centex ethics_08/08

T H EC E N T E X W AYYour guide for decision making

on business conduct issues

S P E A K U PIt’s The Centex Way

1.877.313.4545

Look on page 36 for your Speak Up wallet card.

Our Mission. We are Centex.

One company. United around one goal. One purpose.

One mission.

A unifi ed commitment to

build the best.

Build the best home. Build the best community. Build the

best Centex.

One company. One goal. One purpose. One mission.

Build the Best.

Message from Tim Eller 5

What Comes With the Territory 6

How We Do Th ings at Centex 8

What To Do If Issues Arise 32

How We Keep OnTrack and Improve 34

Th e Speak UpHotline Wallet Card 36

START

Obligations We Share as Centex EmployeesSpecial Obligations of Centex Leaders

When In Doubt We AskKey Business Conduct Spotlight Areas Confl icts of Interest 10 Dealing with Customers, Trade Partners and Others 16 Government Aff airs 20 Centex Property and Information/ Communication 24 Th e Workplace 28

Our Core Values.

Build Trust.

Build Respect.

Build Relationships.

Build Excellence.

Build Value.

Build Excitement.

Dear Colleague:

Excellence is a process, not just an outcome. We have to demand high standards in the work we do – building homes for families. Our homes must be more than “good enough.” Th ey must be the best. And so must our approach, the way we do business and deal with people.

Th e Centex Way embodies our company’s core values – Build Trust, Build Respect, Build Relationships, Build Excellence, Build Value, and Build Excitement – and supports our “unifi ed commitment to build the best.” Build the best home. Build the best community. Build the best career. Build the best Centex.

A high caliber organization is a refl ection of its people. Part of your job is to help set, promote and enforce strong ethics. We have to develop, nurture, embrace and celebrate a strong corporate conscience. Th e Centex Way reinforces our fundamental cultural principles and provides support in identifying cultural and ethical traps.

I believe our core value of Build Trust says it well: Do the right thing for our company, in all situations. Have integrity. Do what you say. We can’t win the struggle for high business standards if we just talk a good game…we’ve got to play a good game.

Let’s continue to build our great company by following Th e Centex Way. It’s our path to continued success.

Tim EllerChairman and CEO

05

When you join Centex you accept certain obligations and some of the most important of these relate to business conduct.

Th e Centex Way applies to all Centex directors, offi cers and employees. A waiver of these obligations for executive offi cers or directors may be made only by the board or a board committee, and must be promptly disclosed to Centex shareholders.

Centex expects each of us to:

_Read and understand Th e Centex Way (as well as any business conduct policies specifi c to our business units).

_Behave ethically and in compliance with all laws, regulations and legal requirements.

_Participate in education to ensure we understand the laws, regulations and legal requirements relevant to our jobs.

_Seek guidance in resolving business conduct and ethics issues by following the processes described in this booklet.

_Honestly answer all questions asked in compliance certifi cations, and fully comply in internal investigations, if asked.

_Deal with departures from Th e Centex Way through the processes described in this booklet.

_Understand that there may be consequencesfor departures from Th e Centex Way, and for departures serious enough, consequences up toand including dismissal.

Centex holds each leader accountable to:

_Lead through example, role-modeling and ethical business conduct.

_Monitor and ensure employees (and third parties acting on our behalf) follow Th e Centex Way.

Th is includes:_Arranging for appropriate orientation and training in the relevant laws, requirementsand processes.

_Being open and available to discuss concerns.

_Deal eff ectively with business conduct issues that arise in their work group, consistent with Th eCentex Way.

Centex will not tolerate any harassment or retaliation against any employee for reporting, supplying information or assisting an investigation into a business conduct concern. Everybody makes honest mistakes, but there’s no suchthing as an honest cover-up.

Consult the “What To Do If IssuesArise” section on page 32 for guidanceif you are concerned about whether certain business conduct may violateTh e Centex Way.

What Comes With the Territory What Comes With the Territory

OBLIGATIONS WE SHAREAS CENTEX EMPLOYEES

SPECIAL OBLIGATIONSOF CENTEX LEADERS

07

Guiding Principle

Policies and Rules

Decision Considerations

The Compass. For each issue, the principle that should guide our action introduces the business conduct topic. Principles are useful because they can be used to guide actions in many situations and can reduce the need to have rules for each situation.

