UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the period ended MARCH 31, 1999.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the transition period from N/A to N/A .
Commission File Number: 1-4785
DEL WEBB CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 86-0077724
(State or other jurisdiction (IRS Employer Identification Number)
of incorporation or organization)
6001 NORTH 24TH STREET, PHOENIX, ARIZONA 85016
(Address of principal executive offices) (Zip Code)
(602) 808-8000
(Registrant's phone number, including area code)
NONE
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of April 30, 1999 Registrant had outstanding 18,208,661 shares of common
stock.
<PAGE>
DEL WEBB CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED
MARCH 31, 1999
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements:
Consolidated Balance Sheets as of March 31, 1999
June 30, 1998 and March 31, 1998............................. 1
Consolidated Statements of Earnings for the three and nine
months ended March 31, 1999 and 1998......................... 2
Consolidated Statements of Cash Flows for the nine
months ended March 31, 1999 and 1998......................... 3
Notes to Consolidated Financial Statements..................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................... 20
<PAGE>
DEL WEBB CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31, June 30, MARCH 31,
1999 1998 1998
(Unaudited) (Unaudited)
- -------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Real estate inventories (Notes 2, 3 and 6) $ 1,579,686 $ 1,113,297 $ 1,107,277
Cash and short-term investments 7,343 14,362 13,746
Receivables 42,796 41,498 33,638
Property and equipment, net 48,600 33,333 32,990
Income taxes receivable (Note 4) -- -- 2,029
Other assets 114,629 107,972 107,907
- -------------------------------------------------------------------------------------------
$ 1,793,054 $ 1,310,462 $ 1,297,587
===========================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
- -------------------------------------------------------------------------------------------
Notes payable, senior and subordinated
debt (Note 3) $ 1,038,171 $ 703,938 $ 736,717
Contractor and trade accounts payable 104,112 78,114 74,205
Accrued liabilities and other payables 123,009 98,066 77,041
Home sale deposits 123,616 80,332 81,874
Deferred income taxes (Note 4) 17,123 4,245 116
Income taxes payable (Note 4) 6,806 -- --
- -------------------------------------------------------------------------------------------
Total liabilities 1,412,837 964,695 969,953
- -------------------------------------------------------------------------------------------
Shareholders' equity:
Common stock, $.001 par value. Authorized
30,000,000 shares; issued 18,216,364 shares
at March 31, 1999, 18,107,606 shares at
June 30, 1998 and 18,035,966 shares
at March 31, 1998 18 18 18
Additional paid-in capital 168,620 166,328 165,156
Retained earnings 218,351 184,890 168,173
- -------------------------------------------------------------------------------------------
386,989 351,236 333,347
Less deferred compensation (6,772) (5,469) (5,713)
- -------------------------------------------------------------------------------------------
Total shareholders' equity 380,217 345,767 327,634
- -------------------------------------------------------------------------------------------
$ 1,793,054 $ 1,310,462 $ 1,297,587
===========================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE>
DEL WEBB CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
- -----------------------------------------------------------------------------------
1999 1998 1999 1998
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues (Note 5) $324,428 $254,714 $947,323 $781,692
- -----------------------------------------------------------------------------------
Costs and expenses (Note 5):
Home construction, land and other 242,010 194,644 716,484 596,625
Selling, general and administrative 49,731 38,847 138,406 114,672
Interest (Note 6) 13,204 9,473 38,736 31,472
- -----------------------------------------------------------------------------------
304,945 242,964 893,626 742,769
- -----------------------------------------------------------------------------------
Earnings before income taxes 19,483 11,750 53,697 38,923
Income taxes (Note 4) 7,014 4,230 19,331 14,012
- -----------------------------------------------------------------------------------
Net earnings $ 12,469 $ 7,520 $ 34,366 $ 24,911
===================================================================================
Weighted average shares outstanding 18,220 17,890 18,161 17,740
===================================================================================
Weighted average shares outstanding -
assuming dilution 18,752 18,749 18,717 18,350
===================================================================================
Net earnings per share - basic $ .68 $ .42 $ 1.89 $ 1.40
===================================================================================
Net earnings per share - assuming
dilution $ .66 $ .40 $ 1.84 $ 1.36
===================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
DEL WEBB CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
MARCH 31,
- -----------------------------------------------------------------------------------------------------------
1999 1998
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers related to community home sales $ 893,243 $ 734,238
Cash received from commercial land and facility sales at operating communities 37,375 36,461
Cash paid for costs related to home construction at operating communities (594,937) (495,039)
- -----------------------------------------------------------------------------------------------------------
Net cash provided by operating community sales activities 335,681 275,660
Cash paid for land acquisitions at operating communities (20,247) (28,983)
Cash paid for lot development at operating communities (129,792) (105,631)
Cash paid for amenity development at operating communities (66,671) (38,722)
- -----------------------------------------------------------------------------------------------------------
Net cash provided by operating communities 118,971 102,324
Cash paid for costs related to communities in the pre-operating stage (333,972) (107,493)
Cash received from mortgage operations 7,497 106
Cash received from residential land development project 2,036 4,649
Cash paid for corporate activities (56,567) (47,092)
Interest paid (57,840) (46,340)
Cash received (paid) for income taxes 1,502 (11,587)
- -----------------------------------------------------------------------------------------------------------
NET CASH USED FOR OPERATING ACTIVITIES (318,373) (105,433)
- -----------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (17,045) (15,038)
Investments in life insurance policies (974) (2,749)
- -----------------------------------------------------------------------------------------------------------
NET CASH USED FOR INVESTING ACTIVITIES (18,019) (17,787)
- -----------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings 628,996 297,035
Repayments of debt (298,951) (186,986)
Stock repurchases (920) (8)
Proceeds from exercise of common stock options 1,153 4,869
Dividends paid (905) (2,659)
- -----------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 329,373 112,251
- -----------------------------------------------------------------------------------------------------------
NET DECREASE IN CASH AND SHORT-TERM INVESTMENTS (7,019) (10,969)
CASH AND SHORT-TERM INVESTMENTS AT BEGINNING OF PERIOD 14,362 24,715
- -----------------------------------------------------------------------------------------------------------
CASH AND SHORT-TERM INVESTMENTS AT END OF PERIOD $ 7,343 $ 13,746
===========================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
DEL WEBB CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
MARCH 31,
- ---------------------------------------------------------------------------------------------------------
1999 1998
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Reconciliation of net earnings to net cash used for operating activities:
Net earnings $ 34,366 $ 24,911
Allocation of non-cash common costs in costs and expenses, excluding interest 235,684 183,050
Amortization of capitalized interest in costs and expenses 38,736 31,472
Deferred compensation amortization 1,581 1,359
Depreciation and other amortization 6,072 4,623
Deferred income taxes 12,878 6,639
Net increase in home construction costs (92,511) (17,497)
Land acquisitions (27,549) (70,509)
Lot development (319,262) (131,782)
Amenity development (208,543) (62,953)
Pre-acquisition costs -- (13,676)
Net change in other assets and liabilities 175 (61,070)
- ---------------------------------------------------------------------------------------------------------
Net cash used for operating activities $(318,373) $(105,433)
=========================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
(1) BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Del Webb
Corporation and its subsidiaries ("Company"). In the opinion of management,
the accompanying unaudited consolidated financial statements contain all
adjustments (consisting of only normal recurring adjustments, primarily
eliminations of all significant intercompany transactions and accounts)
necessary to present fairly the financial position, results of operations
and cash flows for the periods presented.
The Company currently conducts it operations in two primary segments in the
states of Arizona, California, Florida, Illinois, Nevada, South Carolina
and Texas. The Company's active adult communities (primarily its Sun City
communities) are generally large-scale, master planned communities with
extensive amenities for people age 55 and over. The Company's family and
country club communities are open to people of all ages and are generally
developed in metropolitan or market areas in which the Company is
developing age-qualified communities. Within all of its communities, the
Company is usually the exclusive builder of homes.
These consolidated financial statements should be read in conjunction with
the consolidated financial statements and the related disclosures contained
in the Company's Annual Report on Form 10-K for the year ended June 30,
1998, filed with the Securities and Exchange Commission.
In the Consolidated Statements of Cash Flows, the Company defines operating
communities as communities generating revenues from home closings.
Communities in the pre-operating stage are those not yet generating
revenues from home closings.
The results of operations for the nine months ended March 31, 1999 are not
necessarily indicative of the results to be expected for the full fiscal
year.
(2) REAL ESTATE INVENTORIES
The components of real estate inventories are as follows:
In Thousands
- --------------------------------------------------------------------------------
March 31, June 30, March 31,
1999 1998 1998
(Unaudited) (Unaudited)
- --------------------------------------------------------------------------------
Home construction costs $ 274,681 $ 182,170 $ 199,515
Unamortized improvement and amenity
costs 971,391 603,390 574,560
Unamortized capitalized interest 80,658 61,455 57,785
Land held for housing 218,802 220,441 245,556
Land and facilities held for future
development or sale 34,154 45,841 29,861
- --------------------------------------------------------------------------------
$1,579,686 $1,113,297 $1,107,277
================================================================================
At March 31, 1999 the Company had 436 completed homes and 395 homes under
construction that were not subject to a sales contract. These homes
represented $52.1 million of home construction costs at March 31, 1999. At
March 31, 1998 the Company had 479 completed homes and 680 homes under
construction, representing $54.7 million of home construction costs, that
were not subject to a sales contract.
5
<PAGE>
DEL WEBB CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(2) REAL ESTATE INVENTORIES (Continued)
Included in land and facilities held for future development or sale at
March 31, 1999 were 275 acres of residential land, commercial land and
worship sites that are currently being marketed for sale at the Company's
communities.
(3) NOTES PAYABLE, SENIOR AND SUBORDINATED DEBT
Notes payable, senior and subordinated debt consists of the following:
<TABLE>
<CAPTION>
In Thousands
- ------------------------------------------------------------------------------------------------
March 31, June 30, March 31,
1999 1998 1998
(Unaudited) (Unaudited)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
9 3/4% Senior Subordinated Debentures due 2003,
net, unsecured $ 98,390 $ 98,081 $ 97,978
9% Senior Subordinated Debentures due 2006,
net, unsecured 98,107 97,902 97,834
9 3/4% Senior Subordinated Debentures due 2008,
net, unsecured 145,733 145,370 145,249
9 3/8% Senior Subordinated Debentures due 2009,
net, unsecured 195,297 194,977 --
10 1/4% Senior Subordinated Debentures due 2010,
net, unsecured 143,409 -- --
Notes payable to banks under a revolving credit
facility and short-term lines of credit, unsecured 308,200 111,209 311,000
Real estate and other notes, primarily secured 49,035 56,399 84,656
- ------------------------------------------------------------------------------------------------
$1,038,171 $ 703,938 $ 736,717
================================================================================================
</TABLE>
In February 1999 the Company completed a public offering of $150 million in
principal amount of 10 1/4% Senior Subordinated Debentures due 2010. The
$143 million of net proceeds from the offering were used to repay a portion
of the amounts outstanding under the Company's senior unsecured revolving
credit facility (the "Credit Facility").
Also in February 1999, the Company increased the amount of its Credit
Facility from $450 million to $500 million. At March 31, 1999 the Company
had $289.0 million outstanding under its Credit Facility and $19.2 million
outstanding under its $25 million of short-term lines of credit (together
with the Credit Facility, the "Facilities"). As a result of limitations
imposed by the "Total Debt to Tangible Net Worth" covenant under the Credit
Facility, $124.2 million of the $216.8 million of unused capacity under the
Facilities was available to the Company at March 31, 1999.
At March 31, 1999, under the most restrictive of the covenants in the
Company's debt agreements, $43.8 million of the Company's retained earnings
was available for payment of cash dividends and for the acquisition by the
Company of its common stock.
6
<PAGE>
DEL WEBB CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(4) INCOME TAXES
The components of income taxes are:
In Thousands
(Unaudited)
- --------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
March 31, March 31,
- --------------------------------------------------------------------------------
1999 1998 1999 1998
- --------------------------------------------------------------------------------
Current:
Federal $(1,312) $ (613) $ 6,064 $ 6,962
State (149) (269) 389 411
- --------------------------------------------------------------------------------
(1,461) (882) 6,453 7,373
- --------------------------------------------------------------------------------
Deferred:
Federal 7,881 4,756 11,749 6,069
State 594 356 1,129 570
- --------------------------------------------------------------------------------
8,475 5,112 12,878 6,639
- --------------------------------------------------------------------------------
$ 7,014 $ 4,230 $19,331 $14,012
================================================================================
7
<PAGE>
DEL WEBB CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(5) REVENUES AND COSTS AND EXPENSES
The components of revenues and costs and expenses are:
<TABLE>
<CAPTION>
In Thousands
(Unaudited)
- ------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
March 31, March 31,
1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Homebuilding:
Active adult communities $238,658 $184,553 $704,434 $546,292
Family and country club communities 67,045 50,540 188,194 186,711
- ------------------------------------------------------------------------------------------------
Total homebuilding 305,703 235,093 892,628 733,003
Land and facility sales 12,333 17,213 42,011 41,344
Other 6,392 2,408 12,684 7,345
- ------------------------------------------------------------------------------------------------
$324,428 $254,714 $947,323 $781,692
================================================================================================
Costs and expenses:
Home construction and land:
Active adult communities $178,184 $135,774 $524,380 $410,163
Family and country club communities 53,826 41,712 152,848 152,277
- ------------------------------------------------------------------------------------------------
Total homebuilding 232,010 177,486 677,228 562,440
Cost of land and facility sales 8,683 16,252 34,227 32,040
Other cost of sales 1,317 906 5,029 2,145
- ------------------------------------------------------------------------------------------------
Total home construction, land and other 242,010 194,644 716,484 596,625
Selling, general and administrative 49,731 38,847 138,406 114,672
Interest 13,204 9,473 38,736 31,472
- ------------------------------------------------------------------------------------------------
$304,945 $242,964 $893,626 $742,769
================================================================================================
</TABLE>
8
<PAGE>
DEL WEBB CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(6) INTEREST
The components of interest are:
<TABLE>
<CAPTION>
In Thousands
(Unaudited)
- -------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
March 31, March 31,
- -------------------------------------------------------------------------------------------------
1999 1998 1999 1998
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest incurred and capitalized $22,346 $17,133 $57,939 $43,136
=================================================================================================
Amortization of capitalized interest
in costs and expenses $13,204 $ 9,473 $38,736 $31,472
=================================================================================================
Unamortized capitalized interest in real
estate inventories at period end $80,658 $57,785
=================================================================================================
Interest income $ 194 $ 206 $ 831 $ 761
=================================================================================================
</TABLE>
Interest income is included in other revenues.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion of the results of operations and financial condition
should be read in conjunction with the accompanying consolidated financial
statements and notes thereto and the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1998, filed with the Securities and Exchange
Commission.
