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                                                                  EXHIBIT 10.2
                            DEFERRED BONUS AGREEMENT

                                 2001 AWARD YEAR



         THIS DEFERRED BONUS AGREEMENT (the "Agreement") is entered into as of
May 1, 2002, by Larry W. Seay (the "Executive") and Meritage Corporation, an
Arizona corporation (the "Company").

1.       PURPOSE.

         The purpose of this Agreement is to reward Executive for his service
for the Company.

2.       COMPANY CONTRIBUTION.

         The Company agrees to make a "Company Contribution" of $45,000 to the
Deferred Bonus Account established pursuant to Section 3 effective as of
December 31, 2001. The purpose of this Company Contribution is to further
compensate Executive for his many years of service to the Company as a tool to
retain the valuable services of the Executive.

3.       DEFERRED COMPENSATION ACCOUNT.

         The Company shall maintain a bookkeeping account (the "Deferred Bonus
Account") to which it shall credit the Company Contribution in accordance with
Section 2. Interest shall be credited to the Deferred Bonus Account in
accordance with Section 5, below. The Deferred Compensation Account is a
bookkeeping account only and Executive shall not have any claim to any
particular assets of the Company.

4.       VESTING.

         (a) As of the date of this Agreement, the Company Contribution credited
to Executive's Deferred Bonus Account shall be unvested and subject to
forfeiture on the termination of Executive's employment for any reason prior to
January 1, 2005. If Executive continues to be employed by the Company on and
through December 31, 2004, Executive shall be fully vested in amounts credited
to his Deferred Bonus Account and his rights and interests therein shall not be
forfeitable.

         (b) Not withstanding the previous paragraph 4(a), if the Executive is
terminated without "cause", upon a "change of control", or upon the "death" or
"disability" of Executive, (as defined in the Executives' Employment Agreement),
all amounts due under this Agreement shall fully vest and shall be payable
within 30 days of the Executives' termination.

5.       INTEREST.

         Each December 31, the Company shall credit the Deferred Bonus Account
with interest calculated at an annual rate equal to 1.5% plus the prime rate as
announced in the Wall Street Journal on the first business day of each year
compounded annually (or, if no prime rate is announced in the Wall Street
Journal on such date, then on the first day of each year in which the prime rate
is reported in the Wall Street Journal), or such other greater interest rate as
determined by the Company in its discretion.


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6.       DISTRIBUTION OF BENEFITS.

         (a) DISTRIBUTION OF BENEFITS. Payment to Executive shall occur within
thirty (30) days of the effective date of Executive's vesting in his Deferred
Bonus Account. For purposes of determining the distributable amount, the
Deferred Bonus Account shall be valued through the day prior to the day on which
the Deferred Bonus Account is distributed, less any claim, debt, reimbursement,
recoupment, or offset the Company may have against Executive.

         (b) IN-SERVICE DISTRIBUTIONS. Executive shall have no right to borrow
money from his Deferred Bonus Account nor shall he be allowed to receive a
distribution except as provided above.

         (c) METHOD OF DISTRIBUTION. Distribution of benefits shall be made in
one cash lump sum.


7.       INALIENABILITY OF BENEFITS.

         (a) GENERAL PROHIBITION. Executive, nor creditors of Executive, shall
have any right to assign, pledge, hypothecate, anticipate or in any way create a
lien upon Executive's interest created under this Agreement. All payments to be
made to Executive shall be made only upon his personal receipt or endorsement,
and no interest under this Agreement shall be subject to assignment or transfer
or otherwise be alienable, either by voluntary or involuntary act or by
operation of law or equity, or subject to attachment, execution, garnishment,
sequestration, levy or other seizure under any legal, equitable or other
process, or be liable in any way for the debts or defaults of Executive.

         (b) PERMITTED ARRANGEMENTS. This Section shall not preclude
arrangements for the withholding of applicable taxes from payments under this
Agreement, or arrangements for direct deposit of benefit payments to an account
in a bank, savings and loan association or credit union (provided that such
arrangement is not part of an arrangement constituting an assignment or
alienation).

8.       BINDING NATURE OF AGREEMENT.

         This Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of any and all interested parties,
present and future.

9.       NATURE OF PAYMENTS.

         Executive shall, for the purpose of this Agreement, be treated as
general creditors of the Company. Nothing in this Agreement or any action taken
pursuant to this Agreement shall create or be construed to create a fiduciary
relationship between the Company and Executive, or any other person.

