Exhibit 10.1
D.R. HORTON, INC.
GRANT NOTICE FOR 2006 STOCK INCENTIVE PLAN
PERFORMANCE RESTRICTED STOCK UNITS
FOR GOOD AND VALUABLE CONSIDERATION, D. R. Horton, Inc. (the “Company”), hereby
grants to Grantee named below the number of performance restricted stock units
specified below (the “Award” or the “Performance RSUs”), upon the terms and
subject to the conditions set forth in this Grant Notice, the Company’s 2006
Stock Incentive Plan (the “Plan”) and the Standard Terms and Conditions (the
“Standard Terms and Conditions”) adopted pursuant to such Plan and provided to
Grantee, each as amended from time to time. Each performance restricted stock
unit subject to this Award represents the right to receive one share of the
Company’s Common Shares, subject to the conditions set forth in this Grant
Notice, the Plan and the Standard Terms and Conditions. This Award is granted
pursuant to the Plan and is subject to and qualified in its entirety by the
Standard Terms and Conditions.

         
Name of Grantee:
       
 
       
Grant Date:
       
 
       
Number of performance restricted
      (Target) (“Target Award”)
 
       
stock units subject to the Award at
      (Maximum)
 
       
target and maximum performance:
       

By accepting this Grant Notice, Grantee acknowledges that he or she has received
and read, and agrees that this Award shall be subject to, the terms of this
Grant Notice, the Plan and the Standard Terms and Conditions.

                  Grantee:           D.R. HORTON, INC.,
 
                            a Delaware Corporation
Printed Name:
               
 
               
 
          By:   The Compensation Committee of the Board of Directors
 
               
 
          By:    
 
               
 
          Name:    
 
               
 
          Title:    
 
               

 

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D.R. HORTON, INC.
STANDARD TERMS AND CONDITIONS FOR
PERFORMANCE RESTRICTED STOCK UNITS
These Standard Terms and Conditions apply to any Award of performance restricted
stock units granted to an employee of the Company under the Company’s 2006 Stock
Incentive Plan (the “Plan”), on ____________, which are evidenced by a Grant
Notice or an action of the Committee that specifically refers to these Standard
Terms and Conditions.

1.   TERMS OF PERFORMANCE RESTRICTED STOCK UNITS       D.R. Horton, Inc., a
Delaware corporation (the “Company”), has granted to the Grantee named in the
Grant Notice provided to said Grantee herewith (the “Grant Notice”) an award of
a number of performance restricted stock units (the “Award” or the “Performance
RSUs”) specified in the Grant Notice. Each Performance RSU represents the right
to receive one share of the Company’s Common Shares, $0.01 par value per share
(the “Common Shares”) upon the terms and subject to the conditions set forth in
the Grant Notice, these Standard Terms and Conditions, and the Plan, each as
amended from time to time.   2.   VESTING OF PERFORMANCE RESTRICTED STOCK UNITS
      The Award shall not be vested as of the Grant Date set forth in the Grant
Notice and shall be forfeitable unless and until otherwise vested pursuant to
the terms of these Standard Terms and Conditions. After the Grant Date, subject
to termination or acceleration as provided in these Standard Terms and
Conditions and the Plan, the Award shall become vested as described in this
Section 2 with respect to that number of Performance RSUs as described in this
Section 2.       [Examples of Performance Goals]

  A.   The number of Performance RSUs that may be paid to you shall be based
upon the Company’s achievement of the following four performance goals
(“Performance Goals”) over the Performance Period: (i) Relative Total
Shareholder Return (“TSR”) (as defined in Section 17), (ii) Relative Return on
Investment (“ROI”) (as defined in Section 17), (iii) Relative SG&A Containment
(“SG&A Containment” or “SG&A”) (as defined in Section 17), and (iv) Relative
Gross Profit (“GP”) (as defined in Section 17). Each of TSR, ROI, SG&A and GP
shall be given twenty-five percent (25%) weight when ranking relative
performance and when calculating the final vesting of the Award. See Exhibit C
for examples of this calculation. Ranking of the relative performance of the
Company and its peers shall be in accordance with the following ranking tables:

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Total Shareholder Return (weighted 25% of Target Award)

    [Examples of Rankings] The Grantee shall vest in the TSR portion of the
Award based on the Company’s performance of Total Shareholder Return as compared
to the Total Shareholder Return of the S&P 500 Index over the two year
Performance Period. Total Shareholder Return is to be determined by Standard and
Poor’s after the Performance Period using the same or materially similar
criteria used by them in preparing the stock performance graph included each
year in the Company’s public filings (Form 10-K for proxy statement, as
applicable). The Grantee shall receive the number of Performance RSUs in
relation to the Company’s TSR performance as compared to the S&P 500 Index’s TSR
performance as set forth in the table below (See Exhibit A for examples of
hypothetical TSR rankings):

          Company TSR     relative to   Number of S&P 500 Index TSR  
Performance RSUs Awarded
 
       
10 percentage points below
   zero    
9 percentage points below
   2,500   (Threshold)
8 percentage points below
   5,000    
7 percentage points below
   7,500    
6 percentage points below
   10,000    
5 percentage points below
   12,500    
4 percentage points below
   15,000    
3 percentage points below
   17,500    
2 percentage points below
   20,000    
1 percentage point below
   22,500    
 
       
Equal to S&P 500 Index TSR
   25,000   (Target)
 
       
1 percentage point above
   27,500    
2 percentage points above
   30,000    
3 percentage points above
   32,500    
4 percentage points above
   35,000    
5 percentage points above
   37,500    
6 percentage points above
   40,000    
7 percentage points above
   42,500    
8 percentage points above
   45,000    
9 percentage points above
   47,500    
10 percentage points above
   50,000   (Maximum)

The final number of Performance RSUs under this TSR Performance Goal shall be
determined using the above percentages and rankings. Performance and percentages
that fall between those listed in the table above shall be ranked using linear
interpolation. Under the TSR component of the Performance Goals and after giving
effect to the 25% weighting to the total Target Award, the number of Performance
RSUs that can be earned is as follows: 50,000 Maximum, 25,000 Target and 2,500
Threshold.

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ROI and SG&A and GP (each weighted 25% of Target Award)

          Performance Level Performance         Compared to Peer Group   Payout
  Performance RSUs 1st Place   Maximum   150,000 2nd Place       131,250 3rd
Place       112,500 4th Place       93,750 5th Place   Target   75,000 6th Place
      62,500 7th Place       50,000 8th Place       37,500 9th Place      
25,000 10th Place   Threshold   12,500 11th Place       0

      Note: See Exhibit B for the complete listing of Homebuilder Peer Group.  
      The final number of Performance Units under the ROI, SG&A and GP
Performance Goals shall be determined using the above table. Under these three
components of the Performance Goals, the collective number of Performance RSUs
that can be earned is: Maximum 150,000, Target 75,000, and Threshold 12,500.    
B.   After adjustment for forfeitures as provided in Section 2, the number of
Performance RSUs paid to you will be determined based on the Company’s ranking
on each of the four Performance Goals. Notwithstanding the foregoing, the
maximum number of Performance RSUs you can earn will be an aggregate of 200%
(two times) the original Target Award granted to you, and the minimum number of
Performance RSUs that you can earn is zero.     C.   Issuance of shares earned
under this Award shall be made to you as soon as practicable but no later than
45 days following certification by the Compensation Committee of the Board of
Directors of the Company (the “Committee”) as set forth below, unless you timely
elect a deferred payment/receipt in the manner and within the time frames
specified by the Committee and in compliance with Code Section 409A (the “Payout
Date”). In the event of your death prior to the Payout Date, any amount payable
to you under the Award will be paid to your designated beneficiary or, if none,
to your estate. Prior to any issuance 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 RSUs as a result of the achievement of the
Performance Goals.