CERTAIN CONSOLIDATED FINANCIAL AND OPERATING DATA
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
MARCH 31, CHANGE MARCH 31, CHANGE
- ------------------------------------------------------------------------------ ---------------------------------
1999 1998 AMOUNT PERCENT 1999 1998 AMOUNT PERCENT
- ------------------------------------------------------------------------------ ---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Number of net new orders:
Active adult communities:
Sun Cities Phoenix 387 393 (6) (1.5%) 933 927 6 0.6%
Sun Cities Las Vegas 378 308 70 22.7% 910 826 84 10.2%
Sun City Palm Desert 123 162 (39) (24.1%) 353 315 38 12.1%
Sun Cities No. California 232 196 36 18.4% 556 509 47 9.2%
Sun City Hilton Head 141 103 38 36.9% 332 273 59 21.6%
Sun City Georgetown 104 118 (14) (11.9%) 237 311 (74) (23.8%)
Sun City at Huntley 130 N/A 130 N/A 505 N/A 505 N/A
Florida communities 86 122 (36) (29.5%) 246 122 124 101.6%
Other communities 82 67 15 22.4% 183 101 82 81.2%
- ------------------------------------------------------------------------------ ---------------------------------
Total active adult communities 1,663 1,469 194 13.2% 4,255 3,384 871 25.7%
- ------------------------------------------------------------------------------ ---------------------------------
Family and country club communities:
Arizona country club communities 148 1 147 * 148 N/A 148 N/A
Nevada country club communities 60 N/A 60 N/A 164 N/A 164 N/A
Arizona family communities 502 356 146 41.0% 913 833 80 9.6%
Nevada family communities 149 108 41 38.0% 407 221 186 84.2%
California family communities N/A N/A N/A N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------ ---------------------------------
Total family and country club
communities 859 465 394 84.7% 1,632 1,054 578 54.8%
- ------------------------------------------------------------------------------ ---------------------------------
Total 2,522 1,934 588 30.4% 5,887 4,438 1,449 32.6%
============================================================================== ================================
</TABLE>
* Not a meaningful percentage.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
CERTAIN CONSOLIDATED FINANCIAL AND OPERATING DATA (CONTINUED)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
MARCH 31, CHANGE MARCH 31, CHANGE
- ------------------------------------------------------------------------------ ---------------------------------
1999 1998 AMOUNT PERCENT 1999 1998 AMOUNT PERCENT
- ------------------------------------------------------------------------------ ---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Number of home closings:
Active adult communities:
Sun Cities Phoenix 304 292 12 4.1% 910 913 (3) (0.3%)
Sun Cities Las Vegas 323 241 82 34.0% 833 772 61 7.9%
Sun City Palm Desert 109 84 25 29.8% 344 202 142 70.3%
Sun Cities No. California 165 147 18 12.2% 518 420 98 23.3%
Sun City Hilton Head 71 90 (19) (21.1%) 238 270 (32) (11.9%)
Sun City Georgetown 84 75 9 12.0% 268 298 (30) (10.1%)
Sun City at Huntley N/A N/A N/A N/A N/A N/A N/A N/A
Florida communities 89 71 18 25.4% 334 71 263 370.4%
Other communites 61 5 56 * 161 5 156 *
- ------------------------------------------------------------------------------ ---------------------------------
Total active adult communities 1,206 1,005 201 20.0% 3,606 2,951 655 22.2%
- ------------------------------------------------------------------------------ ---------------------------------
Family and country club communities:
Arizona country club communities N/A 6 (6) (100.0%) N/A 118 (118) (100.0%)
Nevada country club communities 13 N/A 13 N/A 13 N/A 13 N/A
Arizona family communities 220 210 10 4.8% 724 652 72 11.0%
Nevada family communities 74 49 25 51.0% 187 173 14 8.1%
California family communities N/A N/A N/A N/A N/A 20 (20) (100.0%)
- ------------------------------------------------------------------------------ ---------------------------------
Total family and country club
communities 307 265 42 15.8% 924 963 (39) 4.0%
- ------------------------------------------------------------------------------ ---------------------------------
Total 1,513 1,270 243 19.1% 4,530 3,914 616 15.7%
============================================================================== =================================
</TABLE>
* Not a meaningful percentage.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
CERTAIN CONSOLIDATED FINANCIAL AND OPERATING DATA (CONTINUED)
AT MARCH 31, CHANGE
- --------------------------------------------------------------------------------
1999 1998 AMOUNT PERCENT
- --------------------------------------------------------------------------------
BACKLOG DATA:
Homes under contract:
Active adult communities:
Sun Cities Phoenix 692 706 (14) (2.0%)
Sun Cities Las Vegas 625 587 38 6.5%
Sun City Palm Desert 274 239 35 14.6%
Sun Cities No. California 420 369 51 13.8%
Sun City Hilton Head 263 162 101 62.3%
Sun City Georgetown 160 215 (55) (25.6%)
Sun City at Huntley 505 N/A 505 N/A
Florida communities 187 256 (69) (27.0%)
Other communities 124 96 28 29.2%
- --------------------------------------------------------------------------------
Total active adult communities 3,250 2,630 620 23.6%
- --------------------------------------------------------------------------------
Family and country club communities:
Arizona country club communities 148 2 146 *
Nevada country club communities 151 N/A 151 N/A
Arizona family communities 674 548 126 23.0%
Nevada family communities 304 139 165 118.7%
California family communities N/A N/A N/A N/A
- --------------------------------------------------------------------------------
Total family and country club
communities 1,277 689 588 85.3%
- --------------------------------------------------------------------------------
Total 4,527 3,319 1,208 36.4%
================================================================================
Aggregate contract sales amount
(dollars in millions) $1,026 $ 663 $ 363 54.8%
================================================================================
Average contract sales amount per home
(dollars in thousands) $ 227 $ 200 $ 27 13.5%
================================================================================
* Not a meaningful percentage.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
CERTAIN CONSOLIDATED FINANCIAL AND OPERATING DATA (CONTINUED)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
MARCH 31, CHANGE MARCH 31, CHANGE
- -------------------------------------------------------------------------- ----------------------------------
1999 1998 AMOUNT PERCENT 1999 1998 AMOUNT PERCENT
- -------------------------------------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AVERAGE REVENUE PER HOME CLOSING:
Active adult communities:
Sun Cities Phoenix $174,900 $158,500 $16,400 10.3% $175,700 $157,800 $17,900 11.3%
Sun Cities Las Vegas 204,900 200,300 4,600 2.3% 204,200 198,600 5,600 2.8%
Sun City Palm Desert 251,400 228,000 23,400 10.3% 243,500 228,500 15,000 6.6%
Sun Cities No. California 249,100 224,500 24,600 11.0% 237,300 214,700 22,600 10.5%
Sun City Hilton Head 183,500 173,100 10,400 6.0% 187,600 169,300 18,300 10.8%
Sun City Georgetown 201,500 195,800 5,700 2.9% 214,100 198,700 15,400 7.8%
Sun City at Huntley N/A N/A N/A N/A N/A N/A N/A N/A
Florida communities 117,700 97,900 19,800 20.2% 110,500 97,900 12,600 12.9%
Other communites 169,700 130,000 39,700 30.5% 179,000 130,000 49,000 37.7%
Average active adult
communities 197,900 183,600 14,300 7.8% 195,400 185,100 10,300 5.6%
Family and country club communities:
Arizona country club communities N/A 379,300 N/A N/A N/A 307,000 N/A N/A
Nevada country club communities 325,400 N/A N/A N/A 325,400 N/A N/A N/A
Arizona family communities 218,500 194,500 24,000 12.3% 203,600 185,300 18,300 9.9%
Nevada family communities 199,200 151,400 47,800 31.6% 195,400 150,000 45,400 30.3%
California family communiites N/A N/A N/A N/A N/A 186,600 N/A N/A
Average family and country
club communities 218,400 190,700 27,700 14.5% 203,700 193,900 9,800 5.1%
Total 202,100 185,100 17,000 9.2% 197,000 187,300 9,700 5.2%
========================================================================== ==================================
OPERATING STATISTICS:
Costs and expenses as a percentage
of revenues:
Home construction, land and
other 74.6% 76.4% (1.8%) (2.4%) 75.6% 76.3% (0.7%) (0.9%)
Selling, general and
administrative 15.3% 15.3% -- -- 14.6% 14.7% (0.1%) (0.7%)
Interest 4.1% 3.7% 0.4% 10.8% 4.1% 4.0% 0.1% 2.5%
Ratio of home closings to homes
under contract in backlog at
beginning of period 43.0% 51.8% (8.8%) (17.0%) 142.9% 151.1% (8.2%) (5.4%)
========================================================================== ===================================
</TABLE>
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
CERTAIN CONSOLIDATED FINANCIAL AND OPERATING DATA (CONTINUED)
NOTES:
New orders are net of cancellations. The Company recognizes revenue at close of
escrow.
The Sun Cities Phoenix include Sun City West, which is built out, and Sun City
Grand.
The Sun Cities Las Vegas include Sun City Summerlin, Sun City MacDonald Ranch
and Sun City Anthem. The Company began taking new home sales orders at Sun City
Anthem in July 1998. Home closings began at Sun City Anthem in December 1998.
The Sun Cities Northern California include Sun City Roseville and Sun Cities
Lincoln Hills. The Company began taking new home sales orders at Sun City
Lincoln Hills in February 1999.
The Company began taking new home sales orders at Sun City at Huntley in
September 1998.
In January 1998 the Company acquired certain assets and assumed certain
liabilities at two operating active adult communities in central Florida.
Other active adult communities represent two smaller-scale communities in
Arizona and California at which new order activity began in October and November
1997, respectively. Home closings began at these communities in March and May
1998, respectively.
Arizona country club communities include Terravita and Anthem Country Club. The
Company completed new order activity at Terravita in April 1997. Home closings
at Terravita were completed in May 1998. The Company began taking new home sales
orders at Anthem Country Club in February 1999.
The Company began taking new home sales orders at Anthem Country Club (a Nevada
country club community near Las Vegas) in July 1998. Home closings began at
Anthem Country Club in February 1999.
The Company completed new order activity for its California family communities
in June 1997. Home closings for these communities were completed in August 1997.
A substantial majority of the backlog at March 31, 1999 is currently anticipated
to result in revenues in the next 12 months. However, a majority of the backlog
is contingent primarily upon the availability of financing for the customer and,
in certain cases, sale of the customer's existing residence or other factors.
Also, as a practical matter, the Company's ability to obtain damages for breach
of contract by a potential home buyer is limited to retaining all or a portion
of the deposit received. Cancellations of home sales orders as a percentage of
new home sales orders written during the nine months ended March 31, 1999 and
1998 were 13.8 percent and 14.2 percent, respectively.
14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
REVENUES. Revenues increased to $324.4 million for the three months ended March
31, 1999 from $254.7 million for the three months ended March 31, 1998.
Management believes that these increases are largely attributable to improvement
in California's real estate economy and its economy generally. The Company's Sun
City Anthem, Anthem Country Club and Coventry Anthem communities near Las Vegas,
its smaller-scale active adult communities in Arizona and California and its
Coventry Bellasera community near Phoenix (which collectively had only five home
closings in the 1998 quarter) accounted for $45.6 million of the increase in
revenues. An increase in the average revenue per home closing resulted in $18.2
million of the increase in revenues.
HOME CONSTRUCTION, LAND AND OTHER COSTS. The increase in home construction, land
and other costs to $242.0 million for the 1999 quarter compared to $194.6
million for the 1998 quarter was largely due to the increase in home closings.
Homebuilding gross margins in the 1999 quarter were in line with previous fiscal
1999 quarters but were slightly lower than the 1998 quarter. As a percentage of
revenues, total home construction, land and other costs decreased to 74.6
percent for the 1999 quarter compared to 76.4 percent for the 1998 quarter. The
percentage decrease was attributable to a gain on an equipment sale and a
utility refund (aggregating $3.2 million) included in revenues in the 1999
quarter and to a large, low-margin land sale in the 1998 quarter.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. As a percentage of revenues,
selling, general and administrative expenses were 15.3 percent for both the 1999
and the 1998 quarters.
INTEREST. As a percentage of revenues, amortization of capitalized interest was
4.1 percent for the 1999 quarter compared to 3.7 percent for the 1998 quarter.
This increase was primarily due to an increase in debt levels (see "Liquidity
and Financial Condition of the Company").
INCOME TAXES. The increase in income taxes to $7.0 million for the 1999 quarter
compared to $4.2 million for the 1998 quarter was due to the increase in
earnings before income taxes. The effective tax rate in both quarters was 36
percent.
NET EARNINGS. The increase in net earnings to $12.5 million for the 1999 quarter
compared to $7.5 million for the 1998 quarter was primarily attributable to the
increases in home closings and revenues.
NET NEW ORDER ACTIVITY AND BACKLOG. Net new orders in the 1999 quarter were 30.4
percent higher than in the 1998 quarter. The number of homes under contract at
March 31, 1999 was 36.4 percent higher than at March 31, 1998. Both of these
increases were primarily attributable to Sun City at Huntley and the Anthem
communities near Phoenix and Las Vegas. These communities had new order activity
for all of the 1999 quarter but had not yet commenced new order activity in the
1998 quarter. Management believes that the decreases in net new orders and
backlog at Sun City Georgetown and the Florida active adult communities may have
been partially attributable to the impact of increased sales prices and
potential buyers awaiting the recent openings of new model homes.
15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
NINE MONTHS ENDED MARCH 31, 1999 AND 1998
REVENUES. Revenues increased to $947.3 million for the nine months ended March
31, 1999 from $781.7 million for the nine months ended March 31, 1998. The
Company's Anthem communities near Las Vegas, Florida communities, smaller-scale
active adult communities in Arizona and California and Coventry Bellasera
community near Phoenix (which collectively had only 76 home closings in the 1998
period) accounted for $104.9 million of the increase in revenues. An increase in
the average revenue per home closing resulted in $59.8 million of the increase
in revenues. Sun City Palm Desert and Sun City Roseville, which respectively
closed 142 and 98 more homes in the 1999 period than in the 1998 period,
accounted for $53.4 million of the increase in revenues. Management believes
that these increases are largely attributable to improvement in California's
real estate economy and its economy generally. Partially offsetting these
increases were $58.2 million of decreased revenues at the completed Sun City
West, Terravita and Coventry Southern California communities, which collectively
had only 19 home closings in the 1999 period.
HOME CONSTRUCTION, LAND AND OTHER COSTS. The increase in home construction, land
and other costs to $716.5 million for the 1999 period compared to $596.6 million
for the 1998 period was largely due to the increase in home closings. As a
percentage of revenues, these costs decreased to 75.6 percent for the 1999
period compared to 76.3 percent for the 1998 period. Homebuilding margins
improved from 23.3 percent to 24.1 percent, primarily as a result of increased
revenue per home closing at virtually all of the Company's communities.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. As a percentage of revenues,
selling, general and administrative expenses decreased to 14.6 percent for the
1999 period compared to 14.7 percent for the 1998 period. This small decrease
resulted from the spreading of corporate overhead over significantly greater
revenues.
INTEREST. As a percentage of revenues, amortization of capitalized interest was
4.1 percent for the 1999 period compared to 4.0 percent for the 1998 period.
This small increase was primarily due to an increase in debt levels (see
"Liquidity and Financial Condition of the Company").
INCOME TAXES. The increase in income taxes to $19.3 million for the 1999 period
compared to $14.0 million for the 1998 period was due to the increase in
earnings before income taxes. The effective tax rate in both periods was 36
percent.
NET EARNINGS. The increase in net earnings to $34.4 million for the 1999 period
compared to $24.9 million for the 1998 period was primarily attributable to the
increase in home closings, revenues and homebuilding gross margins.
NET NEW ORDER ACTIVITY. Net new orders in the 1999 period were 32.6 percent
higher than in the 1998 period. This increase was primarily attributable to Sun
City at Huntley and the Anthem communities near Phoenix and Las Vegas, partially
offset by decreases at Sun City Georgetown and the Florida communities (see
"Three Months Ended March 31, 1999 and 1998 - Net New Order Activity and
Backlog").
LIQUIDITY AND FINANCIAL CONDITION OF THE COMPANY
The cash flow for each of the Company's communities can differ substantially
from reported earnings, depending on the status of the development cycle. The
initial years of development or expansion require significant cash outlays for,
among other things, land acquisition, obtaining master plan and other approvals,
land and lot development, construction of amenities (including golf courses and
recreation centers), model homes, sales and administration facilities, major
roads, utilities and general landscaping and interest. Since these costs are
capitalized, this can result in income reported for financial statement purposes
during those initial years significantly exceeding cash flow. However, after the
initial years of development or expansion, when these expenditures are made,
cash flow can significantly exceed earnings reported for financial statement
purposes, as costs and expenses include amortization charges for substantial
amounts of previously expended costs.
16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
During the first nine months of fiscal 1999 the Company generated $335.7 million
of net cash from operating community sales activities, used $216.7 million for
land and lot and amenity development at operating communities, paid $334.0
million for costs related to communities in the pre-operating stage and used
$103.4 million for other operating activities. The resulting $318.4 million of
net cash used for operating activities was funded mainly through borrowings
under the Company's $500 million senior unsecured revolving credit facility (the
"Credit Facility") and $25 million short-term lines of credit (together with the
Credit Facility, the "Facilities"). The net proceeds from the February 1999
public offering of $150 million in principal amount of 10 1/4% Senior
Subordinated Debentures due 2010 (the "Offering") were used to repay a portion
of the indebtedness outstanding under the Credit Facility. Increased home sale
deposits (resulting from the increase in net new orders and backlog) were also a
significant source of funding in the 1999 period.
Real estate development is dependent on the availability and cost of financing.
