-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, THdT08VIwPmF9ucLjhk/xX7xjjk0H7pP+G47wL6YWkf6a2mO9KwPyLsn/g7isw1y ke13YG4UO/HRAeEcUtQw+Q== 0000950147-99-000465.txt : 19990514 0000950147-99-000465.hdr.sgml : 19990514 ACCESSION NUMBER: 0000950147-99-000465 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEL WEBB CORP CENTRAL INDEX KEY: 0000105189 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 860077724 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04785 FILM NUMBER: 99619630 BUSINESS ADDRESS: STREET 1: 6001 NORTH 24TH STREET CITY: PHOENIX STATE: AZ ZIP: 85016 BUSINESS PHONE: 6028088000 MAIL ADDRESS: STREET 1: 6001 NORTH 24 STREET CITY: PHOENIX STATE: AZ ZIP: 85016 FORMER COMPANY: FORMER CONFORMED NAME: WEBB DEL E CORP DATE OF NAME CHANGE: 19880728 10-Q 1 QUARTERLY REPORT FOR PERIOD ENDING 03-31-99 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. 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 DEL WEBB CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS EXCEPT SHARE DATA)
MARCH 31, June 30, MARCH 31, 1999 1998 1998 (Unaudited) (Unaudited) - ------------------------------------------------------------------------------------------- ASSETS - ------------------------------------------------------------------------------------------- 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 ===========================================================================================
See accompanying notes to consolidated financial statements. 1 DEL WEBB CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (IN THOUSANDS EXCEPT PER SHARE DATA) (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED MARCH 31, MARCH 31, - ----------------------------------------------------------------------------------- 1999 1998 1999 1998 - ----------------------------------------------------------------------------------- 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 ===================================================================================
See accompanying notes to consolidated financial statements. 2 DEL WEBB CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
NINE MONTHS ENDED MARCH 31, - ----------------------------------------------------------------------------------------------------------- 1999 1998 - ----------------------------------------------------------------------------------------------------------- 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 ===========================================================================================================
See accompanying notes to consolidated financial statements. 3 DEL WEBB CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (IN THOUSANDS) (UNAUDITED)
NINE MONTHS ENDED MARCH 31, - --------------------------------------------------------------------------------------------------------- 1999 1998 - --------------------------------------------------------------------------------------------------------- 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) =========================================================================================================
See accompanying notes to consolidated financial statements. 4 (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 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:
In Thousands - ------------------------------------------------------------------------------------------------ March 31, June 30, March 31, 1999 1998 1998 (Unaudited) (Unaudited) - ------------------------------------------------------------------------------------------------ 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 ================================================================================================
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 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 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:
In Thousands (Unaudited) - ------------------------------------------------------------------------------------------------ Three Months Ended Nine Months Ended March 31, March 31, 1999 1998 1999 1998 - ------------------------------------------------------------------------------------------------ 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 ================================================================================================
8 DEL WEBB CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (6) INTEREST The components of interest are:
In Thousands (Unaudited) - ------------------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended March 31, March 31, - ------------------------------------------------------------------------------------------------- 1999 1998 1999 1998 - ------------------------------------------------------------------------------------------------- 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 =================================================================================================
Interest income is included in other revenues. 9 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
THREE MONTHS NINE MONTHS ENDED ENDED MARCH 31, CHANGE MARCH 31, CHANGE - ------------------------------------------------------------------------------ --------------------------------- 1999 1998 AMOUNT PERCENT 1999 1998 AMOUNT PERCENT - ------------------------------------------------------------------------------ --------------------------------- 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% ============================================================================== ================================
* Not a meaningful percentage. 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) CERTAIN CONSOLIDATED FINANCIAL AND OPERATING DATA (CONTINUED)
THREE MONTHS NINE MONTHS ENDED ENDED MARCH 31, CHANGE MARCH 31, CHANGE - ------------------------------------------------------------------------------ --------------------------------- 1999 1998 AMOUNT PERCENT 1999 1998 AMOUNT PERCENT - ------------------------------------------------------------------------------ --------------------------------- 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% ============================================================================== =================================
* Not a meaningful percentage. 11 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 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) CERTAIN CONSOLIDATED FINANCIAL AND OPERATING DATA (CONTINUED)
