) "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
(d) "Board" or "Board of Directors" means the Board of Directors of
Del Webb Corporation, and includes any committee of the Board of Directors
designated by the Board to administer part or all of this Plan.
A-1
<PAGE> 32
(e) A "Change in Control" of Company shall be deemed to have occurred
in any or all of the following instances:
(1) Any "person" as such term is used in Sections 13(d) and 14(d)
of the Exchange Act, other than a trustee or other fiduciary holding
securities under an employee benefit plan of Company or a corporation
owned directly or indirectly by the stockholders of Company in
substantially the same proportions as their ownership of stock of
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
Company representing 20% or more of the total voting power represented
by Company's then outstanding Voting Securities (as defined below); or
(2) During any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of
Company and any new Director whose election by the Board of Directors or
nomination for election by Company's stockholders was approved by a vote
of at least two-thirds of the Directors then still in office who either
were Directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason
to constitute a majority thereof; or
(3) The stockholders of Company approve a merger or consolidation
of Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of
the surviving entity) at least 80% of the total voting power represented
by the Voting Securities of Company or such surviving entity outstanding
immediately after such merger or consolidation; or
(4) The stockholders of Company approve a plan of complete
liquidation of Company or an agreement for the sale or disposition by
Company of (in one transaction or a series of transactions) all or
substantially all Company's assets.
For purposes of this Section, the term "Voting Securities" shall mean
and include any securities of Company which vote generally for the election
of directors.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" means the Human Resources Committee of the Board of
Directors, or any other committee appointed by the Board to administer this
Plan. In any event, unless otherwise specifically provided by the Board,
the Committee shall be comprised of at least two individuals each of whom
qualifies as a "non-employee director" as defined in Rule 16b-3(b)(3) of
the Exchange Act, as it may be amended, replaced, or superseded from time
to time.
(h) "Company" means Del Webb Corporation, a Delaware corporation, or
any successor thereto as provided in Section 10.2 herein.
(i) "Director" means any individual who is a member of the Board of
Directors of Company.
(j) "Disability" means a permanent and total disability, within the
meaning of Code Section 22(e)(3). Disability shall be determined by the
Board in good faith, upon receipt of sufficient competent medical advice
from one or more individuals, selected by the Board, who are qualified to
give professional medical advice.
A-2
<PAGE> 33
(k) "Employee" means any full-time, nonunion, salaried employee of
Company. For purposes of this Plan, an individual whose only employment
relationship with Company is as a Director shall not be deemed to be an
Employee.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act thereto.
(m) "Fair Market Value" means, as of any given date, the fair market
value of a Share or other property determined by such methods or procedures
as may be established from time to time by the Committee. Unless otherwise
determined by the Committee, the Fair Market Value of a Share as of any
date shall be the closing price for a Share on any national securities
exchange on which the Shares are then listed for that date or, if there is
no closing price for that date, the closing price on the next preceding
date for which there is a closing price, all as reported in the Wall Street
Journal.
(n) "Grant Date" means (i) with respect to Awards granted pursuant to
Section 7.1 or 7.3, the effective date of the grant as set forth in Section
7.1 or 7.3, and (ii) with respect to Awards granted pursuant to Sections
6.1, 6.2, 6.3, and 7.2, the tenth (10th) day following the public release
of Company's fiscal year-end earnings information.
(o) "Nonemployee Director" means any individual who is a member of the
Board of Directors of Company, but who is not otherwise an Employee of
Company.
(p) "Option" means an option to purchase Shares, granted under
Articles 6 or 7.
(q) "Participant" means a Nonemployee Director of Company who has
outstanding an Award granted under the Plan.
(r) "Period of Restriction" means the period during which the transfer
of Shares of Restricted Stock is limited in some way, and the Shares are
subject to a substantial risk of forfeiture, as provided in Article 6.
(s) "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d).
(t) "Restricted Stock" means an Award granted to a Nonemployee
Director pursuant to Article 6.
(u) "Shares" means the shares of common stock of Del Webb Corporation.
2.2 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
2.3 Severability. In the event that a court of competent jurisdiction
determines that any portion of this Plan is in violation of any statute, common
law, or public policy, then only the portions of this Plan that violate such
statute, common law, or public policy shall be stricken. All portions of this
Plan that do not violate any statute or public policy shall continue in full
force and effect. Further, any court order striking any portion of this Plan
shall modify the stricken terms as narrowly as possible to give as much effect
as possible to the intentions of the parties under this Plan.
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ARTICLE 3. ADMINISTRATION
3.1 The Board and the Committee. Subject to the restrictions set forth in
this Plan, the Board shall administer the discretionary grant provisions of
Section 7.3 and bear the responsibility for all related administrative matters.
The Committee shall be responsible for the administration of all other
provisions of the Plan.
3.2 Administration. The Committee or the Board, as the case may be, shall
have full power, discretion, and authority to interpret and administer this Plan
in a manner which is consistent with the Plan's provisions. The Board shall have
full power, except as limited by law or by the Articles of Incorporation or
Bylaws of Company, and subject to the provisions herein, to determine the terms
and conditions of any discretionary grants made pursuant to Section 7.3,
including, but not limited to, the number of Shares subject to the Option, the
exercise price, any restrictions or limitations on any Option, any schedule for
lapse of restrictions on the exercisability of an Option, and accelerations or
waivers thereof, based in each case on such considerations as the Board in its
sole discretion determines.
3.3 Decisions Binding. All determinations and decisions made by the Board
or the Committee pursuant to the provisions of the Plan shall be final,
conclusive, and binding on all persons, including Company, its stockholders,
employees, Participants, and their estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3,
the total number of Shares available for grant under the Plan may not exceed
seventy-five thousand (75,000). The Shares issued as Restricted Stock and the
Shares issued pursuant to the Options exercised under this Plan may be
authorized and unissued Shares or Shares reacquired by Company, as determined by
the Committee.
4.2 Lapsed Awards. If any Option or Share of Restricted Stock granted
under this Plan terminates, expires, or lapses for any reason, any Shares
subject to purchase pursuant to such Option and any such Shares of Restricted
Stock again shall be available for grant under the Plan.
4.3 Adjustments. The Committee may make or provide for such adjustments
in the (a) number of Shares covered by outstanding Options and Restricted Stock
granted hereunder, (b) prices per share applicable to outstanding Options and
(c) kind of Shares covered thereby, as the Committee in its sole discretion may
in good faith determine to be equitably required in order to prevent dilution or
enlargement of the rights of Participants that otherwise would result from (x)
any stock dividend, stock split, combination or exchange of Shares,
recapitalization or other change in the capital structure of Company, (y) any
merger, consolidation, spin-off, spin-out, split-off, split-up, reorganization,
partial or complete liquidation, or other distribution of assets (other than a
normal cash dividend), issuance of rights or warrants to purchase securities, or
(z) any other corporate transaction or event having an effect similar to any of
the foregoing. Moreover, in the event of any such transaction or event, the
Committee may provide in substitution for any or all outstanding Awards under
this Plan such alternative consideration as it may in good faith determine to be
equitable under the circumstances and may require in connection therewith the
surrender of all Awards so replaced. The Committee may also make or provide for
such adjustments in the number of Shares specified in Section 4.1 as the
Committee in its sole discretion may in good faith determine to be appropriate
in order to reflect any transaction or event described in this Section 4.3. Any
adjustment pursuant to this Section 4.3 will be conclusive and binding for all
purposes of the Plan.