In periods of significant growth, the Company will require significant
additional capital resources, whether from issuances of equity or by increasing
its indebtedness. In the first nine months of fiscal 1999 the Company has been
engaged in substantial development. It has had under development, among other
projects: (i) Sun City Lincoln Hills, the successor community to Sun City
Roseville; (ii) Anthem Las Vegas, which includes Sun City Anthem, Anthem Country
Club and a family community; (iii) Anthem Phoenix, which includes a country club
community and family communities and (iv) Sun City at Huntley.
To date, material cash expenditures have been made for these communities. The
Company anticipates that it will make material additional development and
housing construction expenditures at these communities through at least December
31, 1999. In order to provide adequate capital to meet the Company's operating
requirements for the next 12 months, the Company in February 1999 completed the
Offering and increased the amount of its Credit Facility from $450 million to
$500 million. At March 31, 1999 the Company had $308.2 million outstanding under
the Facilities. As a result of limitations imposed by the "Total Debt to
Tangible Net Worth" covenant under the Credit Facility, $124.2 million of the
$216.8 million of unused capacity under the Facilities was available to the
Company at March 31, 1999. To the extent the Company can reduce its leverage
ratio, by increasing shareholders' equity or repaying debt or both, more of the
unused portion of the Facilities will become available for borrowing in the
future.
As a result of the Offering and borrowings to fund development expenditures at
the communities referred to above, the Company is considerably more highly
leveraged at March 31, 1999 than it has been in recent years. The Company
expects to continue to borrow additional amounts under the Facilities to fund
continuing development at these communities. The Company expects to have
adequate capital resources to meet its needs for the next 12 months and intends
to manage its expenditures to meet its needs and available resources over this
time period. If there is a significant downturn in the Company's anticipated
operations and other capital resources are not obtained, the Company will need
to modify its business plan to operate with lower capital resources.
Modifications of the business plan could include, among other things, further
delaying development expenditures at its communities.
The Company's degree of leverage from time to time will affect its interest
incurred and capital resources, which could limit its ability to capitalize on
business opportunities or withstand adverse changes. Additionally, the
availability and cost of debt financing depends on governmental policies and
other factors outside the Company's control. If the Company cannot at any time
obtain sufficient capital resources to fund its development and expansion
expenditures, its projects may be delayed, resulting in cost increases, adverse
effects on the Company's results of operations and possible material adverse
effects on the Company. No assurance can be given as to the terms, availability
or cost of any future financing the Company may need. If the Company is at any
time unable to service its debt, refinancing or obtaining additional financing
may be required and may not be available or available on terms acceptable to the
Company.
At March 31, 1999, under the most restrictive of the covenants in the Company's
debt agreements, $43.8 million of the Company's retained earnings was available
for payment of cash dividends or the acquisition by the Company of its common
stock.
17
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
YEAR 2000 ISSUE
The Year 2000 issue is the result of computer programs being written using two
digits (rather than four) to define the applicable year. Computer programs that
have time-sensitive software may not recognize dates beginning in the year 2000,
which could result in miscalculations or system failures.
To date, the Company's Year 2000 remediation efforts have focused primarily on
its core business computer applications (i.e., those systems that the Company is
dependent upon for the conduct of day-to-day business operations). Starting over
two years ago, the Company initiated a comprehensive review of its core business
applications to determine the adequacy of these systems to meet future business
requirements. Year 2000 readiness was only one of many factors considered in
this assessment. Out of this effort, a number of systems were identified for
upgrade or replacement. In no case is a system being replaced solely because of
Year 2000 issues, although in some cases the timing of system replacements is
being accelerated. Thus, the Company does not believe the costs of these system
replacements are specifically Year 2000 related. Additionally, while the Company
may have incurred an opportunity cost for addressing the Year 2000 issue, it
does not believe that any specific information technology projects have been
deferred to date as a result of its Year 2000 efforts.
As of May 1999, the Company believes all of its core business systems are
adequately Year 2000 capable for its purposes, except for its lead tracking and
mortgage processing systems and some of its document imaging systems. Projects
are currently underway to replace each of these systems, with implementations
and testing scheduled for completion by June 1999, with the exception of the
lead tracking system, which is anticipated to be implemented in phases
continuing through October 1999. As with systems that have already been
replaced, the Company does not believe the costs of these replacements, which
are anticipated to aggregate approximately $2 million, are specifically Year
2000 related. The Company has also purchased at a cost of approximately $100,000
a software product that, it believes, can identify personal computers and
related equipment with imbedded software that is not adequately Year 2000
capable for the Company's purposes. The Company expects to incur costs to
replace or repair such equipment, but it has not at this time determined the
amount of these costs. Since some of the equipment would otherwise be replaced
through normal attrition, lease expirations and scheduled upgrades in the
ordinary course of business, it is possible that much of these costs would not
be solely related to Year 2000 readiness.
The Company is also assessing other potential Year 2000 issues, including
non-information technology systems. A broad-based Year 2000 Task Force has been
formed and is meeting monthly to identify areas of concern and develop action
plans. The Company currently anticipates that testing of non-information
technology systems will be completed by mid-1999. As part of the Year 2000 Task
Force effort, the Company's relationships with vendors, contractors, financial
institutions and other third parties are being considered to determine the
status of the Year 2000 issue efforts on the part of the other parties to
material relationships. The Year 2000 Task Force includes both internal and
Company-external representation.
The Company expects to incur Year 2000-related costs through the end of 1999 but
does not at present anticipate that these costs will be material. The Company
believes that the most reasonably likely worst-case scenario for the Year 2000
issue would be that the Company or the third parties with whom it has material
relationships were to be unsuccessful in their Year 2000 remediation efforts. If
this were to occur, the Company may encounter disruptions to its business that
could have a material adverse effect on it. The Company could also be materially
adversely affected by widespread economic or financial market disruption or by
Year 2000 computer system failures at government agencies on which the Company
is dependent for zoning, building permits and related matters.
The Company has not at this time established a formal Year 2000 contingency plan
but will consider and, if necessary, address doing so as part of its Year 2000
Task Force activities. The Company maintains and deploys contingency plans
designed to address various other potential business interruptions. These plans
may be applicable to address the interruption of support provided by third
parties resulting from their failure to be Year 2000 ready.
18
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
FORWARD LOOKING INFORMATION; CERTAIN CAUTIONARY STATEMENTS
Certain statements contained in this "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section that are not historical
results are forward looking statements. These forward looking statements involve
risks and uncertainties including, but not limited to, risks associated with
financing and leverage, the development of future communities and new geographic
markets, governmental regulation, including land exchanges with governmental
entities, environmental considerations, competition, the geographic
concentration of the Company's operations, the cyclical nature of real estate
operations and other conditions generally, fluctuations in labor and material
costs, natural risks that exist in certain of the Company's market areas, risks
associated with the Year 2000 issue and other matters set forth in the Company's
Form 10-K for the year ended June 30, 1998. Certain forward looking statements
are based upon assumptions of future events, which may not prove to be accurate.
Actual results may differ materially from those projected or implied.
19
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 10.1 First Amendment to Second Amended and Restated Revolving
Loan Agreement, entered into as of February 19, 1999 by and
among Del Webb Corporation and Bank of America National
Trust and Savings Association as Agent, and Bank One,
Arizona, NA, as co-Agent.
Exhibit 10.2 First Supplemental Indenture, entered into as of February
18, 1999, by and between Del Webb Corporation and Bank of
Montreal Trust Company as trustee for the Company's $150
million of 10 1/4% Senior Subordinated Debentures due 2010.
Exhibit 10.3 First Amendment to the Del Webb Corporation 1995 Director
Stock Plan effective as of February 11, 1998.
Exhibit 10.4 First Amendment to the Del Webb Corporation 1995 Executive
Management Incentive Plan effective as of February 11, 1998.
Exhibit 10.5 First Amendment to the Del Webb Corporation Director Stock
Plan effective as of February 11, 1998.
Exhibit 10.6 Second Amendment to the Del Webb Corporation 1995 Executive
Long-Term Incentive Plan effective as of February 11, 1998.
Exhibit 10.7 Second Amendment to the Del Webb Corporation 1993 Executive
Long-Term Incentive Plan effective as of February 11, 1998.
Exhibit 10.8 Third Amendment to the Del Webb Corporation Executive Long-
Term Incentive Plan effective as of February 11, 1998.
Exhibit 10.9 Third Amendment to the Del Webb Corporation Supplemental
Executive Retirement Plan No. 1 dated March 10, 1999.
Exhibit 10.10 Fourth Amendment to the Del Webb Corporation Supplemental
Executive Retirement Plan No. 2 dated March 10, 1999.
Exhibit 10.11 Amendment to Employment and Consulting Agreement entered
into as of March 9, 1999 by Del Webb Corporation and Philip
J. Dion.
Exhibit 10.12 Amendment to Employment Agreement entered into as of March
22, 1999 by Del Webb Corporation and LeRoy C. Hanneman, Jr.
Exhibit 10.13 Amendment to Employment Agreement entered into as of March
22, 1999 by Del Webb Corporation and John H. Gleason.
Exhibit 10.14 Change in Control Agreement letter dated March 15, 1999 and
related list of recipients.
Exhibit 27 Financial Data Schedule
(b) In the quarter ended March 31, 1999 the Company filed a report on Form 8-K
dated February 18, 1999 to file the Underwriting Agreement and Indenture
for the $150 million of 10 1/4% Senior Subordinated Debentures due 2010
issued by the Company in February 1999.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, who are duly authorized to do so.
DEL WEBB CORPORATION
(REGISTRANT)
Date: May 13, 1999 /s/ Philip J. Dion
---------------- ------------------------------------
Philip J. Dion
Chairman and Chief Executive Officer
Date: May 13, 1999 /s/ John A. Spencer
---------------- ------------------------------------
John A. Spencer
Executive Vice President and
Chief Financial Officer
21
FIRST AMENDMENT TO SECOND AMENDED AND
-------------------------------------
RESTATED REVOLVING LOAN AGREEMENT
---------------------------------
This First Amendment to Second Amended and Restated Revolving
Loan Agreement ("First Amendment") is entered into as of February 19, 1999 by
and among DEL WEBB CORPORATION, a Delaware corporation ("Borrower"), each bank
whose name is set forth on the signature pages of this First Amendment
(collectively, the "Banks" and individually a "Bank"), BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, a national banking association (the "Agent") and
BANK ONE, ARIZONA, NA, a national banking association (the "Co-Agent"). This
First Amendment is one of the Loan Documents referred to in the Loan Agreement
defined below. All terms and agreements set forth in the Loan Agreement which
are generally applicable to the Loan Documents shall apply to this First
Amendment. Capitalized terms not otherwise defined herein shall have the
meanings given them in the Loan Agreement.
RECITALS
--------
A. Borrower, the Banks, the Agent and the Co-Agent have
previously made and entered into that certain Second Amended and Restated
Revolving Loan Agreement, dated as of June 5, 1998 (the "Loan Agreement"),
pursuant to which the Banks agreed to make revolving loans to Borrower in the
aggregate principal amount of up to $450,000,000 (the "Loan"). The Loan is
evidenced by the Loan Agreement and the various Line A Notes and Line B Notes
executed by Borrower in favor of the Banks.
B. Borrower has requested that an additional $50,000,000 be
made available as part of the Line A Commitment and, subject to the terms and
conditions contained herein, the Banks and the Agent have agreed to such
increase, as more fully set forth below.
C. Concurrently with this First Amendment, BANK UNITED has
executed a Commitment Assignment and Acceptance to become a Bank under the Loan
Agreement concurrently with the effectiveness of this First Amendment. Borrower
and the Agent hereby approve BANK UNITED becoming a Bank.
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Borrower, the Banks, the
Co-Agent and the Agent hereby agree as follows:
1. AMENDMENTS TO LOAN AGREEMENT.
1.1 SECTION 1.1 In Section 1.1 of the Loan Agreement, the
definition of "Line A Commitment" is restated in its entirety to read as
follows:
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<PAGE>
"'LINE A COMMITMENT' means, subject to Sections 2.4
and 2.5, $407,000,000. The respective Pro Rata Shares
of the Banks with respect to the Line A Commitment
are set forth in SCHEDULE 1.1."
1.2 SCHEDULE 1.1. SCHEDULE 1.1 ("Bank Group Commitments") to
the Loan Agreement is amended and restated in its entirety in the schedule
attached to this First Amendment as ANNEX I.
2. FEES. On the effective date of this First Amendment, Borrower agrees
to pay fees as follows:
(a) Borrower shall pay to the Agent for the
respective accounts of each Bank whose aggregate Commitment is
increasing pursuant to this First Amendment, a fee equal to ten (10)
basis points times the increase in such Bank's aggregate Commitment as
shown on ANNEX I hereto; and
(b) Borrower shall pay to any Bank whose Pro Rata
Share of any outstanding Eurodollar Rate Loan is decreased as a result
of the Adjusting Purchase Payments specified in Section 3 hereof a fee
(if applicable) calculated in the manner of a prepayment of such
Eurodollar Rate Loan as specified in Section 3.6(D) of the Loan
Agreement and based on the amount of such decrease; and
(c) Borrower shall pay to any Bank whose Pro Rata
Share of any outstanding Eurodollar Rate Loan is increased as a result
of the Adjusting Purchase Payments specified in Section 3 hereof a fee
equal to the amount of such increase TIMES [number of days between the
date of such increase and the last day of the applicable Eurodollar
Period], DIVIDED BY 360, TIMES the applicable Advance Differential. The
"Advance Differential" applicable to a Eurodollar Rate Loan shall mean
(a) the Eurodollar Rate on, or as near as practicable to the date of
such increase for a hypothetical Eurodollar Rate Loan commencing on
such date and ending on the last day of the Interest Period of the
subject Eurodollar Rate Loan MINUS (b) the Eurodollar Rate applicable
to the subject Eurodollar Rate Loan (but not less than zero); and
(d) Borrower shall pay to the Agent an administration
and syndication fee pursuant to a separate written fee letter between
Borrower and the Agent.
All of the foregoing fees are fully earned upon such effective date and are
nonrefundable.
3. ADJUSTING PURCHASE PAYMENTS. The Agent shall notify the Banks on the
first Banking Day that the conditions specified in Sections 5(A)-5(F) hereof
have been satisfied (the "Notice"). On the following Banking Day, certain of the
Banks shall purchase, and certain of the Banks shall sell, to one another, the
percentage interests in the Commitments as reflected
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<PAGE>
in ANNEX II hereto, in order to reallocate the then outstanding Advances under
the Notes among the Banks to correspond to the revised Pro Rata Shares of the
Banks specified in ANNEX I hereto. The applicable purchase price payments are
specified on ANNEX II hereto and referred to herein as the "Adjusting Purchase
Payments." The Adjusting Purchasing Payments shall be made to the Agent by the
applicable purchasing Banks by Federal Reserve wire transfer initiated by the
payor no later than 9:00 a.m. California time on the Banking Day following the
Notice. Upon receipt of all such payments, the Agent shall promptly send
appropriate portions thereof to the selling Banks by Federal Reserve wire
transfer. The new Pro Rata Shares shall become effective on the close of
business on the day of transfer of such funds.
4. BORROWER'S REPRESENTATIONS AND WARRANTIES. Borrower hereby
represents and warrants that except as previously disclosed to the Banks in
writing, all of the representations and warranties contained in the Loan
Documents are true and correct on and as of the date of this First Amendment as
though made on that date and after giving effect to this First Amendment no
Event of Default shall be continuing.
5. CONDITIONS PRECEDENT. The effectiveness of this First Amendment is
conditioned upon the satisfaction by Borrower of each of the following
conditions on or before March 5, 1999:
(a) Borrower shall have delivered or caused to be
delivered to the Agent fully executed original counterparts of this
First Amendment and EXHIBIT A hereto, sufficient in number for
distribution to the Agent, the Banks and Borrower;
(b) Borrower shall have delivered to the Agent
executed original replacement Line A Notes and Line B Notes, for each
Bank whose Line A or Line B Commitment is changed, in the forms of
EXHIBIT B and EXHIBIT C hereto. Such replacement notes shall reflect
the increase in the Line A Commitment herein as well as the alteration
of the Pro Rata Share of each Bank reflected on ANNEX I hereto;
(c) Borrower shall have paid the fees required in
Section 2 hereof;
(d) The Agent shall have received from Borrower such
documentation as may be required to establish the authority of Borrower
to execute, deliver and perform any of the Loan Documents to which it
is a Party, including, without limitation, this First Amendment and the
replacement Line A Notes and Line B Notes. Such documentation shall
include certified corporate resolutions, incumbency certificates, and
such other certificates or documents as the Agent shall reasonably
require;
(e) The Agent shall have received a written legal
opinion of counsel(s) to Borrower and each Guarantor, in form and
substance satisfactory to the Agent, regarding the execution, delivery,
performance and enforceability of this First
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<PAGE>
Amendment, the Guarantors' Consent hereto and the replacement Line A
Notes and Line B Notes;
(f) The Agent shall have received a written
certification from a Responsible Official of Borrower that Borrower and
its Subsidiaries are in compliance with all the terms and provisions of
the Loan Documents and after giving effect to this First Amendment no
Default or Event of Default shall be continuing;
and the satisfaction by the Banks of the following condition:
(g) The applicable Banks shall have made the
Adjusting Purchase Payments as specified in Section 3 hereof.