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  D.   The Award shall vest as follows:

    The number of Performance RSUs that vest will be determined after the
completion of the performance period, which shall begin on October 1, 2010 and
end on September 30, 2012 (the “Performance Period”), and will be based on the
final peer rankings on each of the four Performance Goals as set forth in this
Section 2.       Notwithstanding anything contained in these Standard Terms and
Conditions to the contrary:

  (i)   if the Grantee’s separation from service is due to death or disability
before September 30, 2012, then after the Performance Period is completed and
vesting determined, if any, the Grantee or his beneficiaries will be paid a
number of Performance RSUs determined on a pro-rata basis based on the number of
full months completed from the Grant Date before the death or disability.    
(ii)   if after 13 months has passed since the Grant Date, the Grantee’s
separation from service is due to voluntary (without cause) or involuntary
(without cause) termination, retirement or resignation before September 30,
2012, then after the Performance Period is completed and vesting determined, if
any, the Grantee will be paid a number of Performance RSUs determined on a
pro-rata basis based on the number of full months completed from the Grant Date
to the date of separation of service.     (iii)   if the Grantee’s separation
from service is for any reason other than those listed in (i) and (ii) above,
any unvested portion of the Award held by the Grantee shall be forfeited and
canceled as of the date of such separation of service.

    For purposes of this Section 2, “pro-rata portion” means a percentage, where
the numerator is the number of full months completed between October 1, 2010 and
the date of the Grantee’s separation of service, and the denominator is
24 months.   3.   SETTLEMENT OF PERFORMANCE RESTRICTED STOCK UNITS       Vested
Performance RSUs shall be settled by the delivery to the Grantee or a designated
brokerage firm of one Share per vested Performance RSU on or before November 30,
2012 or as soon as reasonably practicable thereafter.   4.   RIGHTS AS
STOCKHOLDER       The Grantee shall have no voting rights and no right to
receive any dividends with respect to Common Shares underlying Performance RSUs
unless and until such Common Shares are reflected as issued and outstanding
shares on the Company’s stock ledger.

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5.   CHANGE IN CONTROL       Unless otherwise provided in an employment,
severance or other agreement between the Company and the Grantee, the Committee
shall determine the effect of a Change in Control on all unvested Performance
RSUs. Without limitation, the Committee may provide for the acceleration of
vesting of all or a portion of the unvested Performance RSUs at such performance
level as determined by the Committee, for a payment based on the Change in
Control Price in settlement of the Performance RSUs at such performance level as
determined by the Committee, or for the assumption or substitution of
Performance RSUs by the Grantee’s employer (or the parent or an Affiliate of
such employer) or other service recipient that engages the Grantee immediately
following the Change in Control. In all events, any action under this Section 5
shall comply with the applicable requirements of Section 409A of the Code.   6.
  RESTRICTIONS ON RESALES OF SHARES       The Company may impose such
restrictions, conditions or limitations as it determines appropriate as to the
timing and manner of any resales by the Grantee or other subsequent transfers by
the Grantee of any Common Shares issued in respect of vested Performance RSUs,
including without limitation (a) restrictions under an insider trading policy,
(b) restrictions designed to delay and/or coordinate the timing and manner of
sales by Grantee and other holders and (c) restrictions as to the use of a
specified brokerage firm for such resales or other transfers.   7.   INCOME
TAXES       The Company shall not deliver shares in respect of any Performance
RSUs unless and until the Grantee has made arrangements satisfactory to the
Committee to satisfy applicable withholding tax obligations. Unless otherwise
permitted by the Committee, withholding shall be effected by withholding Common
Shares issuable in connection with the delivery of the Performance RSUs (net
withholding provision) in an amount to satisfy the Grantee’s withholding tax
obligations. The Grantee acknowledges that the Company shall have the right to
deduct any taxes required to be withheld by law in connection with the delivery
of the Performance RSUs from any amounts payable by it to the Grantee
(including, without limitation, future cash wages).   8.   NON-TRANSFERABILITY
OF AWARD       The Grantee represents and warrants that the Performance RSUs are
being acquired by the Grantee solely for the Grantee’s own account for
investment and not with a view to or for sale in connection with any
distribution thereof. The Grantee further understands, acknowledges and agrees
that, except as otherwise provided in the Plan, the Performance RSUs may not be
sold, assigned, transferred, pledged or otherwise directly or indirectly
encumbered or disposed of except to the extent expressly permitted hereby and at
all times in compliance with the U.S. Securities Act of 1933, as amended, and
the rules and regulations of the Securities Exchange Commission thereunder, and
in compliance with applicable state securities or “blue sky” laws and non-U.S.
securities laws. Unless

