Exhibit
10.1


 


C.
TIMOTHY WHITE EMPLOYMENT AGREEMENT


 


This EMPLOYMENT AGREEMENT (the “Agreement”) is effective as of September
30, 2005 by and between MERITAGE HOMES
CORPORATION, a Maryland corporation (the “Company”) and C. Timothy
White, an individual (“Executive”).


RECITALS


WHEREAS,
the Company desires to employ C. Timothy White as its Executive Vice President
and General Counsel, and Executive desires to provide services to the Company,
in accordance with the terms, conditions and provisions of this Agreement;


NOW
THEREFORE, in consideration of the covenants and mutual agreements set forth
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in reliance upon the representations,
covenants and mutual agreements contained herein, the Company and Executive
agree as follows:


1.             Employment.  Subject to the terms and conditions of this
Agreement, the Company agrees to employ Executive as Executive Vice President
and General Counsel of the Company, and Executive agrees to diligently perform
the duties associated with such positions. 
Executive will report directly to the Co-Chairman and Co-Chief Executive
Officers.  Executive will devote
substantially all of his business time, attention and energies to the business
of the Company and will comply with the charters, policies and guidelines
established by the Company from time to time applicable to its senior
management executives.


2.             Term. 
Executive will be employed under this Agreement until December 31, 2007,
unless Executive’s employment is terminated earlier pursuant to Section 6.  The Agreement will renew for additional one
year periods (the “Renewal Term(s)”),
unless on or before February 15, 2007 (or February 15 of any
Renewal Term), either Executive or the Company notifies the other in writing that it wishes
to terminate employment under this Agreement at the end of the term then in
effect.


3.             Salary. 
The Company will pay Executive a base salary (the “Base Salary”) at the annual rate of
$500,000.  The Base Salary will increase
5% on January 1, 2007 and on January 1 of each Renewal Term
thereafter.  The Base Salary will be
payable in accordance with the payroll practices of the Company in effect from
time to time.  The Base Salary may be
raised, but not lowered, without Executive’s consent.


4.             Incentive Compensation.


                A.            Bonus.


                Executive
will be entitled to incentive compensation as specified in Exhibit A hereto (the “Bonus”). 
The Bonus will be due and payable in accordance with Exhibit A.


 





















 


                B.            Stock Options.


                During
this Agreement, commencing in 2005, the Company annually shall grant the
Executive options to acquire 15,000 shares (or equivalent consideration at the
discretion of the Board of Directors). 
The 2005 options will have an exercise price equal to the share price at
the close of trading on August 29, 2005. 
The options granted after 2005 will have an exercise price equal to the
fair market value on the date of grant as defined under the relevant plan.  Subject to the provisions hereof and
Executive’s Change of Control Agreement, the options will be on the same terms
and conditions as other standard option grants to other executives of the
Company.


5.             Executive Benefits.  During the term of this Agreement, Executive
will be entitled to reimbursement of reasonable and customary business
expenses.  The Company will also provide
to Executive during the term of this Agreement a $1,200 per month auto
allowance, $3,000,000 in term life insurance (or reimbursement for the premiums
paid by Executive for such policy), disability insurance with monthly benefits
of $20,000 in the event of Executive’s total disability (or reimbursement for
the premiums paid by Executive for such policy), and such other fringe benefits
and other Executive benefits as are regularly provided by the Company to its
senior management (e.g., health and life insurance, four weeks of annual paid
vacation (7 days in 2005), etc.); provided, however, that nothing herein shall
preclude the Company from amending or terminating any such other employee or
general executive benefit plans or programs.


6.             Termination.


A.                                  Voluntary Resignation by Executive (With
Good Reason) or Termination Without Cause by the Company.


(1)           If
Executive voluntarily terminates his employment with the Company with Good
Reason, or if the Company terminates Executive without Cause or if the Company
fails at any time to renew this Agreement as set forth in Section 2, (i) the
Company will be obligated to pay Executive’s Base Salary through the Date of
Termination; (ii) the Company will be obligated to pay any unpaid bonus for the
previous year, if any, and a pro rated amount of Executive’s bonus for the year
in which the Date of Termination occurs; (iii) the Company shall pay a
severance payment to Executive in an amount equal to 200% of Executive’s base
salary and 200% of Executive’s bonus for the previous fiscal year (the “Severance Payment”) provided that if a
Severance Payment is required before December 31, 2006, then the bonus
component of the Severance Payment shall be calculated based upon Exhibit A and
assuming an EBITDA figure of $500 million; and (iv) the Company shall pay
Executive’s COBRA premiums for the maximum period that the Company is required
to offer COBRA coverage as a matter of law. 
The amounts payable to Executive pursuant to Section 6A(1)(i) and
6A(1)(ii) shall be paid to Executive by check within 15 days of the Date of
Termination.  The Severance Payment shall
be paid to Executive by check within 15 days of the Waiver Deadline (as defined
below) unless Executive makes a Severance Payment/Restrictive Covenant Waiver
(as defined below).  Notwithstanding any
provisions contained in this Agreement, Executive shall have until the sixtieth
(60th) day following the Date of Termination (the “Waiver Deadline”)
to elect to waive the right to receive the Severance Payment in consideration
for the deletion of the Restrictive Covenant contained in Section 7A of this
Agreement (a “Severance Payment/ Restrictive Covenant Waiver”).  A


