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Exhibit 99.4
[CONFORMED COPY]
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), entered into as
of December 4, 1996 by and between CAVCO INDUSTRIES, INC., an Arizona
corporation (the "Company"), and BRENT M. GHELFI (the "Executive"),
W I T N E S S E T H:
WHEREAS, the Executive is currently employed by the Company as
its President and Chief Executive Officer;
WHEREAS, concurrently with the execution and delivery hereof,
Centex Real Estate Corporation, a Nevada corporation ("CREC"), MFH Holding
Company, a Nevada corporation, MFH Acquisition Company, an Arizona corporation
(the "Merger Subsidiary"), Al R. Ghelfi, Janet M. Ghelfi and Janal Limited
Partnership, an Arizona limited partnership ("Janal Partnership" and, together
with Al R. Ghelfi and Janet M. Ghelfi, the "Shareholder Parties") are entering
into an Agreement and Plan of Merger (the "Merger Agreement"), upon the terms
and subject to the conditions of which the Merger Subsidiary will be merged with
and into the Company (the "Merger");
WHEREAS, concurrently with the execution and delivery hereof,
CREC and the Shareholder Parties are entering into a Stock Purchase Agreement,
upon the terms and subject to the conditions of which the Shareholder Parties
will sell an aggregate of 1,047,288 shares of Common Stock, par value $.05 per
share, of the Company owned by them to CREC in the event that the Merger
Agreement is terminated under the circumstances described therein (the "Subject
Share Purchase");
WHEREAS, at the time of the consummation of the Merger or the
Subject Share Purchase, CREC, the Shareholder Parties and (if applicable) the
Company will enter into a Shareholders' Agreement (the "Shareholders'
Agreement") in the form attached as an exhibit to the Merger Agreement or the
Stock Purchase Agreement, as the case may be;
WHEREAS, CREC is a subsidiary of Centex Corporation
("Centex"); and
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WHEREAS, from and after the date (the "Effective Date") upon
which the Merger or the Subject Share Purchase is consummated in accordance with
the terms of the Merger Agreement or the Stock Purchase Agreement, as the case
may be, the Company desires to continue the employment of the Executive, and the
Executive is willing to accept such employment, all upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises, the terms
and provisions set forth herein, the mutual benefits to be gained by the
performance thereof and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Employment. From and after the Effective Date, the
Company hereby continues the employment of the Executive, and the Executive
hereby accepts such employment, all upon the terms and conditions set forth
herein.
SECTION 2. Term. Subject to the terms and conditions set forth
herein, the Executive shall be employed for a term commencing on the Effective
Date and ending on the fifth anniversary thereof (the "Term"), which term may be
extended from time to time pursuant to a written instrument executed by the
Company and the Executive.
SECTION 3. Duties and Responsibilities.
(a) The Executive shall initially serve in the capacity of
President and Chief Executive Officer of the Company, subject to the direction
of the Board of Directors of the Company. The Executive's duties under this
Agreement shall consist of the performance of such services as are consistent
with the responsibilities of said office and such other services commensurate
with his position as a senior executive of the Company as may be assigned to him
from time to time by the Board of Directors. Such duties shall be performed
within the policies and guidelines established from time to time by the Board of
Directors, subject at all times to the ultimate control and direction of the
Board of Directors.
(b) At all times during the Term, the Executive shall devote
substantially all of his business time, attention and energies to the
performance of his duties under this Agreement, and shall not undertake or be
engaged in any other activities, whether or not pursued for gain, profit or
other pecuniary advantage, which could impair his ability to fulfill his duties
to the Company under this Agreement, without the prior written consent of the
Company.
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(c) The Executive shall perform his duties under this
Agreement with fidelity and loyalty, to the best of his ability, experience and
talent and in a manner consistent with his fiduciary responsibilities.
SECTION 4. Compensation.
(a) Base Salary. During the Term, the Company shall pay a
salary (the "Base Salary") of $78,000 per annum to the Executive, payable in
accordance with the general payroll practices of the Company in effect from time
to time. The Company shall review the Base Salary then being paid to the
Executive at such times as the Company regularly reviews the compensation being
paid to its executives generally (but no less frequently than once each year).
Upon completion of such review, the Company may in its sole discretion adjust
the Executive's then current Base Salary; provided, however, that the Company
may not decrease the Executive's then current Base Salary without the prior
written consent of the Executive.
