Exhibit 10.7
Performance Award
2003 Equity Incentive Plan
3-Year Performance Award – May 2008
Dear [Full Name]:
     You have been granted a Performance Award as of May 7, 2008 by Centex
Corporation (the “Company”) of [number] Performance Units under the Centex
Corporation 2003 Equity Incentive Plan (Amended and Restated Effective May 7,
2008) (as such plan may be amended from time to time, the “Plan”), subject to
the terms and conditions of this Performance Award Agreement (this “Award” or
this “Agreement”). A copy of the Plan is available to you upon request to the
Law Department.
     This Award is subject to adjustment and other provisions as set forth on
Exhibit A hereto (the “Terms and Conditions”). Depending on the Company’s
achievement of the performance goal specified in the Terms and Conditions during
the period beginning April 1, 2008 and ending March 31, 2011 (the “Performance
Period”), you shall be entitled to a cash payment equal to the value of your
adjusted number of Performance Units as of the last business day of the
Performance Period determined under the Terms and Conditions, less deductions
for taxes and withholdings required by law, except as otherwise provided herein.
     The Company may cancel and revoke this Award and/or replace it with a
revised award at any time if the Company determines, in its good faith judgment,
that this Award was granted in error or that this Award contains an error. In
the event of such determination by the Company, and written notice thereof to
you at your business or home address, all of your rights and all of the
Company’s obligations as to any unvested portion of this Award shall immediately
terminate. If the Company replaces this Award with a revised award, then you
will have all of the benefits conferred under the revised award, effective as of
such time as the revised award goes into effect.
     For purposes of the Plan, (a) this Award is a Qualified Performance Award
(but not a Stock Award) that may be settled only in cash and (b) amounts payable
hereunder (i) will not bear interest or be entitled to dividends payable on
Common Stock and (ii) may not be deferred. This Award is given to you as part of
your compensation, but is neither voluntary nor contributory by you. This Award
is subject to the Plan in all respects, and the Plan will govern where there is
any inconsistency between the Plan and this Award. The provisions of the Plan
are also provisions of this Award, and all terms, provisions and definitions set
forth in the Plan are incorporated in this Award and made a part of this Award
for all purposes. Capitalized terms used but not defined in this Award will have
the meanings assigned to such terms in the Plan. This Award is subject to the
Company’s Policy on Recoupment in Restatement Situations, and you agree that you
will comply with the terms of that Policy.
     This Performance Award has been signed by the Company and delivered to you,
and (when signed by you) has been accepted by you as of May 7, 2008.

     
ACCEPTED

  CENTEX CORPORATION
 
   
 

 
[Full Name]
  /s/ Timothy R. Eller

 
Timothy R. Eller
Chairman & Chief Executive Officer

 

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Exhibit A to Performance Award — Terms and Conditions of Award
1. Award.
     (a) The amount that may be paid to you with respect to the Performance
Units shall be based upon the Company’s achievement of the following performance
goal (“Performance Goal”) over the Performance Period as determined by the
Compensation and Management Development Committee of the Board of Directors of
the Company (or any successor thereto) (the “Committee”): Relative Total
Shareholder Return (as defined in Section 4), in accordance with the following
matrix:

          Relative Total Shareholder Return Percentile Ranking         Compared
to Peer Group   Level of Performance   Performance Percentage (%)
100th percentile
  Maximum Payout   200%
50th percentile (median)
  Target Payout   100%
25th percentile
  Threshold Payout   25%
Below 25th percentile
  Below Threshold   0%

 

    NOTE 1. Below the Target Payout level (but above the Threshold Payout level)
each 1% decrease in the percentile rank results in a 3% decrease in the
Performance Percentage.       NOTE 2. Above the Target Payout level (and up to
the Maximum Payout level) each 1% increase in the percentile rank results in a
2% increase in the Performance Percentage.