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    permitted by the Committee, the Performance RSUs may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated by the
Grantee other than by will or the laws of descent and distribution.

9.   THE PLAN AND OTHER AGREEMENTS       In addition to these Terms and
Conditions, the Award shall be subject to the terms of the Plan, which are
incorporated into these Standard Terms and Conditions by this reference. Certain
capitalized terms not otherwise defined herein are defined in the Plan. In the
event of a conflict between the terms and conditions of these Standard Terms and
Condition and the Plan, the Plan controls.       Subject to the next paragraph,
the Grant Notice, these Standard Terms and Conditions and the Plan constitute
the entire understanding between the Grantee and the Company regarding the
Award, and any prior agreements, commitments or negotiations concerning the
Award are superseded.       The Award (including the terms described herein) are
subject to the provisions of the Plan and, if the Grantee is outside the U.S.,
there may be an addendum containing special terms and conditions applicable to
grants in the Grantee’s country. The grant of the Performance RSUs to any such
Grantee is contingent upon the Grantee executing and returning any such addendum
in the manner directed by the Company.   10.   NOT A CONTRACT FOR EMPLOYMENT    
  Nothing in the Plan, in the Grant Notice, these Standard Terms and Conditions
or any other instrument executed pursuant to the Plan shall confer upon the
Grantee any right to continue in the Company’s employ or service nor limit in
any way the Company’s right to terminate the Grantee’s employment or other
service at any time for any reason.   11.   SEVERABILITY       In the event that
any provision of these Standard Terms and Conditions is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, such
provision shall be reformed, if possible, to the extent necessary to render it
legal, valid and enforceable, or otherwise deleted, and the remainder of these
Standard Terms and Conditions shall not be affected except to the extent
necessary to reform or delete such illegal, invalid or unenforceable provision.
  12.   HEADINGS       The headings preceding the text of the sections hereof
are inserted solely for convenience of reference, and shall not constitute a
part of these Standard Terms and Conditions, nor shall they affect its meaning,
construction or effect.

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13.   FURTHER ASSURANCES       Each party shall cooperate and take such action
as may be reasonably requested by another party in order to carry out the
provisions and purposes of these Standard Terms and Conditions.   14.   BINDING
EFFECT       These Standard Terms and Conditions shall inure to the benefit of
and be binding upon the parties hereto and their respective permitted heirs,
beneficiaries, successors and assigns.   15.   ELECTRONIC DELIVERY       By
executing the Grant Notice, the Grantee hereby consents to the delivery of
information (including, without limitation, information required to be delivered
to the Grantee pursuant to applicable securities laws) regarding the Company and
its subsidiaries, the Plan, and the Performance RSUs via Company web site or
other electronic delivery.   16.   SECTION 409A       The Award shall be
administered pursuant to the requirements of Section 409A of the Code. For
purposes hereof, “separation from service” shall have the meaning specified in
Section 409A of the Code and the regulations thereunder. To the extent required
by Section 409A of the Code, any payment hereunder to a Grantee is a “specified
employee” shall be delayed until six months following such Grantee’s separation
from service.   17.   DEFINITIONS [Examples of Performance Goal and Related
Definitions]       Total Shareholder Return: For purposes of Total Shareholder
Return, the following terms shall have the following meanings:      
     “Relative Total Shareholder Return” for the Performance Period means the
Company’s Total Shareholder Return, as compared to the S&P 500 Index Total
Shareholder Return. See Exhibit A for examples of this calculation. For this
purpose the Total Shareholder Return shall be computed by Standard and Poor’s.  
         “Total Shareholder Return” shall mean the total shareholder return of
the Company and for the S&P 500 Index for the Performance Period as determined
by Standard and Poor’s after the Performance Period using the same or materially
similar criteria used by Standard and Poor’s in preparing the stock performance
graph included each year in the Company’s public filings (Form 10-K or proxy
statement, as applicable).