(b) Bonus. In addition to the payment of Base Salary, for each
fiscal month of the Company during the Term, the Executive shall be awarded a
bonus in an amount to be determined as follows:
(i) For the fiscal years of the Company ending on March 31,
1998 and March 31, 1999, the amount of the monthly bonus paid to the
Executive shall be equal to the bonus that would be payable to the
Executive for each month during each such fiscal year in accordance
with the policies and practices of the Company in effect on the date
hereof with respect to the payment of annual bonuses to its Chief
Executive Officer, which policies and practices are described in
Exhibit A (the "Existing Company Policies").
(ii) For any fiscal years of the Company ending on or after
March 31, 1999, the amount of the monthly bonus paid to the Executive
shall be an amount determined by the Board of Directors of the Company
that is not less than (A) $27,100 or (B) the bonus that would be
payable to the Executive for each month during such fiscal year as
determined in accordance with the Existing Company Policies, whichever
is smaller.
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(c) Centex Stock Options.
(i) Centex undertakes and agrees to use its best efforts to
cause the Stock Option Committee of the Board of Directors of Centex to
grant to the Executive, as soon as reasonably practicable after the
Effective Date (and after the condition set forth in subparagraph (iii)
below shall have been satisfied), a non-qualified stock option (the
"Centex Time Vesting Stock Option") under the 1987 Stock Option Plan of
Centex (the "1987 Stock Option Plan") to purchase an aggregate of
25,000 shares of common stock, par value $.25 per share ("Centex Common
Stock"), of Centex. The option exercise price per share of the Centex
Time Vesting Stock Option will be the fair market value per share of
Centex Common Stock on the date of grant. The Centex Time Vesting Stock
Option will have a term of ten years from the date of grant, and such
option shall vest and become exercisable with respect to 20% of the
shares of Centex Common Stock subject thereto on each of the first,
second, third, fourth and fifth anniversaries of the Effective Date,
with such exercise privileges to be cumulative. The Centex Time Vesting
Stock Option will be evidenced by, and subject to, a stock option
agreement containing terms and conditions customarily included by
Centex in agreements providing for the grant of similar stock options
pursuant to the 1987 Stock Option Plan.
(ii) In addition, Centex undertakes and agrees to use its best
efforts to cause the Stock Option Committee of the Board of Directors
of Centex to grant to the Executive, as promptly as practicable after
Centex determines (after consultation with the Executive) the
applicable Performance Measures (as hereinafter defined) (and after the
condition set forth in subparagraph (iii) below shall have been
satisfied), a non-qualified stock option (the "Centex Performance Stock
Option" and, together with the Centex Time Vesting Stock Option, the
"Centex Stock Options") under the 1987 Stock Option Plan to purchase an
aggregate of 25,000 shares of Centex Common Stock. The option exercise
price per share of the Centex Performance Stock Option will be the fair
market value per share of Centex Common Stock on the date of grant. The
Centex Performance Stock Option will have a term of ten years from the
date of grant, and such option shall vest and become exercisable in
accordance with a schedule to be determined by the Stock Option
Committee based upon the attainment of performance goals or measures
(the "Performance Measures") determined by Centex (after consultation
with the Executive) relating to the business of
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the Company and its subsidiaries. The Centex Performance Stock Option
will be evidenced by, and subject to, a stock option agreement
containing terms and conditions customarily included by Centex in
agreements providing for the grant of similar stock options pursuant to
the 1987 Stock Option Plan.
(iii) Notwithstanding anything to the contrary contained in
this paragraph (c), Centex shall not be required to grant the Centex
Stock Options to the Executive until such time as the Executive becomes
eligible to receive a grant of such options in accordance with the
terms of the 1987 Stock Option Plan. The Executive acknowledges that
Centex has provided to him a copy of the 1987 Stock Option Plan and has
advised the Executive that he will not become eligible for the grant of
any stock options thereunder until such time as he is employed by an
"Affiliate" of Centex within the meaning of such plan (which term is
defined to include any corporation in which Centex owns stock
possessing 50% or more of the total combined voting power of all
classes of stock). Centex represents that, if the Merger is consummated
in accordance with the terms of the Merger Agreement, the Company will
thereupon become an "Affiliate" of Centex within the meaning of the
1987 Stock Option Plan.
(d) Expense Reimbursement. During the Term, the Executive
shall be entitled to receive prompt reimbursement for all reasonable
out-of-pocket expenses incurred in the reasonable discretion of the Executive in
connection with the due and proper performance of his duties hereunder in
accordance with the Company's regular practices with respect to other similarly
situated executives of the Company.