6. RETURN OF CANCELED NOTES TO BORROWER. Upon the effectiveness of this
First Amendment in accordance herewith, including the delivery by Borrower of
all documents required under Section 5 hereof, the Banks shall return the Line A
Notes and Line B Notes that have been replaced pursuant to Section 5(B) hereof
to the Agent for redelivery to Borrower, in each case marked "Canceled."
7. AMENDMENT TO OTHER LOAN DOCUMENTS. Each of the Loan Documents is
hereby amended such that all references to the Loan Agreement contained therein
shall be deemed to be made with respect to the Loan Agreement as amended hereby.
Each of the Loan Documents are hereby further amended such that any reference
contained therein to any document amended hereby shall be deemed to be made with
respect to such document as amended hereby. Each reference to Loan Documents
generally shall be deemed to include this First Amendment.
8. LOAN DOCUMENTS IN FULL FORCE AND EFFECT. Except as modified hereby,
the Loan Documents remain in full force and effect.
9. GOVERNING LAW. This First Amendment shall be governed by, and
construed in accordance with, the Laws of the State of California.
10. SEVERABILITY. If any provision of this First Amendment is held
invalid or unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provision hereof.
11. COUNTERPARTS. This First Amendment may be executed in counterparts
and any party may execute any counterpart, each of which shall be deemed to be
an original and all of which, taken together, shall be deemed to be one and the
same document. The execution hereof by any parties shall not become effective
until this First Amendment, and EXHIBIT A hereto, is executed and delivered by
all parties hereto and thereto.
12. PRIOR AGREEMENTS. This First Amendment contains the entire
agreement between Borrower, the Banks and the Agent with respect to the subject
matter hereof, and all
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<PAGE>
prior negotiations, understandings, and agreements with respect thereto are
superseded by this First Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be duly executed as of the date first above written.
"Borrower" "Banks"
DEL WEBB CORPORATION BANK ONE, ARIZONA, NA, as a Bank
By: By:
-------------------------------- --------------------------------
John A. Spencer
Senior Vice President --------------------------------
Printed Name and Title
"Agent"
BANK OF AMERICA NATIONAL
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
TRUST AND SAVINGS ASSOCIATION, as a Bank
as Agent
By:
By: --------------------------------
--------------------------------
--------------------------------
-------------------------------- Printed Name and Title
Printed Name and Title
GUARANTY FEDERAL BANK, F.S.B.
"Co-Agent"
BANK ONE, ARIZONA, NA, as Co-Agent By:
--------------------------------
By: --------------------------------
-------------------------------- Printed Name and Title
--------------------------------
Printed Name and Title BANKBOSTON, N.A. (formerly known as
The First National Bank of Boston)
By:
--------------------------------
--------------------------------
Printed Name and Title
-5-
<PAGE>
CREDIT LYONNAIS M&I THUNDERBIRD BANK
LOS ANGELES BRANCH
By:
By: --------------------------------
--------------------------------
--------------------------------
-------------------------------- Printed Name and Title
Printed Name and Title
By:
FIRST UNION NATIONAL BANK --------------------------------
(formerly known as First Union National
Bank of North Carolina) --------------------------------
Printed Name and Title
By:
-------------------------------- NORWEST BANK ARIZONA,
National Association
--------------------------------
Printed Name and Title
By:
--------------------------------
BANK OF HAWAII
--------------------------------
Printed Name and Title
By:
--------------------------------
PNC BANK, N.A.
--------------------------------
Printed Name and Title
By:
--------------------------------
FLEET NATIONAL BANK
--------------------------------
Printed Name and Title
By:
--------------------------------
COMERICA BANK
--------------------------------
Printed Name and Title
By:
--------------------------------
--------------------------------
Printed Name and Title
-6-
<PAGE>
BANK UNITED
By:
--------------------------------
--------------------------------
Printed Name and Title
Address for Bank United
Bank United
6991 East Camelback, C-303
Scottsdale, Arizona 85251
Attn: Maureen K. Koerner, Vice President
Telephone: (602) 945-7213
Telecopier: (602) 941-0371
-7-
<PAGE>
EXHIBIT A
GUARANTORS' CONSENTS
The undersigned do each hereby (a) consent to that certain
First Amendment to Amended and Restated Revolving Loan Agreement, dated as of
February 19, 1999, by and among Del Webb Corporation ("Borrower"), the Banks
named therein, Bank of America National Trust and Savings Association, as Agent,
and Bank One, Arizona, NA, as Co-Agent, including the increase of $50,000,000 in
the Line A Commitment contained therein and (b) reaffirm (i) their respective
obligations under that certain 1998 Subsidiary Guaranty, dated as of June 5,
1998, and (ii) that the 1998 Subsidiary Guaranty remains in full force and
effect and that, without limitation, any indebtedness of Borrower represented by
the $50,000,000 increase in the Line A Commitment constitutes "Guarantied
Obligations" thereunder.
Dated: February 19, 1999
Del Webb California Corp., Del Webb Conservation Holding Corp., an
an Arizona corporation Arizona corporation
By: By:
------------------------------- -------------------------------
Donald V. Mickus Donald V. Mickus
Treasurer Treasurer
Del Webb Commercial Properties Del Webb Home Construction, Inc.,
Corporation, an Arizona corporation an Arizona corporation
By: By:
------------------------------- -------------------------------
Donald V. Mickus Donald V. Mickus
Treasurer Treasurer
Del Webb Communities, Inc., Anthem Arizona, Inc. (formerly known as
an Arizona corporation The Villages at Desert Hills, Inc. and as
Del Webb Lakeview Corporation), an
Arizona corporation
By:
-------------------------------
Donald V. Mickus By:
Treasurer -------------------------------
Donald V. Mickus
Treasurer
Exhibit A
Page 1 of 4
<PAGE>
Del Webb's Coventry Homes Construction Del E. Webb Development Co., L.P.,
Co., an Arizona corporation a Delaware limited partnership
By: Del Webb Communities, Inc.,
By: general partner
-------------------------------
Donald V. Mickus
Treasurer By:
--------------------------
Donald V. Mickus
Del Webb's Coventry Homes, Inc., Treasurer
an Arizona corporation
Del E. Webb Foothills Corporation,
By: an Arizona corporation
-------------------------------
Donald V. Mickus
Treasurer By:
-------------------------------
Del Webb's Coventry Homes of Nevada, Donald V. Mickus
Inc., an Arizona corporation (formerly Treasurer
known as Del Webb of Nevada, Inc.)
DW Aviation Co., an Arizona corporation
By:
-------------------------------
Donald V. Mickus By:
Treasurer -------------------------------
Donald V. Mickus
Treasurer
Del Webb's Coventry Homes Construction
of Tucson Co., an Arizona corporation
Fairmount Mortgage, Inc., an Arizona
corporation
By:
-------------------------------
Donald V. Mickus By:
Treasurer -------------------------------
Richard W. Day
Treasurer
Del Webb's Coventry Homes of Tucson,
Inc., an Arizona corporation
Terravita Corp., an Arizona corporation
By:
------------------------------- By:
Donald V. Mickus -------------------------------
Treasurer Donald V. Mickus
Treasurer
Exhibit A
Page 2 of 4
<PAGE>
Terravita Home Construction Co., New Mexico Asset Corporation,
an Arizona corporation an Arizona corporation
By: By:
------------------------------- -------------------------------
Donald V. Mickus Donald V. Mickus
Treasurer Treasurer
Trovas Company, an Arizona corporation Del Webb Texas Limited Partnership,
an Arizona limited partnership
By: By: Del Webb Southwest Co.,
------------------------------- an Arizona corporation
Donald V. Mickus
Treasurer
By:
--------------------------
Trovas Construction Co., an Arizona Donald V. Mickus
corporation Treasurer
By: New Mexico Asset Limited Partnership
------------------------------- (formerly known as New Mexico
Donald V. Mickus Investment Co. Limited Partnership), an
Treasurer Arizona limited partnership
By: Del Webb Corporation, a Delaware
Del Webb Limited Holding Co., corporation
an Arizona corporation
By:
By: --------------------------
------------------------------- Donald V. Mickus
Donald V. Mickus Treasurer
Treasurer
Bellasera Corp., an Arizona corporation
Del Webb Southwest Co., an Arizona
corporation
By:
-------------------------------
By: Donald V. Mickus
------------------------------- Treasurer
Donald V. Mickus
Treasurer
Exhibit A
Page 3 of 4
<PAGE>
Del Webb's Sunflower of Tucson, Inc., an
Arizona corporation
By:
-------------------------------
Donald V. Mickus
Treasurer
Del Webb's Spruce Creek Communities,
Inc., an Arizona corporation
By:
-------------------------------
Donald V. Mickus
Treasurer
Exhibit A
Page 4 of 4
<PAGE>
EXHIBIT B
---------
LINE A NOTE
-----------
$________________ ______________, 1999
Los Angeles, California
FOR VALUE RECEIVED, the undersigned promises to pay to the
order of ______________________________________________________ (the "Bank"),
the principal amount of
__________________________________________________________ ($_____________) or
such lesser aggregate amount of Advances as may be made by the Bank with respect
to the Line A Commitment under the Loan Agreement referred to below, together
with interest on the principal amount of each Advance made hereunder and
remaining unpaid from time to time from the date of each such Advance until the
date of payment in full, payable as hereinafter set forth.
Reference is made to the Second Amended and Restated Revolving
Loan Agreement, dated as of June 5, 1998, as amended by that certain First
Amendment to Second Amended and Restated Revolving Loan Agreement, dated as of
even date herewith, by and among the undersigned, as Borrower, the Banks which
are parties thereto, Bank One, Arizona, NA, as Co-Agent, and Bank of America
National Trust and Savings Association, as Agent for the Banks (as so amended,
the "Loan Agreement"). Terms defined in the Loan Agreement and not otherwise
defined herein are used herein with the meanings given those terms in the Loan
Agreement. This is one of the Line A Notes referred to in the Loan Agreement,
and any holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Loan Agreement as originally executed or as it
may from time to time be supplemented, modified or amended. The Loan Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events upon the terms and conditions
therein specified.
The principal indebtedness evidenced by this Line A Note shall
be payable as provided in the Loan Agreement and in any event on the Maturity
Date.
Interest shall be payable on the outstanding daily unpaid
principal amount of Advances from the date of each such Advance until payment in
full and shall accrue and be payable at the rates and on the dates set forth in
the Loan Agreement both before and after default and before and after maturity
and judgment, with interest on overdue principal and interest to bear interest
at the rate set forth in Section 3.7 of the Loan Agreement, to the fullest
extent permitted by applicable Law.
Each payment hereunder shall be made to the Agent at the
Agent's Office for the account of the Bank in immediately available funds not
later than 11:00 a.m. (San Francisco time) on the day of payment (which must be
a Banking Day). All payments
Exhibit B
Page 1 of 2
<PAGE>
received after 11:00 a.m. (San Francisco time) on any particular Banking Day
shall be deemed received on the next succeeding Banking Day. All payments shall
be made in lawful money of the United States of America.
The Bank shall use its best efforts to keep a record of
Advances made by it and payments received by it with respect to this Line A
Note, and such record shall be presumptive evidence of the amounts owing under
this Line A Note.
The undersigned hereby promises to pay all costs and expenses
of any rightful holder hereof incurred in collecting the undersigned's
obligations hereunder or in enforcing or attempting to enforce any of such
holder's rights hereunder, including reasonable attorneys' fees and
disbursements, whether or not an action is filed in connection therewith.
The undersigned hereby waives presentment, demand for payment,
dishonor, notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
This Line A Note shall be delivered to and accepted by the
Bank in the State of California, and shall be governed by, and construed and
enforced in accordance with, the local Laws thereof.
[ . . . This Line A Note replaces, amends and restates that
certain Line A Note, dated as of [ . . . June 5, 1998 . . .], in the principal
amount of $____________, heretofore delivered by the undersigned to the Bank
pursuant to the Loan Agreement. . . .]
DEL WEBB CORPORATION,
a Delaware corporation
By:
----------------------------------
----------------------------------
Printed Name and Title
Exhibit B
Page 2 of 2
<PAGE>
EXHIBIT C
---------
LINE B NOTE
-----------
$_______________ ______________, 1999
Los Angeles, California
FOR VALUE RECEIVED, the undersigned promises to pay to the
order of ________________________________________________________ (the "Bank"),
the principal amount of _______________________________________________________
($____________) or such lesser aggregate amount of Advances as may be made by
the Bank with respect to the Line B Commitment under the Loan Agreement referred
to below, together with interest on the principal amount of each Advance made
hereunder and remaining unpaid from time to time from the date of each such
Advance until the date of payment in full, payable as hereinafter set forth.
Reference is made to the Second Amended and Restated Revolving
Loan Agreement, dated as of June 5, 1998, as amended by that certain First
Amendment to Second Amended and Restated Revolving Loan Agreement, dated as of
even date herewith, by and among the undersigned, as Borrower, the Banks which
are parties thereto, Bank One, Arizona, NA, as Co-Agent, and Bank of America
National Trust and Savings Association, as Agent for the Banks (as so amended,
the "Loan Agreement"). Terms defined in the Loan Agreement and not otherwise
defined herein are used herein with the meanings given those terms in the Loan
Agreement. This is one of the Line B Notes referred to in the Loan Agreement,
and any holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Loan Agreement as originally executed or as it
may from time to time be supplemented, modified or amended. The Loan Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events upon the terms and conditions
therein specified.
The principal indebtedness evidenced by this Line B Note shall
be payable as provided in the Loan Agreement and in any event on the Maturity
Date.
Interest shall be payable on the outstanding daily unpaid
principal amount of Advances from the date of each such Advance until payment in
full and shall accrue and be payable at the rates and on the dates set forth in
the Loan Agreement both before and after default and before and after maturity
and judgment, with interest on overdue principal and interest to bear interest
at the rate set forth in Section 3.7 of the Loan Agreement, to the fullest
extent permitted by applicable Law.
Exhibit C
Page 1 of 2
<PAGE>
Each payment hereunder shall be made to the Agent at the
Agent's Office for the account of the Bank in immediately available funds not
later than 11:00 a.m. (San Francisco time) on the day of payment (which must be
a Banking Day). All payments received after 11:00 a.m. (San Francisco time) on
any particular Banking Day shall be deemed received on the next succeeding
Banking Day. All payments shall be made in lawful money of the United States of
America.
The Bank shall use its best efforts to keep a record of
Advances made by it and payments received by it with respect to this Line B
Note, and such record shall be presumptive evidence of the amounts owing under
this Line B Note.
The undersigned hereby promises to pay all costs and expenses
of any rightful holder hereof incurred in collecting the undersigned's
obligations hereunder or in enforcing or attempting to enforce any of such
holder's rights hereunder, including reasonable attorneys' fees and
disbursements, whether or not an action is filed in connection therewith.
The undersigned hereby waives presentment, demand for payment,
dishonor, notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
This Line B Note shall be delivered to and accepted by the
Bank in the State of California, and shall be governed by, and construed and
enforced in accordance with, the local Laws thereof.
[ . . . This Line B Note replaces, amends and restates that
certain Line B Note, dated as of [ . . . June 5, 1998 . . .], in the principal
amount of $_______________ , heretofore delivered by the undersigned to the Bank
pursuant to the Loan Agreement. . . .]
