Chief Financial Officer Employment Agreement

EXHIBIT 10.3


[EXECUTION COPY]


EMPLOYMENT AGREEMENT


This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of June 30, 2003 by and between CAVCO INDUSTRIES, INC., a Delaware corporation (the "Company"), and SEAN K. NOLEN (the "Executive").


W I T N E S S E T H:


WHEREAS, the Board of Directors of Centex Corporation ("Centex") has determined that it would be advisable and in the best interests of Centex and its stockholders for Centex to organize the Company, and to transfer substantially all of the business, operations, assets and liabilities related to Cavco Industries, LLC to the Company; and


WHEREAS, the Company has agreed to assume substantially all of the business, operations, assets and liabilities related to Cavco Industries, LLC; and


WHEREAS, the Board of Directors of Centex has also determined that it would be advisable and in the best interests of Centex and its stockholders for Centex to distribute on a pro-rata basis to the holders of record of Centex common stock, par value $0.25 per share (the "Centex Common Stock"), without any consideration being paid by such holders, all of the outstanding shares of the Company's common stock, par value $.01 per share (the "Cavco Common Stock"), owned by Centex (the "Distribution"); and


WHEREAS, for United States federal income tax purposes, the Distribution is intended to qualify as a tax-free spin-off within the meaning of Sections 355 and 368(a)(1)(D) of the United States Internal Revenue Code of 1986, as amended (the "Code"); and


WHEREAS, from and after the date (the "Effective Date") upon which the Distribution is effectuated, the Company desires to employ 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, and subject to the Distribution being effectuated on or before June 30, 2003, the parties hereto agree as follows:


SECTION 1. Definitions. For purposes of this Agreement, the following definitions shall apply:


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"Breach" shall mean a breach by either the Executive or the Company, as
the case may be, of a term of this Agreement which breach remains uncured
for 15 days after written notice is received by the party in breach from
the party asserting the breach.


"Change in Control" shall be deemed to have occurred if, subsequent to the
Distribution: (i) the Company merges or consolidates with any other
corporation (other than a wholly-owned subsidiary) and is not the
surviving corporation (or survives only as a subsidiary of another
corporation), (ii) the Company sells all or substantially all of its
assets to any other person or entity (other than a wholly-owned
subsidiary), (iii) the Company is dissolved, or (iv) a third person,
including a "group" as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, becomes the beneficial owner of shares of Cavco
Common Stock having 50% or more of the total number of votes that may be
cast for the election of directors of the Company; or as a result of, or
in connection with, a contested election for directors, the persons who
were directors of the Company before such election shall cease to
constitute a majority of the Board of Directors of the Company.
Notwithstanding any provision of this paragraph, an event, transaction, or
corporate action described in this Subsection which would otherwise be
deemed a Change in Control, will not be deemed a Change in Control if: it
is a management led or supported transaction by persons who were the
directors of the Company and persons who were the executive officers of
the Company as of six months prior to such event; and if immediately after
such event such persons constitute a majority of the directors and
constitute a majority of executive officers for, and own in the aggregate
at least fifteen percent of the voting securities or interest of, the
Company or the surviving or resulting corporation or the parent of the
resulting corporation.


"Common Stock" means the common stock of the Company, par value $.01.


"Disability" shall mean the Executive's inability, by reason of a mental
or physical impairment, to perform his duties and responsibilities, as set
forth in Section 4, below for a period of at least six (6) consecutive
months.


"Termination for Cause" shall mean the Company's termination of the
Executive's employment pursuant to a determination by the Company's Board
of Directors, in its sole and absolute discretion, but acting in good
faith, that the Executive is guilty of engaging in acts during the Term of
this Agreement that constitute theft, dishonesty, fraud, or embezzlement,
or that constitute willful and repeated insubordination.


"Termination Without Cause" shall mean the Company's termination of the
Executive's employment other than a Termination for Cause. In addition, if
the Company alters the Executive's duties so that he no longer renders
such services


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of an executive and administrative character to the Company as are usual
and customary in the case of the chief financial officer of an entity such
as the Company, and the Executive thereafter terminates employment with
the Company, such termination by the Executive shall be deemed not a
voluntary termination of employment by the Executive but a Termination
Without Cause.


All other defined terms set forth in the text of this Agreement will have the meaning assigned to them in this Agreement.


SECTION 2. Employment. From and after the Effective Date, the Executive will be employed by the Company upon the terms and conditions set forth herein.


SECTION 3. 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 third anniversary thereof (the "Initial Term"), unless earlier terminated as provided in this Agreement. Thereafter, the term of this Agreement shall automatically be extended for successive one (1) year periods ("Renewal Terms") unless either the Company or the Executive gives written notice to the other at least ninety (90) days prior to the end of the Initial Term or any Renewal Term, as the case may be, of its or his intention not to renew the term of this Agreement. The Initial Term and any Renewal Terms of this Agreement shall be collectively referred to as the "Term."


SECTION 4. Duties and Responsibilities.


(a) The Executive shall initially serve in the capacity of Vice President, Chief Financial Officer and Treasurer of the Company, subject to the direction of the President and Chief Executive Officer 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 President and Chief Executive Officer of the Company. Such duties shall be performed within the policies and guidelines established from time to time by the Compan ...