(e) Incentive, Savings and Retirement Plans. During the Term,
the Executive shall be entitled to participate in all incentive, savings and
retirement plans, whether or not qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended, established or adopted and maintained by the
Company from time to time, in accordance with the Company's regular practices
applicable to other similarly situated executives of the Company. The provisions
of this paragraph (e) shall not affect in any way the rights of the Company to
amend or terminate any such incentive, savings or retirement plans in accordance
with the terms of such plans and the provisions of applicable law.
(f) Group Benefit Plans. During the Term, the Executive shall
be entitled to participate in all group benefit plans (including, but not
limited to, disability,
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accident, medical, life insurance and hospitalization plans) established or
adopted and maintained by the Company from time to time, in accordance with the
Company's regular practices applicable to other similarly situated executives of
the Company. The provisions of this paragraph (f) shall not affect in any way
the rights of the Company to amend or terminate any such group benefit plans in
accordance with the terms of such plans and the provisions of applicable law.
(g) Vacation. The Executive shall be entitled to such
vacation, holidays and other paid or unpaid leaves of absence as are consistent
with the Company's normal policies or as are otherwise approved by the Company.
SECTION 5. Termination.
(a) This Agreement shall terminate and be of no further force
or effect if the Effective Date does not occur prior to or on December 31, 1997.
(b) This Agreement shall terminate if the Executive shall die.
The termination of this Agreement pursuant to this paragraph (b) shall be
effective at the time of death.
(c) This Agreement may be terminated by the Executive if the
Company commits a material breach of the terms and conditions of this Agreement
and the Company fails to cure such breach prior to the expiration of a period of
ten days after delivery by the Executive to the Company of a written notice
setting forth the nature and extent of such breach. The termination of this
Agreement pursuant to this paragraph (c) shall be effective at a time specified
by the Executive that is no more than 60 days after the aforesaid ten-day
period.
(d) This Agreement may be terminated by the Company in any of
the following circumstances:
(i) for "cause," i.e., acts of theft, embezzlement, fraud,
dishonesty or sexual harassment, which acts are either admitted by the
Executive in writing or determined to be one or more of such acts by
the Board of Directors of the Company by a Supermajority Board Vote (as
defined in the Shareholders' Agreement), or for which the Executive is
convicted;
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(ii) if the Executive shall materially breach this Agreement
or habitually neglect his duties hereunder, as determined by the Board
of Directors of the Company by a Supermajority Board Vote, after
written notice to Executive (which notice shall specify in reasonable
detail the possible grounds for the termination of this Agreement) and
opportunity for the Executive to be heard before a meeting of the Board
of Directors;
(iii) If the Executive shall be unable to perform his material
duties hereunder owing to illness or incapacity for 90 consecutive days
during any 360-day period; or
(iv) If the Company determines that it no longer requires the
services of the Executive for any other reason.
The termination of this Agreement pursuant to this paragraph (d) shall be
effective (A) in the case of a termination of this Agreement pursuant to
subparagraph (d)(i) or (d)(ii) above, immediately upon the determination of the
Board of Directors referred to in such provision (or, if no such determination
is required to be made, immediately upon receipt by the Executive of written
notice of termination from the Company) or (B) in the case of a termination
pursuant to subparagraph (d)(iii) or (d)(iv) above, 30 days after receipt by the
Executive of written notice of termination from the Company.
(e) This Agreement shall terminate upon the expiration of the
Term, as the same may be extended from time to time in accordance with Section
2.
(f) If this Agreement is terminated by the Executive pursuant
to paragraph (c) above or by the Company pursuant to paragraph (d)(iv) above,
the Company shall pay to the Executive (i) an amount in cash equal to $300,000
per annum for the balance of the Term in accordance with the general payroll
practices of the Company in effect from time to time with respect to the payment
of salary to its senior executives and (ii) all expenses incurred by the
Executive through the date of termination for which the Executive is entitled to
reimbursement in accordance with Section 4(d) above.
