Exhibit 10.2
PULTE HOMES, INC.
Long-Term Incentive Program
I. Introduction
1.1 Purposes. The purposes of this Long-Term Incentive Program, as established
by Pulte Homes, Inc., a Michigan corporation (the “Company”), are (i) to provide
incentive compensation to officers of the Company and its subsidiaries based on
the achievement of performance goals designated by the Compensation Committee of
the Board pursuant to the Company’s 2008 Senior Management Incentive Plan,
(ii) to advance the interests of the Company and its shareholders by attracting
and retaining highly competent officers and (iii) to motivate such persons to
act in the long-term best interests of the Company and its shareholders.
1.2 Certain Definitions. For purposes of the Program, the following capitalized
terms shall have the respective meanings set forth below. Capitalized terms not
defined herein shall have the respective meanings specified in the Plan.
     (a) “Affiliate” means a direct or indirect subsidiary of the Company.
     (b) “Agreement” means a written agreement, consisting of a Grant Acceptance
Agreement and a Long-Term Incentive Award Agreement, between the Company and the
recipient of a Long-Term Incentive Award hereunder setting forth the terms and
conditions of such Long-Term Incentive Award.
     (c) “Beneficiary” means the person appointed by a Participant’s written
designation to receive payment with respect to any Long-Term Incentive Awards
held by such Participant upon the death of the Participant, subject to the
following provisions. A Beneficiary designation shall become effective only when
filed in writing with the Company during the Participant’s lifetime on a form
prescribed by the Company. The spouse of a married Participant domiciled in a
community property jurisdiction shall join in any designation of a Beneficiary
other than such spouse. The filing with the Company of a new Beneficiary
designation shall cancel all previously filed Beneficiary designations. If a
Participant fails to designate a Beneficiary, or if the designated Beneficiary
dies before the Participant, then the Participant’s administrator, legal
representative or similar person shall be deemed to be the Beneficiary of such
Participant.
     (d) “Cause” means a determination by the Company that the Participant has
(i) willfully and continuously failed to substantially perform the duties
assigned by the Company or an Affiliate (other than a failure resulting from the
Participant’s disability), (ii) willfully engaged in conduct which is
demonstrably injurious to the Company or any Affiliate, monetarily or otherwise,
including conduct that, in the reasonable judgment of the Company, does not
conform to the standard of the Company’s executives, or (iii) engaged in any act
of dishonesty, the commission of a felony, or a significant violation of any
statutory or common law duty of loyalty to the Company or any Affiliate.
     (e) “Change in Control” means:
     (i) the acquisition by any individual, entity or group (a “Person”),
including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, of

 

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beneficial ownership within the meaning of Rule 13d-3 promulgated under the
Exchange Act, of 40% or more of either (A) the then outstanding shares of common
stock of the Company (the “Outstanding Common Stock”) or (B) the combined voting
power of the then outstanding securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Voting Securities”);
excluding, however, the following: (1) any acquisition directly from the Company
(excluding any acquisition resulting from the exercise of an exercise,
conversion or exchange privilege unless the security being so exercised,
converted or exchanged was acquired directly from the Company), (2) any
acquisition by the Company, (3) any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company, (4) any acquisition by any corporation pursuant to a
transaction which complies with clauses (A), (B) and (C) of subparagraph
(iii) of this definition or (5) any acquisition by any one or more of William J.
Pulte, his spouse, any trust or other entity established for the benefit of
either or both of such persons, or any charitable organization established by
either or both of such persons (“Exempt Persons”); provided further, that for
purposes of clause (2), if any Person (other than the Company, any one or more
Exempt Persons or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company) shall
become the beneficial owner of 40% or more of the Outstanding Common Stock or
40% or more of the Outstanding Voting Securities by reason of an acquisition by
the Company, and such Person shall, after such acquisition by the Company,
become the beneficial owner of any additional shares of the Outstanding Common
Stock or any additional Outstanding Voting Securities and such beneficial
ownership is publicly announced, such additional beneficial ownership shall
constitute a Change in Control;
     (ii) individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of
such Board; provided that any individual who becomes a director of the Company
subsequent to the date hereof whose election, or nomination for election by the
Company’s shareholders, was approved by the vote of at least a majority of the
directors then comprising the Incumbent Board shall be deemed a member of the
Incumbent Board; and provided further, that any individual who was initially
elected as a director of the Company as a result of an actual or threatened
solicitation by a Person other than the Board for the purpose of opposing a
solicitation by any other Person with respect to the election or removal of
directors, or any other actual or threatened solicitation of proxies or consents
by or on behalf of any Person other than the Board shall not be deemed a member
of the Incumbent Board;
     (iii) the consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company (a
“Corporate Transaction”); excluding, however, a Corporate Transaction pursuant
to which (A) all or substantially all of the individuals or entities who are the
beneficial owners, respectively, of the Outstanding Common Stock and the
Outstanding Voting Securities immediately prior to such Corporate Transaction
will beneficially own, directly or indirectly, more than 60% of, respectively,
the outstanding shares of common stock, and the combined voting power of the
outstanding securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Corporate