 


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Severance Payment/Restrictive Covenant Waiver shall be made
by Executive providing the Company with written notice thereof on or before the
Waiver Deadline.  If Executive timely
makes a Severance Payment/Restrictive Covenant Waiver, Executive will not be
entitled to receive the Severance Payment and the Restrictive Covenant
contained in Section 7A shall be deemed null and void.  If Executive fails to make a Severance
Payment/Restrictive Covenant Waiver on or before the Waiver Deadline, Executive
shall be deemed to have elected to receive the Severance Payment and to be
bound by the Restrictive Covenant contained in Section 7A.  Executive’s eligibility for the Severance
Payment under this Section is expressly conditioned upon his compliance with
the restrictions set forth in Section 7A of this Agreement.  If Executive engages in conduct that violates
Section 7A of this Agreement, then he will be conclusively deemed to have
elected not to receive the Severance Payment compensation under this Section of
this Agreement.  If Executive, after
receiving the Severance Payment engages in conduct that violates
Section 7A of this Agreement, then he will be obligated to remit the
Severance Payment to the Company.


(2)           Upon termination of Executive’s
employment pursuant to this Section 6A, any options previously granted to
Executive shall accelerate and automatically vest as if Executive remained
employed by the Company.


B.            Termination
upon Death or Disability.  If
Executive’s employment is terminated as a result of Executive’s death or
Disability, then the Company will be obligated to pay (i) Executive’s then
current Base Salary through the Date of Termination, (ii) any unpaid bonus for
the previous year and a pro rated amount of Executive’s Bonus for the year in
which the Date of Termination occurs, which amount shall be payable at the time
set forth in Exhibit A, and (iii) Executive’s COBRA premiums for the
period that the Company is required to offer COBRA coverage as a matter of
law.  In addition, upon such a
termination, the Executive’s options granted shall accelerate and become vested
without further action and, to the extent permitted under the plan’s governing
documents, Executive (or his heirs or estate) shall have a period of one year
from the Date of Termination to exercise such options.


C.                                    Voluntary Termination by Executive
(Without Good Reason) or Termination for Cause by the Company.


(1)           If the Executive resigns without Good
Reason, it being understood that Executive shall have the right to do so at any
time, or if the Company discharges Executive for Cause, then the Company will
be obligated to pay Executive’s Base Salary through the Date of Termination and
any unpaid bonus for the previous year and no bonus will be payable with respect
to the year in which the Date of Termination occurs.  Such amounts shall be payable to Executive
within 15 days of the Date of Termination.


 


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D.            Definitions. 
For purposes of this Agreement:


(1)           “Cause”
and “Good Reason” shall have the
meanings ascribed to them in the C. Timothy White Change of Control
Agreement (the “Change of Control Agreement”),
effective as of September 30, 2005.


(2)           “Date of Termination” shall mean (i) if this Agreement is
terminated as a result of Executive’s death, the date of Executive’s death,
(ii) if this Agreement is terminated by Executive, the date on which he
notifies the Company in writing, (iii) if this Agreement is terminated by the
Company for Disability, the date a notice of termination is given, (iv) if this
Agreement is terminated by the Company for Cause, the date a notice of
termination is given
to Executive by the Company, or (v) if this Agreement is terminated by the
Company without Cause, the date notice of termination is given to Executive by
the Company, and


(3)           “Disability”
shall mean a disability that results in Executive being medically unable to
fulfill his duties under this Agreement for six consecutive months.


E.             Procedures
for Notices of Termination.  The procedures
set forth in Section 10 (a), (b) and (d) of the Change of Control Agreement
shall apply under this Agreement in connection with a notice of termination as
to the kind of termination events described in those subsections.


7.             Restrictive Covenant.


A.            Subject
to the provisions of Section 6, above, Executive hereby covenants and
agrees that with respect to a termination of Executive’s employment which
entitles Executive to receive the Severance Payment, Executive will not, for a
period of six months from the Date of 
Termination, engage, directly or indirectly, either as an employee,
consultant or independent contractor, or agent, or in any other manner
participate in the ownership, management, operation, or control of any publicly
traded homebuilding company, which is competitive with the products offered or
sold by Company or its subsidiaries within any county in which Company or its
subsidiaries do business.  This
restrictive covenant will not in any way restrict Executive from activities
related in any way to the private practice of law, including, without
limitation, representation by Executive, as outside counsel of homebuilding
companies.