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ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Persons eligible to participate in this Plan are limited
to Nonemployee Directors.
5.2 Actual Participation. All eligible Nonemployee Directors shall
receive grants of Options pursuant to Article 7, and shall be given the
opportunity to defer all or a portion of their Annual Retainers into Options
and/or Restricted Stock, pursuant to the terms and provisions set forth in
Article 6.
ARTICLE 6. DEFERRAL OF ANNUAL RETAINERS
6.1 Deferral Election. On or before December 31 of each year during the
term of this Plan, each Nonemployee Director shall have the ability to elect to
defer any portion or all of his or her Annual Retainer, pursuant to the terms of
this Article 6. Deferrals may, at the discretion of the Director, be made in the
form of discounted Options or Restricted Stock, or a combination thereof.
The deferral election shall be irrevocable and shall be made by means of a
written notice delivered to the Secretary of Company on or before December 31 of
the calendar year which ends prior to the beginning of the applicable fiscal
year. The deferral election shall state the percentage and/or dollar amount of
the Director's Annual Retainer which is to be deferred and shall specify whether
the deferral is to be in the form of discounted Options or Restricted Stock or a
combination thereof.
Each deferral election by a Director shall relate to the Annual Retainer
which is to be earned by the Director for Company's fiscal year which begins in
the first calendar year following the calendar year in which the deferral
election is made. For example, a deferral election made by a Director on
December 31, 1998 will correspond to the deferral of an Annual Retainer which is
to be earned by the Director during the fiscal year beginning July 1, 1999, and
ending June 30, 2000.
The effective date of the Award grant relating to Annual Retainer deferrals
shall be the Grant Date which falls in the first calendar year following the
calendar year in which the applicable deferral election is made. Awards of
Restricted Stock pursuant to Annual Retainer deferrals under this Plan also
shall be made on the same Grant Date.
6.2 Terms of Stock Option Deferrals.
(a) Number of Shares under Option. The number of Shares which may be
purchased under Options issued pursuant to Annual Retainer deferrals shall
be determined according to the following formula:
<TABLE>
<S> <C>
Amount of Deferral
Number of Shares = -------------------------------------------------------
0.25 X Fair Market Value of Shares at Grant Date
</TABLE>
The Option price for each Share granted pursuant to an Annual Retainer
deferral shall equal seventy-five percent (75%) of the Fair Market Value of
a Share on the Grant Date. Options are issued using this formula to give
the Director who is deferring his or her Annual Retainer an equivalent
economic value.
(b) Vesting of Options. Options granted under this Article 6 shall
vest immediately.
(c) Individual Award Agreement. Each Option grant shall be evidenced
by an Individual Award Agreement that will not include any terms or
conditions that are inconsistent with the terms and conditions of this
Plan.
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(d) Duration of Options. Unless earlier terminated, forfeited, or
surrendered pursuant to a provision of this Plan, each Option shall expire
on the tenth (10th) anniversary date of its grant.
(e) Payment. Options shall be exercised by the delivery of a written
notice of exercise to the Secretary of Company, setting forth the number of
Shares with respect to which the Option is to be exercised, accompanied by
full payment for the Shares.
The Option price upon exercise of any Option shall be payable to
Company in full either: (i) in cash or its equivalent, (ii) by tendering
previously acquired Shares having a Fair Market Value at the time of
exercise equal to the total Option price, (iii) subject to the approval of
the Board in the case of discretionary grants under Section 7.3, or subject
to the approval of the Committee in all other cases, pursuant to a cashless
exercise arrangement, including a broker-assisted cashless exercise
arrangement under Federal Reserve Board Regulation T, or (iv) by a
combination of (i), (ii) and (iii). The proceeds from such a payment shall
be added to the general funds of Company and shall be used for general
corporate purposes.
To the extent that a Participant exercises an Option by tendering
previously acquired Shares, the Participant may elect to defer the receipt
of any "Excess Shares" so acquired, with such election to be made at such
time and in such manner as may be prescribed from time to time in rules
adopted for purposes of this paragraph. For purposes of this paragraph, the
term "Excess Shares" means (i) the difference between the number of Shares
that could be received upon exercise of the Option by tendering previously
acquired Shares and (ii) the number of previously acquired Shares tendered
as payment of the exercise price.
(f) Restrictions on Share Transferability. To the extent necessary
to ensure that Awards granted hereunder comply with applicable law, the
Committee shall impose restrictions on any Shares acquired pursuant to the
exercise of an Option under this Plan, including, without limitation,
restrictions under applicable Federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are
then listed and/or traded, and under any blue sky or state securities laws
applicable to such Shares.
(g) Termination of Service on Board of Directors. In the event the
service of a Participant on the Board is terminated for any reason, any
Option acquired pursuant to this Article shall remain exercisable at any
time prior to its expiration date, or for one (1) year after the
termination of service, whichever period is shorter, by the Participant or
such person or persons as shall have been named as the Participant's legal
representative or beneficiary, or by such persons that have acquired the
Participant's rights under the Option by will or by the laws of descent and
distribution.
(h) Nontransferability of Options. Except as otherwise allowed by
uniform rules adopted by the Board or the Committee, no Option granted
under this Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will, by the laws of descent and
distribution, or pursuant to Section 10.1. Further, all Options granted to
a Participant under this Plan shall be exercisable during his or her
lifetime only by such Participant.
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6.3 Terms of Restricted Stock Deferrals.
(a) Grants of Restricted Stock. The number of shares of Restricted
Stock which shall be granted pursuant to an Annual Retainer deferral shall
be determined according to the following formula:
<TABLE>
<S> <C>
Amount of Deferral
Number of Shares = -------------------------------------------------------
Fair Market Value of Shares at Grant Date
</TABLE>
Awards of Restricted Stock under this Plan shall be made on the Grant
Date which falls within the first (1st) calendar year following the
calendar year in which the applicable deferral election was made.
(b) Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Agreement that shall specify the Period of
Restriction, or Periods, the number of Restricted Stock Shares granted, and
such other provisions as the Committee shall determine.
(c) Transferability. Except as provided in this Section 6.3(c), the
Shares of Restricted Stock granted herein may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated (other than
pursuant to Section 10.1) until the end of the applicable Period of
Restriction, as specified in the Restricted Stock Agreement.
The Period of Restriction for Shares of Restricted Stock awarded
pursuant to this Article 6 shall end six (6) months following the Grant
Date on which such Shares were issued. All rights with respect to the
Restricted Stock granted to a Director under the Plan shall be available
during his or her lifetime only to such Director.
(d) Certificate Legend. Each certificate representing Shares of
Restricted Stock granted pursuant to the Plan may bear the following
legend:
"The sale or other transfer of the Shares of Stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the Del Webb
Corporation 1998 Director Stock Plan and in a Restricted Stock Agreement. A
copy of the Plan and such Restricted Stock Agreement may be obtained from
the Secretary of Del Webb Corporation."