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Transaction (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or indirectly) in substantially the same proportions
relative to each other as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Common Stock and the Outstanding Voting
Securities, as the case may be, (B) no Person (other than: the Company; any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company; the corporation resulting from
such Corporate Transaction; and any Person which beneficially owned, immediately
prior to such Corporate Transaction, directly or indirectly, 40% or more of the
Outstanding Common Stock or the Outstanding Voting Securities, as the case may
be) will beneficially own, directly or indirectly, 40% or more of, respectively,
the outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the outstanding securities
of such corporation entitled to vote generally in the election of directors and
(C) individuals who were members of the Incumbent Board will constitute at least
a majority of the members of the board of directors of the corporation resulting
from such Corporate Transaction; or
     (iv) the consummation of a plan of complete liquidation or dissolution of
the Company.
     (f) “Exchange Act” means the Securities Exchange Act of 1934, as then in
effect, or any successor federal statute of substantially similar effect.
     (g) “Grant Acceptance Agreement” means the Grant Acceptance Agreement
between the Company and the recipient of a Long-Term Incentive Award hereunder
which, together with its accompanying Long-Term Incentive Award Agreement,
constitutes an Agreement.
     (h) “Long-Term Incentive Award” means an award conferring a right,
contingent upon the attainment of specified Performance Measures within a
specified Performance Period, to receive cash, as determined by the Committee or
as evidenced in the Agreement relating to such Long-Term Incentive Award.
     (i) “Long-Term Incentive Award Agreement” means the Long-Term Incentive
Award Agreement between the Company and the recipient of a Long-Term Incentive
Award hereunder which, together with its accompanying Grant Acceptance
Agreement, constitutes an Agreement.
     (j) “Participant” means a person holding an outstanding Long-Term Incentive
Award granted under the Program.
     (k) “Performance Measures” means the performance measure or measures
designated by the Committee pursuant to the terms of the Plan as a condition to
the earning of a Long-Term Incentive Award granted hereunder.
     (l) “Performance Period” means the calendar year designated by the
Committee with respect to which the Performance Measures applicable to a
Long-Term Incentive Award shall be measured.

