Fifth Amendment



 EXHIBIT 10.1 
  
 FIFTH AMENDMENT 
 TO 
 EMPLOYMENT AGREEMENT 
  
 This Fifth Amendment to Employment Agreement is made and entered into effective as of January 1, 2005, 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 and January 1, 2004; and 

  
 WHEREAS, on March 9, 2005, the Compensation Committee
of the Company’s Board of Directors set the targets for the performance based compensation payable by the Company to the Employee for the year 2005; and 
  
 WHEREAS, the Company and the Employee now desire to amend Employment Agreement and Exhibit A-1 to the Employment Agreement to specify the
performance based compensation amount payable by the Company to the Employee for the calendar year 2005. 
  
 NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this Fifth Amendment, and other good and valuable
consideration, the parties to this Fifth Amendment agree as follows: 
  
 1. All capitalized terms in this Fifth Amendment shall have the same meaning as in the Employment Agreement, unless otherwise specified. 
  
 2. The Employment Agreement is hereby amended by replacing “Exhibit A-1 — 2004 Performance Goals and Performance Based Compensation” with
the attached “Exhibit A-1 — 2005 Performance Goals and Performance Based Compensation” thereto. 
  
 3. All other terms and conditions of the Employment Agreement shall remain the same. 







 IN WITNESS WHEREOF, the parties have caused this Fifth 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









 EXHIBIT A-1 
  
 2005 Performance Goals and Performance Based Compensation 
  

						
	 IV.
	 	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 12/31/05 does not exceed $35.22	  	$	0
			
	 	 	(ii) If the price of a share of Common Stock on 12/31/05 exceeds $35.22 but does not equal or exceed $40.50, for each $0.01 increase in per share price of a share of Common Stock above
$35.22	  	$	1,200
			
	 	 	(iii) If the price of a share of Common Stock on 12/31/05 equals or exceeds $40.50, for each $0.01 increase in per share price of a share of Common Stock above $35.22	  	$	1,800
			
	 V.
	 	Method of Payment	  	 	 

  

					
	 	  	A.	  	Cash. The Performance Based Compensation determined for 2005 under the formula set forth in Section I above shall be paid in cash if and to the extent such Compensation does not exceed
$3,000,000.
			
	 	  	B.	  	Restricted Stock. If the Performance Based Compensation determined for 2005 under the formula set forth in Section I above exceeds $3,000,000 (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, 2005. 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, 2014 (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).
		
	 VI.
	  	 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 March 9, 2005	 	 	 	 /s/ Paul Manley


	 	 	 	 	Paul Manley, Chairman
	 	 	 	 	Compensation Committee
			
	 	 	 	 	Acknowledged and Accepted:
			
	 	 	 	 	 /s/ Albert H. Nahmad


	 	 	 	 	Albert H. Nahmad