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EXHIBIT 10.7
TERMINATION OF EMPLOYMENT
AND CONSULTING AGREEMENT
This Termination of Employment and Consulting Agreement (the
"Agreement") is made and entered into on December 4, 1997 by and between
Xxxxxxx X Xxxxxxxx III ("Xxxxxxxx"), an individual residing in Dallas, Texas,
and Centex Corporation ("Centex"), a Nevada corporation, with offices in
Dallas, Texas.
RECITALS
Xxxxxxxx has been employed by Centex and its Affiliates (as defined
below) in various capacities since 1973; and
Centex and Xxxxxxxx have agreed that Xxxxxxxx'x employment by Centex
and its Affiliates will end on December 31, 1997; and
Centex and Xxxxxxxx have agreed that beginning January 1, 1998 Centex
will retain Xxxxxxxx as a consultant, subject to the terms and conditions of
this Agreement.
WITNESSETH
NOW, THEREFORE, in consideration of the covenants herein set forth,
Centex and Xxxxxxxx agree as follows:
1. DEFINITIONS. For the purposes of the Agreement, the
following definitions shall apply unless the context requires otherwise:
a. "Affiliate" shall mean any entity or corporation that
controls, is controlled by, or is under common control with Centex Corporation.
b. "Consulting Period" shall mean the period beginning
on January 1, 1998 and ending on December 31, 1998 (or earlier, as provided
below) subject to any mutual extensions thereof.
2. RESIGNATION. Xxxxxxxx does hereby resign, effective on the
close of business on December 31, 1997, all of his positions and employment
with Centex and its Affiliates, including his position as a member of the Board
of Directors of Centex
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Corporation and those Affiliates for which he serves on the Board of Directors,
and his position as Chairman of the Centex Housing Group. Effective January 1,
1998 Xxxxxxxx shall be appointed as Chairman-Emeritus of the Centex Housing
Group.
3. CONSULTING SERVICES AND COMPENSATION.
a. Consulting Period: As of January 1, 1998 Xxxxxxxx
shall be retained by Centex for the Consulting Period. The term of the
Consulting Period can be terminated at any point in time for any reason by
either party, upon delivery of written notice to the other. The effective date
of such termination will be thirty days following the date of delivery of such
notice.
b. Services During Consulting Period: Xxxxxxxx agrees
to provide consulting services to Centex and its Affiliates and in exchange
therefor Centex and its Affiliates will pay the compensation described below.
During the Consulting Period Xxxxxxxx will assist Centex from time to time in
connection with the homebuilding and real estate operations of Centex and its
Affiliates. The primary responsibilities of Xxxxxxxx will be to continue to
supervise and build the real estate and homebuilding operations of Centex
Affiliates in Mexico and to help assess, investigate and develop homebuilding
opportunities presented to Centex and its Affiliates in Europe. Further, from
time to time Xxxxxxxx will assist the Chief Executive Officer of Centex Homes
to address homebuilding issues on an as needed basis and will assist Centex and
its Affiliates to address manufactured housing issues on an as needed basis.
It is understood that Xxxxxxxx will not be required to provide consulting
services for more than two weeks during any one month period.
c. Compensation: Subject to all appropriate deductions
for taxes, if any, Xxxxxxxx shall receive during the Consulting Period the sum
of $10,000 per week (or $2,000 per day if Xxxxxxxx does not work on each
business day during such week) for any week during which Xxxxxxxx provides
consulting services at the request of Centex or any of its Affiliates. In
addition, the Company will pay for, or reimburse Xxxxxxxx, as the case may be,
all reasonable costs and expenses incurred by him in the performance of
consulting services under this Agreement. As noted above Xxxxxxxx, without his
consent, will not be required to provide consulting services more than two
weeks during any one month period.