Boundary Map. Rules are also necessary and useful, particularly where there are laws or policies that we must know about.

Navigation Aids. Since not all ethical questions are easily answered “yes” or “no,” good judgment is required. If there are special considerations to support your navigation through a “maybe” area, they are offered as the third element.

MAP LEGEND

The most common business conduct issues are addressed from three perspectives in this section.

You should seek advice from your supervisor if you are unable to answer “no” to any of these questions.

1. Is this action inconsistent with Th e Centex Way, our Company’s core values or business unit policy?2. Is the action likely to endanger anyone’s health

or safety?3. Do I have any doubts about whether the action

is legal?4. Even if it is legal, do I have any doubts about

whether it also is the right thing to do?5. Would it be hard to defend this action with

my supervisor, co-workers, customers, trade partners or those in the community where we do business? In other words, would I or could Centex be embarrassed if this action or situation were reported in the newspaper, on TV or posted on a Centex bulletin board?

6. Could I regret not having discussed this situation with my supervisor or others within Centex before taking the action?

How We Do Things at Centex

WHEN IN DOUBT WE ASK

Confl icts of Interest. You know that a trade partner is quietly performing remodeling work on your supervisor’s home for free. Your supervisor manages the relationship with the trade partner, and says that using this partner saves the division a signifi cant amount of money. He has told you that any employee who reports this information is untrustworthy and will be let go. What should you do?

A. Investigate the situation yourself, then tell your supervisor that in the interest of fairness, the trade partner should be willing to perform free work for you, too.

B. Report the situation to your supervisor’s supervisor or your division president. If you are uncomfortable doing that, call Centex’s Speak Up Hotline. You may choose to remain anonymous when you call the hotline.

C. Keep the information to yourself. Your supervisor is saving the company money. You don’t have an obligation to report it, and you might lose your job if you do.

Answer B. Employees should never accept a gift of goods

or services on their house from a Centex trade partner. It’s every employee’s responsibility to raise business conduct concerns. Centex will not tolerate any harassment or retaliation against any employee for honestly reporting, supplying information or assisting an investigation into a business conduct concern. You shouldn’t conduct your own investigation before reporting a misconduct concern.

A confl ict of interest is defi ned at Centex as any activity, investment

or association that interferes or might appear to interfere with your judgment, objectivity or ability in performing your job in the best interests of the Company and our shareholders.

We do not maintain relationships that could be detrimental to Centex’s best interests or that could create the appearance of divided loyalty.

Examples of Potential Confl ict ofInterest Situations

_An ownership interest in a Centex trade partner. _A family member with an ownership interest in a Centex trade partner.

_Gift s of more than nominal value accepted from or given to a current or prospective trade partner.

_Doing work for a Centex competitor.

_Doing work for another employer during the work day, even if there is no direct relationship between the other company and Centex.

_Selling non-Centex products on Company property.

_Supervising or making or infl uencing employment decisions about a family member or an employee with whom you have an intimate or other substantial relationship.


CONFLICTS OF INTEREST

Guiding Principle

Under No Circumstances

_You must never, either directly or indirectly (nor should any member of your family), accept cash, or accept gift s or

entertainment of greater than nominal value from any current or prospective trade partner, customer or competitor.

_You must not make or infl uence decisions at Centex, including contract terms, whenever a business or person with whom you have an intimate or other substantial relationship is involved.

_You should never accept a gift of goods or services on your house from a Centex trade partner.

_You may not build a home in a manner that violates Centex’s policies with respect to the construction of homes by employees.

With the Approval of Both Your Supervisor and the Top Executive of Your Business Unit

Permission must be granted before:_Obtaining an ownership interest in, or position with, a Centex trade partner, customer or competitor.

_Th ere is an exception where the interest in the outside company is solely through the ownership of publicly traded securities that constitute less than 1% of the company’s outstanding public securities, and the investment is not a signifi cant part ofyour assets.

_Employing any family members where there is either a direct or indirect reporting relationship or a substantial amount of interaction between family members on the job.

_Excepted are situations where familymembers are distant relatives (more remote than a fi rst cousin).

_Always follow employment-related hiring policies.

_Engaging in a business relationship between Centex and a company in which you or your family member has an ownership interest or holds a position. Th is includes your participation (or a family member’s) in a company or other business association that agrees to sell land to Centex. If the transaction or relationship has already occurred, you must bring it to the attention of your direct supervisor and the top executive promptly aft er you become aware of it.