(e) Removal of Restrictions. Except as otherwise provided in this
Plan, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan shall become freely transferable by the Participant
after the last day of the Period of Restriction. Once the Shares are
released from the restrictions, the Director shall be entitled to have the
legend required by Section 6.3(d) removed from his or her Share
certificate.
(f) Voting Rights. During the Period of Restriction, Directors
holding Shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to those Shares.
(g) Dividends and Other Distributions. During the Period of
Restriction, Directors holding Shares of Restricted Stock granted hereunder
shall be entitled to receive all dividends and other distributions paid
with respect to those Shares while they are so held. If any such dividends
or distributions are paid in Shares, the Shares shall be subject to the
same restrictions on transferability and forfeitability as the Shares of
Restricted Stock with respect to which they were paid.
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(h) Termination of Service on Board of Directors Due to Death,
Disability, or Retirement. In the event that a Director's service on the
Board terminates prior to the end of the Period of Restriction by reason of
death, Disability, or retirement from the Board after attaining age 72,
then the percentage vesting of the Shares of Restricted Stock shall be
determined according to a fraction, the numerator of which is the number of
full weeks of service on the Board between the applicable Grant Date and
the date the Director's service on the Board terminates, and the
denominator of which is twenty-six (26).
Within thirty (30) days after termination of service on the Board, the
Director (or his or her legal representative) shall return to Company all
of the certificates representing Shares of Restricted Stock. As soon as
practicable thereafter, Company shall issue a new certificate representing
the number of vested Shares to which the Director is entitled.
(i) Termination of Service on Board of Directors for Other
Reasons. If the service of a Director on the Board terminates prior to the
end of the Period of Restriction for reasons other than death, Disability,
or retirement from the Board after attaining age 72, then all Shares of
Restricted Stock that are not vested as of the date the Director's service
on the Board terminates shall be forfeited to Company (and shall once again
become available for grant under the Plan). Within thirty (30) days after
the termination of service on the Board, the Director shall return to
Company all of the certificates representing his or her Shares of
Restricted Stock.
ARTICLE 7. INITIAL AND ANNUAL OPTION GRANTS
7.1 Initial Option Grants. Each individual who first became or becomes a
Nonemployee Director on or after July 23, 1998 shall be granted an Option to
purchase six thousand (6,000) Shares, effective as of the later of July 23, 1998
or the first Board meeting at which such individual serves as a Nonemployee
Director. Effective as of July 23, 1998, each other Nonemployee Director shall
be granted an option to purchase the number of Shares equal to such Nonemployee
Director's "shortfall". A Nonemployee Director's "shortfall" shall equal the
difference between six thousand (6,000) Shares and the number of Shares subject
to Options granted to the Director prior to July 23, 1998.
7.2 Annual Grant of Options. Each Nonemployee Director shall be granted
an Option to purchase two thousand (2,000) Shares upon each November 20 of each
calendar year commencing in 1998 (less the number of shares granted to the
Director under the Del Webb Corporation Director Stock Plan or the Del Webb
Corporation 1995 Director Stock Plan during each such calendar year).
7.3 Discretionary Grants. The Board shall have the authority to grant
Options, in addition to those granted under Sections 6.1, 6.2, 7.1 and 7.2, in
such amounts and at such times as the Board determines to be appropriate. The
specific terms of a discretionary option grant made pursuant to this Section
will be subject to all of the provisions of this Article and the related Option
Agreement. The Grant Date for such Option shall be determined by the Board at
the time the Award is made.
7.4 Individual Award Agreement. Each Option grant shall be evidenced by
an Individual Award Agreement that will not include any terms or conditions that
are inconsistent with the terms and conditions of this Plan.
7.5 Option Price. The purchase price per Share for an Option granted
pursuant to this Article 7 shall be equal to the Fair Market Value of such Share
on the date the Option is granted.
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7.6 Duration of Options. Unless earlier terminated, forfeited, or
surrendered pursuant to a provision of this Plan, each Option granted under this
Article 7 shall expire on the tenth (10th) anniversary of its Grant Date.
7.7 Vesting and Exercise. Participants shall be entitled to exercise
Options granted under this Article 7 at any time and from time to time after the
Options vest and prior to the end of the ten (10) year period beginning on the
Grant Date of the Option. The Option shall vest according to the following
vesting schedule: one-third of the Options shall vest on the first anniversary
date of the Grant Date of the Options, and one-third of the Options shall vest
on each of the second and third anniversaries of the Grant Date of the Options.
7.8 Payment. Options granted under this Article 7 shall be exercised in
the manner set forth in Section 6.2(e).
7.9 Restrictions on Share Transferability. To the extent necessary to
ensure that Options granted under this Article 7 comply with applicable law, the
Board shall impose restrictions on any Shares acquired pursuant to the exercise
of an Option under this Article 7, including, without limitation, restrictions
under applicable Federal securities laws, under the requirements of any stock
exchange or market upon which such Shares are then listed and/or traded, and
under any blue sky or state securities laws applicable to such Shares.
7.10 Termination of Service Due to Death, Disability, or Retirement. In
the event the service of a Participant on the Board is terminated by reason of
death, Disability, or retirement from the Board after attaining age 72, and if a
portion of the Participant's Award is not fully vested as of the date of
termination of service on the Board, then the portion of the Participant's Award
which is exercisable as of the date of termination of service on the Board shall
be determined by prorating the Award according to the following guidelines:
(i) The portion of the Award which is exercisable as of the date of
termination of service on the Board shall remain exercisable;
(ii) The percentage vesting of the portion of an Award which otherwise
would have vested on the anniversary of the Grant Date next following the
date on which the Participant's service on the Board terminates (the "Next
Vesting Date") will be a fraction, the numerate of which is the number of
full weeks of service on the Board during the 12-month period ending on the
Next Vesting Date, and the denominator of which is fifty-two (52); and
(iii) Any portion of an Option which is not deemed vested as of the
date service to the Board is terminated, including the portion of an Option
that is not deemed vested prior to the Next Vesting Date (determined in
accordance with Subparagraph (ii) above), and the portion of an Option
which would have vested after the Next Vesting Date, shall be forfeited by
the Participant and shall again be available for grant under the Plan.
To the extent an Option is exercisable as of the date of termination of
service on the Board, it shall remain exercisable at any time prior to its
expiration date, or for one (1) year after the date of death (or the date of
termination by reason of Disability or retirement from the Board after attaining
age 72, as applicable), whichever period is shorter, by the Participant or such
person or persons as shall have been named as the Participant's legal
representative or beneficiary, or by such persons that have acquired the
Participant's rights under the Option by will or by the laws of descent and
distribution.
7.11 Termination of Service on the Board of Directors for Other
Reasons. If the service of a Participant on the Board shall terminate for any
reason other than for death, Disability or retirement
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from the Board after attaining age 72, any outstanding Options held by the
Participant that are not exercisable as of the date of termination shall be
forfeited and lapse. To the extent an Option is exercisable as of the date of
termination of the Participant's service on the Board under this Section 7.11,
it shall remain exercisable at any time prior to its expiration date, or for one
(1) year after the date the Participant's service on the Board terminates,
whichever period is shorter.
7.12 Nontransferability of Options. Except as otherwise allowed by
uniform rules adopted by the Board or the Committee, no Option granted under
this Article 7 may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution, or pursuant to Section 10.1. Further, all Options granted to a
Participant under this Article 7 shall be exercisable during his or her lifetime
only by such Participant.