10.      DISPUTE RESOLUTION.

         All claims, disputes and other matters in question between the parties
arising under this Agreement shall, unless otherwise provided herein, be
resolved in accordance with the dispute resolution provisions set forth in
Executive's Employment Agreement. If no such agreement is

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in effect, or if the Employment Agreement in effect at the time of Executive's
termination of employment does not include a dispute resolution provision, all
claims, disputes and other matters in question between the parties arising under
this Agreement shall be decided in accordance with the dispute resolution
provisions stated below:

         (a) MEDIATION. Any and all disputes arising under, pertaining to or
touching upon this Agreement, or the statutory rights or obligations of either
party hereto, shall, if not settled by negotiation, be subject to non-binding
mediation before an independent mediator selected by the parties pursuant to
Section 10(d). Notwithstanding the foregoing, both Executive and Company may
seek preliminary judicial relief if such action is necessary to avoid
irreparable damage during the pendency of the proceedings described in this
Section 10. Any demand for mediation shall be made in writing and served upon
the other party to the dispute, by certified mail, return receipt requested, at
the address specified in the signature blocks of this agreement. The demand
shall set forth with reasonable specificity the basis of the dispute and the
relief sought. The mediation hearing will occur at a time and place convenient
to the parties within 30 days of the date of selection or appointment of the
mediator.

         (b) ARBITRATION. In the event that the dispute is not settled through
mediation, the parties shall then proceed to binding arbitration before an
independent arbitrator selected pursuant to Section 10(d). The mediator shall
not serve as the arbitrator. EXCEPT AS PROVIDED IN SECTION 10(a), ALL DISPUTES
INVOLVING ALLEGED UNLAWFUL EMPLOYMENT DISCRIMINATION, TERMINATION BY ALLEGED
BREACH OF CONTRACT OR POLICY, OR ALLEGED EMPLOYMENT TORT COMMITTED BY COMPANY OR
A REPRESENTATIVE OF COMPANY, INCLUDING CLAIMS OF VIOLATIONS OF FEDERAL OR STATE
DISCRIMINATION STATUTES OR PUBLIC POLICY, SHALL BE RESOLVED PURSUANT TO THIS
SECTION 10 AND THERE SHALL BE NO RECOURSE TO COURT, WITH OR WITHOUT A JURY
TRIAL. The arbitration hearing shall occur at a time and place convenient to the
parties within 90 days of selection or appointment of the arbitrator, or as
otherwise agreed to. The arbitration shall be governed by the Federal
Arbitration Act, 9 U.S.C. Sections 1-16 and the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association
("AAA") in effect on the date of the first notice of demand for arbitration.
Notwithstanding any provisions in such rules to the contrary, the arbitrator
shall issue findings of fact and conclusions of law, and an award, within 15
days of the date of the hearing unless the parties otherwise agree.

         (c) DAMAGES. In case of breach of contract or policy, damages shall be
limited to contract damages. In cases of discrimination claims prohibited by
statute, the arbitrator may direct payment consistent with the applicable
statute. In cases of employment tort, the arbitrator may award punitive damages
if proved by clear and convincing evidence. Issues of procedure, arbitrability,
or confirmation of award shall be governed by the Federal Arbitration Act, 9
U.S.C. Sections 1-16, except that court review of the arbitrator's award
shall be that of an appellate court reviewing a decision of a trial judge
sitting without a jury.

         (d) SELECTION OF MEDIATOR OR ARBITRATOR. The parties shall select the
mediator and arbitrator from a panel list made available by the AAA. If the
parties are unable to agree to a mediator or an arbitrator within 10 days of
receipt of a demand for mediation or arbitration, the mediator or arbitrator
will be chosen by alternatively striking from a list of five mediators or
arbitrators obtained by Company from the AAA. Executive shall have the first
strike.


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         (e) FEES AND EXPENSES. The fees of the AAA and Mediation/Arbitration
shall be borne equally by the parties, unless ordered otherwise by the
Arbitrator. Each party shall bear its own attorney's fees and other expenses,
unless ordered otherwise by the Arbitrator.

11.      VALIDITY.

         The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

12.      NO EMPLOYMENT OR SERVICE CONTRACT.

         Except as may be otherwise provided in the Executive's Employment
Agreement, nothing in this Agreement shall confer upon Executive any right to
continue in the service of the Company (or any parent or subsidiary corporation
of the Company employing or retaining Executive) for any period of time.

13.      AMENDMENT AND TERMINATION.

         Any amendment, modification, change, or termination of this Agreement
must be done so in writing and signed by both parties.

14.      GOVERNING LAW.

         The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the State of Arizona.

15.      COUNTERPARTS.

         This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original, but all of which together will constitute one
and the same instrument.

16.      EFFECT ON EMPLOYMENT AGREEMENT.

         This Agreement supplements, and does not replace, Executive's
Employment Agreement as it may be amended or replaced from time to time. If
there are any conflicts between the provisions of this Agreement and Executive's
Employment Agreement, the provisions of this Agreement shall control.

17.      ENTIRE AGREEMENT.

         This Agreement sets forth the entire agreement between Executive and
the Company concerning the subject matter discussed in this Agreement and
supersedes all prior agreements, promises, covenants, arrangements,
communications, and representations or warranties, whether written or oral, by
any officer, employee, or representative of the Company. Any prior agreements or
understandings with respect to the subject matter set forth in this Agreement
are hereby terminated and canceled.


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         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.


                                   MERITAGE CORPORATION

                                   6613 N. Scottsdale Rd., Suite 200
                                   Scottsdale, AZ 85250


                                   By:
                                      ----------------------------------------

                                   Its:
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                                   EXECUTIVE


                                   Larry W. Seay
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                                   Address:
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