DEL WEBB CORPORATION,
a Delaware corporation
By:
----------------------------------
----------------------------------
Printed Name and Title
Exhibit C
Page 2 of 2
<PAGE>
ANNEX I
-------
DEL WEBB CORPORATION
BANK GROUP COMMITMENTS
<TABLE>
<CAPTION>
Total Prior Increase in
Line "A" Line "B" Commitment Commitment Aggregate
SYNDICATE BANK PRO RATA SHARE $407,000,000 $93,000,000 $500,000,000 $450,000,000 COMMITMENT
- -------------- -------------- ------------ ----------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Bank of America NT & SA 24.00% $97,680,000 22,320,000 120,000,000 120,000,000 -0-
Bank One, Arizona, NA 12.00% 48,840,000 11,160,000 60,000,000 60,000,000 -0-
Guaranty Federal Bank, F.S.B. 9.00% 36,630,000 8,370,000 45,000,000 45,000,000 -0-
BankBoston, N.A. 7.00% 28,490,000 6,510,000 35,000,000 35,000,000 -0-
First Union National Bank 5.00% 20,350,000 4,650,000 25,000,000 25,000,000 -0-
Bank of Hawaii 6.00% 24,420,000 5,580,000 30,000,000 30,000,000 -0-
Fleet National Bank 7.00% 28,490,000 6,510,000 35,000,000 35,000,000 -0-
Credit Lyonnais 4.00% 16,280,000 3,720,000 20,000,000 20,000,000 -0-
M&I Thunderbird Bank 4.00% 16,280,000 3,720,000 20,000,000 20,000,000 -0-
Comerica Bank 8.00% 32,560,000 7,440,000 40,000,000 20,000,000 $20,000,000
PNC Bank, N.A. 4.00% 16,280,000 3,720,000 20,000,000 20,000,000 -0-
Norwest Bank Arizona 4.00% 16,280,000 3,720,000 20,000,000 20,000,000 -0-
Bank United 6.00% 24,420,000 5,580,000 30,000,000 -0- 30,000,000
TOTAL: 100.00% $407,000,000 $ 93,000,000 $500,000,000 $450,000,000 $ 50,000,000
</TABLE>
Annex I
Page 1 of 1
<PAGE>
ANNEX II
ADJUSTING PURCHASE PAYMENTS
Aggregate Principal Balance of existing Promissory Notes
immediately prior to effective date of First Amendment - $___________
("Carryover Principal Balance").
<TABLE>
<CAPTION>
Banks Making Former Share Former New Share of Adjusting Adjusting
Adjusting of Carryover Pro Rata Carryover New Purchase Purchase
PURCHASE PAYMENTS PRINCIPAL BALANCE SHARE PRINCIPAL BALANCE PRO RATA SHARE PAYMENT TO PAY PAYMENT TO RECEIVE
- ----------------- ----------------- ----- ----------------- -------------- -------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Comerica Bank
Bank United
BANKS RECEIVING ADJUSTING
PURCHASE PAYMENTS
Bank of America NT & SA
Bank One, Arizona, NA
Guaranty Federal Bank, F.S.B.
BankBoston, N.A.
First Union National Bank
Bank of Hawaii
Fleet National Bank
Credit Lyonnais
M&I Thunderbird Bank
PNC Bank, N.A.
Norwest Bank Arizona
TOTAL: 100.00% 100.00%
</TABLE>
Annex II
Page 1 of 1
DEL WEBB CORPORATION
FIRST SUPPLEMENTAL INDENTURE
TO INDENTURE DATED AS OF FEBRUARY 18, 1999
------------------------------------------
This First Supplemental Indenture (this "First Supplemental
Indenture"), dated as of February 18, 1999, is entered into by Del Webb
Corporation, a Delaware corporation ("the Company"), and Bank of Montreal Trust
Company, a New York banking corporation, as trustee (the "Trustee").
The Company and the Trustee are parties to an Indenture (the
"Indenture"), dated as of February 18, 1999, with respect to the Company's
$150,000,000 of 10 1/4% Senior Subordinated Debentures due 2010 (the
"Securities"). Capitalized terms used below and not otherwise defined in this
First Supplemental Indenture have the meanings given to them in the Indenture.
AMENDMENT OF THE INDENTURE AND REPLACEMENT OF THE SECURITY
The parties agree that (i) the cover page of the Indenture is amended
to change the number "$200,000,000" to "$150,000,000", (ii) the first sentence
of the second paragraph of the Indenture is amended to change the number
"$200,000,000" to "$150,000,000", (iii) the parenthetical in the first sentence
of the fourth paragraph in Section 2.02 of the Indenture is amended to change
the number "$200,000,000" to "$150,000,000", (iv) subsentence (iv) of the second
sentence of the definition of "Senior Debt" in Section 11.02 of the Indenture is
amended to change "The Villages at Desert Hills, Inc." to "The Villages at
Desert Hills, Inc. (now known as 'Anthem Arizona L.L.C.')", (v) the fourth
sentence of paragraph 4 of Exhibit A to the Indenture is amended to change the
number "$200,000,000" to "$150,000,000", (vi) subsentence (iv) of the second
sentence of paragraph 9 of Exhibit A to the Indenture is amended to change "The
Villages at Desert Hills, Inc." to "The Villages at Desert Hills, Inc. (now
known as 'Anthem Arizona L.L.C.')", (vii) the fourth sentence of paragraph 4 on
the back of the Security is amended to change the number "$200,000,000" to
"$150,000,000" and (viii) subsentence (iv) of the second sentence of paragraph 9
on the back of the Security is amended to change "The Villages at Desert Hills,
Inc." to "The Villages at Desert Hills, Inc. (now known as 'Anthem Arizona
L.L.C.')" (each, an "Amendment"). A replacement Security, amended as set forth
above, will be issued and delivered to the Trustee for authentication pursuant
to Section 2.02 of the Indenture, as amended by this First Supplemental
Indenture, and, upon such delivery and authentication, the original Security
held by the Trustee will be marked "canceled" and returned to the Company.
RELEVANT PROVISIONS OF THE INDENTURE
- ------------------------------------
Section 9.01 of the Indenture provides that:
"The Company and the Trustee may amend this Indenture
or the Securities without notice to or the consent of any
Securityholder:
(1) to cure any ambiguity, defect or
inconsistency. . .
<PAGE>
* * *
(4) to make any change that does not
adversely affect the legal rights hereunder of any
Securityholder. . . ."
The Company represents and warrants to the Trustee that each Amendment
provided for above cures an ambiguity, defect or inconsistency in the Indenture
and does not, and the Amendments in the aggregate do not, affect the legal
rights of any Securityholder and may be adopted without notice to or the consent
of any Securityholder.
GENERAL PROVISIONS
- ------------------
THE INDENTURE IS, AND THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE,
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
This First Supplemental Indenture is a supplemental indenture pursuant
to Article 9 of the Indenture. Upon execution and delivery of this First
Supplemental Indenture, the Indenture shall be modified and amended in
accordance with this First Supplemental Indenture, and all the terms and
conditions of both shall be read together as though they constitute one
instrument, except that, in case of conflict, the provisions of this First
Supplemental Indenture will control.
The parties may sign any number of copies of this First Supplemental
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.
The parties have executed this Supplemental Indenture as of February
18, 1999.
DEL WEBB CORPORATION
By /s/ Robertson C. Jones
---------------------------------
Attest:
Cass Kershner
- ------------------------
BANK OF MONTREAL TRUST COMPANY, as Trustee
By /s/ Peter Morse
---------------------------------
Attest:
/s/ Signature Illegible
- ------------------------
2
<PAGE>
DEL WEBB CORPORATION
6001 North 24th Street
Phoenix, Arizona 85016
as of February 18, 1999
Bank of Montreal Trust Company
88 Pine Street
New York, NY 10005
Re: Authentication Order
--------------------
Ladies and Gentlemen:
Del Webb Corporation (the "Company") hereby delivers to you for
issuance under the Indenture, dated as of February 18, 1999 (the "Indenture"),
between the Company and you, as Trustee ("Trustee"), as amended by the First
Supplemental Indenture, between the Company and you, as Trustee, its 10 1/4%
Senior Subordinated Debentures due 2010 (the "New Debentures"), in an aggregate
principal amount of $150,000,000, issued as a replacement for the 10 1/4% Senior
Subordinated Debentures due 2010 issued and sold pursuant to an Underwriting
Agreement, dated February 12, 1999, between the Company, on the one hand, and,
as underwriters, Warburg Dillon Read LLC, Goldman, Sachs & Co., Salomon Smith
Barney Inc. and NationsBanc Montgomery Securities LLC (the "Old Debentures").
Pursuant to Section 2.02 of the Indenture, you, as Trustee, are hereby ordered
to cause to be authenticated $150,000,000 aggregate principal amount of the New
Debentures, each registered in such names and for the respective amounts as are
registered the Old Debentures, and to hold as custodian for The Depository Trust
Company or its designee, or deliver to such other registered holders of the Old
Debentures, the New Debentures when so authenticated and registered. At the same
time, you are further ordered to mark as canceled the Old Debentures and return
them to the Company.
Very truly yours,
DEL WEBB CORPORATION
/s/ Robertson C. Jones
------------------------------------
Robertson C. Jones
Senior Vice President and General Counsel
The undersigned, as Trustee under the Indenture referred to above,
acknowledges receipt of the Debentures of the Company referred to in the
foregoing letter.
Dated: as of February 18, 1999 BANK OF MONTREAL TRUST
COMPANY, as Trustee
By: /s/ Peter Morse
------------------------
PETER MORSE
Title: VICE PRESIDENT
----------------------
FIRST AMENDMENT
TO THE
DEL WEBB CORPORATION
1995 DIRECTOR STOCK PLAN
1. THIS FIRST AMENDMENT to the Del Webb Corporation 1995 Director Stock
Plan (the "Plan") shall only amend those Sections specified herein and the
remaining provisions of the Plan not so amended are hereby ratified and
affirmed.
2. Section 6.2(e) of the Plan is hereby amended to read as follows:
(e) The Option Price upon exercise of any Option shall be
payable to the 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 proceeds from such a payment shall
be added to the general funds of the Company and shall be used for
general corporate purposes.
3. Sections 6.2(g)(ii) and (iii) of the Plan are hereby amended to read
as follows:
(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
numerator 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.
4. Section 7.6 of the Plan is hereby amended to read as follows:
7.6 VESTING OF SHARES SUBJECT TO OPTION.
The Participant shall be entitled to exercise Options granted
under this Article 7 at any time and ending ten years after grant of
the Option, and according to the following vesting schedule: one-third
of the Options shall vest on the anniversary date of date of grant of
the Options, and one-third of the Options shall vest on each of the
second and third anniversaries of the date of grant of the Options.
<PAGE>
5. Section 9.3 of the Plan is hereby added by redesignating the second
full sentence of Section 10.3 of the Plan as Section 9.3 of the Plan.
6. Section 10.3 of the Plan is hereby amended by adding a second
paragraph thereto to read as follows:
Notwithstanding any other provision set forth in the Plan, if
required by the then current Rule 16b-3 of the Exchange Act, any
"derivative security or equity security" offered pursuant to the Plan
to any Insider may not be sold or transferred for at least six (6)
months after the date of grant of such Award, except in the case of the
death, disability, or termination of employment of the Participant. The
terms "equity security" and "derivative security" shall have the
meanings ascribed to them in the then current Rule 16b-3 of the
Exchange Act.
7. This First amendment is pursuant to a Board of Directors resolution
dated February 11, 1998 and is effective as of that date.
DEL WEBB CORPORATION
By:/s/ Robertson C. Jones
---------------------------------
Its: Senior Vice President
---------------------------------
---------------------------------
FIRST AMENDMENT
TO THE
DEL WEBB CORPORATION
1995 EXECUTIVE
MANAGEMENT INCENTIVE PLAN
THIS FIRST AMENDMENT to the Del Webb Corporation Management Incentive
Plan (the "Plan") shall only amend those Sections specified herein and the
remaining provisions of the Plan not so amended are hereby ratified and
affirmed.
1. Section 6.4 of the Plan is hereby amended by adding the following to
the end of the paragraph as follows:
; PROVIDED THAT, if the Plan or a participant's employment is
terminated (except termination for Cause) following a Change in Control
(as defined below) but prior to the date that an Award is paid with
respect to the Performance Period(s) in which the Change in Control
occurs, such participant shall be paid a percentage of the bonus which
would have been payable to him or her at the end of such Performance
Period(s) (computed as if all Performance Goals and other criteria had
been achieved). The percentage of the Award will equal a fraction, the
numerator of which is the number of full weeks of employment during the
Performance Period in which employment termination occurs, and the
denominator of which is fifty-two (52); provided that, if a Participant
has an employment agreement, change in control agreement or other
agreement relating to termination following a Change of Control, such
agreement, and not the above proviso, shall govern the obligations of
the Company and the Participant.
For purposes of this Section 6.4, "Cause" shall mean (I) the
breach by a Participant of any employment contract between the
Participant and the Company, (ii) the conviction of a Participant of a
felony or crime involving morale turpitude (meaning a crime that
necessarily includes the commission of an act of gross depravity,
dishonesty or bad morales), or (iii) willful and gross misconduct on
the part of a Participant that is materially and demonstrably
detrimental to the Company.
For purposes of this Plan, a "Change in Control" of the
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
<PAGE>
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 the Company which vote
generally for the election of directors.
2. This First amendment is pursuant to a Board of Directors resolution
dated February 11, 1998.
DEL WEBB CORPORATION
By:/s/ Robertson C. Jones
---------------------------------
Its: Senior Vice President
---------------------------------
---------------------------------
FIRST AMENDMENT
TO THE
DEL WEBB CORPORATION
DIRECTOR STOCK PLAN
1. THIS FIRST AMENDMENT to the Del Webb Corporation Director Stock Plan
(the "Plan") shall only amend those Sections specified herein and the remaining
provisions of the Plan not so amended are hereby ratified and affirmed.
2. Section 2.1(e) of the Plan is hereby amended to read as follows:
2.1(e) A "Change in Control" of the 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
<PAGE>
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 the Company which vote
generally for the election of directors.
3. Section 2.1(h) of the Plan is hereby amended to read as follows:
2.1(h) "Company" means Del Webb Corporation, a Delaware
corporation, or any successors thereto as provided in Section 10.3
herein.
4. Section 6.2(e) of the Plan is hereby amended to read as follows:
The Option Price upon exercise of any Option shall be payable
to the 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 proceeds from such a payment shall be
added to the general funds of the Company and shall be used for general
corporate purposes.
5. Section 6.2(g) of the Plan is hereby amended to read as follows:
6.2(g) TERMINATION OF SERVICE ON BOARD OF DIRECTORS 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 such
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")
<PAGE>
will be a fraction, the numerator 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 death
(or as of the date of termination by reason of Disability or retirement
from the Board after attaining age 72, as applicable), 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.
6. Section 6.2(h) of the Plan is hereby amended to read as follows:
6.2(h) TERMINATION OF SERVICE ON BOARD OF DIRECTORS FOR OTHER
REASONS. If the service of the Participant on the Board shall terminate
for any reason other than death, Disability, or retirement from the
Board after attaining age 72, any outstanding Options held by the
Participant that are not exercisable as of the date of termination
immediately shall be forfeited to the Company (and shall once again
become available for grant under the Plan).
To the extent an Option is exercisable as of the date of
termination of the Participant's service on the Board under this
Section 6.2(h), 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. Section 6.3(h) of the Plan is hereby amended to read as follows:
6.3(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
<PAGE>
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).
8. Section 6.3(i) of the Plan is hereby amended to read as follows:
6.3 (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 the
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 the Company all of the certificates
representing his or her Shares of Restricted Stock. As soon as
practicable thereafter the Company shall issue a new certificate
representing the number of vested shares to which the Director is
entitled.
9. Section 7.7 of the Plan is hereby amended to read as follows:
7.7 VESTING OF SHARES SUBJECT TO OPTION. Participants shall be
entitled to exercise Options granted under this Article 7 at any time
and from time to time, ending ten years after the grant of the Option,
and according to the following vesting schedule: one-third of the
Option shall vest on the first anniversary date of grant of the Option,
and one-third of the Option shall vest on each of the second and third
anniversaries of the date of grant of the Options.
10. Section 7.10 of the Plan is hereby amended to read as follows:
7.10 TERMINATION OF SERVICES ON BOARD OF DIRECTORS 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 according to the guidelines
set forth in Section 6.2(g) herein.