ARTICLE 8. CHANGE IN CONTROL
In the event of a Change in Control of Company, all Awards granted under
this Plan that are still outstanding and not yet vested, shall become
immediately one hundred percent (100%) vested in each Participant, as of the
first date that the definition of Change in Control has been fulfilled, and
shall remain as such for the remaining life of the Award, as such life is
provided herein, and within the provisions of the related individual Award
agreements entered into with each Participant. All Options that are exercisable
as of the effective date of the Change in Control shall remain as such for the
remaining life of the Options.
ARTICLE 9. AMENDMENT, MODIFICATION, AND TERMINATION
9.1 Amendment, Modification, and Termination. Subject to the terms set
forth in this Section 9.1, the Board may terminate, amend, or modify this Plan
at any time and from time to time. However, to the extent necessary and
desirable to comply with any applicable law, regulation, or stock exchange rule,
the Board shall obtain shareholder approval of any Plan amendment in such manner
and to such a degree as may be required.
9.2 Awards Previously Granted. Unless required by law, no termination,
amendment, or modification of this Plan shall in any manner adversely affect any
Award previously granted under this Plan, without the written consent of the
Participant holding such Award.
ARTICLE 10. MISCELLANEOUS
10.1 Beneficiary Designation. Each Participant under this Plan may, from
time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under this Plan is to be paid
in the event of his or her death. Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Committee during his or her lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to the Participant's estate.
10.2 Successors. All obligations of Company under this Plan, with respect
to Awards granted hereunder, shall be binding on any successor to Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of Company.
10.3 Requirements of Law. The granting of Awards under the Plan shall be
subject to all applicable laws, rules, and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may be required.
10.4 Governing Law. This Plan, and all agreements hereunder, shall be
governed by the laws of the State of Delaware.
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APPENDIX B
DEL WEBB CORPORATION
1998 EXECUTIVE LONG-TERM INCENTIVE PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 Establishment of the Plan. Del Webb Corporation, a Delaware
corporation (the "Company"), hereby establishes an incentive compensation plan
to be known as the "Del Webb Corporation 1998 Executive Long-Term Incentive
Plan" (the "Plan"), as set forth in this document. The Plan permits the grant of
Nonqualified Stock Options, Incentive Stock Options, Restricted Stock,
Performance Units, and Performance-Based Awards.
Upon approval by the Board of Directors of Company and subject to
shareholder ratification, the Plan shall become effective as of November 4, 1998
(the "Effective Date") and shall remain in effect as provided in Section 1.3.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
success, and enhance the value, of Company by linking the personal interests of
Participants to those of Company shareholders, and by providing Participants
with an incentive for outstanding performance.
The Plan is further intended to provide flexibility to Company in its
ability to motivate, attract, and retain the services of Participants upon whose
judgment, interest, and special effort the successful conduct of its operation
largely is dependent.
1.3 Duration of the Plan. Subject to approval by the Board of Directors of
Company and ratification by the shareholders of Company, the Plan shall commence
on the Effective Date, as described in Section 1.1, and shall remain in effect,
subject to the right of the Board of Directors to terminate the Plan at any time
pursuant to Article 14, until all Shares subject to it shall have been purchased
or acquired according to the Plan's provisions. However, in no event may an
Award be granted under the Plan on or after November 3, 2008.
ARTICLE 2. DEFINITIONS AND CONSTRUCTION
2.1 Definitions. Whenever used in the Plan, the following terms shall have
the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:
(a) "Award" means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, Restricted
Stock, Performance Units, or Performance-Based Awards.
(b) "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
(c) "Board" or "Board or Directors" means the Board of Directors of
Del Webb Corporation.
(d) "Cause" means (i) the breach by a Participant of any employment
contract between the Participant and Company, (ii) the conviction of a
Participant of a felony or crime involving moral turpitude (meaning a crime
that necessarily includes the commission of an act of gross depravity,
dishonesty or bad morals), or (iii) willful and gross misconduct on the
part of a Participant that is materially and demonstrably detrimental to
Company.
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(e) A "Change in Control" of Company shall be deemed to have occurred
in any or all of the following instances:
(1) Any "person" as such term is used in Sections 13(d) and 14(d)
of the Exchange Act, other than a trustee or other fiduciary holding
securities under an employee benefit plan of Company or a corporation
owned directly or indirectly by the stockholders of Company in
substantially the same proportions as their ownership of stock of
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
Company representing 20% or more of the total voting power represented
by Company's then outstanding Voting Securities (as defined below); or
(2) During any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of
Company and any new Director whose election by the Board of Directors or
nomination for election by Company's stockholders was approved by a vote
of at least two-thirds of the Directors then still in office who either
were Directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason
to constitute a majority thereof; or
(3) The stockholders of Company approve a merger or consolidation
of Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of
the surviving entity) at least 80% of the total voting power represented
by the Voting Securities of Company or such surviving entity outstanding
immediately after such merger or consolidation; or
(4) The stockholders of Company approve a plan of complete
liquidation of Company or an agreement for the sale or disposition by
Company of (in one transaction or a series of transactions) all or
substantially all Company's assets.
For purposes of this Section, the term "Voting Securities" shall mean
and include any securities of Company which vote generally for the election
of directors.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" means the committee, as specified in Article 3,
appointed by the Board to administer the Plan with respect to grants of
Awards.
(h) "Company" means Del Webb Corporation, a Delaware corporation
(including any and all Subsidiaries), or any successor thereto as provided
in Article 16 herein.
(i) "Covered Employee" means an Employee who is a "covered employee"
within the meaning of Section 162(m) of the Code.
(j) "Director" means any individual who is a member of the Board of
Directors of Company.
(k) "Disability" means a permanent and total disability, within the
meaning of Code Section 22(e)(3), as determined by the Committee in good
faith, upon receipt of sufficient competent medical advice from one or more
individuals, selected by the Committee, who are qualified to give
professional medical advice.
(l) "Employee" means any full-time, nonunion employee of Company.
Directors who are not otherwise employed by Company shall not be considered
Employees under this Plan.
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(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act thereto.
(n) "Fair Market Value" means, as of any given date, the fair market
value of a Share or other property determined by such methods or procedures
as may be established from time to time by the Committee. Unless otherwise
determined by the Committee, the Fair Market Value of a Share as of any
date shall be the closing price for a Share on any national securities
exchange on which the Shares are then listed for that date or, if there is
no closing price for that date, the closing price on the next preceding
date for which there is a closing price, all as reported in the Wall Street
Journal.
(o) "Incentive Stock Option" or "ISO" means an option to purchase
Shares which is designated as an Incentive Stock Option and is intended to
meet the requirements of Section 422 of the Code.
(p) "Insider" means an Employee who is, at the time an Award is made
under this Plan, an insider pursuant to Section 16 of the Exchange Act.
(q) "Non-Employee Director" means a member of the Board who qualifies
as a "Non-Employee Director" as defined in Rule 16b-3(b)(3) of the Exchange
Act as it may be amended, replaced, or suspended from time to time.
(r) "Nonqualified Stock Option" or "NQSO" means an Option to purchase
Shares which is not intended to be an Incentive Stock Option.
