William J. Pulte, chairman of Pulte Homes, Inc., on Wednesday filed with the Securities and Exchange Commission a sale agreement covering 5 million shares of company stock, or approximately 12% of the shares he controls.
The Form 144 filing allows Pulte to sell up to that amount of shares through a prepaid variable forward contract, which provides Pulte with cash now while also giving him the right to retain ownership of these shares by buyout out the contract at the end of a two-year term. It also allows Pulte to retain an interest in a possible increase in the shares' value over that two-year period and provides protection against a potential decline in value of Pulte shares over the term of the deal.
The company said the filing is in accordance with its nsider trading policy.
Pulte said he entered the deal to substitute collateral currently committed in support of certain non-company related loan agreements and to pay down loan balances.
"I have unwavering confidence in the future of Pulte Homes," Pulte said in a statement. "This transaction helps diversify collateral I have pledged in support of loans for family members and charitable causes that are important to me."