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     (m) “Permanent Disability” means a sickness or disability extending for
more than three (3) consecutive months as a result of which the Participant is
unable to perform his or her duties for the Company or an Affiliate, as
applicable, in the required and customary manner and that will continue for not
less than an additional three (3) months, as determined by the Company in its
sole discretion.
     (n) “Program” means this Pulte Homes, Inc. Long-Term Incentive Program, as
amended from time to time.
     (o) “Plan” means the Pulte Homes, Inc. 2008 Senior Management Incentive
Plan, as amended from time to time.
     (p) “Vesting Date” means the date on which the Long-Term Incentive Award
awarded to a Participant ceases to be subject to a risk of forfeiture, as set
forth in the Grant Acceptance Agreement.
1.3 Administration. The Program shall be administered by the Committee. The
Committee shall, in its sole and absolute discretion and subject only to the
terms of the Program and the Plan, have the full power and authority to
interpret the Program and the application thereof, establish (and rescind) any
rules and regulations it may deem necessary, appropriate or desirable for the
administration of the Program, establish the Performance Measures and other
conditions to the payment of all or a portion of each Long-Term Incentive Award
and make adjustments to applicable Performance Measures, subject to the terms of
the Plan, to reflect extraordinary events, and impose, incidental to the grant
of a Long-Term Incentive Award, conditions with respect to the Long-Term
Incentive Award, such as (i) the continued employment of the Participant for a
specified period of time subsequent to the end of a Performance Period and
(ii) limiting competitive employment or other activities as set forth in the
Agreement relating to such Long-Term Incentive Award. The Committee shall also
have the sole and absolute discretion to reduce the amount of any payment with
respect to any Individual Award Opportunity that would otherwise be made to any
Participant or to decide that no payment shall be made. All interpretations,
rules, regulations, conditions and other acts of the Committee shall be final,
binding and conclusive on all parties.
     The Committee may delegate some or all of its power and authority hereunder
to the Chief Executive Officer or other executive officer of the Company as the
Committee deems appropriate; provided, however, that with respect to any person
who is a “covered employee” within the meaning of Section 162(m) of the Code or
who, in the Committee’s judgment, is likely to be a covered employee at any time
during the applicable Performance Period, only the Committee shall be permitted
to (a) designate such person to participate in the Plan for such Performance
Period, (b) establish performance goals and Individual Award Opportunities for
such person, and (c) certify the achievement of such performance goals. The
Committee may also delegate ministerial administrative functions, such as
receipt of notices, implementation of Program payments and mathematical
calculations, to one or more employees or consultants as the Committee may deem
necessary or desirable.
     No member of the Board or Committee, and neither the President and Chief
Executive Officer nor any other person to whom the Committee delegates any of
its power and authority hereunder, shall be liable for any act, omission,
interpretation, construction or determination

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made in connection with this Program in good faith, and each such person shall
be entitled to indemnification and reimbursement by the Company in respect of
any claim, loss, damage or expense (including attorneys’ fees) arising therefrom
to the full extent permitted by law (except as otherwise may be provided in the
Company’s Articles of Incorporation and/or By-laws) and under any directors’ and
officers’ liability insurance that may be in effect from time to time.
II. Terms Of Long-Term Incentive Awards
2.1 Eligibility. Participants in the Program shall consist of such officers of
the Company and its Affiliates as the Committee in its sole discretion may
select from time to time. For purposes of the Program, references to employment
by the Company shall also mean employment by an Affiliate. A grant of a
Long-Term Incentive Award to any person shall not entitle such person to an
additional grant of Long-Term Incentive Awards at any subsequent time.
2.2 Terms of Long-Term Incentive Awards. (a) In General. Long-Term Incentive
Awards shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of the
Program and the Plan, as the Committee shall deem advisable.
     (b) Amount of Long-Term Incentive Award and Performance Measures. The
Agreement shall set forth the amount of the Long-Term Incentive Award and a
description of the Performance Measures and the Performance Period applicable to
such Long-Term Incentive Award, as determined by the Committee in its
discretion.
     (c) Vesting and Forfeiture.
     (i) General. Except as otherwise provided in the Agreement and subject to
all other requirements of the Program, any Long-Term Incentive Award that is
earned pursuant to the terms of the Agreement shall become vested as of the
Vesting Date set forth in the Grant Acceptance Agreement, provided that the
Participant holding such Long-Term Incentive Award remains continuously employed
by the Company through the Vesting Date.
     (ii) Termination by Reason of Death or Permanent Disability. Except as
otherwise provided in the Agreement, if the Participant’s employment with the
Company terminates by reason of death or Permanent Disability, (i) in the case
of a Long-Term Incentive Award relating to a completed Performance Period, the
Long-Term Incentive Award shall be paid, to the extent earned, to the
Participant or the Participant’s Beneficiary, as the case may be, as if the
Participant had remained employed with the Company through the Vesting Date,
(ii) in the case of a Long-Term Incentive Award relating to a pending
Performance Period, the Participant or the Participant’s Beneficiary, as the
case may be, shall be entitled to a prorated award. Such prorated award shall be
equal to the value of the target award set forth in the Agreement multiplied by
a fraction, the numerator of which shall equal the number of days such
Participant was employed with the Company during the Performance Period and the
denominator of which shall equal the number of days in the Performance Period.
Notwithstanding anything herein to the contrary, if a Participant or a
Participant’s Beneficiary, as the case may be, shall be entitled to receive
payment of a Long-Term Incentive Award or a prorated award,