(g) If this Agreement is terminated by the Company pursuant to
subparagraphs (d)(i) or (d)(ii) above or if the Executive terminates his
employment hereunder other than in the circumstances described in paragraph (c)
above, the Company shall pay to the Executive (i) the Base Salary then in effect
through the date of termination and (ii) all expenses incurred by the Executive
through the date of termination for which the Executive is entitled to
reimbursement in accordance with Section 4(d); provided,
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however, that, in the case of a termination pursuant to subparagraph (d)(i)
above, the Company may set off against such amounts for acts of theft,
embezzlement, fraud or dishonesty which result in liquidated amounts owing to
the Company by the Executive.
(h) If this Agreement is terminated upon the death of the
Executive pursuant to paragraph (b) above, by reason of the inability of the
Executive to perform his duties hereunder owing to illness or incapacity
pursuant to subparagraph (d)(iii) above or upon the expiration of the Term
pursuant to paragraph (e) above, the Company shall pay to the Executive (or, if
applicable, his personal representative) (i) the Base Salary then in effect
through the date of termination and (ii) all expenses incurred by the Executive
through the date of termination for which the Executive is entitled to
reimbursement in accordance with Section 4(d).
(i) If this Agreement is terminated by reason of the inability
of the Executive to perform his duties hereunder owing to illness or incapacity
pursuant to subparagraph (d)(iii) above, by the Company pursuant to subparagraph
(d)(iv) above or upon the expiration of the Term pursuant to paragraph (e)
above, the Company may in its sole discretion elect to make payments to the
Executive in cash (the "Non-Competition Extension Payments") in an aggregate
amount equal to $300,000 per annum (less any amounts payable to the Executive
pursuant to clause (i) of paragraph (f) above) for a period of three years after
the date of termination in accordance with the general payroll practices of the
Company in effect from time to time with respect to the payment of salary to its
senior executives, which payments shall be made in consideration of the
Executive's obligations after the date of termination under Section 6. The
election by the Company to pay the Executive the Non-Competition Extension
Payments shall be set forth in a written notice delivered by the Company to the
Executive no later than 30 days after the applicable date of termination stating
that the Company irrevocably agrees to make the Non-Competition Extension
Payments to the Executive.
(j) The failure or delay by either party hereto to exercise
its right to terminate this Agreement with respect to any one or more of the
matters referred to in this Section 5 shall not be taken or held to be a waiver
by such party of its right of termination of this Agreement in respect to such
matter or any subsequent matter.
(k) Except as expressly provided in this Section 5, upon the
termination of this Agreement, the Company shall not have any liability or
obligation of any kind or character to the Executive under the terms of this
Agreement or in connection with the expiration or termination of the Executive's
employment hereunder.
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(l) Upon any termination or expiration of this Agreement or
the Executive's employment hereunder (other than any termination pursuant to
paragraph (a) above), the Executive shall continue to be subject to the
provisions of Sections 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16 (it being
understood and agreed that such provisions shall survive any such termination or
expiration and shall continue in full force and effect thereafter).
SECTION 6. Competitive Activity.
(a) The Executive recognizes and acknowledges that the
relationship created by this Agreement is one of trust, and the Executive agrees
that, during the Non-Competition Period (as hereinafter defined), the Executive
shall not (whether acting alone or through any of his affiliates, as a member of
a partnership or a joint venture or in conjunction with any corporation or other
entity or any other person (including, but not limited to, any present or former
director, officer or consultant of the Company) or in any other capacity
whatsoever and whether by investing in, or holding securities of, any
corporation or other entity, advancing or lending any funds to, making available
any facilities, equipment or other assets to any corporation or other person or
any other person or assisting or participating in any other transaction or
arrangement whatsoever), engage in any of the following activities:
(i) except in connection with the due and proper performance
of his duties hereunder, engage in any of the Covered Businesses in the
Territory;
(ii) except in connection with the due and proper performance
of his duties hereunder, solicit or contact (with respect to any of the
Covered Businesses) retailers, dealers, suppliers, customers or
potential customers on behalf of any corporation or other entity or any
other person engaged in any of the Covered Businesses in the Territory;
or
(iii) solicit or otherwise induce any employee of the Company
or any of its subsidiaries to terminate his service with the Company or
any such subsidiary or hire any person who was an employee of the
Company or any such subsidiary at any time during the 12-month period
immediately prior to the date of termination or expiration of the
Executive's employment hereunder.
