EX-10.26






Exhibit 10.26




Technical Olympic USA, Inc.




Annual and Long-Term Incentive Plan




Director Non-Qualified Stock Option Agreement




AGREEMENT made as of [insert date of grant], between Technical Olympic USA, Inc., a Delaware
corporation (the “Company”), and      (“Director”).



To carry out the purposes of the Technical Olympic USA, Inc. Annual and Long-Term Incentive
Plan (the “Plan”) and the Policy for Compensation of Outside Directors, by affording Director the
opportunity to purchase shares of common stock, par value $.01, (“Stock”) of Technical Olympic USA,
Inc. (the “Company”) in recognition of Director’s significant duties and responsibilities as a
member of the Company Board of Directors, the Company and Director hereby agree as follows:



1. Grant of Option. The Company hereby irrevocably grants to Director the right and
option (“Option”) to purchase all or any part of an aggregate of      shares of Stock on the
terms and conditions set forth herein and in the Plan, which Plan is incorporated herein by
reference as a part of this Agreement. In the event of any conflict between the terms of this
Agreement and the Plan, the Plan shall control. Capitalized terms used but not defined in this
Agreement shall have the meaning attributed to such terms under the Plan, unless the context
requires otherwise.



2. Purchase Price. The purchase price per share of Stock purchased pursuant to the
exercise of this Option shall be $     .



3. Exercise of Option. This Option shall vest ratably over a twelve (12) month period
on a monthly basis (i.e., 1/12th of total Option shall vest on each monthly anniversary
of the date hereof). Director may exercise vested Option rights on or after each vesting date in
accordance with the terms of this Agreement. This Option may be exercised, by written notice to
the Company at its principal executive office addressed to the attention of its Secretary (or such
other officer or employee of the Company as the Company may designate from time to time), at any
time and from time to time after the date of grant hereof, subject, however, to the following
provisions:




(a) If Director’s membership on the Board of Directors ceases due to death, disability,
incapacity, or in the event of a Change of Control, this Option shall immediately vest in
its entirety and all Option rights may be exercised at any time by Director or Director’s
guardian or legal representative (or by Director’s estate or the person who acquires this
Option by will or the laws of descent and distribution or otherwise by reason of the death
of Director). For purposes of this Agreement, “Change of Control” shall have the meaning
set forth on Exhibit A attached hereto.




(b) If Director’s membership on the Board of Directors ceases due to voluntary
resignation prior to completion of such Director’s then-current elected term, this Option
may be exercised at any time during the 90-day period following such cessation of service by
Director or by Director’s guardian or legal representative (or by Director’s estate or the
person who acquires this Option by will or the laws of descent and distribution or otherwise
by reason of the death of Director if Director dies during such 90-day period), but in each
case only as to the vested number of shares of Stock, if any, that Director was entitled to
purchase hereunder as of the date Director’s membership on the Board of Directors so
terminates.




(c) Notwithstanding the foregoing, there is no minimum or maximum number of shares of
Stock that must be purchased by Director upon exercise of this Option. Instead, Director
may, at any time and from time to time, purchase any number of shares of Stock that are then
vested and exercisable according to the provisions of this Agreement.




(d) Notwithstanding the foregoing, this Option shall not be exercisable in any event
after the expiration of 10 years from the date of grant hereof.



The purchase price of the shares of Stock as to which this Option is exercised shall be paid
in full at the time of exercise (a) in cash (including by check acceptable to the Company), (b) if
the shares are readily tradable on a national securities market or exchange, through a “cashless
broker exercise” procedure in accordance with a program established by the Company, or (c) any
combination of the foregoing. No fraction of a share shall be issued by the Company upon exercise
of an Option. Unless and until a certificate or certificates representing such shares shall have
been issued by the Company to Director, Director (or the person permitted to exercise this Option
in the event of Director’s death) shall not be or have any of the rights or privileges of a
shareholder of the Company with respect to shares acquirable upon an exercise of this Option.



4. Withholding of Tax. To the extent that the exercise of this Option or the
disposition of shares acquired by exercise of this Option results in wages to Director for federal,
state or local tax purposes, Director shall deliver to the Company at the time of such exercise or
disposition such amount of money, if any, as the Company may require to meet its minimum
withholding obligations under applicable tax laws or regulations. No exercise of this Option shall
be effective until Director (or the person entitled to exercise this Option, as applicable) has
made arrangements approved by the Company to satisfy all applicable minimum tax withholding
requirements of the Company.