(s) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
(t) "Option Price" means the price at which a Share may be purchased
by a Participant pursuant to an Option, as determined by the Committee.
(u) "Parent" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
(v) "Participant" means an Employee of Company who has outstanding an
Award granted under the Plan.
(w) "Performance-Based Awards" means the Restricted Stock Awards and
Performance Unit Awards granted to selected Covered Employees pursuant to
Articles 7 and 8, but which are subject to the terms and conditions set
forth in Article 9. All Performance-Based Awards are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code.
(x) "Performance Criteria" means the criteria that the Committee
selects for purposes of establishing the Performance Goal or Performance
Goals for a Participant for a Performance Period. The Performance Criteria
that will be used to establish Performance Goals are limited to the
following: pre- or after-tax net earnings, revenue growth, operating
income, operating cash flow, return on net assets, return on shareholders'
equity, return on assets, return on capital, Share price growth,
shareholder returns, gross or net profit margin, earnings per share, price
per Share, and market share, any of which may be measured either in
absolute terms or as compared to any incremental increase or as compared to
results of a peer group. The Committee shall, within the time prescribed by
Section 162(m) of the Code, define in an objective fashion the manner of
calculating the Performance Criteria it selects to use for such Performance
Period for such Participant.
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(y) "Performance Goals" means, for a Performance Period, the goals
established in writing by the Committee for the Performance Period based
upon the Performance Criteria. Depending on the Performance Criteria used
to establish such Goal, the Goal may be expressed in terms of overall
Company performance or the performance of an operating unit or community.
The Committee, in its discretion, may, within the time prescribed by
Section 162(m) of the Code, adjust or modify the calculation of Performance
Goals for such Performance Period in order to prevent the dilution or
enlargement of the rights of Participants, (i) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction,
event, or development; and (ii) in recognition of, or in anticipation of,
any other unusual or nonrecurring events affecting Company, or the
financial statements of Company, or (iii) in response to, or in
anticipation of, changes in applicable laws, regulations, accounting
principles, or business conditions.
(z) "Performance Period" means the one or more periods of time, which
may be of varying and overlapping durations, as the Committee may select,
over which the attainment of one or more Performance Goals will be measured
for the purpose of determining a Participant's right to, and the payment
of, a Performance-Based Award.
(aa) "Performance Unit" means an Award granted to an Employee pursuant
to Article 8.
(bb) "Period of Restriction" means the period during which the
transfer of Shares of Restricted Stock is limited in some way (based on the
passage of time, the achievement of performance goals, or upon the
occurrence of other events as determined by the Committee, in its
discretion), and the Shares are subject to a substantial risk of
forfeiture, as provided in Article 7.
(cc) "Restricted Stock" means an Award granted to a Participant
pursuant to Article 7.
(dd) "Retirement" means a voluntary termination of employment by a
Participant who has less than ten (10) years of service with Company at or
after age sixty-five (65), or voluntary termination at or after age
fifty-five (55) for Participants who have at least ten (10) years of
service with Company as of the date of employment termination.
(ee) "Shares" means the shares of common stock of Del Webb
Corporation.
(ff) "Subsidiary" means any corporation in which Company owns
directly, or indirectly through subsidiaries, at least fifty percent (50%)
of the total combined voting power of all classes of stock, or any other
entity (including, but not limited to, partnerships and joint ventures) in
which Company owns at least fifty percent (50%) of the combined equity
thereof.
2.2 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
2.3 Severability. In the event that a court of competent jurisdiction
determines that any portion of this Plan is in violation of any statute, common
law, or public policy, then only the portions of this Plan that violate such
statute, common law, or public policy shall be stricken. All portions of this
Plan that do not violate any statute or public policy shall continue in full
force and effect. Further, any court order striking any portion of this Plan
shall modify the stricken terms as narrowly as possible to give as much effect
as possible to the intentions of the parties under this Plan.
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ARTICLE 3. ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Human Resources
Committee of the Board, or by any other Committee appointed by the Board to
administer the Plan. In any event, unless otherwise specifically provided by the
Board, the Committee shall consist of not less than two (2) Directors each of
whom qualifies as (i) a Non-Employee Director, and (ii) an "outside director"
under Code Section 162(m) and the regulations thereunder. The members of the
Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board of Directors. The Human Resources Committee of the
Board shall constitute the Committee unless the Board determines otherwise.
3.2 Authority of the Committee. The Committee shall have full power,
except as limited by law or by the Articles of Incorporation or Bylaws of
Company, and subject to the provisions herein, to determine the size and types
of Awards; to determine the terms and conditions of such Awards including, but
not limited to, the exercise price, grant price, or purchase price, any
restrictions or limitations on any Award, any schedule for lapse of forfeiture
restrictions or restrictions on the exercisability of an Award, and
accelerations or waivers thereof, based in each case on such considerations as
the Committee in its sole discretion determines; to cancel and reissue any
Awards granted hereunder in the event the Award lapses for any reason (provided
that the Committee shall not have the authority to reprice previously issued and
currently outstanding Awards without shareholder approval); to construe and
interpret the Plan and any agreement or instrument entered into under the Plan;
to establish, amend, or waive rules and regulations for the Plan's
administration; and (subject to the provisions of Article 14) to amend the terms
and conditions of any outstanding Award to the extent such terms and conditions
are within the discretion of the Committee as provided in the Plan. Further, the
Committee shall make all other determinations which may be necessary or
advisable for the administration of the Plan. As permitted by law, the Committee
may delegate its authorities as identified hereunder.
3.3 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive, and binding on
all persons, including Company, its stockholders, Employees, Participants, and
their estates and beneficiaries.
3.4 Delegation. The Committee may delegate to any officer of Company or
any committee comprised of officers of Company the authority to take any and all
actions permitted or required to be taken by the Committee hereunder; provided
that such delegation shall not be permitted with respect to Options or other
Awards granted or to be granted to any officer of Company and that, to the
extent the Committee delegates authority to grant Options and other Awards
hereunder, such delegation shall specify the aggregate number of Shares that may
be awarded pursuant to such delegation and may establish the maximum number of
Shares that may be subject to any Award made pursuant to such delegation and any
other limitations thereon that the Committee may choose to impose.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3,
the total number of Shares available for grant under the Plan shall be one
million (1,000,000). These one million (1,000,000) Shares may be either
authorized but unissued or reacquired Shares.
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4.2 Lapsed Awards. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason, any Shares subject to such Award
again shall be available for the grant of an Award under the Plan.
4.3 Adjustments in Authorized Shares. The Committee may make or provide
for such adjustments in the (a) number of Shares covered by outstanding Awards
granted hereunder, (b) prices per Share applicable to outstanding Awards and (c)
kind of Shares covered thereby, as the Committee in its sole discretion may in
good faith determine to be equitably required in order to prevent dilution or
enlargement of the rights of Participants that otherwise would result from (x)
any stock dividend, stock split, combination or exchange of Shares,
recapitalization or other change in the capital structure of Company, (y) any
merger, consolidation, spin-off, spin-out, split-off, split-up, reorganization,
partial or complete liquidation, or other distribution of assets (other than a
normal cash dividend), issuance of rights or warrants to purchase securities, or
(z) any other corporate transaction or event having an effect similar to any of
the foregoing. Moreover, in the event of any such transaction or event, the
Committee may provide in substitution for any or all outstanding Awards under
this Plan such alternative consideration as it may in good faith determine to be
equitable under the circumstances and may require in connection therewith the
surrender of all Awards so replaced. The Committee may also make or provide for
such adjustments in the number of Shares specified in Section 4.1, 4.4, or 9.5
as the Committee in its sole discretion may in good faith determine to be
appropriate in order to reflect any transaction or event described in this
Section. Any adjustment pursuant to this Section will be conclusive and binding
for all purposes of the Plan.