_Th is could happen because of a recent marriage or because you learn about the actions of a family member aft er they have occurred.

With the Knowledge of Your Supervisor

_You must inform your supervisor before accepting any outside positions that involve substantial time commitments, and in fulfi lling those commitments you must not use Centex time, personnel or property to carry out the work.



Policies and Rules

The decision about what constitutes gifts and entertainment of more than nominal value requires

judgment. Is the gift or entertainment valuable enough that it could affect decision making or even appear to do so? If the answer is “yes,” the gift or entertainment is not nominal. And even something of small value that actually compromises good decision making is not nominal regardless of amount.

Frequency enters into the equation too. Occasional meals where the giver is present are generally within the usual boundaries of good business conduct, whereas repeated meals may be perceived as having greater than nominal value or may appear compromising.

Here are some of the questions that you might ask yourself if you are unsure whether accepting a gift or entertainment is appropriate:

_Is this gift being off ered or given because my position enables me to infl uence a Centex decision in favor of the customer or trade partner?

_Will my accepting this gift infl uence or aff ect what Centex pays or is paid for products and services?

_By accepting this gift , will I put myself, or appear to put myself, in a compromised position with my peers or the general public?

_Would providing the same gift in return be outside the boundaries of what is acceptable at Centex?

_Is the gift personal, or is it something that can be used on the job and shared with co-workers?

_Is the reason I am accepting this gift merely because “it always has been done this way?”

_Will this action set a precedent?

_Is the gift , service or entertainment something I could not aff ord to buy or provide myself?

_Is any eff ort being made to conceal the gift or off er?

If your answer is “yes” or even “maybe” to any of these questions, then you should seek your supervisor’s advice.

Th ere also may be situations not specifi cally covered here that could involve a confl ict of interest. If you believe you may have an outside interest that could confl ict with those of Centex, you should seek guidance from your supervisor. Your business unit may also have its own more narrowly defi ned policies on confl icts of interest. If so, you must comply with both the policy set out here and your business unit policy.




Dealing with Customers, Trade Partners and Others.Susan believes her division’s purchasing manager gave preferential consideration to new trade partners selected for division projects. She told the director of construction operations and he said he would investigate. Susan hasn’t heard anything in three months despite her requests for updates. She’s afraid she might lose her job if she further reports the problem. What should she do?

A. She reported the problem to a supervisor. She should now focus on her job and let others focus on theirs.

B. Because purchasing managers have certain leeway when selecting partners, she should assume there is no impropriety.

C. Because Susan believes her concern was not properly investigated, she should continue to follow the steps in the “What To Do If Issues Arise” section of Th e Centex Way: tell the division president, call the Corporate Compliance Offi ce or call Centex’s Speak

Up Hotline.

AnswerC. Giving preferential treatment to prospective

trade partners violates Th e Centex Way fair dealing principle. Every employee has the responsibility to raise concerns and to surface deviations from Th e Centex Way, and Centex will not tolerate retaliation against those who do.

All of Centex’s dealings with outside parties must refl ect our commitment

to “fair dealing.” Fair dealing means that we:

_Honor customer privacy with respect to the information customers provide to Centex, and not use the information for purposes other than for which it was intended.

_Buy and sell products and services on the basis of their value, and do so without creating perceptions that bribes, personal incentives or kickbacks are involved, or that competitive bids are rigged.

_Make honest representations about Centex and its products, without misrepresentation or distortionof facts.

_Do not use our position in the Company to obtain a personal benefi t from a current or prospective trade partner.

Examples of Potentially Unfair or Unlawful Dealings

_Selling or giving non-public personal information about customers

to others.

_Providing personal gift s or making personal loans to customers to get business.

_Discussing pricing strategy with competitors.


DEALING WITH CUSTOMERS, TRADE

PARTNERS AND OTHERS

Guiding Principle


You must never: _Enter into discussions with competitors

to fi x prices or terms of sale, divide up markets or customers, limit production or rig a competitive bidding process.

_Discuss, agree to, or take any action to boycott a competitor, customer or trade partner.

_Give to or receive from a customer or any other third party a gift , loan, cash or anything of value that could be viewed as:

_A bribe or kickback, or

_An attempt to improperly infl uence the relationship between Centex and the customer or other third party.