Director agrees that the shares which Director may acquire by exercising this Option will not
be sold or otherwise disposed of in any manner which would constitute a violation of any applicable
federal or state securities laws. Director also agrees that (i) the certificates representing the
shares purchased under this Option may bear such legend or legends as the Committee deems
appropriate in order to assure compliance with applicable securities laws, (ii) the Company may
refuse to register the transfer of the shares purchased under this Option on the stock transfer
records of the Company if such proposed transfer would in the opinion of counsel satisfactory to
the Company constitute a violation of any applicable securities law, and (iii) the Company may give
related instructions to its transfer agent, if any, to stop registration of the transfer of the
shares purchased under this Option.



5. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
any successors to the Company and all persons lawfully claiming under Director.



6. Entire Agreement. This Agreement together with the attached Exhibit A constitutes
the entire agreement of the parties with regard to the subject matter hereof, and contains all the
covenants, promises, representations, warranties and agreements between the parties with respect to
the Option granted hereby. Without limiting the scope of the preceding sentence, all prior
understandings and agreements, if any, among the parties hereto relating to the subject matter
hereof are hereby null and void and of no further force or effect. Any modification of this
Agreement shall be effective only if it is in writing and signed by both Director and an authorized
officer of the Company.



7. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflicts of laws principles thereof.



IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and Director has executed this Agreement, all effective as of the day and year
first above written.




TECHNICAL OLYMPIC USA, INC.




By:




Name:




Title:




DIRECTOR




[ Name ]



Exhibit A: Change of Control



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EXHIBIT A





	 	 	“Change of Control” means the occurrence of any of the following events, each of which
shall be determined independently of the others:





(a) any “Person” (as defined below) becomes a “beneficial owner” (as such term is used in Rule
13d-3 promulgated under the Exchange Act) of forty percent (40%) or more of the stock of any member
of the Consolidated Group (as defined below) entitled to vote in the election of directors. For
purposes of this Exhibit A, the term “Person” is used as such term is used in Sections 13(d) and
14(d) of the Exchange Act; provided, however that the term shall not include any member of the
Consolidated Group, any trustee or other fiduciary holding securities under an employee benefit
plan of any member of the Consolidated Group, or any corporation owned, directly or indirectly, by
the shareholders of any member of the Consolidated Group;



(b) shareholders of any member of the Consolidated Group adopt a plan of complete or
substantial (eighty-five percent (85%) or more) liquidation or an agreement providing for the
distribution of all or substantially all of the assets of such member;



(c) any member of the Consolidated Group is party to a merger, consolidation, other form of
business combination or a sale of all or substantially all (eighty-five percent (85%) or more) of
its assets, unless the business of such member is continued following any such transaction by a
resulting entity (which may be, but need not be, such member) and the shareholders of such member
immediately prior to such transaction (the “Prior Shareholders”) hold, directly or indirectly, at
least forty percent (40%) of the voting power of the resulting entity (there being excluded from
the voting power held by the Prior Shareholders, but not from the total voting power of the
resulting entity, any voting power received by Affiliates of a party to the transaction (other than
such member) in their capacities as shareholders of such member); provided, however, that a merger
or consolidation effected to implement a recapitalization of such member (or similar transaction)
in which no Person acquires more than thirty percent (30%) of the combined voting power of such
member’s then outstanding securities shall not constitute a Change in Control; or



(d) any member of the Consolidated Group is a subject of a “Rule 13e-3 transaction” as that
term is defined in Exchange Act Rule 13e-3, and the first purchase has been made pursuant to such
transaction.



Notwithstanding the foregoing, if, immediately after the occurrence of any event enumerated
above, the Continuing Directors control the majority of the Board of Directors of the Company (or,
in the case of any merger or combination in which the Company is not the surviving entity, continue
to constitute a majority of the board of directors of such successor entity), such event shall not
constitute a Change of Control for purposes of this Agreement until such time as the Continuing
Directors no longer constitute a majority of the Board of Directors of the Company (or the
successor entity, if applicable). “Continuing Directors” for this purpose means the members of the
Board of Directors of the Company on the Effective Date, provided that any person becoming a member
of the Board of Directors of the Company subsequent to such date whose election or nomination for
election was supported by a majority of the directors who at the time of the election or nomination
for election comprised the Continuing Directors shall be considered to be a Continuing Director.



“Consolidated Group” shall mean (i) the group of companies composed of Technical Olympic,
Inc. or the Company, and (ii) any successor or surviving company of any of the foregoing entities.




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