4.4 Limitation on Number of Shares Subject to Award. Notwithstanding any
provision in the Plan to the contrary, the maximum number of shares of Stock
that may be subject to one or more Awards granted to any one Participant over
the term of the Plan shall be three hundred thousand (300,000).
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Persons eligible to participate in this Plan include all
officers and key Employees of Company, as determined by the Committee, including
Employees who are members of the Board, but excluding Non-Employee Directors.
5.2 Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees those to
whom Awards shall be granted and shall determine the nature and amount of each
Award. No Employee shall have any right to be granted an Award under this Plan.
In addition, nothing in this Plan shall interfere with or limit in any way the
right of Company to terminate any Participant's employment at any time, nor
confer upon any Participant any right to continue in the employ of Company.
ARTICLE 6. STOCK OPTIONS
6.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Employees at any time and from time to time as shall
be determined by the Committee. The Committee shall have discretion in
determining the number of Shares subject to Options granted to each Participant.
The Committee may grant ISOs, NQSOs, or a combination thereof. Nothing in this
Article 6 shall be deemed to prevent the grant of NQSOs in excess of the maximum
established for ISOs by Section 422(d) of the Code.
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6.2 Option Agreement. Each Option grant shall be evidenced by an Option
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Option Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Section 422 of the Code,
or a NQSO whose grant is intended not to fall under the provisions of Section
422 of the Code.
6.3 Option Price. The Option Price for each grant of an Option shall not
be less than one hundred percent (100%) of the Fair Market Value of such Share
on the date the Option is granted.
6.4 Duration of Options. Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that no
Option shall be exercisable later than the tenth (10th) anniversary date of its
grant.
6.5 Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6 Payment. Options shall be exercised by the delivery of a written
notice of exercise to the Secretary of Company, setting forth the number of
Shares with respect to which the Option is to be exercised, accompanied by full
payment for the Shares.
The Option Price upon exercise of any Option shall be payable to Company in
full either: (a) in cash or its equivalent, or (b) by tendering previously
acquired Shares having a Fair Market Value at the time of exercise equal to the
total Option Price, or (c) by a combination of (a) and (b).
The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Committee determines to be consistent with the
Plan's purpose and applicable law. The proceeds from such a payment shall be
added to the general funds of Company and shall be used for general corporate
purposes.
As soon as practicable after receipt of a written notification of exercise
and full payment, Company shall deliver to the Participant, in the Participant's
name, Share certificates in an appropriate amount based upon the number of
Shares purchased under the Option(s).
6.7 Restrictions on Share Transferability. The Committee shall impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
under the Plan as it may deem advisable, including, without limitation,
restrictions under applicable Federal securities laws, under the requirements of
any stock exchange or market upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to such
Shares.
6.8 Termination of Employment Due to Death, Disability, or Retirement.
(a) Termination by Death. In the event the employment of a Participant
is terminated by reason of death, any outstanding Options granted to that
Participant which are deemed vested as of the date of death shall remain
exercisable at any time prior to their expiration date, or for one (1) year
after the date that employment was terminated, whichever period is shorter,
by such person or persons as shall have been named as the Participant's
beneficiary or by such persons that have acquired the Participant's rights
under the Option by will or by the laws of descent and distribution.
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The portion of any outstanding Option which is deemed vested under
this Plan as of the date of employment termination shall be determined
according to the following guidelines:
(i) The portion of the Option which is exercisable as of the date
of employment termination shall remain exercisable;
(ii) The percentage vesting of the portion of an Option which
otherwise would have vested on the anniversary of the date of grant next
following the Participant's death (the "Next Vesting Date"), shall equal
a fraction, the numerator of which is the number of full weeks of such
Participant's employment during the 12-month period ending on the Next
Vesting Date, and the denominator of which is fifty-two (52); and
(iii) Any portion of an Option which is not deemed vested as of the
date of employment termination, including the portion of an Option that
is not deemed vested prior to the Next Vesting Date (determined in
accordance with Subparagraph (ii) above), and the portion of an Option
which would have vested after the Next Vesting Date, shall expire
immediately and may not be exercised following such time. The Shares
subject to such expired Option shall be forfeited by the Participant and
shall again be available for grant under the Plan.
(b) Termination by Disability. In the event the employment of a
Participant is terminated by reason of Disability, any outstanding Options
granted to that Participant which are vested as of the date of termination
due to Disability shall remain exercisable at any time prior to their
expiration date, or for one (l) year after the date of termination due to
Disability, whichever period is shorter.
The portion of any outstanding Option which is deemed vested as of the
date of termination due to Disability shall be determined pursuant to the
guidelines set forth in Subparagraphs (a)(i) through (a)(iii) of this
Section 6.8.
Any Options that are not vested as of the date of termination due to
Disability shall expire immediately and may not be exercised following such
date.
(c) Termination by Retirement. In the event the employment of a
Participant is terminated by reason of Retirement, any outstanding Options
granted to that Participant which are vested as of the effective date of
Retirement shall remain exercisable at any time prior to their expiration
date, or for three (3) years after the effective date of Retirement,
whichever period is shorter.
The portion of any outstanding Option which is deemed vested as of the
effective date of Retirement shall be determined pursuant to the guidelines
set forth in Subparagraphs (a)(i) through (a)(iii) of this Section 6.8.
Any Options which are not vested as of the effective date of
Retirement shall expire immediately and may not be exercised following such
date.
(d) Exercise Limitations on ISOs. In the case of ISOs, the tax
treatment prescribed under Section 422 of the Code may not be available if
the Options are not exercised within the Section 422 prescribed time
periods after each of the various types of employment termination.
(e) Option Agreements. The exercise periods and vesting rules
described in Subparagraphs (a), (b), and (c) above shall apply in the
absence of any contrary provisions in the Option Agreement. The Committee
may prescribe alternative vesting rules and exercise periods in an Option
Agreement.
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6.9 Termination of Employment for Other Reasons. Except as otherwise
provided in an applicable Option Agreement, if the employment of a Participant
shall terminate for any reason (other than the reasons set forth in Section 6.8
or for Cause), all Options held by the Participant which are not vested as of
the effective date of employment termination immediately shall be forfeited to
Company (and shall once again become available for grant under the Plan).
Except as otherwise provided in an applicable Option Agreement, options
which are vested as of the effective date of employment termination may be
exercised by the Participant within the period beginning on the effective date
of employment termination and ending three (3) months after such date.
If the employment of a Participant shall terminate for Cause, all
outstanding Options held by the Participant immediately shall be forfeited to
Company and no additional exercise period shall be allowed, regardless of the
vested status of the Options.