11. Section 7.11 of the Plan is hereby amended as follows:
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
from the Board after
<PAGE>
attaining age 72, any outstanding Options held by the Participant that
are not exercisable as of the date of termination shall be governed by
the guidelines set forth in Section 6.2(h) herein.
12. Section 9.3 of the Plan is hereby added by redesignating the second
full sentence of Section 10.4 of the Plan as Section 9.3 of the Plan.
13. Section 10.4 of the Plan is hereby amended by adding a second
paragraph thereto to read as follows:
Notwithstanding any other provision set forth in the Plan, if
required by the then current Rule 16b-3 of the Exchange Act, any
"derivative security or equity security" offered pursuant to the Plan
to any Insider may not be sold or transferred for at least six (6)
months after the date of grant of such Award, except in the case of the
death, disability, or termination of employment of the Participant. The
terms "equity security" and "derivative security" shall have the
meanings ascribed to them in the then current Rule 16b-3 of the
Exchange Act.
14. Section 10.5 of the Plan is hereby amended as follows:
10.5 GOVERNING LAW. This Plan, and all agreements hereunder,
shall be governed by the laws of the State of Delaware.
15. This First amendment is pursuant to a Board of Directors resolution
dated February 11, 1998 and is effective as of that date.
DEL WEBB CORPORATION
By:/s/ Robertson C. Jones
---------------------------------
Its: Senior Vice President
---------------------------------
---------------------------------
SECOND AMENDMENT
TO THE
DEL WEBB CORPORATION
1995 EXECUTIVE LONG-TERM INCENTIVE PLAN
1. THIS SECOND AMENDMENT to the Del Webb Corporation 1995 Executive
Long-Term Incentive Plan (the "Plan") shall only amend those Sections specified
herein and the remaining provisions of the Plan not so amended are hereby
ratified and affirmed.
2. Section 2.1(d) of the Plan is hereby amended to read as follows:
2.1(d) "Cause" shall mean (i) the breach by a Participant of
any employment contract between the Participant and the 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 the Company.
3. Section 2.1(e) of the Plan is hereby amended to read as follows:
2.1(e) A "Change in Control" of the 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
<PAGE>
(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 the Company which vote
generally for the election of directors.
4. Section 6.5 of the Plan is hereby amended to read as follows:
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.
5. Section 6.6 of the Plan is hereby amended by changing the second
full paragraph thereof to read as follows:
The Option Price upon exercise of any Option shall be payable
to the 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).
6. Section 6.8(a) of the Plan is hereby amended to read as follows:
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
due, 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
<PAGE>
Participant's rights under the Option by will or by the laws of descent
and distribution.
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.
7. Section 7.3 of the Plan is hereby amended to delete the language in
the original Section 7.3 and add the following language to the language added in
the First Amendment:
Except as provided in this Article 7, the Shares of Restricted
Stock granted herein 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.
8. Section 7.9 of the Plan is hereby amended to read as follows:
7.9 TERMINATION OF EMPLOYMENT. If the employment of a
Participant shall terminate for any reason, 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
<PAGE>
determined pursuant to the guidelines set forth with respect to the
vesting of Options, as specified in Sections 6.8 and 6.9 herein.
With the exception of a termination of employment for Cause,
the Committee, in its sole discretion, shall have the right to provide
for lapsing of the restrictions on Restricted Stock following
employment termination, upon such terms and provisions as it deems
proper; provided that, no such lapsing of restrictions shall occur
after the expiration date of the Restricted Stock.
9. Section 13 (a) of the Plan is hereby amended as follows:
(a) Any and all Options granted hereunder 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.
10. This Second amendment is pursuant to a Board of Directors
resolution dated February 11, 1998 and is effective as of that date.
DEL WEBB CORPORATION
By:/s/ Robertson C. Jones
---------------------------------
Its: Senior Vice President
---------------------------------
---------------------------------
SECOND AMENDMENT
TO THE
DEL WEBB CORPORATION
1993 EXECUTIVE LONG-TERM INCENTIVE PLAN
1. THIS SECOND AMENDMENT to the Del Webb Corporation 1993 Executive
Long-Term Incentive Plan (the "Plan") shall only amend those Sections specified
herein and the remaining provisions of the Plan not so amended are hereby
ratified and affirmed.
2. Section 2.1(d) of the Plan is hereby amended to read as follows:
2.1(d) "Cause" shall mean (i) the breach by a Participant of
any employment contract between the Participant and the 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 the Company.
3. Section 2.1(e) of the Plan is hereby amended to read as follows:
2.1(e) A "Change in Control" of the 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
<PAGE>
(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 the Company which vote
generally for the election of directors.
4. Section 2.1(h) of the Plan is hereby amended to read as follows:
2.1(h) "Company" means Del Webb Corporation, a Delaware
corporation (including any and all Subsidiaries), or any successor
thereto as provided in Article 16 herein.
5. Section 6.5 of the Plan is hereby amended to read as follows:
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. Section 6.6 of the Plan is hereby amended by changing the second
full paragraph thereof to read as follows:
The Option Price upon exercise of any Option shall be payable
to the 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).
7. Section 6.8(a) of the Plan is hereby amended to read as follows:
(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
due, or for one
<PAGE>
(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.
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 denomination 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.
8. Section 7.3 of the Plan is hereby amended to delete the language in
the original Section 7.3 and add the following to the language added by the
First Amendment:
7.3 TRANSFERABILITY. Except as provided in this Article 7, the
Shares of Restricted Stock granted herein 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.
9. Section 12 (a) of the Plan is hereby amended to read as follows:
(a) Any and all Options granted hereunder 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
<PAGE>
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.
10. Section 17.2 of the Plan is hereby amended to read as follows:
17.2 GOVERNING LAW. The Plan, and all agreements hereunder,
shall be governed by the laws of the State of Delaware.
11. This Second amendment is pursuant to a Board of Directors
resolution dated February 11, 1998 and is effective as of that date.
DEL WEBB CORPORATION
By:/s/ Robertson C. Jones
---------------------------------
Its: Senior Vice President
---------------------------------
---------------------------------
THIRD AMENDMENT
TO THE
DEL WEBB CORPORATION
EXECUTIVE LONG-TERM INCENTIVE PLAN
1. THIS THIRD AMENDMENT to the Del Webb Corporation Executive Long-
Term Incentive Plan (the "Plan") shall only amend those Sections specified
herein and the remaining provisions of the Plan not so amended are hereby
ratified and affirmed.
2. Section 2.1(d) of the Plan is hereby amended to read as follows:
2.1(d) "Cause" shall mean (i) the breach by a Participant of
any employment contract between the Participant and the 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 the Company.
3. Section 2.1(e) of the Plan is hereby amended to read as follows:
2.1(e) A "Change in Control" of the 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
<PAGE>
(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 the Company which vote
generally for the election of directors.
4. Section 2.1(h) of the Plan is hereby amended to read as follows:
2.1(h) "Company" means Del Webb Corporation, a Delaware
corporation (including any and all Subsidiaries), or any successor
thereto as provided in Article 17 hereof.
5. Section 6.5 of the Plan is hereby amended to read as follows:
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. Section 6.6 of the Plan is hereby amended by changing the second
full paragraph thereof to read as follows:
The Option Price upon exercise of any Option shall be payable to the
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).
7. Section 6.8(a) of the Plan is hereby amended to read as follows:
(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
due, or for one
<PAGE>
(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.
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 denomination 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 the
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.
8. Section 7.3 of the Plan is hereby amended to delete the language in
the original Section 7.3 and add the following to the language added in the
Second Amendment:
7.3 TRANSFERABILITY. Except as provided in this Article 7, the
Shares of Restricted Stock granted herein 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.
9. Section 13 (a) of the Plan is hereby amended to read as follows:
(a) Any and all Options granted hereunder shall become immediately
exercisable and shall remain exercisable by the Participant at
any time prior
<PAGE>
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.
10. Section 18.2 of the Plan is hereby amended to read as follows:
18.2 GOVERNING LAW. The Plan, and all agreements hereunder,
shall be governed by the laws of the State of Delaware.
11. This Third amendment is pursuant to a Board of Directors resolution
dated February 11, 1998 and is effective as of that date.
DEL WEBB CORPORATION
By:/s/ Robertson C. Jones
---------------------------------
Its: Senior Vice President
---------------------------------
---------------------------------
[THIRD] AMENDMENT
TO THE
DEL WEBB CORPORATION
SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN NO. 1
The Del Webb Corporation Supplemental Executive Retirement Plan No. 1
(the "Plan"), which was originally effective as of January 1, 1989, and was
restated effective as of April 20, 1993, and was amended July 13, 1995 and June
26, 1996, is hereby further amended as follows:
1. Section 3.4(b) of the Plan is hereby amended to read as
follows:
3.4(b) "Disability" means that because of physical or mental
illness or disability, with or without accommodation, the
Participant shall have been continuously unable to perform his
duties under any existing employment contract between the
Participant and the Company or in accordance with the
Participant's current job description for a consecutive period
of 180 days.
2. The first paragraph of Section 4.3 of the Plan is hereby
amended to read as follows:
EARLY RETIREMENT. If a Participant retires on or after his
Early Retirement Date but before his Normal Retirement Date,
the Employer shall pay the Participant the Normal Retirement
Benefit under 4.2 accrued to the date of termination as
follows:
3. The first paragraph of Section 4.6(a) of the Plan is hereby
amended as follows:
(a) AMOUNT. In the event that, within thirty-six (36)
months after a Change in Control of the Employer, the
Participant terminates employment for Good Reason (as defined
in Section 4.6(c) of the Plan), or the Participant's
employment with the Employer is terminated by the Employer for
reasons other than death, Disability, Retirement, or for
Cause, the Employer shall pay the Participant the Normal
Retirement Benefits under Section 4.2 as follows:
4. Section 4.6(c) (iii) of the Plan is hereby amended to read as
follows:
(iii) The failure by the Employer to continue in effect any
thrift, incentive or compensation plan, or any pension, life
insurance, health and accident or
<PAGE>
disability plan (including the Plan), in which the Participant
is participating at the time of a Change in Control of the
Employer (or plans providing substantially similar benefits),
the taking of any action by the Employer which would adversely
affect participation in or materially reduce benefits under
any of such plans or deprive the Participant of any material
fringe benefit enjoyed at the time of the Change in Control,
or the failure by the Employer to provide the Participant with
the number of paid vacation days to which he is then entitled
on the basis of years of service with the Employer in
accordance with the Employer's normal vacation policy in
effect on the date hereof;
5. Section 4.6(d) of the Plan is hereby amended by deleting
subparagraph (ii) therefrom and renaming subparagraph (iii) thereof as
subparagraph (ii).
6. Section 8.1 of the Plan is hereby amended to read as follows:
8.1 RIGHT TO TERMINATE OR AMEND. The Board may, in its sole
discretion, terminate the Plan at any time. The Board may
amend the Plan at any time or from time to time. Any amendment
may provide different benefits or amounts of benefits from
those herein set forth. However, no such termination or
amendment shall adversely affect the benefits of Participants
which have accrued prior to or as a result of such action
(including termination as described in Section 4.6(a) of the
Plan, following a Change in Control), the benefits of any
Participant who has previously retired, or the benefits of any
Beneficiary of a Participant who has previously died.
7. Section 9.6 of the Plan is hereby amended as follows:
This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Delaware.
Except as otherwise provided above, the provisions of the Plan, as
amended herein, shall continue in full force and effect.
DEL WEBB CORPORATION
By:/s/ Robertson C. Jones
---------------------------------
Its: Senior Vice President
---------------------------------
Dated: March 10, 1999
-----------------------------
[FOURTH] AMENDMENT
TO THE
DEL WEBB CORPORATION
SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN NO. 2
The Del Webb Corporation Supplemental Executive Retirement Plan No. 2
(the "Plan"), which was originally effective as of January 1, 1989, and was
restated effective as of April 20, 1993, and was amended June 26, 1996, is
hereby further amended as follows:
1. Section 3.4(b) of the Plan is hereby amended to read as
follows:
3.4(b) DISABILITY. "Disability" means a Participant's
incapacity due to physical or mental illness which results in
(i) the Participant's absence from his or her duties with the
Employer on a full-time basis for six (6) months or more and
(ii) approval of the Participant for long-term disability
payments under the Employer's long-term disability plan.
2. The first paragraph of Section 4.3 of the Plan is hereby
amended to read as follows:
4.3 EARLY RETIREMENT. If a Participant retires on or after his
Early Retirement Date but before his Normal Retirement Date,
the Employer shall pay the Participant the Normal Retirement
Benefit under 4.2 accrued to the date of termination as
follows:
3. The first paragraph of Section 4.6(a) of the Plan is hereby amended
as follows:
(a) AMOUNT. In the event that, within thirty-six (36)
months after a Change in Control of the Employer, the
Participant terminates employment for Good Reason (as defined
in Section 4.6(c) of the Plan), or the Participant's
employment with the Employer is terminated by the Employer for
reasons other than death, Disability, Retirement, or for
Cause, the Employer shall pay the Participant the Normal
Retirement Benefits under Section 4.2 as follows:
4. Section 4.6(c) (iii) of the Plan is hereby amended to read as
follows:
(iii) The failure by the Employer to continue in effect any
thrift, incentive or compensation plan, or any pension, life
insurance, health and accident or disability plan (including
the Plan), in which the Participant is participating at
<PAGE>
the time of a Change in Control of the Employer (or plans
providing substantially similar benefits), the taking of any
action by the Employer which would adversely affect
participation in or materially reduce benefits under any of
such plans or deprive the Participant of any material fringe
benefit enjoyed at the time of the Change in Control, or the
failure by the Employer to provide the Participant with the
number of paid vacation days to which he is then entitled on
the basis of years of service with the Employer in accordance
with the Employer's normal vacation policy in effect on the
date hereof;
5. Section 4.6(d) of the Plan is hereby amended by deleting
subparagraphs (ii) and (iii) and inserting the following as a new subparagraph
(ii):
The Participant's conviction of a felony or crime involving
morale turpitude (meaning a crime that necessarily includes
the commission of an act of gross depravity, dishonesty or bad
morals); provided that, after the occurrence of a Potential
Change in Control, but prior to a Change in Control, Cause
shall also include willful and gross misconduct that is
materially and demonstratively detrimental to the company.
6. Section 8.1 of the Plan is hereby amended to read as follows:
8.1 RIGHT TO TERMINATE OR AMEND. The Board may, in its sole
discretion, terminate the Plan at any time. The Board may
amend the Plan at any time or from time to time. Any amendment
may provide different benefits or amounts of benefits from
those herein set forth. However, no such termination or
amendment shall adversely affect the benefits of Participants
which have accrued prior to or as a result of such action
(including termination as described in Section 4.6(a) of the
Plan, following a Change in Control), the benefits of any
Participant who has previously retired, or the benefits of any
Beneficiary of a Participant who has previously died.
7. Section 9.6 of the Plan is hereby amended as follows:
This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Delaware.
<PAGE>
Except as otherwise provided above, the provisions of the Plan, as
amended herein, shall continue in full force and effect.
DEL WEBB CORPORATION
By:/s/ Robertson C. Jones
---------------------------------
Its: Senior Vice President
---------------------------------
Dated: March 10, 1999
---------------------------------
AMENDMENT TO EMPLOYMENT
AND CONSULTING AGREEMENT
This Amendment (the "Amendment") is entered into as of the 9th day of
March, 1999, by DEL WEBB CORPORATION, a Delaware corporation (the "Company"),
and Philip J. Dion ("Dion").
WHEREAS, the Company and Dion have entered into that certain Employment
and Consulting Agreement (the "Agreement"), dated July 10, 1996; and
WHEREAS, the Company and Dion desire to amend the Agreement in certain
respects;
NOW THEREFORE, the Agreement is hereby amended as follows:
1. Section 10(b)(1) of the Agreement is hereby amended to read as
follows:
10(b)(1) If the Termination Date occurs during the Employment
Period, Company will pay Dion his Base Salary as set forth in
Section 4 (or as it may be increased from time to time), plus
16-2/3% of the Base Salary in lieu of employee benefits
referred to in Section 4(b), in equal bi-weekly installments.
