EXHIBIT 10.18

SEVENTH AMENDMENT

TO

EMPLOYMENT AGREEMENT

This Seventh Amendment to Employment Agreement is made and entered into
effective as of January 1, 2007, by and between WATSCO, INC., a Florida
corporation (hereinafter called the “Company”), and ALBERT H. NAHMAD
(hereinafter called the “Employee”).

RECITALS

WHEREAS, the Company and the Employee entered into an Employment Agreement
effective as of January 31, 1996 (the “Employment Agreement”) pursuant to which
the Employee renders certain services to the Company; and

WHEREAS, the Compensation Committee of the Company’s Board of Directors amended
the Employment Agreement effective as of January 1, 2001, January 1,
2002, January 1, 2003, January 1, 2004, January 1, 2005 and January 1, 2006; and

WHEREAS, the Compensation Committee of the Company’s Board of Directors has
determined to increase the Employee’s Base Salary from $960,000 to $998,000,
effective as of January 1, 2007, and has set the targets for the performance
based compensation payable by the Company to the Employee for the year 2007; and

WHEREAS, the Company and the Employee now desire to amend Employment Agreement
and Exhibit A-1 to the Employment Agreement to reflect the increase in Base
Salary and specify the performance based compensation amount payable by the
Company to the Employee for the calendar year 2007.

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
in this Seventh Amendment, and other good and valuable consideration, the
parties to this Seventh Amendment agree as follows:

 

--------------------------------------------------------------------------------

1. All capitalized terms in this Seventh Amendment shall have the same meaning
as in the Employment Agreement, unless otherwise specified.

2. The first sentence of Section 4 of the Employment Agreement is hereby amended
to read as follows:

“Effective as of January 1, 2007, the Company agrees to pay to Employee and
Employee agrees to accept from the Company a salary at the annual rate of not
less than Nine Hundred Ninety Eight Thousand ($998,000) Dollars, payable in
bi-weekly or monthly installments.”

3. The Employment Agreement is hereby amended by replacing “Exhibit A-1 — 2006
Performance Goals and Performance Based Compensation” with the attached “Exhibit
A-1 — 2007 Performance Goals and Performance Based Compensation” thereto.

4. All other terms and conditions of the Employment Agreement shall remain the
same.

IN WITNESS WHEREOF, the parties have caused this Seventh Amendment to be duly
executed effective as of the day and year first above written.

 

COMPANY:

WATSCO, INC.

By:

 

/s/ BARRY S. LOGAN

 

 

Barry S. Logan, Senior Vice President

EMPLOYEE:

/s/ ALBERT H. NAHMAD

 

ALBERT H. NAHMAD

 

-2-

--------------------------------------------------------------------------------

EXHIBIT A-1

2007 Performance Goals and Performance Based Compensation

II. Formula

     

Performance

Based

Compensation Formula

A. Earnings Per Share

  

For each $.01 increase

   $ 65,250

B. Increase in Common Stock Price

  

(i) If the price of a share of Common Stock on 12/31/07 does not exceed $47.16

   $ 0

(ii) If the price of a share of Common Stock on 12/31/07 exceeds $47.16 but does
not equal or exceed $55.00, for each $0.01 increase in per share price of a
share of Common Stock above $47.16

   $ 1,200

(iii) If the price of a share of Common Stock on 12/31/07 equals or exceeds
$55.00, for each $0.01 increase in per share price of a share of Common Stock
above $47.16

   $ 1,800

III. Method of Payment

 

  A. Cash. The Performance Based Compensation determined for 2007 under the
formula set forth in Section I above shall be paid in cash if and to the extent
such Compensation does not exceed $5,000,000.

 

  B. Restricted Stock. If the Performance Based Compensation determined for 2007
under the formula set forth in Section I above exceeds $5,000,000 (such excess
amount being referred to as the “Additional Amount”), the Executive shall be
granted a number of shares of restricted Class B Common Stock of the Company
(the “Shares”) equal to the amount determined by dividing (i) two times the
Additional Amount, by (ii) the closing price for the Class B Common Stock of the
Company on the American Stock Exchange as of the close of trading on
December 31, 2007. The value of any fractional shares shall be paid in cash. The
restrictions on the Shares shall lapse on the first to occur of (i) October 15,
2018 (ii) termination of the Executive’s employment with the Company by reason
of Executive’s disability or death, (iii) the Executive’s termination of
employment with the Company for Good Reason; (iv) the Company’s termination of
Executive’s employment without Cause, or (v) the occurrence of a Change in
Control of the Company (“Good Reason”, “Cause”, and “Change in Control” to be
defined in a manner consistent with the most recent grant of Restricted Stock by
the Company to the Executive).

 

--------------------------------------------------------------------------------

IV. 2001 Incentive Compensation Plan

The performance based award and method of payment specified above (the “Award”)
were made by the Compensation Committee in accordance with Section 8 of the
Company’s 2001 Incentive Compensation Plan (the “Incentive Plan”) and are
subject to the limitations contained in Section 5 of the Incentive Plan. The
Award is intended to qualify as “performance based compensation” under
Section 162(m) of the Internal Revenue Code.

 

Dated: Effective as of January 1, 2007   

/s/ PAUL F. MANLEY

 

   Paul F. Manley, Chairman    Compensation Committee    Acknowledged and
Accepted:   

/s/ ALBERT H. NAHMAD

 

   Albert H. Nahmad