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As used in this Section 6, the terms set forth below have the
following respective meanings:
"Covered Businesses" means the businesses of (i) designing,
manufacturing and selling manufactured housing to be used for residential,
recreational and other purposes and (ii) developing housing subdivisions and
selling manufactured, modular and conventional housing units or lots located
therein.
"Non-Competition Period" means the period commencing on the
Effective Date and ending on (i) if this Agreement is terminated by the
Executive pursuant to Section 5(c), the date of termination of this Agreement,
(ii) if this Agreement is terminated by the Company pursuant to Section 5(d)(i)
or (ii) or if the Executive voluntarily terminates his employment hereunder
prior to the expiration of the Term (other than upon the termination by the
Executive of this Agreement pursuant to Section 5(c)), the third anniversary of
the date of termination of this Agreement or the Executive's employment
hereunder, as the case may be, or (iii) if this Agreement is terminated by the
Company pursuant to Section 5(d)(iii) or (iv) above or upon the expiration of
the Term pursuant to paragraph (e) above, the date of termination of this
Agreement (or, if the Company elects to make the Non-Competition Extension
Payments in accordance with Section 5(i), the third anniversary of the date of
termination).
"Territory" means the territory consisting of the States of
Arizona, California, Colorado, Idaho, Nevada, New Mexico, Texas and Utah.
(b) Notwithstanding anything to the contrary in this Section
6, the Executive may own, for investment purposes only, up to one percent of the
stock of any publicly-held corporation that engages in the Covered Businesses or
that otherwise directly or indirectly competes with the Company if the stock of
such corporation is either listed on a national securities exchange or traded on
the Nasdaq National Market and if the Executive is not an employee or consultant
of, and is not otherwise affiliated with, such corporation.
(c) It is hereby agreed by and between the Executive and the
Company that if (notwithstanding the provisions of paragraph (d) below) the
non-competition covenants contained in this Agreement should be held by any
court or other constituted legal authority to be void or unenforceable in any
particular area or jurisdiction, then the parties hereto shall consider this
Agreement to be amended and modified so as to eliminate therefrom that
particular area or jurisdiction as to which the non-competition covenants are
held to be void or otherwise unenforceable, and as to all other areas and
jurisdictions
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covered by this Agreement, the terms and provisions hereof shall remain in full
force and effect as originally written.
(d) It is further agreed that if the non-competition covenants
contained in this Agreement should be held by any court or other constituted
legal authority to be effective in any particular area or jurisdiction only if
said covenants are modified to limit their duration or scope, then the parties
hereto shall consider such non-competition covenants to be amended and modified
with respect to that particular area or jurisdiction so as to comply with the
order of any court or other constituted legal authority, and as to all other
areas and jurisdictions, the non-competition covenants contained herein shall
remain in full force and effect as originally written.
(e) The Executive and the Company agree that the covenants set
forth herein are appropriate and reasonable when considered in light of the
nature and extent of the Covered Businesses as conducted by the Company and its
subsidiaries. The Executive acknowledges that (i) the Company has a legitimate
interest in protecting the Covered Businesses as conducted by the Company and
its subsidiaries, (ii) the covenants set forth herein are not oppressive to the
Executive and contain such reasonable limitations as to time, scope,
geographical area and activity, (iii) the covenants do not harm in any manner
whatsoever the public interest and (iv) the Executive has received and will
receive substantial consideration for agreeing to such covenants.
SECTION 7. Confidentiality.
(a) The Executive acknowledges that the Trade Secrets and
Confidential Information are valuable, special and unique assets of the Company,
and the Executive agrees that he (i) shall not reveal, divulge or disclose any
Trade Secrets or Confidential Information and (ii) except as required in
connection with the due and proper performance of his duties hereunder, shall
not use or exploit any Trade Secrets or Confidential Information.
