Exhibit 4.2


 


MERITAGE HOMES CORPORATION


RESTRICTED STOCK AGREEMENT


 


This Restricted Stock
Agreement (“Agreement”) is between Meritage Homes Corporation (“Company”),
and                                           
(“Grantee”), as of the       day of                   ,
2006 (“Date of Grant”).


 


RECITALS


 


A.                                   The Company has adopted the Meritage Homes
Corporation 2006 Stock Incentive Plan (“Plan”) to provide incentives to
attract and retain those individuals whose services are considered unusually
valuable by providing them an opportunity to own stock in the Company.


 


B.                                     The Company believes that entering into this
Agreement with the Grantee is consistent with those purposes. Any capitalized
term not defined in this Agreement will have the meaning as set forth in the
Plan.


 


NOW, THEREFORE, the Company
and Grantee agree as follows:


 


AGREEMENT


 


1.                                      GRANT OF RESTRICTED SHARES. Subject to the terms of this Agreement and
Article 10 of the Plan, the Company grants to Grantee                   
shares (“Restricted Shares”) of the Company’s non-voting common stock (“Stock”).
The delivery of any document evidencing the Restricted Shares is subject to the
provisions of Section 10.4 of the Plan.


 


2.                                      RIGHTS OF GRANTEE. Subject to the provisions of this Agreement
and the Plan, as of the Date of Grant, Grantee shall be a stockholder with
respect to all of such Restricted Shares and shall have all of the rights of a
stockholder in the Company with respect to the Restricted Shares.


 


3.                                      RESTRICTIONS ON RESTRICTED
SHARES.


 


A.                                    Limitations on Transfer. Grantee agrees to not sell, transfer,
pledge, exchange, hypothecate, grant any security interest in, or otherwise
dispose of, any Restricted Shares before the date on which the restrictions
lapse under Section 4.A., or enter into any agreement or make any commitment to
do so. Any attempted sale, transfer, pledge, exchange, hypothecation or
disposition of the Restricted Shares shall be null and void, and the Company
shall not recognize or give effect to such transaction on its books and records
(including the books and records of the Company’s transfer agent) or recognize
the person or persons to whom such sale, transfer, pledge, exchange,
hypothecation or disposition has been made as the legal or beneficial owner of
the Restricted Shares.


 


B.                                    Permitted Transfers. Notwithstanding 3.A., or any other
provision of this Agreement, Grantee may, upon the approval of the Committee,
assign and transfer some or all of the Restricted Shares as provided in Section
12.4(b) of the Plan, provided the transferee remains subject to the
restrictions and limitations in Section 3.A.


 


4.                                      LAPSE OF RESTRICTIONS.


 


A.                                    Schedule. Subject to the other conditions in this
Agreement, the restrictions on the Stock set forth in Section 3 will lapse
under the following schedule:


 


Notwithstanding the above,
(i) the restrictions on the Stock shall lapse upon a Change of Control as
provided in Section 12.7 of the Plan, and (ii) if the Grantee’s service is
terminated for any reason (whether with or


 

















 


without cause) the Grantee
will be required to transfer all shares of Stock (that remain subject to
restrictions under Section 3) back to the Company for no consideration.


 


B.                                    Condition That Must be
Satisfied Before Restrictions Lapse. Except as set forth in Section 4.A above, the restrictions on the
Stock will not lapse unless the Grantee remains in the service of the Company
(or a Subsidiary) as of the date the restrictions lapse in accordance with the
above schedule.


 


C.                                    Issuance of Certificates. The Company shall only be required to issue
stock certificates representing those Restricted Shares on which restrictions
have lapsed in accordance with the provisions of this Agreement. Within 60 days
after restrictions on some or all of the Stock have lapsed, the Company shall
issue to Grantee a stock certificate representing those shares of Stock that
have become unrestricted.