The Committee shall have the right to adjust the results of performance and/or
the performance percentage on an individual or Peer Group basis, to recognize
special or non-recurring situations, such as acquisitions, divestitures or
mergers, stock splits or stock dividends, changes in capitalization, or other
similar material circumstances affecting or with respect to the Company or any
other member of the Peer Group for any years during the Performance Period, with
a goal of fairly comparing the Company’s performance with the other companies in
the Peer Group over the Performance Period, or for any other reason deemed
necessary or appropriate by the Committee. If one or more members of the Peer
Group ceases to be a publicly traded entity during the Performance Period, then
that company will be removed from the Peer Group. However, none of these
adjustments shall be permitted if it would result in the loss of the otherwise
available exemption of the Award under Section 162(m) of the Code without the
consent of the Committee. In addition, in the event of any occurrence that would
result in an adjustment of shares under Section 15 of the Plan, the Committee
shall cause an equitable adjustment to be made in the number of Performance
Units subject to this Award.
     (b) After adjustment for forfeitures as provided in Section 2, the number
of Performance Units granted to you will be adjusted based on Total Shareholder
Return as provided in this Section. The adjusted number of Performance Units to
which you will be entitled shall be equal to the number of Performance Units
granted hereunder multiplied by the Performance Percentage set forth in Section
1(a) for the level of achievement of the performance goal. Notwithstanding the
foregoing, the maximum number of Performance Units you can earn will be an
aggregate of 200% of the original number granted to you (after adjustment for
forfeitures), and the minimum number of Performance Units that will be awarded
is zero. By way of example, assuming an initial grant of 100 Performance Units,
if the Company reached the 77th percentile in Total Shareholder Return, the
performance percentage would be 200% and the adjusted number of your Performance
Units would be 200 (200% x 100). If Total Shareholder Return reached the 50th
percentile, the performance percentage would be 100% and the adjusted number of
your Performance Units would be 100 (100% x 100). If Total Shareholder Return
reached the 24th percentile, the performance percentage would be zero and the
adjusted number of your Performance Units would be zero.
     (c) The adjusted number of Performance Units, determined as provided in
Section 1(b), will be multiplied by the average of the last reported sales price
per share of the Company’s common stock on the New York Stock Exchange —
Composite Transactions for the thirty (30) trading days preceding April 1, 2011,
the end of the performance period (unless another date is specified in
Section 2). Except as provided in Section 2, payment of amounts due under

(i)

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this Award shall be made to you in June 2011 (the “Payout Date”) in accordance
with the provisions of Section 10(d) of the Plan. In the event of your death
prior to receiving payment upon the Payout Date, any amount payable to you under
the Award will be paid to your designated beneficiary or, if none, to your
estate. Any amount paid in respect of this Award shall be payable solely in
cash, by way of an addition to your normal paycheck (if you are then employed;
otherwise, by Company check), or, at the Company’s option, by way of an addition
to your account with the Company’s Stock Plan Administrator, and in no case
shall this Award be payable in Common Stock or other securities of the Company.
Prior to any payments under this Award, the Committee shall certify in writing,
by resolution or otherwise, that the performance goals and any other material
terms of the Award were in fact satisfied and the amount to be paid in respect
of the Performance Units as a result of the achievement of the performance
goals. The Committee shall not increase the amount payable to you to an amount
that is higher than the amount payable under the formula described herein.
2. Early Termination; Change in Control.
     (a) Except as otherwise provided in this Section 2, you will forfeit this
Award in all respects if you cease for any reason to be actively employed by at
least one of the employers in the group of employers consisting of the Company
and its Affiliates before the last day of the Performance Period.
     (b) If your employment is terminated for cause (as determined by the
Committee) or as a result of your voluntary termination (other than Retirement,
as defined in Section 4) before the last day of the Performance Period, this
Award shall terminate in full immediately and all of your Performance Units
shall be forfeited.
     (c) Except as otherwise provided in this subsection, if your employment is
involuntarily terminated (other than for cause) before the last day of the
Performance Period and as a result you cease to be employed by at least one of
the employers in the group of employers consisting of the Company and its
Affiliates, you will forfeit this Award in all respects. However, if you are
awarded severance benefits under the Centex Corporation Executive Severance
Policy in connection with the involuntary termination, or if the Committee
otherwise so provides by policy or other approval, then if the number of months
of accelerated vesting to which you are entitled upon your termination, plus the
number of months that have elapsed between the beginning of the Performance
Period and the effective date of the termination, would equal or exceed
36 months, then you shall be entitled to payout of this award as follows: the
number of Performance Units awarded to you shall be adjusted upward or downward
by the applicable Performance Percentage based on the Company’s most recent
quarterly estimate of the Company’s achievement of the Performance Goal. The
value of the adjusted number of Performance Units, using the Fair Market Value
as of the effective date of the termination of employment, shall be paid on the
earlier of the Payout Date or your Separation from Service in accordance with
the provisions of Section 10(d) of the Plan; provided that your payment will be
subject to the delay as set out in Section 10(e) of the Plan if you are paid on
account of your Separation from Service and you are a Specified Employee on the
date of your Separation from Service.
     (d) If your employment terminates before the last day of the Performance
Period as a result of your death or Disability, then you shall forfeit as of the
date of your termination a number of Performance Units determined by multiplying
the number of Performance Units granted to you by a fraction, (x) the numerator
of which is the number of whole months following the date of death or Disability
to the end of the Performance Period and (y) the denominator of which is
thirty-six (36). The value of your Performance Units that are not forfeited
under this subsection, using the Target Payout levels and the original grant
value share price, shall be paid on the earlier of the Payout Date or your
Separation from Service in accordance with the provisions of Section 10(d) of
the Plan; provided that your payment will be subject to the delay as set out in
Section 10(e) of the Plan if you are paid on account of your Separation from
Service and you are a Specified Employee on the date of your Separation from
Service.
     (e) If your employment terminates before the last day of the Performance
Period as a result of your Retirement, which has been approved by the Company’s
Senior Vice President — Human Resources or his or her designee on or after the
date you reach age 65, then you shall forfeit as of the date of your Retirement
a number of Performance Units determined by multiplying the number of
Performance Units granted to you by a fraction, (x) the numerator of which is
the number of whole months following the date of termination to the end of the
Performance Period and (y) the denominator of which is thirty-six (36). The
Performance Units that are not forfeited under this subsection shall be