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4. INDEMNIFICATION OF XXXXXXXX. Centex and its Affiliates will
indemnify and defend Xxxxxxxx, at Centex' expense, to the full extent allowed
by applicable laws of the United States, applicable corporate law of Nevada and
the Bylaws of Centex existing at the time Xxxxxxxx makes a demand hereunder,
against liabilities which Xxxxxxxx may incur arising by reason of the fact that
he is or was an employee or director of Centex or its Affiliates. In addition,
the Indemnification Agreement made July 20, 1989 between Centex and Xxxxxxxx
remains in full force and effect. Further, Centex and its Affiliates will
indemnify and defend Xxxxxxxx, at Centex' expense, against all claims and
damages which may arise from the performance by Xxxxxxxx of consulting services
under this Agreement, excluding however claims arising from gross negligence or
willful misconduct.
5. EXISTING EMPLOYMENT AGREEMENT AND TERMINATION PAY. Centex and
Xxxxxxxx are parties to that certain Executive Employment Agreement dated
January 18, 1991 which, except as provided below, will terminate as of December
31, 1997. Xxxxxxxx and Centex acknowledge and agree that, as provided in
Section 9 of said Executive Employment Agreement, Xxxxxxxx is entitled to
receive his Base Salary (as defined therein) for two years commencing January
1, 1998 at the rate of $425,000 per year. Payments will be made in accordance
with the salary payment procedures of Centex during that two year time period.
These payments are in addition to whatever consulting payments are made to
Xxxxxxxx pursuant to Section 3.c above.
The terms, provisions and conditions of Section 10 of said Executive
Employment Agreement, which addresses trade secrets and non-competition, will
survive termination of employment of Xxxxxxxx by Centex and its Affiliates and
will remain binding upon and enforceable against Xxxxxxxx from and after
January 1, 1998, upon the terms and conditions provided in said Section 10.
Xxxxxxxx acknowledges and agrees that, with regard to enforcing the
non-competition provisions of Section 10, the termination of his employment
with Centex did not result from a Change in Control or Breach of the Executive
Employment Agreement by Centex.
Further, Section 10.b of the Executive Employment Agreement, which is
captioned "Non-Competition," is hereby modified by adding the following
thereto:
The foregoing non-competition covenant is limited to the business of
homebuilding. Further, businesses that are deemed to be "significant
competitors" of the Corporation or any of the Corporation's Affiliates
or
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principal divisions are limited to the top ten competitors of the
Corporation's principal homebuilding subsidiary on a nationwide basis,
as well as the top two homebuilding companies (other than the
Corporation or its Affiliates) in the ten largest markets of the
Corporation's principal homebuilding subsidiary. These "significant
competitors" are listed on Exhibit A attached hereto.
In the event that Xxxxxxxx dies prior to December 31, 1999, Centex
shall make any remaining payments which are due to Xxxxxxxx hereunder to the
heirs, devisees and legatees of Xxxxxxxx, with preference given to the
instructions of Xxxxxxxx in his will.
6. RELEASE OF CENTEX. In consideration of the foregoing,
Xxxxxxxx does hereby fully and finally release and forever discharge Centex and
its Affiliates, together with all directors, officers, employees and agents of
the same, from any and all claims, demands, liability, damages, causes of
action, costs and expenses of every kind and nature whatsoever, past, present
or future, whether known or unknown, arising out of or relating to his
employment by Centex and Affiliates since 1973. The foregoing release does not
extend to breaches by Centex of its obligations under this Agreement, nor does
it extend to any vested interest Xxxxxxxx may have in the Centex Corporation
Profit Sharing and Retirement Plan or the Centex Corporation Supplemental
Executive Retirement Plan.
This release includes, without limiting the generality of the same,
all claims, demands and actions under Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act, the Civil Rights Act of 1986,
and all other federal, state and local statutes, ordinances and regulations
regarding employment, discrimination in employment, or the termination of
employment, and the common law of the State of California. Xxxxxxxx
acknowledges that before signing this Agreement they gave him at least
twenty-one (21) days to consider it and that he is entitled to revoke the
waiver of rights under the Age Discrimination in Employment Act if Centex
receives notice of his revocation within seven (7) days after his execution
this Agreement and that this Agreement does not become effective or enforceable
until this seven-day revocation period has expired without Xxxxxxxx revoking
his waiver of rights under the Act.