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    Return on Investment: For purposes of Return on Investment, the following
terms shall have the following meanings:            “Annual Pre-Tax Income” for
a period of four consecutive quarters means the sum of quarterly homebuilding
income (loss) before income taxes (including corporate general and
administrative expenses) during the four quarters of the Company’s fiscal year.
           “Annual Return on Investment” or “Annual ROI” for a period of four
consecutive quarters means the Annual Pre-Tax Income for the four quarters of
the Company’s fiscal year divided by the Annual Total Assets for the four
quarters of the Company’s fiscal year.            “Annual Total Assets” for a
period of four consecutive quarters of the Company’s fiscal year means the
average of the beginning balance of total inventories, excluding land inventory
not owned, as of the end of the quarter immediately preceding the first quarter
(i.e., September 30, 2010) and as of the end of each of the four quarters of the
Company’s fiscal year (i.e., December 31st, March 31st, June 30th and
September 30th).            “Performance Period Return on Investment” or
“Performance Period ROI” means the sum of (1) the Annual ROI for the four
consecutive quarters ending September 30, 2011, and (2) the Annual ROI for the
four consecutive quarters ending September 30, 2012.            “Relative Return
on Investment” or “Relative ROI” means the Performance Period ROI of the
Company, compared to the other members of the Homebuilding Peer Group.      
SG&A Containment: For purposes of SG&A Containment or SG&A, the following terms
shall have the following meanings:            “SG&A Containment” or “SG&A” means
consolidated homebuilding selling, general and administrative expense (including
corporate general and administrative expenses) as a percent of consolidated
homebuilding revenue determined from the Company’s or from a Homebuilding Peer
Group member’s, as applicable, Consolidated Statements of Operations (or
equivalent statement or disclosure in a publicly filed Form 10-K or Form 10-Q),
for the Performance Period.            “Relative SG&A Containment” means the
SG&A Containment (of the Company and each member of the Homebuilding Peer Group,
determined on an individual basis as applicable), as compared to and ranked with
the other members of the Homebuilding Peer Group.

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    Gross Profit: For purposes of Gross Profit, the following terms shall have
the following meanings:            “Gross Profit” means gross profit
(homebuilding revenue minus homebuilding cost of sales, including impairments
and related write-off costs) divided by homebuilding revenue (expressed as a
percentage) as reported in the Consolidated Statements of Operations (or
equivalent statement or disclosure in a publicly filed Form 10-K or Form 10-Q),
for the Performance Period, expressed in percentage terms.            “Relative
Gross Profit” means the Gross Profit (of the Company and each member of the
Homebuilding Peer Group, determined on an individual basis as applicable), as
compared to and ranked with the other members of the Homebuilding Peer Group.  
    Other Definitions:            “Code” means the Internal Revenue Code of
1986, as amended, and the rulings, regulations and other guidance thereunder.  
         “Homebuilding Peer Group” means the companies listed on Exhibit B. If a
member of the Peer Group is acquired or is otherwise a party to a corporate
transaction and no longer exists as a separate entity, or if its common stock is
delisted, the ranking of the ROI, SG&A and GP Performance Goals of the
Homebuilding Peer Group will be determined for the performance period
retroactively to October 1, 2010, without such former peer group member.      
     “Performance Period” means the 2-year period (8 quarters or 24 months)
beginning October 1, 2010 and ending September 30, 2012. In comparing results of
the Company with the performance of the other companies in the Homebuilding Peer
Group, there shall be used the fiscal quarter that corresponds to the same
fiscal quarter of the Company, or if there is not a comparable period, then the
fiscal quarter ending most closely before a fiscal quarter of the Company and,
in the case of fiscal year computations, there shall be used the four fiscal
quarters ending at or most closely preceding the fiscal year of the Company;
provided that the performance metrics will be compared to those of the Company’s
Homebuilding Peer Group based on publicly available information of the
Homebuilding Peer Group at September 30, 2011, and 2012, as applicable.      
     “Retirement” has the meaning set forth in the Plan or in a manner
consistent with the Company’s other incentive plans or such date as the
Committee shall approve.            “Disability” has the meaning set forth in
the Plan or in a manner consistent with the Company’s other incentive plans or
such date as the Committee shall approve.   (a)   Rules of Construction. All
references to Sections refer to sections in this Award. The titles to sections
of this Award are for convenience of reference only and, in the case of
conflict, the text of this Award, rather than the titles, shall control.