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pursuant to this Section 2.2(c)(ii), such Participant or such Participant’s
Beneficiary, as the case may be, shall receive such payment in a lump sum cash
amount no later than the March 15th occurring immediately after the year in
which the Participant’s employment terminates.
     (iii) Termination by Reason Other Than Voluntary Termination by
Participant, Death, Permanent Disability or Cause. Except as otherwise provided
in the Agreement, if the Participant’s employment with the Company terminates
for any reason, other than voluntary termination by Participant, death,
Permanent Disability or Cause, (i) in the case of a Long-Term Incentive Award
relating to a completed Performance Period, the Long-Term Incentive Award shall
be paid, to the extent earned, to the Participant as if the Participant had
remained employed with the Company through the Vesting Date, (ii) in the case of
a Long-Term Incentive Award relating to a pending Performance Period, the
Performance Period shall continue through the last day thereof and the
Participant shall be entitled to a prorated award. Such prorated award shall be
equal to the value of the award at the end of the Performance Period based on
the actual performance during the Performance Period multiplied by a fraction,
the numerator of which shall equal the number of days such Participant was
employed with the Company during the Performance Period and the denominator of
which shall equal the number of days in the Performance Period. Notwithstanding
anything herein to the contrary, if a Participant shall be entitled to receive
payment of a Long-Term Incentive Award or a prorated award, pursuant to this
Section 2.2(c)(iii), such Participant shall receive such payment in a lump sum
cash amount no later than the March 15th occurring immediately after the year in
which the Participant’s employment terminates.
     (iv) Termination by Reason of Voluntary Termination by Participant or
Cause. Except as otherwise provided in the Agreement, if the Participant’s
employment with the Company is terminated voluntarily by Participant or is
terminated by the Company for Cause, the Participant’s Long-Term Incentive
Awards that are unvested as of the date of termination, shall be immediately
forfeited.
     (d) Payment. A Participant holding a Long-Term Incentive Award which shall
have vested shall receive, no later than the March 15th occurring immediately
after the year in which the Vesting Date occurs, a lump sum cash payment from
the Company in an amount equal, as determined by the Committee, to the Long-Term
Incentive Award which became vested as of such Vesting Date, subject to the
deduction of taxes and other amounts pursuant to Section 3.4 of the Program. All
payments under this Program are intended to be exempt from Section 409A of the
Code as “short-term deferrals,” within the meaning of Treasury regulations
promulgated under Section 409A of the Code.
     (e) Committee Discretion. Notwithstanding the attainment of the Performance
Measures with respect to a Long-Term Incentive Award or anything herein to the
contrary, in all cases, the Committee shall have the sole and absolute
discretion to reduce the amount of any payment with respect to any Long-Term
Incentive Award that would otherwise be made to any Participant or to decide
that no payment shall be made.