THREE MONTHS NINE MONTHS ENDED ENDED MARCH 31, CHANGE MARCH 31, CHANGE - -------------------------------------------------------------------------- ---------------------------------- 1999 1998 AMOUNT PERCENT 1999 1998 AMOUNT PERCENT - -------------------------------------------------------------------------- ---------------------------------- 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%) ========================================================================== ===================================
13 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 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 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 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 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 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 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 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 EX-10.1 2 FIRST AMENDMENT TO SECOND AMENDED LOAN AGREEMENT 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: -1- "'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 -2- 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 -3- 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 -4- 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- 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- 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- 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 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 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 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 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 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 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 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 ANNEX I ------- DEL WEBB CORPORATION BANK GROUP COMMITMENTS
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 - -------------- -------------- ------------ ----------- ------------ ------------ ---------- 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
Annex I Page 1 of 1 ANNEX II ADJUSTING PURCHASE PAYMENTS Aggregate Principal Balance of existing Promissory Notes immediately prior to effective date of First Amendment - $___________ ("Carryover Principal Balance").
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 - ----------------- ----------------- ----- ----------------- -------------- -------------- ------------------ 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%
Annex II Page 1 of 1 EX-10.2 3 FIRST SUPPLEMENTAL INDENTURE, AS OF FEB 18, 1999 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. . . * * * (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 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 ---------------------- EX-10.3 4 FIRST AMENDMENT TO THE DEL WEBB STOCK PLAN 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. 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 --------------------------------- --------------------------------- EX-10.4 5 FIRST AMNDMNT TO THE DEL WEBB EXEC. INCENTIVE PLAN 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 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 --------------------------------- --------------------------------- EX-10.5 6 FIRST AMEND. TO THE DEL WEBB DIRECTOR STOCK PLAN 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 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") 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 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 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 --------------------------------- --------------------------------- EX-10.6 7 SECOND AMEND. TO THE DEL WEBB INCENTIVE PLAN 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 (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 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 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 --------------------------------- --------------------------------- EX-10.7 8 SECOND AMEND. TO THE DEL WEBB INCENTIVE PLAN 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 (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 (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 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 --------------------------------- --------------------------------- EX-10.8 9 THIRD AMEND. TO THE DEL WEBB INCENTIVE PLAN 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 (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 (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 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 --------------------------------- --------------------------------- EX-10.9 10 THIRD AMEND. TO THE DEL WEBB RETIREMENT PLAN [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 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 ----------------------------- EX-10.10 11 FOURTH AMEND. TO THE DEL WEBB RETIREMENT PLAN [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 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. 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 --------------------------------- EX-10.11 12 AMEND. TO EMPLOYMENT AND CONSULTING AGREEMENT 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." 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 EX-10.12 13 AMEND. TO EMPLOYMENT AGREEMENT WITH HANNEMAN 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 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 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 EX-10.13 14 AMENDMENT TO EMPLOYEE AGREEMENT WITH GLEASON 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 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 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 EX-10.14 15 CHANGE IN CONTROL AGREEMENT 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). 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: 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." 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 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. 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 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"). 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. 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 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. 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: 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 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 EX-27 16 FINANCIAL DATA SCHEDULE
5 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. 1000 U.S. DOLLARS 9-MOS JUN-30-1999 JUL-01-1998 MAR-31-1999 1 7,343 0 42,796 0 1,579,686 0 48,600 0 1,793,054 0 1,038,171 0 0 18 380,199 1,793,054 0 947,323 0 755,220 138,406 0 0 53,697 19,331 34,366 0 0 0 34,366 1.89 1.84
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