6.10 Nontransferability of Options. An Incentive Stock Option granted
under the Plan may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution. A NQSO granted under the Plan may be transferrable subject to such
terms and conditions as may be established by the Committee from time to time.
All Options granted to a Participant under the Plan shall be exercisable during
his or her lifetime only by such Participant; provided that a NQSO that has been
transferred pursuant to the preceding sentence may be exercised by the
transferee.
ARTICLE 7. RESTRICTED STOCK
7.1 Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to eligible Employees in such amounts as the Committee shall
determine. The total number of Shares of Restricted Stock granted under this
Plan pursuant to Restricted Stock Agreements that include only time based
restrictions shall not exceed one hundred thousand (100,000) Shares of
Restricted Stock. The total number of Shares of Restricted Stock granted under
this Plan pursuant to Restricted Stock Agreements that include restrictions
based on achievement of specific performance goals, (including, but not limited
to Company-wide, divisional, and/or individual goals) shall not exceed an
additional one hundred thousand (100,000) Shares.
7.2 Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Agreement that shall specify the Period of
Restriction, or Periods, the number of Restricted Stock Shares granted, and such
other provisions as the Committee shall determine.
7.3 Transferability. Except as provided in this Article 7, the Shares of
Restricted Stock granted under this Plan may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the end of the applicable
Period of Restriction established by the Committee and specified in the
Restricted Stock Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Restricted Stock Agreement. All rights with respect to the Restricted
Stock granted to a Participant under the Plan shall be available during his or
her lifetime only to such Participant.
7.4 Other Restrictions. The Committee shall impose such other
restrictions on any Shares of Restricted Stock granted pursuant to the Plan as
it may deem advisable including, without limitation, restrictions based upon the
achievement of specific performance goals (Company-wide, divisional, and/or
individual), and/or restrictions under applicable Federal or state securities
laws;
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and may legend the certificates representing Restricted Stock to give
appropriate notice of such restrictions.
7.5 Certificate Legend. In addition to any legends placed on certificates
pursuant to Section 7.4, each certificate representing Shares of Restricted
Stock granted pursuant to the Plan may bear the following legend:
"The sale or other transfer of the Shares of Stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the Del Webb
Corporation 1998 Executive Long-Term Incentive Plan, and in a Restricted
Stock Agreement. A copy of the Plan and such Restricted Stock Agreement may
be obtained from the Secretary of Del Webb Corporation."
7.6 Removal of Restrictions. Except as otherwise provided in this Article
7, Shares of Restricted Stock covered by each Restricted Stock grant made under
the Plan shall become freely transferable by the Participant after the last day
of the Period of Restriction. Once the Shares are released from the
restrictions, the Participant shall be entitled to have the legend required by
Section 7.5 removed from his or her Share certificate.
7.7 Voting Rights. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted under this Plan may exercise full voting
rights with respect to those Shares.
7.8 Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted under this Plan shall be
entitled to receive all dividends and other distributions paid with respect to
those Shares while they are so held. If any such dividends or distributions are
paid in Shares, the Shares shall be subject to the same restrictions on
transferability and forfeitability as the Shares of Restricted Stock with
respect to which they were paid.
7.9 Termination of Employment. If the employment of a Participant shall
terminate for any reason, except as otherwise set forth in the Restricted Stock
Agreement all nonvested shares of Restricted Stock held by the Participant upon
the effective date of employment termination immediately shall be forfeited and
shall once again become available for grant under the Plan. The number of Shares
of Restricted Stock which are deemed vested as of the effective date of
employment termination shall be determined pursuant to the guidelines set forth
with respect to the vesting of Options, as specified in Sections 6.8 and 6.9,
except as otherwise provided in the Restricted Stock Agreement.
ARTICLE 8. PERFORMANCE UNITS
8.1 Grant of Performance Units. Subject to the terms of the Plan,
Performance Units may be granted to eligible Employees at any time and from time
to time, as shall be determined by the Committee. The Committee shall have
complete discretion in determining the number of Performance Units granted to
each Participant. The terms upon which the Performance Units are granted shall
be set forth in a Performance Unit Award Agreement
8.2 Value of Performance Units. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. The
Committee shall set performance goals in its discretion which, depending on the
extent to which they are met, will determine the number and/or value of
Performance Units that will be paid out to the Participants.
8.3 Earning of Performance Units. After the applicable time period during
which the goals must be met, the holder of Performance Units shall be entitled
to receive payout on the number of
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Performance Units earned by the Participant over such period, to be determined
as a function of the extent to which the corresponding performance goals have
been achieved, all as set forth in the Performance Unit Award Agreement.
8.4 Form and Timing of Payment of Performance Units. Payment of earned
Performance Units shall be made in a single lump sum, within forty-five (45)
calendar days following the close of the applicable time period during which the
goals must be met. The Committee, in its sole discretion, may pay earned
Performance Units in the form of cash or in Shares (or in a combination thereof)
which have an aggregate Fair Market Value equal to the value of the earned
Performance Units at the close of such period.
Prior to the beginning of each time period during which the goals must be
met, Participants may elect to defer the receipt of the Performance Unit payout
upon such terms as the Committee deems appropriate.
8.5 Termination of Employment Due to Death, Disability, Retirement, or
Involuntary Termination (without Cause). In the event the employment of a
Participant is terminated by reason of death, Disability, Retirement, or
involuntary termination without Cause during a Performance Period, the
Participant shall receive a prorated payout of the Performance Units. The
prorated payout shall be determined by the Committee, in its sole discretion,
based upon the guidelines set forth with respect to the vesting of Options, as
specified in Sections 6.8 and 6.9, or such other standards as may be prescribed
by the Committee in the Performance Unit Award Agreement, and further adjusted
based on the achievement of the preestablished performance goals.
Payment of earned Performance Units shall be made at the same time payments
are made to Participants who did not terminate employment during the applicable
time period during which the goals must be met.
8.6 Termination of Employment for Other Reasons. In the event that a
Participant terminates employment with Company for any reason other than those
reasons set forth in Section 8.5, unless the Committee determines otherwise, all
Performance Units shall be forfeited by the Participant to Company and shall
once again be available for grant under the Plan.
8.7 Nontransferability. Performance Units may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution. Further a Participant's rights under
the Plan shall be exercisable during the Participant's lifetime only by the
Participant or the Participant's legal representative.
ARTICLE 9. PERFORMANCE-BASED AWARDS
9.1 Purpose. The purpose of this Article 9 is to provide the Committee the
ability to qualify the Restricted Stock Awards under Article 7 and the
Performance Unit Awards under Article 8 as "performance-based compensation"
under Section 162(m) of the Code. If the Committee, in its discretion, decides
to grant a Performance-Based Award to a Covered Employee, the provisions of this
Article 9 shall control over any contrary provision contained in Articles 7 or
8.
9.2 Applicability. This Article 9 shall apply only to those Covered
Employees selected by the Committee to receive Performance-Based Awards. The
Committee may, in its discretion, grant Restricted Stock Awards or Performance
Unit Awards to Covered Employees that do not satisfy the requirements of this
Article 9. The designation of a Covered Employee as a Participant for a
Performance Period shall not in any manner entitle the Participant to receive an
Award for the period. Moreover, designation of a Covered Employee as a
Participant for a particular Performance
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Period shall not require designation of such Covered Employee as a Participant
in any subsequent Performance Period and designation of one Covered Employee as
a Participant shall not require designation of any other Covered Employee as a
Participant in such period or in any other period.