_Provide a gift that knowingly violates the policies of the recipient’s employer.

_Use information we receive from companies or individuals for purposes other than for which it was intended, or violate any restrictions we agree to by virtue of receiving the information.

_Demand or accept payment or personal favors from current or prospective trade partners.


Permission must be granted before:_Discussing profi ts, costs, employee compensation, market share, pricing or any other competitive information with any competitor. (Th ere may be narrow circumstances where such discussions could be appropriate, but this is an area where General Counsel should be consulted for confi rmation.)

_Serving as a director or an advisor to a competitor organization.

With the Knowledge of Your Supervisor

_All gift s and payments made to third parties on behalf of Centex must be properly recorded.

_Any entertainment receipts must be properly submitted for reimbursement.


DEALING WITH CUSTOMERS, TRADE PARTNERS AND OTHERS

Policies and Rules

Government Aff airs. Your division is building a new home for a City Council member, and it’s making an exception and customizing the home by making one of the garages into an offi ce. You’ve heard that the council member won’t be charged for the customization. It’s very diffi cult for the division to get land entitlements without good relationships with elected offi cials, and you suspect that division leadership has made this special concession to gain favor with the council member for future votes. What should you do?

A. Wait and see whether the council member pays market value for the customization of the home. If you fi nd out that the council member didn’t pay for the customization, you can report it then.

B. Report your concern now following the process in the “What To Do If Issues Arise” section of Th e Centex Way. You don’t have to provide evidence of misconduct when you report your concerns.

C. Don’t report anything. You may not have all the facts, and it won’t do any good anyway.

AnswerB. Report your concerns promptly so Centex

can investigate. Centex employees must never make payments or off er anything of value (even nominal value), directly or indirectly to government offi cials to obtain a particular result for the Company.

Government offi cials and government agencies should be dealt

with using the same standards as other third parties; however, political contributions and lobbying are special categories of governmental dealings where specifi c laws apply.

We must always understand the laws before we make political contributions or engage in lobbying, and act in accordance with these laws.

Examples of Potentially Unlawful Dealings

_Entertaining or making gift s to government offi cials or their family members.

_Providing resources (money or in-kind value) to political candidates, political parties or committees.

_Hosting political fund-raising events.

_Coercing employees or trade partners to support candidates or engage in political activity.

_Seeking reimbursement from Centex forpolitical contributions.

Guiding Principle


GOVERNMENT AFFAIRS


You must never: _Make payments or off er anything of

value (even of nominal value), directly or indirectly, (as an individual or as an employee group) to:

_Government offi cials, domestic or foreign, to obtain a particular result for the Company.

_Any family member or friend of a government offi cial because of the offi cial’s status in order to obtain a particular result for the Company.

_Coerce, threaten, intimidate or otherwise improperly induce any Centex employee to make or not make a political contribution or to engage or not engage in political activity.

_Seek or accept reimbursement from Centex, directly or indirectly, for making a political contribution.


_Funds or any other resources of the Company (including “employee time”) may be used for federal, state or local political campaign activity only with full confi dence about the legality ofthe action.

Since laws in this area are complex and vary by jurisdiction, legality must be confi rmed in advance by submitting a request form in accordance with Centex’s political activity policies and procedures, which provide for a review for compliance with federal, state and local laws.

_Communications with government offi cials to promote Centex or infl uence legislative or administrative action on behalf of Centex may be done only with:

_Proper registrations, if required, and

_Full confi dence about the legality ofthe action.


GOVERNMENT AFFAIRS

Policies and Rules

Centex Property and Information/Communication. At a meeting discussing a land deal, a new employee mentions that his former employer considered purchasing this same piece of land, and he has a report he could share with the team. John, a land manager, recommends checking with Legal to determine if that’s appropriate. Several participants dismiss his comments, stating that because the other company is no longer interested in the land, Centex would not be using competitive trade secrets. In this situation, John should:

A. Do nothing. Th e report probably consists of information that is publicly available or is generally known in the market.

B. Insist that Legal provide a recommendation before reviewing the report. It’s better to get clarifi cation than risk using confi dential information from another company.

C. Call the other company to confi rm they are not interested in the land.

AnswerB. Centex employees should never use confi dential

information obtained from other companies or previous employers. If you’re not sure whether information is confi dential or proprietary, you should ask a Company lawyer or call the Corporate Compliance Offi ce.