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EXHIBIT A
Examples of Total Shareholder Return Rankings
Company compared to S&P 500 Index
Example 1: If after the Performance Period the S&P 500 Index had a Total
Shareholder Return of 10% and DHI had a Total Shareholder Return of 10% then the
ranking payout on this TSR Performance Goal would be equal to the Target RSUs of
25,000.
Example 2: If after the Performance Period the S&P 500 Index had a Total
Shareholder Return of 10% and DHI had a Total Shareholder Return of 5% then the
ranking payout on this TSR Performance Goal would equal to 12,500 RSUs (25,000
minus 12,500).
Example 3: If after the Performance Period the S&P 500 Index had a Total
Shareholder Return of 10% and DHI had a Total Shareholder Return of 14% then the
ranking payout on this TSR Performance Goal would equal to 35,000 RSUs (25,000
plus 10,000).
Example 4: If after the Performance Period the S&P 500 Index had a Total
Shareholder Return of 10% and DHI had a Total Shareholder Return of 20% then the
ranking payout on this TSR Performance Goal would equal to 50,000 RSUs (25,000
plus 25,000).
Example 5: If after the Performance Period the S&P 500 Index had a Total
Shareholder Return of -5% and DHI had a Total Shareholder Return of -5% then the
ranking payout on this TSR Performance Goal would equal to 25,000 RSUs (equal to
Target).
Example 6: If after the Performance Period the S&P 500 Index had a Total
Shareholder Return of -4% and DHI had a Total Shareholder Return of -6% then the
ranking payout on this TSR Performance Goal would equal to 20,000 RSUs (25,000
minus 5,000).
Example 7: If after the Performance Period the S&P 500 Index had a Total
Shareholder Return of -1% and DHI had a Total Shareholder Return of 0%
(flat) then the ranking payout on this TSR Performance Goal would equal to
27,500 RSUs (25,000 plus 2,500).
Example 8: If after the Performance Period the S&P 500 Index had a Total
Shareholder Return of -1% and DHI had a Total Shareholder Return of 1% then the
ranking payout on this TSR Performance Goal would equal to 30,000 RSUs (25,000
plus 5,000).

A-1

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EXHIBIT B
MEMBERS OF HOMEBUILDING PEER GROUP

    Peer Group for Operating Performance Metrics (ROI, SG&A and GP):

     
Beazer Homes USA
  Meritage Homes Corp
Hovnanian Enterprises
  NVR, Inc.
KB Home
  Pulte Homes
Lennar Corporation
  Ryland Group
M.D.C. Holdings
  Toll Brothers

    Total of ten companies in Homebuilder Peer Group related to ROI, SG&A and GP
(eleven including the Company (DHI)).

B-1

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EXHIBIT C
EXAMPLES OF FINAL RANKING CALCULATIONS
(to follow)

C-1