(b) The Executive shall not be subject to the restrictions set
forth in paragraph (a) above with respect to information which:
(i) becomes generally available to the public other than as a
result of disclosure by the Executive;
(ii) becomes available to such party on a non-confidential
basis from a source other than the Company or its directors, officers
or other
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representatives, provided that, to the knowledge of the Executive, such
source lawfully obtained such information and is not bound by a
confidentiality agreement with the Company; or
(iii) is required to be disclosed by law or judicial or
administrative process (provided, however, that the Executive has
complied with his obligations under paragraph (c) below).
(c) If the Executive is requested (whether by oral questions,
interrogatory, request for documents, subpoena, civil investigative demand or
other legal process) to disclose any part of the Trade Secrets or Confidential
Information, the Executive shall (i) give prompt written notice to the Company
of the existence of, and the circumstances attendant to, such request, (ii)
consult with the Company as to the advisability of taking legally available
steps, at the Company's expense, to resist or narrow any such request or
otherwise to eliminate the need for such disclosure and (iii) if disclosure is
required, cooperate with the Company, at its expense, to obtain a protective
order or other reliable assurance in form and substance reasonably satisfactory
to the Company that confidential treatment will be accorded to such portion of
the Trade Secrets and Confidential Information as is required to be disclosed.
(d) As used in this Section 7, the terms set forth below have
the following meanings:
"Confidential Information" means information that, although
not a Trade Secret, is not generally known and from which the Company derives
actual or potential economic value because such information is not generally
known by others, including, but not limited to, sales and marketing information,
customer lists, customer account records, training and operations materials and
memoranda, personnel records, pricing and financial information relating to the
business, dealers, retailers, customers, employees and affairs of the Company,
any information marked "Confidential" by the Company, and any other such
information that does not rise to the level of a Trade Secret.
"Trade Secrets" means (i) any scientific or technical
information, design, process, procedure, formula or improvement that is secret
and of value and (ii) any other information, including, but not limited to,
technical or nontechnical data, formula patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial data, and lists of
actual or potential customers, which, in each case, the Company has taken
reasonable efforts to protect from disclosure and from which the Company derives
actual or potential economic value due to its confidential nature.
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SECTION 8. Remedies. The Executive hereby agrees that a
violation of the provisions of Section 6 or 7 would cause irreparable injury to
the Company for which it would have no adequate remedy at law. Accordingly, in
the event of any such violation, the Company shall be entitled to preliminary
and other injunctive relief without necessity of complying with any requirement
as to the posting of a bond or other security (it being understood that the
Executive hereby waives any such requirement). Any such injunctive relief shall
be in addition to any other remedies to which the Company may be entitled at law
or in equity, or otherwise.
SECTION 9. Rights of Payment. All payments to be made to the
Executive by the Company under the terms of this Agreement shall be paid in cash
from the general funds of the Company, and no special or separate funds shall be
established and no other segregation of assets shall be made to assure payment.
The Executive shall have no right, title or interest whatsoever in or to any
investments which the Company may make to aid it in meeting its obligations
hereunder. Nothing contained in this Agreement, and no action taken pursuant to
the provisions hereof, shall create, or be construed to create, a trust of any
kind or any fiduciary responsibility of the Company to the Executive or any
other person. To the extent that any person acquires a right to receive payments
from the Company hereunder, such right shall be no greater than the right of an
unsecured creditor of the Company.
SECTION 10. Arbitration. Any dispute or controversy arising
under or in connection with this Agreement (other than any dispute or
controversy arising from a violation or alleged violation by the Executive of
the provisions of Section 6 or 7) shall be settled by arbitration in Dallas,
Texas. The arbitration shall be heard and determined by a single arbitrator
selected in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. In addition, any arbitration proceeding pursuant to
this Section 10 shall be conducted in accordance with such arbitral rules. The
cost of the arbitration proceedings (including fees and disbursements of
counsel) shall be borne in the manner determined by the arbitrator. The decision
of the arbitrator shall be final, binding and conclusive, and judgment on the
award (if any) of the arbitrator may be entered in any court of competent
jurisdiction.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be given by delivery in person, by
registered or certified mail (return receipt requested and with postage prepaid
thereon) or by cable, telex or facsimile transmission to the parties at the
following addresses (or at such other address as either party shall have
furnished to the other in accordance with the terms of this Section 11):
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if to the Company:
Cavco Industries, Inc.