Centex owns both tangible (physical) property, such as computers and

offi ces, and intangible (intellectual) property, such as trademarks and confi dential information and materials. As part of our jobs, we must properly use and protect Centex’s property.

You are expected to: _Be an active steward in protecting and preserving the value of Centex’s property.

_Understand and abide by laws and Centex policies concerning the communication of information, and its protection from unauthorized disclosure.

Examples of Misuse or Improper Disclosure of Information

_Using material, non-public information as the basis for buying or selling Centex stock (or stock in another company).

_“Tipping” or disclosing material, non-public information that another person might use as a basis for buying or selling stock in Centex (or another company).

_Falsifying vouchers, bills, payments or receipts.

_Maintaining “off -the-books” accounts.

_Withholding pertinent information in internal or external audits or investigations.

_Revealing trade secrets at a conference.

_Acting as a spokesperson for Centex on fi nancial matters (other than those specially designated).

_Reviewing or discussing sensitive and proprietary or otherwise confi dential information in public places where others could see or overhear (e.g., on commercial airplane fl ights, elevators).

_Leaving portable computers unsecured.

Guiding Principle


CENTEX PROPERTY ANDINFORMATION/

COMMUNICATION


You must never: _Destroy or alter any records that may

relate to pending or anticipated litigation, audit or investigation or otherwise violate the records retention policy.

_Falsify or misstate, even in a minor way, vouchers, bills, payments or receipts or accounting records.

_Disclose to third parties what might be considered “insider information” (non-public information on Centex operations, fi nancial results or prospects).

_Buy or sell securities of a company, including Centex securities, while in possession of material non-public information.

_Disclose or improperly discard confi dential customer or employee information in violation of Centex policy or legal requirements.

_Give Centex property to, or accept Centex property from, another employee. Th ere is an exception, of course, for an employee’s offi cial Centex salary and incentive compensation.

Only With the Approval of the Top Executive of Your Business Unit

_Disclose to third parties valuable internal information (including trade secrets, processes, data, know-how, techniques and strategies).

_Issue press releases referencing Centex. All press releases must be coordinated through Centex Corporate Communications.

_Produce and distribute external communications materials that refer to another Centex business unit.

_Establish or modify a Centex-related Internet site, home page or hyperlink.

_Endorse any products or services using your job role or title, or on behalf of Centex.


CENTEX PROPERTY ANDINFORMATION/COMMUNICATION

Policies and RulesProperty

“Treating company property as if it were our own” is an expression

sometimes used to describe how we should preserve and protect Company property. Keepin mind however, that Company property is owned by Centex. As such, Centex reserves the right to inspect or search any Company property at any time, with or without your presence, to ensure workplace safety and compliance with law and policy.

Th ere should be no presumption or expectation of privacy related to any personal property that may be co-mingled with Company property, such as in offi ce fi les, e-mails or voice mails.

Communication

Our jobs oft en require us to discuss Company matters with third parties, such as when we are setting expectations with trade partners or customers; when we are describing Centex culture to prospective employees; or when we are responding to routine inquiries.

Th ere are three questions that you should keep in mind for which the answer always should be “yes” before you share information about Centex:

_Am I providing accurate and credible information?

_Is the information generally known to the public or in the industry (e.g., not insider information or a trade secret)?

_Am I the right person to be providing the information? (For example, only designated employees are authorized to discuss Company fi nancial matters with investors.)

When in doubt about any of these, your business unit communications leader and the VP of Corporate Communications are good resources for advice, especially with respect to press inquiries.


27

Th e Workplace. You have recently seen a trade partner’s employee pay a lot of attention to a new female employee in a Centex sales offi ce, saying things that cross the line of proper businesslike behavior. The woman seems annoyed, and you’re concerned that she may be afraid to confront the trade partner’s employee because her supervisor has a good relationship with him. What should you do?

A. Advise the woman to ignore the trade partner’s employee. Th at’s all you can do because the trade partner’s employee doesn’t have to comply with Th e Centex Way.

B. Confront the trade partner’s employee and tell him to stop harassing the woman and to leave her alone.

C. Report your concern. You have an obligation to report concerns, but you’re not responsible to handle misconduct yourself.