9.3 Discretion of Committee with Respect to Performance Awards. With
regard to a particular Performance Period, the Committee shall have full
discretion to select the length of such Performance Period, the type of
Performance-Based Awards to be issued, the kind and/or level of the Performance
Goal, and whether the Performance Goal is to apply to Company, a Subsidiary or
any division or business unit thereof.
9.4 Payment of Performance Awards. Unless otherwise provided in the
relevant Award Agreement, a Participant must be employed by Company or a
Subsidiary on the last day of the Performance Period to be eligible for a
Performance Award for such Performance Period. Furthermore, a Participant shall
be eligible to receive payment under a Performance-Based Award for a Performance
Period only if the Performance Goals for such period are achieved.
In determining the actual size of an individual Performance-Based Award,
the Committee may reduce or eliminate the amount of the Performance-Based Award
earned for the Performance Period, if in its sole and absolute discretion such
reduction or elimination is appropriate.
9.5 Maximum Award Payable. Notwithstanding any provision contained in the
Plan to the contrary, the maximum Performance-Based Award payable to any one
Participant under the Plan for a Performance Period is seventy-five thousand
(75,000) Shares, or in the event the Performance-Based Award is paid in cash,
such maximum Performance-Based Award shall be determined by multiplying
seventy-five thousand (75,000) by the Fair Market Value of one Share as of the
date of grant of the Performance-Based Award.
ARTICLE 10. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed by Company, and will be effective only when filed by the Participant
in writing with the Human Resource Department of Company during the
Participant's lifetime. In the absence of any such designation, benefits
remaining unpaid at the Participant's death shall be paid to the Participant's
estate.
ARTICLE 11. DEFERRALS
The Committee may permit a Participant to defer such Participant's receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant by virtue of the exercise of an Option, the lapse or waiver of
restrictions with respect to Restricted Stock, or the satisfaction of any
requirements or goals with respect to Performance Units. If any such deferral
election is required or permitted, the Committee shall, in its sole discretion,
establish rules and procedures for such payment deferrals.
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ARTICLE 12. RIGHTS OF EMPLOYEES
12.1 Employment. Nothing in the Plan shall interfere with or limit in any
way the right of Company to terminate any Participant's employment at any time,
nor confer upon any Participant any right to continue in the employ of Company.
For purposes of the Plan, transfer of employment of a Participant between
Company and any one of its Subsidiaries (or between Subsidiaries) shall not be
deemed a termination of employment.
12.2 Participation. No Employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.
ARTICLE 13. CHANGE IN CONTROL
Upon the occurrence of a Change in Control, unless otherwise specifically
prohibited by the terms of Article 17:
(a) Any and all Options granted under the Plan shall become
immediately exercisable and shall remain exercisable by the Participant at
any time prior to their expiration date or for one (1) year after the date
of the occurrence of the Change in Control, whichever period is shorter;
provided that, if the Participant is terminated following such Change in
Control, the provisions of the Plan regarding exercisability of vested
options set forth in Sections 6.8 and 6.9 shall apply.
(b) Any restriction periods and restrictions imposed on Restricted
Shares shall lapse, and within ten (10) business days after the occurrence
of a Change in Control, the stock certificates representing Shares of
Restricted Stock, without any restrictions or legend thereon, shall be
delivered to the applicable Participants;
(c) The value of all Performance Units and the time and manner of
payment for Performance Units shall be governed by the terms of the
Performance Unit Award Agreement; and
(d) Subject to Article 14, the Committee shall have the authority to
make any modifications to the Awards as determined by the Committee to be
appropriate before the effective date of the Change in Control.
ARTICLE 14. AMENDMENT, MODIFICATION, AND TERMINATION
14.1 Amendment, Modification, and Termination. With the approval of the
Board, at any time and from time to time, the Committee may terminate, amend, or
modify the Plan. However, to the extent necessary and desirable to comply with
any applicable law, regulation, or stock exchange rule, the Board shall obtain
shareholder approval of any Plan amendment in such manner and to such a degree
as may be required.
14.2 Awards Previously Granted. No termination, amendment, or modification
of the Plan shall in any manner adversely affect any Award previously granted
under the Plan, without the written consent of the Participant holding such
Award.
ARTICLE 15. WITHHOLDING
The Company shall have the power and the right to deduct or withhold, or
require a Participant to remit to Company, an amount sufficient to satisfy
Federal, state, and local taxes (including the
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Participant's FICA obligation) required by law to be withheld with respect to
any grant, exercise, or payment made under or as a result of this Plan.
ARTICLE 16. SUCCESSORS
All obligations of Company with respect to Awards granted under the Plan
shall be binding on any successor to Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation,
or otherwise, of all or substantially all of the business and/or assets of
Company.
ARTICLE 17. REQUIREMENTS OF LAW
17.1 Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
17.2 Governing Law. The Plan, and all agreements hereunder, shall be
governed by the laws of the State of Delaware.
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DEL WEBB CORPORATION
Annual Meeting of Shareholders -- November 4, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Philip J. Dion, Robertson C. Jones and
Donald V. Mickus and each of them, proxies with full power of substitution and
revocation, acting unanimously and voting or if only one is present and voting
then that one, to vote, as designated below, all shares of Common Stock of Del
Webb Corporation held of record by the undersigned on September 14, 1998, at the
Annual Meeting of Shareholders to be held on November 4, 1998, and at any
adjournment or adjournments thereof, with all the powers the undersigned would
possess if present.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 AND 4 BELOW
1. ELECTION OF THREE DIRECTORS TO CLASS II OF THE BOARD OF DIRECTORS (Check one
box only):
[ ] FOR all nominees listed below (except as marked to the contrary below): [
] WITHHOLD authority to vote for all nominees
listed below.
D. KENT ANDERSON MICHAEL E. ROSSI SAM YELLEN
(Instructions: To withhold authority to vote for any individual nominee, check
the "FOR all nominees" box above and write that nominee's name in the space
provided below.)
- --------------------------------------------------------------------------------
2. APPROVAL OF THE DEL WEBB CORPORATION 1998 DIRECTOR STOCK PLAN:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVAL OF THE DEL WEBB CORPORATION 1998 EXECUTIVE LONG-TERM INCENTIVE PLAN:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE SIGN AND DATE THE REVERSE SIDE.
<PAGE> 56
4. RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE PRINCIPAL
INDEPENDENT PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR THE YEAR ENDING JUNE
30, 1999:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In the proxies' discretion on such other matters as may properly come before
the meeting on any adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, 3 AND 4 AND IN THE DISCRETION OF THE PROXIES ON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS
THEREOF.
DATED, 1998
-----------------------------------
(Sign Here)
-----------------------------------
(Sign Here, if Held Jointly)
(Please sign EXACTLY as your name
appears hereon. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title. If more than one
trustee, all should sign. All joint
owners should sign. If a
corporation, sign in full corporate
name by president or other
authorized officer. If in a
partnership, sign in partnership
name by authorized person.
[ ] PLEASE CHECK IF YOU PLAN TO ATTEND THE SHAREHOLDER MEETING. PLEASE MARK,
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