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III. General
3.1 Effective Date and Term of Program. The Program shall be effective as of
January 1, 2008, and shall continue until such time as it is terminated by the
Board.
3.2 Amendments. The Board may amend the Program and any Agreement as it shall
deem advisable in the exercise of its sole and absolute discretion; provided,
however that no such amendment may adversely affect the rights granted to a
Participant with respect to an outstanding Long-Term Incentive Award pursuant to
its related Agreement without the consent of such Participant.
3.3 Non-Transferability. No Long-Term Incentive Award or any rights thereunder
shall be transferable other than by will or the laws of descent and distribution
or pursuant to any Beneficiary designation procedures as may approved by the
Committee for such purpose. Except as permitted by the preceding sentence, no
Long-Term Incentive Award hereunder shall be sold, transferred, assigned,
pledged, hypothecated, encumbered or otherwise disposed of (whether by operation
of law or otherwise) or be subject to execution, attachment or similar process.
Upon any attempt by the holder of a Long-Term Incentive Award to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of such
Long-Term Incentive Award, such Long-Term Incentive Award and all rights
thereunder shall immediately become null and void.
3.4 Tax and Other Withholding. The Company shall have the right to deduct from
any amounts paid pursuant to the Program (or from other compensation payable by
the Company to the Participant) all Federal, state, local and other taxes and
any other amounts which may be required under law or elected by the Participant
to be withheld or paid in connection with the settlement of a Long-Term
Incentive Award or any other payment made hereunder.
3.5 Change in Control. Upon the occurrence of a Change in Control, (i) in the
case of a Long-Term Incentive Award relating to a completed Performance Period,
the Long-Term Incentive Award shall be paid, to the extent earned, to the
Participant as if the Participant had remained employed with the Company through
the Vesting Date, (ii) in the case of a Long-Term Incentive Award relating to a
pending Performance Period, the Participant shall be entitled to a prorated
award. Such prorated award shall be equal to the value of the target award set
forth in the Agreement multiplied by a fraction, the numerator of which shall
equal the number of days prior to the Change in Control during the Performance
Period and the denominator of which shall equal the number of days in the
Performance Period. Such award shall be paid as soon as practicable, and in no
event more than sixty (60) days, after the date of the Change in Control.
3.6 No Right of Participation or Employment. No person shall have any right to
participate in the Program or to be granted Long-Term Incentive Awards under the
Program. Neither the Program nor any Agreement relating to a Long-Term Incentive
Award granted hereunder shall confer upon any person any right to be employed,
reemployed or continue employment by the Company or any Affiliate of the Company
or affect in any manner the right of the Company or any Affiliate of the Company
to terminate the employment of any person with or without notice at any time for
any reason without liability hereunder. Nothing herein shall confer any right or
benefit or any entitlement to any benefit on any Participant unless and until a
benefit is actually vested pursuant to the Program. The adoption and maintenance
of the

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Program shall not be deemed to constitute a contract of employment or otherwise
between the Company or any of its Affiliates and any Participant, or to be a
consideration for or an inducement or condition of any employment. Neither the
provisions of the Program nor any action taken by the Company or the Board or
the Committee pursuant to the provisions of the Program shall be deemed to
create any trust, express or implied, or any fiduciary relationship between or
among the Company, the Board or Committee, any member of the Board or Committee,
or any employee, former employee or beneficiary thereof.
3.7 Unfunded Arrangement. The Program shall at all times be entirely unfunded
and no provision shall at any time be made with respect to segregating assets of
the Company for payment of any benefit hereunder. No holder of a Long-Term
Incentive Award shall have any interest in any particular assets of the Company
or any of its Affiliates by reason of the right to receive a benefit under the
Program and any such holder shall have only the rights of an unsecured creditor
of the Company with respect to any rights under the Program.
3.8 Governing Law. This Program, each Long-Term Incentive Award granted
hereunder and its related Agreement, and all determinations made and actions
taken pursuant thereto, to the extent not otherwise governed by the laws of the
United States, shall be governed by the laws of the State of Michigan and
construed in accordance therewith without giving effect to principles of
conflicts of laws.

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