AnswerC. Centex does not allow our agents, customers or

trade partners to harass any Centex employee. Harassment means verbal or physical abuse, unwelcome contact, advances or propositions, displays of off ensive materials or other acts that create a hostile work environment. You should report your concern promptly so that Centex can handle it.

Centex must be a place where every employee can do his/her job

to the best of his/her abilities. This means each employee has an obligation to do his/her part to maintain a safe and secure work environment free of discrimination, harassment and violence.

Examples Counter to the Principle

_Promotion decisions based on anything other than job qualifi cations, competence and merit.

_Display of off ensive materials.

_Inattention to resolving workplace safety hazards.

_Fighting or threatening behavior.

_Being under the infl uence of alcohol or drugsat work.

_Remarks that are off ensive or that could be viewed as harassment.

_Unwelcome physical contact.

Guiding Principle


THE WORKPLACE


You must never: _Discriminate on the basis of age, color,

race, religion, disability, gender, sexual orientation or national origin.

_Use hiring tests that are not directly related to job requirements or that have not been specifi cally validated for the job group.

_Harass or allow our customers or trade partners to harass Centex employees. Harassment means verbal or physical abuse, unwelcome contact, advances or propositions, displays of off ensive materials or other acts that create a hostile work environment.

_Allow unsafe working conditions or environmental hazards to go unreported to your supervisor.

_Make threats of violence, engage in acts of violence, or otherwise intimidate other employees.

_Use, possess, distribute, manufacture or transport on Centex property, or on company business, or during working hours, any of the following:

_Illegal drugs, equipment or paraphernalia related to illegal drugs, or prescriptiondrugs other than by those for whom theywere prescribed.

_Alcoholic beverages, except as specifi cally authorized for company functions.

_Use or carry any lethal weapons or allow any customers or trade partners to use or carry lethal weapons on Centex property (unless they are police offi cers, appropriately licensed security guards or others with prior written consent from Centex, or except to the extent applicable law may prevent Centex from prohibiting the possession of fi rearms for lawful self-defense).

Only With the Approval of the Top Executive of Your Business Unit

_Allow family members or guests to visit non-public Company facilities unaccompanied by an employee.


THE WORKPLACE

Policies and RulesWhat may be offensive,

threatening or intimidating toone person may not be to another. The simple rule of

thumb is “if any employee thinks my behavior is, then it is,” and hence it should trigger sincere re-examination.

The questions that you should ask yourself are:

_Is my behavior fully conducive to others doing their best work?

_Is my behavior relevant to meeting workplace goals?

_Is there anything about my behavior that does not imply dignity and respect for the individual, including respect for personal privacy?

If you cannot answer “yes” to all these questions, then the behavior probably is inappropriate.


33

It is impossible to conduct business without facing business conduct issues. Most issues are fairly straightforward to resolve, but sometimes the issues are more complicated. The basic steps

for resolving any business conduct issue, whether it is complicated or not, are the same.

When you confront an issue or have a question, the following sequential steps are advised:

1. First, consult the appropriate section of Th e Centex Way or your business unit’s policies as key reference guides.

2. If you still have questions about what to do, seek your supervisor’s counsel and guidance. Your supervisor may also suggest other people to go to for assistance, such as someone in the legal department or in human resources.

3. If your supervisor is unable to guide you or if you feel your supervisor’s advice is compromised in some way, you have two options.

_One is to approach your supervisor’s boss with the matter (or even higher levelsas required).

_Th e other is to call the Centex Corporate Compliance Offi ce at 214-981-6822. Th is path also remains available if moving up the business channel proves unsatisfactory.

4. In the special case of questionable accounting or auditing matters, you have two additional avenues for resolving the issue or question.

_By calling the Centex VP of Internal Auditat 214-981-6336.

_By calling 877-313-4545 and requesting that your concern go to the Centex Board of Directors Audit Committee Chairperson.

5. If the process breaks down in any way or if you feel a need to raise concerns anonymously, Centex has established the Speak Up Hotline as an alternative avenue for raising concerns. Th e Speak Up Hotline number is 877-313-4545.

It is every employee’s responsibility to raise concerns and to surface deviations from Th e Centex Way, including violations of law by Centex employees (or those who are acting on Centex’s behalf).

_No Retaliation. Centex will not tolerate retaliation against any employee who raises a business conduct issue or reports a violation of the law or of Centex policy. You may not discharge, demote, suspend, threaten, harass, discriminate or retaliate against a person who alleges misconduct or provides information in good faith in an investigation.

