Once again, Pulte Homes founder and chairman William J. Pulte has notified the Securities and Exchange Commission (SEC) that he intends to sell stock through a prepaid variable forward contract.
In a Form 144 filed Monday, Feb. 9, Pulte said he intends to sell up to 4.75 million shares of company stock, about 11% of the shares he controls. According to the Form 144, he plans to use the proceeds from the contract to terminate a separate prepaid variable forward contract he entered into in February 2008 before it expires and to "provide additional liquidity for Mr. Pulte."
The new contract combines the 3.35 million shares Pulte pledged in February 2008 with 1.4 million new shares.
"The prepaid variable forward contract allows Mr. Pulte to receive cash now while also giving him the right to retain ownership of these shares at the end of the 16-month term of the forward by settling the forward with cash," the filing said. "The transaction also allows Mr. Pulte to retain an interest in a possible increase in the shares' value over that 16-month period and provides protection against a potential decline in value of Pulte shares during that same timeframe."
In early December 2008, Pulte filed another Form 144 with the SEC covering 5 million shares of company stock, about 12% of what he controlled at the time.
That filing said he planned to use the cash in order to substitute collateral currently committed in support of non-company-related loan agreements and to pay down loan balances.
"I have unwavering confidence in the future of Pulte Homes," Mr. Pulte said in a statement filed in December. "This transaction helps diversify collateral I have pledged in support of loans for family members and charitable causes that are important to me."