With each such payment, Company also shall make an "Incentive
Compensation Payment" to Dion. Each "Incentive Compensation
Payment" shall equal the average annual "Incentive
Compensation" paid to Dion by Company with respect to the five
fiscal years preceding the fiscal year in which the
Termination Date occurs divided by 26. For purposes of this
Section, "Incentive Compensation" refers to the amounts
payable to Dion pursuant to any management incentive
compensation or bonus program sponsored by Company during the
fiscal years included in the five-year averaging period. The
payments called for by the preceding provisions of this
Section shall continue throughout the Employment Period.
Company then shall pay Dion the Consulting Fee in equal
bi-weekly payments throughout the Consulting Period.
2. Section 20 of the Agreement is hereby amended to read as
follows:
"GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of
Delaware."
<PAGE>
3. Except as amended herein, the provisions of the Agreement
shall continue in full force and effect.
DEL WEBB CORPORATION
By:/s/ Robertson C. Jones
---------------------------------
Its: Senior Vice President
---------------------------------
/s/ Philip J. Dion
---------------------------------
Philip J. Dion
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment (the "Amendment") is entered into as of the 22nd day of
March, 1999, by DEL WEBB CORPORATION, a Delaware corporation (the "Company"),
and LeRoy C. Hanneman, Jr..
WHEREAS, the Company and the Employee have entered into that certain
Employment Agreement (the "Agreement"), dated April 11, 1997; and
WHEREAS, the Company and the Employee desire to amend the Agreement in
certain respects;
NOW THEREFORE, the Agreement is hereby amended as follows:
1. Section 9(e)(4) of the Agreement is hereby amended to read as
follows:
9(e)(4) Two additional elements of Good Reason shall be added
as follows:
(A) Employee is assigned to, or Company's office at
which Employee is principally employed on the Relevant Date is
relocated to, a location which would require a round-trip
commute to work from Employee's principal residence on the
Relevant Date of more than 100 miles per day.
(B) Failure of Company to obtain an agreement
satisfactory to Employee from any successor to the business,
or substantially all the assets, of Company to assume this
Agreement or issue a substantially similar agreement.
2. Section 9(g)(1) of the Agreement is hereby amended to read as
follows:
9(g)(1) Within five days following Employee's termination, a
lump sum severance payment will be made to Employee. The lump
sum severance payment shall be in an amount equal to: (i) 2.5
times Employee's yearly Base Salary as set forth in Section 3
or as it may be increased from time to time; plus (ii) 2.5
times the greatest of (a) the average annual incentive
compensation paid to Employee pursuant to the MIP (or any
predecessor or successor plan) with respect to the five fiscal
years preceding the fiscal year in which the Change in Control
occurs, or (b) an amount equal to 100% of the incentive
compensation paid to Employee pursuant to the MIP (or any
predecessor or successor plan) during the 12 month period
prior to the Termination Date, or (c) an amount equal to the
Employee's Base Salary as set forth in Section 3 or as such
Base Salary may be
<PAGE>
increased from time to time, multiplied by such Employee's
current target bonus percentage under the MIP then in effect;
minus (iii) the total amounts due to Employee, if any,
pursuant to Sections 8(b)(1) and (2).
3. Section 10 of the Agreement is hereby amended to read as
follows:
10. EXCISE AND INCOME TAX GROSS-UP
------------------------------
The Internal Revenue Code of 1986 (the "Code")
imposes significant tax burdens on the Employee and Company if
the total amounts received by the Employee due to a Change in
Control exceed prescribed limits. These tax burdens include a
requirement that the Employee pay a 20% excise tax on certain
amounts received in excess of the prescribed limits and a loss
of deduction for Company. If, as a result of these Code
provisions, the Employee is required to pay such excise tax,
then upon written notice from the Employee to Company, Company
shall pay the Employee an amount equal to the total excise tax
imposed on the Employee (including the excise tax
reimbursements due pursuant to this sentence and the excise
taxes on any federal and state tax reimbursements due pursuant
to the next sentence). If Company is obligated to pay the
Employee pursuant to the preceding sentence, Company also
shall pay the Employee an amount equal to the "total presumed
federal and state taxes" that could be imposed on the Employee
with respect to the excise tax reimbursements due to the
Employee pursuant to the preceding sentence and the federal
and state tax reimbursements due to the Employee pursuant to
this sentence. For purposes of the preceding sentence, the
"total presumed federal and state taxes" that could be imposed
on the Employee shall be conclusively calculated using a
combined tax rate equal to the sum of (a) the highest
individual income tax rate in effect under (I) Federal tax law
and (ii) the tax laws of the state in which the Employee
resides on the date that the payment under this Section 10 is
computed and (b) the hospital insurance portion of FICA. No
adjustments will be made in this combined rate for the
deduction of state taxes on the federal return, the loss of
itemized deductions or exemptions, or for any other purpose.
The Employee shall be responsible for paying the actual taxes.
The amounts payable to the Employee pursuant to this or any
other agreement or arrangement with Company shall not be
limited in any way by the amount that may be paid pursuant to
the Code without the imposition of an excise tax or the loss
of Company deductions. Either the Employee or Company may
elect to challenge any excise taxes imposed by the Internal
Revenue Service and the Employee and Company agree to
cooperate with each other in prosecuting such challenges. If
the Employee elects to litigate or
<PAGE>
otherwise challenge the imposition of such excise tax,
however, Company will join the Employee in such litigation or
challenge only if Company's General Counsel determines in good
faith that the Employee's position has substantial merit and
that the issues should be litigated from the standpoint of
Company's best interest.
4. Section 12(e) of the Agreement is hereby amended to read as
follows:
12(e) EXPENSES
The costs and expenses of any mediator shall be borne by
Company. Should the Employee or Company, at any time, initiate
arbitration for breach of this Agreement, Company shall
reimburse the Employee for all amounts spent by the Employee
to pursue such arbitration, unless the arbitrator finds the
Employee's action to have been frivolous and without merit.
5. Section 18 of the Agreement is hereby amended to read as
follows:
GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of
Delaware.
6. Except as amended herein, the provisions of the Agreement,
shall continue in full force and effect.
DEL WEBB CORPORATION
By:/s/ Robertson C. Jones
---------------------------------
Its: Senior Vice President
---------------------------------
COMPANY
/s/ LeRoy C. Hanneman, Jr.
---------------------------------
LeRoy C. Hanneman, Jr.
Employee
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment (the "Amendment") is entered into as of the 22nd day of
March, 1999, by DEL WEBB CORPORATION, a Delaware corporation (the "Company"),
and John H. Gleason.
WHEREAS, the Company and the Employee have entered into that certain
Employment Agreement (the "Agreement"), dated April 11, 1997; and
WHEREAS, the Company and the Employee desire to amend the Agreement in
certain respects;
NOW THEREFORE, the Agreement is hereby amended as follows:
13. Section 9(e)(4) of the Agreement is hereby amended to read as
follows:
9(e)(4) Two additional elements of Good Reason shall be added
as follows:
(A) Employee is assigned to, or Company's office at
which Employee is principally employed on the Relevant Date is
relocated to, a location which would require a round-trip
commute to work from Employee's principal residence on the
Relevant Date of more than 100 miles per day.
(B) Failure of Company to obtain an agreement
satisfactory to Employee from any successor to the business,
or substantially all the assets, of Company to assume this
Agreement or issue a substantially similar agreement.
14. Section 9(g)(1) of the Agreement is hereby amended to read as
follows:
9(g)(1) Within five days following Employee's termination, a
lump sum severance payment will be made to Employee. The lump
sum severance payment shall be in an amount equal to: (i) 2.5
times Employee's yearly Base Salary as set forth in Section 3
or as it may be increased from time to time; plus (ii) 2.5
times the greatest of (a) the average annual incentive
compensation paid to Employee pursuant to the MIP (or any
predecessor or successor plan) with respect to the five fiscal
years preceding the fiscal year in which the Change in Control
occurs, or (b) an amount equal to 100% of the incentive
compensation paid to Employee pursuant to the MIP (or any
predecessor or successor plan) during the 12 month period
prior to the Termination Date, or (c) an amount equal to the
Employee's Base Salary as set forth in Section 3 or as such
Base Salary may be
<PAGE>
increased from time to time, multiplied by such Employee's
current target bonus percentage under the MIP then in effect;
minus (iii) the total amounts due to Employee, if any,
pursuant to Sections 8(b)(1) and (2).
15. Section 10 of the Agreement is hereby amended to read as follows:
10. EXCISE AND INCOME TAX GROSS-UP
------------------------------
The Internal Revenue Code of 1986 (the "Code")
imposes significant tax burdens on the Employee and Company if
the total amounts received by the Employee due to a Change in
Control exceed prescribed limits. These tax burdens include a
requirement that the Employee pay a 20% excise tax on certain
amounts received in excess of the prescribed limits and a loss
of deduction for Company. If, as a result of these Code
provisions, the Employee is required to pay such excise tax,
then upon written notice from the Employee to Company, Company
shall pay the Employee an amount equal to the total excise tax
imposed on the Employee (including the excise tax
reimbursements due pursuant to this sentence and the excise
taxes on any federal and state tax reimbursements due pursuant
to the next sentence). If Company is obligated to pay the
Employee pursuant to the preceding sentence, Company also
shall pay the Employee an amount equal to the "total presumed
federal and state taxes" that could be imposed on the Employee
with respect to the excise tax reimbursements due to the
Employee pursuant to the preceding sentence and the federal
and state tax reimbursements due to the Employee pursuant to
this sentence. For purposes of the preceding sentence, the
"total presumed federal and state taxes" that could be imposed
on the Employee shall be conclusively calculated using a
combined tax rate equal to the sum of (a) the highest
individual income tax rate in effect under (I) Federal tax law
and (ii) the tax laws of the state in which the Employee
resides on the date that the payment under this Section 10 is
computed and (b) the hospital insurance portion of FICA. No
adjustments will be made in this combined rate for the
deduction of state taxes on the federal return, the loss of
itemized deductions or exemptions, or for any other purpose.
The Employee shall be responsible for paying the actual taxes.
The amounts payable to the Employee pursuant to this or any
other agreement or arrangement with Company shall not be
limited in any way by the amount that may be paid pursuant to
the Code without the imposition of an excise tax or the loss
of Company deductions. Either the Employee or Company may
elect to challenge any excise taxes imposed by the Internal
Revenue Service and the Employee and Company agree to
cooperate with each other in prosecuting such challenges. If
the Employee elects to litigate or
<PAGE>
otherwise challenge the imposition of such excise tax,
however, Company will join the Employee in such litigation or
challenge only if Company's General Counsel determines in good
faith that the Employee's position has substantial merit and
that the issues should be litigated from the standpoint of
Company's best interest.
16. Section 12(e) of the Agreement is hereby amended to read as
follows:
12(e) EXPENSES
The costs and expenses of any mediator shall be borne by
Company. Should the Employee or Company, at any time, initiate
arbitration for breach of this Agreement, Company shall
reimburse the Employee for all amounts spent by the Employee
to pursue such arbitration, unless the arbitrator finds the
Employee's action to have been frivolous and without merit.
17. Section 18 of the Agreement is hereby amended to read as
follows:
GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of
Delaware.
18. Except as amended herein, the provisions of the Agreement,
shall continue in full force and effect.
By:/s/ Robertson C. Jones
---------------------------------
Its: Senior Vice President
---------------------------------
COMPANY
/s/ John H. Gleason
---------------------------------
John H. Gleason
Employee
Del Webb Corporation
- --------------------------------------------------------------------------------
ROBERTSON C. JONES
Senior Vice President
General Counsel
March 15, 1999
Dear ___________:
The Board of Directors of Del Webb Corporation (the "Company") and the Human
Resources Committee (the "Committee") of the Board have determined that it is in
the best interest of the Company and its shareholders for the Company to agree,
as provided herein, to pay you termination compensation in the event you should
leave the employ of the Company or a Subsidiary under the circumstances
described below. Reference in this letter to your employment by or with the
Company shall be deemed to include employment by or with a Subsidiary.
The Board and Committee recognize that the continuing possibility of a change in
the control of the Company is unsettling to you and other senior executives of
the Company. Therefore, these arrangements are being made to help assure a
continuing dedication by you to your duties to the Company notwithstanding the
occurrence or potential occurrence of a change in control. In particular, the
Board and the Committee believe it important, should the Company receive
proposals from third parties with respect to its future, to enable you, without
being influenced by the uncertainties of your own situation, to assess and to
take such other action regarding such proposals as the Board might determine to
be appropriate. The Board and the Committee also wish to demonstrate to
executives of the Company and its Subsidiaries that the Company is concerned
with the welfare of its executives and intends to see that loyal executives are
provided with the benefits stated herein.
In view of the foregoing and in further consideration of your continued
employment with the Company, the Company agrees with you as follows:
1. LIMITED RIGHT TO RECEIVE SEVERANCE BENEFITS. In the event that within
twenty-four (24) months after a "Change in Control" (as defined herein)
of the Company your employment with the Company is terminated, you
shall be entitled to the severance benefits provided in Section 3
hereof unless such termination is (i) because of your death, "Permanent
Disability" (as defined herein) or retirement, (ii) by the Company for
"Cause" (as defined herein) or (iii) by you, other than for "Good
Reason" (as defined herein).
<PAGE>
May 15, 1999
Page 2
2. CERTAIN DEFINITIONS. For purposes of this Agreement:
(a) CHANGE IN CONTROL. A "Change in Control" of the Company shall
be deemed to have occurred in any or all of the following
instances:
(i) 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 Company 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
(ii) 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
(iii) The stockholders of Company approve a merger or
consolidation of Company with any other Company,
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
(iv) 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.
(b) POTENTIAL CHANGE IN CONTROL. A "Potential Change in Control"
shall be deemed to have occurred in any or all of the
following instances:
<PAGE>
May 15, 1999
Page 3
(i) Company enters into an agreement, the consummation of
which would result in the occurrence of an Actual
Change in Control;
(ii) Any person (including Company) publicly announces an
intention to take or to consider taking actions which
if consummated would constitute a Change in Control;
(iii) Any person 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 who is or becomes the beneficial
owner, directly or indirectly, of securities of
Company representing 10% or more of the combined
voting power of the Company's then outstanding Voting
Securities, increases such person's beneficial
ownership of such securities by five percentage
points (5 %) or more over the percentage so owned by
such person; or
(iv) The Board of Directors adopts a resolution to the
effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
For purposes of Sections 2(a) and 2(b) above, the term "Voting Securities" shall
mean and include any securities of the Company which vote generally for the
election of directors.
(c) RETIREMENT. Termination by the Company or you of your
employment based on "Retirement" shall mean (i) voluntary
retirement by you from active full- time employment with any
person or Company on and after the attainment of sixty-five
(65) years, (ii) voluntary separation because of retirement
from active employment in accordance with the Company's
retirement policy in effect as of the date of Change in
Control (including early retirement at your option) generally
applicable to its salaried employees, or (iii) in accordance
with any written retirement policy established by the Company
for you with your written consent.
(d) PERMANENT DISABILITY. If, as a result of your incapacity
because of physical or mental illness, you shall have been
absent from your duties with the Company or a Subsidiary on a
full-time basis for six (6) months or more and you apply for
and are approved for long-term disability payments under the
Company's long-term disability plan, the Company may terminate
this Agreement for "Permanent Disability."
<PAGE>
May 15, 1999
Page 4
Notwithstanding the foregoing, this Agreement may not be
terminated pursuant to this Section 2(d) unless the incapacity
giving rise to such Permanent Disability occurs prior to the
occurrence of an event which might cause amounts to be payable
to you under this Agreement. Once payments have begun pursuant
to any provision of this Agreement, this Agreement may not be
terminated pursuant to this Section 2(d) and such payment
shall not cease or diminish on account of your Permanent
Disability.
(e) CAUSE. The Company shall have "Cause" to terminate your
employment upon (i) the breach by you of any employment
contract between you and the Company, or (ii) your conviction
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).