(ii)

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adjusted upward or downward by the applicable Performance Percentage based on
the Company’s most recent quarterly estimate of the Company’s achievement of the
Performance Goals, and the value of the adjusted number of Performance Units,
using the Fair Market Value as of the date of the Retirement, shall be paid on
the earlier of the Payout Date or your Separation from Service in accordance
with the provisions of Section 10(d) of the Plan; provided that your payment
will be subject to the delay as set out in Section 10(e) of the Plan if you are
paid on account of your Separation from Service and you are a Specified Employee
on the date of your Separation from Service.
     (f) If you are an Employee Director on the date of this Award and if your
employment terminates before the last day of the Performance Period as a result
of your involuntary termination or Retirement, then, unless otherwise provided
herein, none of your Performance Units shall be forfeited and this Award shall
be paid in accordance with its terms on the Payout Date.
     (g) The Committee or its designee shall determine the number of Performance
Units forfeited pursuant to the applicable subparagraph of this Section and the
amount to be paid to you or your beneficiary in accordance with this Section.
Except as otherwise provided in this Section 2, amounts payable hereunder will
be paid on the Payout Date.
     (h) If there is a Change in Control (as defined in the Plan) during the
Performance Period, you shall be deemed to have achieved the target payout level
(100%) for the Performance Goal in accordance with the terms of the Plan, with
the target level of your Performance Units being multiplied by the Fair Market
Value of the Company’s common stock on the day immediately prior to the Change
in Control. Payment of the amount due to you under this Award shall be made to
you upon the Change in Control in accordance with the provisions of Section
10(d) of the Plan.
3. Miscellaneous.
     (a) You understand and acknowledge that you are one of a limited number of
employees of the Company who have been selected to receive Performance Awards
and that this grant is considered confidential information. You hereby covenant
and agree not to disclose the award to you of this Award to any other person
except (i) your immediate family and legal or financial advisors who agree to
maintain the confidentiality of this Award, (ii) as required in connection with
the administration of this Award and the Plan as it relates to this Award or
under applicable law, or (iii) to the extent the terms of this Award had been
publicly disclosed by the Company.
     (b) The Company shall be entitled to make all lawful deductions from any
payment it is required to make to you under this Award in respective applicable
federal, state, local or employment taxes, Social Security and Medicare.
     (c) The authority to manage and control the operation and administration of
this Award shall be vested in the Committee, and the Committee shall have all
powers with respect to this Award as it has with respect to the Plan. Any
interpretation of this Award by the Committee and any decision made by it with
respect to this Award shall be final and binding on all persons.
     (d) This Award shall be construed and interpreted to comply with
Section 409A of the Code. The Company reserves the right, without your prior
consent, to modify or amend this Award to the extent it reasonably determines is
necessary in order to (i) preserve the intended tax consequences of the
Performance Units in light of Section 409A of the Code and any regulations or
other guidance promulgated thereunder, or (ii) correct, with the consent of the
Committee, unintentional design errors. In addition, the Committee reserves the
right, without your prior consent, to reduce the amount payable under this Award
to the extent it deems necessary taking into account competitive performance and
other factors. Such modifications or amendments may limit or eliminate certain
rights otherwise available to you under the Plan or this Agreement. Neither the
Company nor members of the Committee shall be liable for any determination or
action taken or made with respect to this Award or the Performance Units granted
hereunder.
     (e) Neither this Award nor your rights hereunder shall be transferable
during your life other than by will, pursuant to the applicable laws of descent
and distribution or as provided in your beneficiary designation form, unless
otherwise provided in the Plan. None of your rights or privileges in connection
with this Award shall be transferred, assigned, pledged or hypothecated by you
or by any other person in any way, whether by operation of law, or otherwise,

(iii)