If you feel that you have experienced retaliation as a result of making a complaint or providing information you should report it to your supervisor, other management personnel, the legal department, human resources, the Corporate Compliance Offi ce or the Speak Up Hotline.

Centex will investigate allegations of retaliation,and violations will result in consequences up toand including termination of employment.

_False Claims. Employees who make claimsthat they know to be false will be subject to disciplinary action.

_Confi dentiality. Centex will make every eff ort to protect the confi dentiality of individuals who report violations of the law or Company policies, although it may not be possible to do so in every case, such as when disclosure is required by law.

What To Do If Issues Arise

The Centex Way is not just a code of conduct. It is a process for ensuring everyone in the Centex family “knows

the way” and “follows the way”. It is part of what distinguishes us as a great organization that consistently

operates at the highest standards of business conduct in everything we do.

Our process for keeping on track entails steps in each of our work groups, steps as a company and steps for us individually.

In Our Work Group

Since each business unit faces distinct challenges, we should expect the key business conduct issues in each business unit to have a diff erent emphasis.

At least once each year Centex expects you will have the opportunity to: _Refresh (and deepen) your understanding about how Th e Centex Way applies specifi cally to your work group.

_Surface business conduct topics most needing preventive attention and maintenance.

_Develop action plans appropriate to your business.

_Assess progress made on those action plans.

Each business unit individually determines how these discussions occur and cascade in the organization, and how action planning and follow-up occur. Commonly, Th e Centex Way is a staff meeting agenda item, assisted by a Leaders Tool Kit.

As a Company

Each year at one of the quarterly reviews of business strategy execution, business unit executives share with Centex corporate senior management:

_Th e business conduct issue themes and challenges most important to the business.

_What is occurring in the business to ensure we keep on Th e Centex Way.

Th is enables Centex to: _Ensure proper focus is maintained.

_Communicate the importance placed onbusiness conduct.

_Make good decisions about priority setting.

_Have a well-informed basis for reporting to the Centex Board of Directors on this key governance accountability.

Each of Us Individually

As a Centex employee, you are required to promptly and honestly complete an annual questionnaire that asks important questions about your business conduct and the business conduct you have observed at Centex over the past year. One of these questions is whether you have had an opportunity over the past year to discuss Th e Centex Way in your work group. Th e answers to this question are tabulated and status is providedto business leaders.

Th e purpose of this step is to ensure the key business conduct issues in Th e Centex Way are kept top of mind for veteran employees and are properly introduced during orientations for new employees.

Th ere is also a compliance benefi t to this step that is in keeping with good governance best practices, but the primary purposes at Centex are communication, process control, diagnosisand improvement.

How We Keep On Track and Improve

Please carry your Speak Up Hotline card in your wallet or purse.

Obligations We Share as Centex Employees

When you join Centex you accept certain obligations and some of the most important of these relate to business conduct.

1. Read and understand Th e Centex Way (as well as any business conduct policies specifi c to your business unit).

2. Behave ethically and in compliance with all laws, regulations and legal requirements.

3. Participate in education to ensure you understand the laws, regulations and legal requirements relevant to your job.

4. Seek guidance in resolving business conduct and ethics issues by following the processes described in Th e Centex Way.

5. Honestly answer all questions in compliance certifi cations or in internal investigations.

6. Deal with departures from Th e Centex Way through the processes described in this booklet.

7. Understand that there may be consequences for departures from Th e Centex Way and, for departures serious enough, consequences up to and including dismissal.

S P E A K U PIt’s the Centex Way

1.877.313.4545Ask yourself, does it:

Build Trust.

Build Respect.

Build Relationships.

Build Excellence.

Build Value.

Build Excitement.

About Our CompanyDallas-based Centex, founded in

1950, is one of the nation’s leading

home building companies. Its

leading brands include Centex

Homes, Fox & Jacobs Homes and

CityHomes. In addition to its home

building operations, Centex also

offers mortgage, title and insurance

services. Centex has ranked among

the top three builders on FORTUNE

magazine’s list of “America’s Most

Admired Companies” for nine

straight years and is a leader in

quality and customer satisfaction.

The Centex Way articulates what

it means to be a Centex employee

with respect to exemplary business

conduct, a critical dimension of how

we measure success.

© 2003-2008 Centex CorporationREV 07/08

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