(f) GOOD REASON. You may terminate your employment for Good
Reason, and receive the benefits provided in Section 3 hereof,
only if you do so within one hundred twenty (120) days
following the occurrence of the last of any of the events
specified in (i) - (v) below. Termination of your employment
by you for "Good Reason" shall mean:
(i) without your express written consent, the assignment
to you of any duties that are not reasonably
consistent with your positions, duties,
responsibilities and status with the Company
immediately prior to a Change in Control, or a
demotion, or a change in your titles or offices as in
effect immediately prior to a Change in Control, or
any removal of you from or any failure to re-elect
you to any of such positions, except in connection
with the termination of your employment for Cause,
Permanent Disability or as a result of your death or
by other than for Good Reason;
(ii) a reduction by the Company in your base salary as in
effect on the date hereof or as the same may be
increased from time to time;
(iii) (A) the failure by the Company to continue in effect
any thrift, incentive or compensation plan, or any
pension, life insurance, health and accident or
disability plan in which you are participating at the
time of a Change in Control of the Company (or plans
providing you with substantially similar benefits),
(B) the taking of any action by the Company which
would adversely affect your participation in or
materially reduce your benefits under any of such
plans or deprive you of any material fringe benefit
enjoyed by you at the time of the change in control,
or (C) the failure by the Company to provide you with
the number of paid vacation days to which you are
then entitled
<PAGE>
May 15, 1999
Page 5
on the basis of years of service with the Company in
accordance with the Company's normal vacation policy
in effect on the date hereof ;
(iv) you are assigned to, or the Company's office at which
you are principally employed immediately prior to the
date of the Change in Control of the Company is
relocated to, a location which would require a
round-trip commute to work from your residence of
more than one hundred (100) miles per day:
(v) the failure of the Company to obtain an agreement
satisfactory to you from any successor to the
business, or substantially all the assets, of the
Company to assume this Agreement or issue a
substantially similar agreement;
(g) Termination of your employment by you for "Good Reason," with
receipt of the benefits provided in Section 3, shall also
include:
(i) your termination by the Company, purportedly for
Cause, if it is thereafter determined that cause did
not exist under this Agreement with respect to your
termination.
(ii) the taking of any action by the Company at the
request of or on behalf of any person, after the
occurrence of a Potential Change in Control, but
prior to a Change in Control, terminating this
Agreement or terminating your employment with the
Company, other than for Cause: PROVIDED THAT, for
purposes of this subparagraph only, Cause shall
include willful and gross misconduct on your part
that is materially and demonstratively detrimental to
the Company.
(h) NOTICE OF TERMINATION. Any termination by the Company or you
shall be communicated by written notice to the other party
("Notice of Termination"). With respect to any termination by
the Company for Cause, Retirement or Disability, or any
termination by you for Good Reason, the Notice of Termination
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for such termination.
(i) SUBSIDIARY. "Subsidiary" means any corporation in which the
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 the
Company owns at least fifty percent (50%) of the combined
equity thereof.
<PAGE>
May 6, 1999
Page 6
3. EFFECT OF TERMINATION. If you are entitled to receive severance
benefits pursuant to this agreement, such severance benefits shall be
as follows:
(a) within five (5) days following your termination, you will be
entitled to a cash payment in lump sum (or, if you make an
irrevocable election prior to a Change in Control, payable in
equal biweekly installments without interest) equal to the sum
of two (2) times (I) the highest annual base salary in effect
at any time during the twelve (12) months prior to the date
the Notice of Termination is given ("Termination Salary"),
plus (ii) an amount equal to the greater of the value of all
bonuses paid to you during the twelve (12) month period prior
to the giving of such Notice of Termination, or your current
target bonus under the management incentive program then in
effect;
(b) any stock options to purchase common stock of the Company or
stock appreciation rights held by you on the date the Notice
of Termination is given, which are not at that date currently
exercisable, shall on that date automatically become
exercisable; and be exercisable for three (3) months after
termination of employment;
(c) all shares of common stock of the Company held by you under
the Company's long-term incentive plans which are still
subject to restrictions on the date the Notice of Termination
is given shall, as of that date, automatically become free of
all restrictions;
(d) a payment of twenty percent (20%) of your Termination Salary
in lieu of fringe benefits other than those provided
separately in Section 5.
4. EXCISE AND INCOME TAX GROSS-UP. The Internal Revenue Code of 1986 (the
"Code") imposes significant tax burdens on you and Company if the total
amounts received by you pursuant to this agreement exceed prescribed
limits. These tax burdens include a requirement that you pay a 20%
excise tax on certain amounts received in excess of the prescribed
limits and a loss of deduction for Company. If, as a result of these
Code provisions, you are required to pay such excise tax, then upon
written notice from you to Company, Company shall pay you an amount
equal to the total excise tax imposed on you (including the excise tax
reimbursements due pursuant to this sentence and the excise taxes on
any federal and state tax reimbursements due pursuant to the next
sentence). If Company is obligated to pay you pursuant to the preceding
sentence, Company also shall pay you an amount equal to the "total
presumed federal and state taxes" that could be imposed on you with
respect to the excise tax reimbursements due to you pursuant to the
preceding sentence and the federal and state tax reimbursements due to
you pursuant to this sentence. For purposes of the preceding sentence,
the "total presumed federal and state taxes" that could be imposed on
you shall be
<PAGE>
May 15, 1999
Page 7
conclusively calculated using a combined tax rate equal to the sum of
(a) the highest individual income tax rate in effect under (i) Federal
tax law and (ii) the tax laws of the state in which you reside on the
date that the payment under this Section 4 is computed and (b) the
hospital insurance portion of FICA. No adjustments will be made in this
combined rate for the deduction of state taxes on the federal return,
the loss of itemized deductions or exemptions, or for any other
purpose. You will be responsible for paying the actual taxes. The
amounts payable to you pursuant to this or any other agreement or
arrangement with Company will not be limited in any way by the amount
that may be paid pursuant to the Code without the imposition of an
excise tax or the loss of Company deductions. Either you or Company may
elect to challenge any excise taxes imposed by the Internal Revenue
Service and you and Company agree to cooperate with each other in
prosecuting such challenges. If you elect to litigate or otherwise
challenge the imposition of such excise tax, however, Company will join
you in such litigation or challenge only if Company's General Counsel
determines in good faith that your position has substantial merit and
that the issues should be litigated from the standpoint of Company's
best interest.
5. EFFECT ON OTHER BENEFITS. Except to the extent specified in Section 3
hereof, this Agreement shall not affect your participation in,
distributions from and vested rights under any pension, profit sharing
or other employee benefit plan of the Company or any of its
Subsidiaries, which will be governed by the terms of those respective
plans. Any forfeitures you experience under any pension, profit sharing
or stock bonus plans because of your termination shall be paid to you
by the Company in cash in the event any payment is made to you pursuant
to Section 3. In the event that on the date your employment with the
Company is terminated (and provided you are entitled to benefits) you
are provided or are entitled to the use of an automobile under the
Company's executive automobile policy, you shall have the use of such
automobile for one (1) year after the date of such termination of
employment, on terms no less favorable than those contained in such
policy prior to such termination of employment. In addition, for a
twelve (12) month period after any termination entitling you to
benefits under Section 3 hereof, the Company shall arrange to provide
you with life, disability, accident and group health benefits and
coverages substantially similar to those which you were receiving
immediately prior to the Notice of Termination. The cost to you of such
coverage shall be not more than the cost to you of similar coverage
immediately prior to the Notice of Termination. Your right to continued
life, disability, accident and health benefits shall be in addition to
and not in lieu of your rights under the Consolidated Omnibus
Reconciliation Act of 1986 ("COBRA").
<PAGE>
May 15, 1999
Page 8
6. CONTINUATION OF EMPLOYMENT. This Agreement shall not be construed to
confer upon you any right to continue in the employ of the Company or a
Subsidiary, and shall not limit any right of the Company or a
Subsidiary to in its sole discretion terminate your employment.
7. ENTIRE AGREEMENT. This Agreement supersedes the change in control
agreement between the Company and you entered into on N/A, 19 ,
respecting certain termination benefits which might become payable to
you in connection with a change in control. In the event of the
termination of your employment under circumstances entitling you to the
termination payments hereunder, the arrangements provided for by this
Agreement, together with any written employment contract between you
and the Company and any applicable benefit plan of the Company or any
of its Subsidiaries in effect at the time (including but not limited to
the plans referred to in Section 5), would constitute the entire
obligation of the Company to you and performance thereof would
constitute full settlement of any claim that you might otherwise assert
against the Company on account of such termination.
8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of you, your estate and the Company and any successor of
the Company, but neither this Agreement nor any rights arising
hereunder may be assigned or pledged by you.
9. MISCELLANEOUS. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed
to in writing, signed by you and such officer as may be specifically
designated by the Board of Directors of the Company.
No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same time or
at any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not set forth expressly
in this Agreement.
10. TERMINATION OF THIS AGREEMENT. This Agreement may be unilaterally
terminated by the Company upon twelve (12) months prior written notice
to you; PROVIDED THAT (subject to the provisions of Section 2(f)
relating to a Potential Change in Control) after the occurrence of a
Potential Change in Control the foregoing provision shall not apply.
<PAGE>
May 15, 1999
Page 9
11. MEDIATION AND ARBITRATION.
(a) MEDIATION. Any and all disputes arising under, pertaining to
or touching upon this Agreement or the statutory rights or
obligations of either you or the Company hereto, shall, if not
settled by negotiation, be subject to non- binding mediation.
Excepted from this Section 11 is the right of Company or you
to seek preliminary judicial relief with respect to a dispute
should such action be necessary to avoid immediate,
irreparable harm or damage pending the proceedings provided
for in this Section 11. Mediation shall be before an
independent mediator selected by the you or the Company
pursuant to Section 11(e). Any demand for mediation shall be
made in writing. The demand shall set forth with reasonable
specificity the basis of the dispute and the relief sought.
The mediation hearing will occur at a time and place
convenient to the parties in Maricopa County, Arizona, within
30 days of the date of selection or appointment of the
mediator.
(b) ARBITRATION. In the event that the dispute is not settled
through mediation, you shall then proceed to binding
arbitration before a panel of three independent arbitrators
selected pursuant to Section 11(e). The mediator shall not
serve as an arbitrator. ALL DISPUTES INVOLVING ALLEGED
UNLAWFUL EMPLOYMENT DISCRIMINATION, TERMINATION BY ALLEGED
BREACH OF CONTRACT OR POLICY, OR ALLEGED EMPLOYMENT TORT
COMMITTED BY COMPANY OR A REPRESENTATIVE OF COMPANY, INCLUDING
CLAIMS OF VIOLATIONS OF FEDERAL OR STATE DISCRIMINATION
STATUTES OR PUBLIC POLICY, SHALL BE RESOLVED PURSUANT TO THIS
PARAGRAPH (b) AND THERE SHALL BE NO RECOURSE TO COURT, WITH OR
WITHOUT A JURY TRIAL. The arbitration hearing shall occur at a
time and place convenient to you and Company in Maricopa
County, Arizona, within 30 days of selection or appointment of
the last of the three arbitrators. If Company has adopted a
policy that is applicable to arbitrations with executives, the
arbitration shall be conducted in accordance with said policy
to the extent that the policy is consistent with this
Agreement and the Federal Arbitration Act, 9 U.S.C.
ss.ss.1-16. If no such policy has been adopted, the
arbitration shall be governed by the current arbitration rules
of the American Arbitration Association or its successor (the
"Association"). Notwithstanding any provisions in such rules
to the contrary, the arbitrators shall issue findings of fact
and conclusions of law, and an award, within 15 days of the
date of the hearing unless the parties otherwise agree.
(c) DAMAGES. In case of breach of contract or policy, damages
shall be limited to contract damages. In cases of intentional
discrimination claims prohibited by statute, the arbitrators
may direct payment consistent with 42
<PAGE>
May 15, 1999
Page 10
U.S.C.ss. 1981(a) and the Civil Rights Act of 1991. In cases
of employment tort, the arbitrators may award punitive damages
if proved by clear and convincing evidence. Issues of
procedure, arbitrability, or confirmation of award shall be
governed by the Federal Arbitration Act, 9 U.S.C.ss.ss.1-16,
except that Court review of the arbitrators' award shall be
that of an appellate court reviewing a decision of a trial
judge sitting without a jury. The arbitrators may not award
reinstatement. Instead, if the arbitrators find that the
termination by Company was not for Permanent Disability or not
for Cause or that your termination was for Good Reason, you
shall only be entitled to the severance benefits provided by
Section 3 and payment of your reasonable legal expenses in
such arbitration. Until a final, binding determination has
been entered relieving Company of its duty to provide payments
hereunder, Company shall pay you all amounts to which you
would be entitled under Section 3, calculated on the
assumption that your employment had been terminated without
Cause.
(d) SELECTION OF MEDIATOR OR ARBITRATORS. You and Company shall
elect the mediator from a panel list made available by the
Association. If you or Company are unable to agree to a
mediator within ten days of receipt of a demand for mediation,
the mediator will be chosen by alternatively striking from a
list of five mediators obtained by Company from the
Association. You shall have the first strike. You and Company
shall also select the arbitrators from a panel list made
available by the Association. Company and you each shall
select one arbitrator from such panel list within ten days of
receipt of such list. After Company and you have each selected
an arbitrator, the two arbitrators so selected shall select
the third arbitrator from such list within the next ten days.
(e) EXPENSES. The costs and expenses of any mediator shall be
borne by Company. Should you or Company, at any time, initiate
arbitration for breach of this Agreement, Company shall
reimburse you for all amounts spent by you to pursue such
arbitration, unless the arbitrator finds your action to have
been frivolous and without merit.
12. SEVERABILITY. If any one (1) or more of the provisions or parts of a
provision contained in this Agreement shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity or
enforceability shall not affect any other provision or part of a
provision of this Agreement, but this Agreement shall be reformed and
construed as if such invalid or illegal or unenforceable provision or
part of a provision had never been contained herein and such provisions
or part thereof shall be reformed so that it would be valid, legal and
enforceable to the maximum extent permitted by law. Any such
reformation shall be read as narrowly as possible to give the maximum
effect to our mutual intentions.
<PAGE>
May 15, 1999
Page 11
13. MITIGATION. In the event that your employment is terminated and
payments become due pursuant to this Agreement, you shall have no duty
to mitigate damages or to become re-employed by another employer.
If you are in agreement with the foregoing, please so indicate by
signing and returning to the Company the enclosed copy of this letter,
whereupon this letter shall constitute a binding agreement between you
and the Company in accordance with its terms.
14. GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware.
Sincerely yours,
/s/ Robertson C. Jones
Robertson C. Jones
RCJ/cjk
Enclosure
AGREED:
<PAGE>
May 15, 1999
Page 12
ELECTION FOR RECEIPT OF INSTALLMENT PAYMENTS
--------------------------------------------
Pursuant to the terms of the Change in Control Agreement dated March , 1999
between Del Webb Company and the undersigned, I elect to have the payments due
me under Section 3(a) of this letter agreement paid to me in equal biweekly
installments over a period of twenty-four (24) months.
--------------------------------------
Date:
--------------------------------
State of Arizona )
) ss.
County of Maricopa )
The foregoing instrument was acknowledged before me this day of ________, ____,
by Mary S. Alexander.
My Commission Expires________________ ._____________________ .
Notary
<PAGE>
EXHIBIT
DEL WEBB CORPORATION
CHANGE IN CONTROL AGREEMENT
LIST OF RECIPIENTS
Mary S. Alexander
Larry W. Beckner
Kimball Bannister, III
John H. Gleason
LeRoy C. Hanneman, Jr.
Robertson C. Jones
Anne L. Mariucci
Helen M. McEnerney
Donald V. Mickus
Frank D. Pankratz
Scott J. Peterson
David E. Rau
Charles T. Roach
David G. Schreiner
M. Lynn Schuttenberg
John A. Spencer
Robert R. Wagoner
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1999 AND THE CONSOLIDATED STATEMENT
OF EARNINGS FOR THE NINE MONTHS ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 7,343
<SECURITIES> 0
<RECEIVABLES> 42,796
<ALLOWANCES> 0
<INVENTORY> 1,579,686
<CURRENT-ASSETS> 0
<PP&E> 48,600
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,793,054
<CURRENT-LIABILITIES> 0
<BONDS> 1,038,171
0
0
<COMMON> 18
<OTHER-SE> 380,199
<TOTAL-LIABILITY-AND-EQUITY> 1,793,054
<SALES> 0
<TOTAL-REVENUES> 947,323
<CGS> 0
<TOTAL-COSTS> 755,220
<OTHER-EXPENSES> 138,406
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 53,697
<INCOME-TAX> 19,331
<INCOME-CONTINUING> 34,366
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,366
<EPS-PRIMARY> 1.89
<EPS-DILUTED> 1.84
</TABLE>