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and shall not be subject to execution, attachment, garnishment or similar
process. In the event of any such occurrence, this Award shall automatically be
terminated and shall thereafter be null and void.
     (f) Nothing in this Award shall confer upon you any right to continued
employment with the Company or any of its subsidiaries, or to interfere in any
way with the right of the Company to terminate your employment relationship with
the Company or any of its subsidiaries at any time.
     (g) If any term or provision of this Award shall at any time or to any
extent be invalid, illegal or unenforceable in any respect as written, you and
the Company intend for any court construing this Award to modify or limit such
provision so as to render it valid and enforceable to the fullest extent allowed
by law. Any such provision that is not susceptible of such reformation shall be
ignored so as not to affect any other term or provision hereof, and the
remainder of this Award, or the application of such term or provision to persons
or circumstances other than those as to which it has held invalid, illegal or
unenforceable, shall not be affected thereby and each term and provision of this
Award shall be valid and enforced to the fullest extent permitted by law.
     (h) The Company’s obligation under the plan and this Award is an unsecured
and unfunded promise to pay benefits that may be earned in the future. The
Company shall have no obligation to set aside, earmark or invest any fund or
money with which to pay its obligations under this Award. You or any successor
in interest shall be and remain a general creditor of the Company in the same
manner as any other creditor having a general claim from matured and unpaid
compensation.
     (i) This Award shall not entitle the holder to any dividends, rights upon
liquidation, voting rights or other rights of stockholders of the Company.
4. Definitions and Rules of Construction.
     (a) Definitions. The following terms have the meanings set forth below:
     “Code” means the Internal Revenue Code of 1986, as amended, and the
rulings, regulations and other guidance thereunder.
     “Peer Group” means, in addition to the Company, the largest (by U.S.
homebuilding revenue) eight (8) other publicly traded homebuilders at the
beginning of the Performance Period. The Peer Group companies are: Lennar, DR
Horton, Pulte Homes, KB Home, Hovnanian, Beazer Homes, MDC Holdings and Ryland
Group.
     “Performance Period” means the three-year period beginning April 1, 2008
and ending March 31, 2011.
     “Relative Total Shareholder Return” means the Total Shareholder Return of
the Company compared to the other members of the Peer Group, as determined in
good faith by the Committee.
     “Total Shareholder Return” means the appreciation in the price of the
Company’s Common Stock, including dividends (as if reinvested), cumulatively
over the Performance Period, as determined in good faith by the Committee. Total
Shareholder Return for the Company and the Peer Group shall be calculated using
the average of the last reported sales price per share of voting common stock on
the New York Stock Exchange — Composite Transactions (or such other comparable
securities exchange or trading market as the common stock of the Company or the
applicable Peer Group company shall then be traded) for the last thirty
(30) trading days preceding April 1, 2008, and for the last thirty (30) trading
days preceding April 1, 2011.
     (b) Rules of Construction. All references to Sections refer to sections in
this Agreement. The titles to sections of this Agreement are for convenience of
reference only and, in the case of conflict, the text of this Agreement, rather
than the titles, shall control.

(iv)

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CENTEX CORPORATION 2003 EQUITY INCENTIVE PLAN
LONG-TERM PERFORMANCE AWARD
BENEFICIARY DESIGNATION FORM

       
Participant’s Name:
   
 
   
Social Security Number:
   

This Beneficiary Designation (this “Beneficiary Designation”) is subject to all
of the terms and conditions of the Centex Corporation 2003 Equity Incentive Plan
(as amended and restated) (the “Plan”) and the 3-Year Performance Award —
May 2008 granted to me by Centex Corporation (the “Company”) with an effective
date of May 7, 2008 (the “Performance Award”).
By signing this Beneficiary Designation, I hereby declare that upon my death the
following individual(s) (my “Beneficiary(ies)”) shall be entitled to receive the
stated percentage of any amount that may be payable with respect to me following
my death under the Performance Award:

                    Full Name of
Designated Beneficiary   Relationship to
You   Social Security/Tax ID Number   Percentage    
 
                   
Address
      Birth Date (MM/DD/YYYY)   Sex        
 
               
 
                  Full Name of
Designated Beneficiary   Relationship to
You   Social Security/Tax ID Number   Percentage    
 
                   
Address
      Birth Date (MM/DD/YYYY)   Sex        
 
               
 
              Total: 100%

I understand that if no Beneficiary is designated then, in the event of my
death, the amount payable under the Performance Award will be made to my estate.
If my sole Beneficiary dies, or if any of my other designated Beneficiaries die
prior to the payment of all of the amounts payable under the Performance Award,
then payment of such deceased Beneficiary’s stated percentage will be made to
such deceased Beneficiary’s estate.
I further understand that all prior beneficiary designations for the Performance
Award are hereby revoked and that this Beneficiary Designation may only be
revoked in writing on a form provided by the Company on behalf of the Committee,
signed by me (and witnessed) and received by the Committee. The foregoing
Beneficiary Designation shall remain in effect until such time as I file another
such designation with the Company bearing a more recent date except to the
extent otherwise required by law.

     
 
   
 
   
Signature
  Witness
 
   
 
     
Date of signature
   

(v)