1001 N. Central Avenue
Eighth Floor
Phoenix, Arizona 85004
Facs: (602) 256-6189
Attention: Al R. Ghelfi
with copies to (which shall not constitute notice to the
Company):
Centex Real Estate Corporation
2728 North Harwood
Dallas, Texas 75201-1516
Facs: (214) 981-6859
Attention: David W. Quinn
and
Baker & Botts, L.L.P.
2001 Ross Avenue
Dallas, Texas 75201
Facs: (214) 953-6503
Attention: Geoffrey L. Newton
if to the Executive:
Brent M. Ghelfi
c/o Cavco Industries, Inc.
1001 N. Central Avenue
Eighth Floor
Phoenix, Arizona 85004
Facs: (602) 256-6189
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with copies to (which shall not constitute notice to the
Executive):
Osborn Maledon
2929 North Central Avenue
Phoenix, Arizona 85012
Facs: (602) 235-9444
Attention: William M. Hardin
All notices and other communications hereunder that are addressed as provided in
or pursuant to this Section 11 shall be deemed duly and validly given (a) if
delivered in person, upon delivery, (b) if delivered by registered or certified
mail (return receipt requested and with postage paid thereon), 72 hours after
being placed in a depository of the United States mails and (c) if delivered by
cable, telex or facsimile transmission, upon transmission thereof and receipt of
the appropriate answerback.
SECTION 12. Amendment; Waiver. The terms and provisions of
this Agreement may be modified or amended only by a written instrument executed
by each of the parties hereto (provided, however, that if any modification to or
amendment of this Agreement is proposed at any time prior to the Effective Date,
such modification or amendment shall also require the prior written approval of
CREC), and compliance with the terms and provisions hereof may be waived only by
a written instrument executed by each party entitled to the benefits thereof. No
failure or delay on the part of any party in exercising any right, power or
privilege granted hereunder shall constitute a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege granted hereunder.
SECTION 13. Entire Agreement. This Agreement (including the
Exhibit hereto) constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior written or oral
agreements or understandings between the parties relating thereto.
SECTION 14. Severability. In the event that any provision
contained in this Agreement is found to be invalid, illegal or unenforceable,
the invalidity, illegality and unenforceability thereof shall not affect any
other provisions hereof, which shall remain in full force and effect.
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SECTION 15. Binding Effect; Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors and assigns. Neither party may assign this Agreement without the
prior written consent of the other party; provided, however, that the Company
may assign this Agreement to any of its affiliates or to any successor (whether
by operation of law or otherwise) to all or substantially all of its business
and assets without the consent of the Executive.
SECTION 16. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas (without regard
to any conflicts of law principles that would require the application of the
laws of any other state or jurisdiction).
SECTION 17. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
COMPANY:
CAVCO INDUSTRIES, INC.
By: /s/ Al Ghelfi
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Name: Al Ghelfi
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Title: Chairman
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EXECUTIVE:
/s/ Brent M. Ghelfi
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Brent M. Ghelfi
The undersigned has executed this Agreement solely for the
purpose of evidencing its obligation to use its best efforts to cause the Centex
Stock Options to be granted to the Executive upon the terms and subject to the
conditions set forth in Section 4(c).
CENTEX CORPORATION
By: /s/ Laurence E. Hirsch
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Name: Laurence E. Hirsch
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Title: Chairman and CEO
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Exhibit A
(to Employment Agreement)
SALARIED BONUS PLAN
(Description of provisions applicable to President and CEO)
Cavco Industries, Inc. has a monthly bonus plan for Key Factory Managers and
Key Corporate Managers of the organization. A percentage of the Profits from
each factory is paid to managers and supervisors on a monthly basis.
The monthly bonus entitlement of the President and CEO is three percent (3%) of
aggregate monthly profit (as defined below) from the Company's Durango, RV and
Litchfield facilities.
Profits are defined as the net monthly operating profits from the manufacturing
operations before deductions for income taxes and the bonus paid to the Key
Factory Managers and Key Corporate Managers.
All bonus percentages are approved by the President of the Company in his
discretion. The President's bonus percentage is set by the Chairman of the
Board. A payroll change notice is placed in each employee file showing the
percentage paid.
Monthly bonuses are earned for each month and are not subject to recoupment
based on subsequent Company performance. Bonuses earned for each month are
generally paid in the third weekly pay period of the month following the month
for which they are earned.