 


5.                                      ACKNOWLEDGEMENTS AND
REPRESENTATION OF GRANTEE.
In connection with Grantee’s receipt of the Restricted Shares, Grantee hereby
acknowledges the following:


 


A.                                    Further Limitations on
Disposition. Grantee
understands and acknowledges that Grantee may not make any sale, assignment,
transfer or other disposition (including transfer by gift or operation of law)
of all or any portion of the Restricted Shares except in accordance with this
Agreement. Further, Grantee agrees to make no sale, assignment, transfer or
other disposition of all or any portion of the Restricted Shares unless there
is then in effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with such
registration statement, or Grantee has obtained an opinion of the Company’s
counsel that such disposition does not require registration under the
Securities Act of 1933.


 


B.                                    Section 83(b) Election. Grantee understands that Section 83 of the
Internal Revenue Code of 1986, as amended (“Code”) taxes as ordinary
income the difference between the amount paid for the Restricted Shares and the
Fair Market Value of the Restricted Shares as of the date any restrictions on
the Restricted Shares lapse. In this context, “restriction” means the
restrictions set forth in Section 3 hereof. Grantee understands that Grantee
may elect to be taxed at the time the Restricted Shares are granted rather than
when and as the Restricted Shares vest by filing an election under
Section 83(b) of the Code with the Internal Revenue Service within thirty
(30) days from the Date of Grant. Grantee understands that failure to make this
filing timely shall result in the recognition of ordinary income by Grantee on
the Fair Market Value of the Restricted Shares at the time such restrictions
lapse.


 


THE GRANTEE
ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY, AND NOT THE
COMPANY’S, TO FILE TIMELY THE ELECTION UNDER SECTION 83(b) OF THE CODE,
EVEN IF THE GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS
FILING ON THE GRANTEE’S BEHALF.


 


6.                                      FEDERAL AND STATE TAXES. Grantee may incur certain liabilities for
Federal, state, or local taxes in connection with the grant of the Restricted
Shares hereunder, and the Company may be required by law to withhold such taxes.
Upon determination of the year in which such taxes are due and the
determination by the Company of the amount of taxes required to be withheld, Grantee
shall pay an amount equal to the amount of Federal, state, or local taxes
required to be withheld to the Company. If Grantee fails to make such payment
in a timely manner, the Company may withhold and set-off against compensation
payable to Grantee the amount of such required payment.


 


7.                                      ADJUSTMENT OF SHARES. The number of Restricted Shares issued to
Grantee pursuant to this Agreement shall be adjusted by the Committee pursuant
to Article 13 of the Plan, in its discretion, in the event of a change in the
Company’s capital structure.


 


8.                                      AMENDMENT OF AGREEMENT. This Agreement may only be amended with the
written approval of Grantee and the Company.


 


2

















 


9.                                      GOVERNING LAW. This Agreement shall be governed in all
respects, whether as to validity, construction, capacity, performance, or
otherwise, by the laws of the State of Maryland, without regard to
conflicts-of-laws principles that would require the application of any other
law.


 


10.                               SEVERABILITY. If any provision of this Agreement, or the
application of any such provision to any person or circumstance, is held to be
unenforceable or invalid by any court of competent jurisdiction or under any
applicable law, the parties hereto shall negotiate an equitable adjustment to
the provisions of this Agreement with the view to effecting, to the greatest
extent possible, the original purpose and intent of this Agreement, and in any
event, the validity and enforceability of the remaining provisions of this
Agreement shall not be affected thereby.


 


11.                               ENTIRE AGREEMENT. This Agreement constitutes the entire,
final, and complete agreement between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements, promises,
understandings, negotiations, representations, and commitments, both written
and oral, between the parties hereto with respect to the subject matter hereof.
Neither party hereto shall be bound by or liable for any statement,
representation, promise, inducement, commitment, or understanding of any kind
whatsoever not expressly set forth in this Agreement.


 


IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized representative and Grantee has signed this Agreement, in each
case as of the day and year first written above.


 


	
   

  	
  MERITAGE
  HOMES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
  GRANTEE:

  
	
   

  	
   

  
	
   

  	
   

  



 


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