7. CONFIDENTIALITY OF AGREEMENT. Xxxxxxxx and Centex understand
and agree that the existence and terms of this Agreement are confidential and
they will, to
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the extent reasonably practical, maintain this confidentiality.
8. APPLICABLE LAW. This Agreement shall be governed by and
construed in accord with the laws of the State of Texas. Should a court or
other body of competent jurisdiction determine that any provision of this
Agreement is excessive in scope or otherwise invalid or unenforceable, such
provision shall be adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and all other provisions of this
Agreement shall be deemed valid and enforceable to the extent possible.
9. BINDING ON SUCCESSORS. This Agreement shall be binding upon
and inure to the benefit of Centex and its Affiliates and Xxxxxxxx, as well as
their respective heirs, personal representatives, successors and assigns.
However, except as provided in this Agreement, neither party may assign any
rights hereunder nor delegate any duties without the prior written consent of
the other, which consent will not be unreasonably withheld, conditioned or
delayed.
10. ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties respecting the subject matters contained herein
and supersedes all other agreements, written or oral, respecting such subject
matters.
11. ACKNOWLEDGMENT BY XXXXXXXX. Xxxxxxxx acknowledges that before
signing this Agreement he has had adequate opportunity to review it with
persons of his choosing, including an attorney, and was advised to do so by
Centex so that he would be fully advised of the implications of this Agreement;
that he fully understands its terms; that he was not coerced into signing it;
and that he has signed it knowingly and voluntarily.
12. NOTICE. Any notice to be given to Centex hereunder shall be
deemed sufficient if addressed to Centex in writing and personally delivered or
mailed by certified mail to its office at 0000 Xxxxx Xxxxxxx, Xxxxxx, Xxxxx
00000-0000. Any notice to be given to Xxxxxxxx hereunder shall be deemed
sufficient if addressed to him in writing and personally delivered to him or
mailed by certified mail to 0000 Xxxxxxxxxx Xx., Xxxxxx, XX 00000. Either
party may, by notice as aforesaid, designate a different address or addresses.
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IN WITNESS WHEREOF, the parties hereto executed this Agreement on the
day first above written.
WITNESS CENTEX CORPORATION
/s/ XXXX X. XXXXX By: /s/ XXXXXXXX X. XXXXXX
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Xxxxxxxx X. Xxxxxx
Chairman & Chief Executive
Officer
WITNESS
/s/ XXXX X. XXXXX /s/ XXXXXXX X XXXXXXXX III
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Xxxxxxx X Xxxxxxxx III
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Top Ten National Competitors:
o Pulte Home Corporation
x Xxxxxx Group
o Kaufman and Broad
o U.S. Home Corporation
o NVR
o Beazer Homes U.S.A.
o Lennar Corporation
o Xxx Xxxx Corporation
o M.D.C. Holdings
o Continental Homes
Top Two Competitors in Centex's Top Ten Homebuilding Markets:
o Dallas/Fort Worth: Highland Homes, Xxxxx Xxxxxxx Homes
o Southern California: Xxxxx Homes, California Pacific
o Orlando: Cambridge Homes, Mercedes Homes
o Phoenix: Xxxx Homes, Xxxxxxxx Homes
o D.C. Metro: Washington Homes, Winchester Homes
o S.E. Florida: G.L. Homes, Xxxxx Homes
o Charlotte: Xxxx Xxxxxxx Homes, Xxxx Homes
o Central Valley, CA: Xxxx Xxxxxx Homes, Xxxxxxx Homes
o N. California: Standard Pacific, Xxxx Homes
o Denver: Melody Homes, Oakwood Homes
EXHIBIT A