B.            Following the termination of
Executive’s employment pursuant to Section 6C, and subject to the provisions of
Section 6, above, Executive hereby covenants and agrees that for a period
of one year from the Date of Termination, Executive will not directly or
indirectly solicit for employment or hire (whether as an employee, consultant,
independent contractor, or otherwise) either any person who is an employee,
independent contractor or the like of the Company or any of its subsidiaries,
or any person who was an employee of the Company during Executive’s final year
of employment with the Company, unless Company gives its advance written
consent to such employment or offer of employment. Subject to the provisions of
Section 6, above, the covenants set forth in this Section shall begin as
of the date hereof and will survive the termination of employment under Section
6.


 


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8.             Non-Disclosure of Confidential Information.


A.            It
is understood that in the course of Executive’s employment with Company,
Executive will become acquainted with Company Confidential Information (as defined
below).  Executive recognizes that
Company Confidential Information has been developed or acquired at great
expense, is proprietary to the Company, and is and shall remain the exclusive
property of the Company.  Accordingly,
Executive agrees that he will not, disclose to others, copy, make any use of,
or remove from Company’s premises any Company Confidential Information, except
as Executive’s duties may specifically require, without the express written
consent of the Company, during Executive’s employment with the Company and
thereafter until such time as Company Confidential Information becomes
generally disclosed or known, or readily ascertainable by proper means by
persons unrelated to the Company.


B.            Upon
any termination of employment, Executive shall promptly deliver to the Company
the originals and all copies of any and all materials, documents, notes,
manuals, or lists containing or embodying Company Confidential Information, or
relating directly or indirectly to the business of the Company, in the
possession or control of Executive.


C.            Executive
hereby agrees that the period of time provided for in this Section 8 and
other provisions and restrictions set forth herein are reasonable and necessary
to protect the Company and its successors and assigns in the use and employment
of the goodwill of the business conducted by Executive.  Executive further agrees that damages cannot
compensate the Company in the event of a violation of this Section 8 and
that, if such violation should occur, injunctive relief shall be essential for
the protection of the Company and its successors and assigns.  Accordingly, Executive hereby covenants and
agrees that, in the event any of the provisions of this Section 8 shall
be violated or breached, the Company shall be entitled to obtain injunctive
relief against the party or parties violating such covenants, without bond but
upon due notice, in addition to such further or other relief as may be
available at equity or law.  Obtainment
of such an injunction by the Company shall not be considered an election of
remedies or a waiver of any right to assert any other remedies which the
Company has at law or in equity.  No
waiver of any breach or violation hereof shall be implied from forbearance or
failure by the Company to take action thereof. 
The prevailing party in any litigation, arbitration or similar dispute
resolution proceeding to enforce this provision will recover any and all
reasonable costs and expenses, including attorneys’ fees.


D.            “Company
Confidential Information” shall mean confidential, proprietary
information or trade secrets of Company and its subsidiaries and affiliates
including without limitation the following: 
(1) customer lists and customer information as compiled by Company; (2)
Company’s internal practices and procedures; (3) Company’s financial condition
and financial results of operation; (4) supply of materials information,
including sources and costs, designs, information on land and lot inventories,
and current and prospective projects; (5) strategic planning, manufacturing,
engineering, purchasing, finance, marketing, promotion, distribution, and
selling activities; (6) all other information which Executive has a reasonable
basis to consider confidential or which is treated by Company as confidential;
and (7) all information having independent economic value to Company that is
not generally disclosed or known to, and not readily ascertainable by proper
means by, persons who can obtain economic value from its disclosure or use.  Notwithstanding the foregoing provisions, the
following shall


 


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not be
considered “Company Confidential Information”: (i) the general skills of the
Executive as an attorney or an experienced real estate and homebuilding senior management
level employee; (ii) information generally known by senior management
executives within the homebuilding and/or land development industry; (iii)
persons, entities, contacts or relationships of Executive that predate this
Agreement or that are also generally known in the industry; and (iv)
information which becomes available on a non-confidential basis from a source
other than Executive which source is not prohibited from disclosing such
confidential information by legal, contractual or other obligation.


9.             Severability.  If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under any applicable law, then such
provision will be deemed to be modified to the extent necessary to render it
legal, valid and enforceable, and if no such modification will make the
provision legal, valid and enforceable, then this Agreement will be construed
as if not containing the provision held to be invalid, and the rights and
obligations of the parties will be construed and enforced accordingly.


10.           Assignment by Company.  Nothing in this Agreement shall preclude the
Company from consolidating or merging into or with, or transferring all or
substantially all of its assets to, another corporation or entity that assumes
this Agreement and all obligations and undertakings hereunder.  Upon such consolidation, merger or transfer
of assets and assumption, the term “Company” as used herein shall mean such
other corporation or entity, as appropriate, and this Agreement shall continue
in full force and effect.


11.           Entire Agreement.  This Agreement, the Change of Control
Agreement with Executive, and any agreements concerning stock options or other
benefits, embody the complete agreement of the parties hereto with respect to
the subject matter hereof and supersede any prior written, or prior or
contemporaneous oral, understandings or agreements between the parties that may
have related in any way to the subject matter hereof.  This Agreement may be amended only in writing
executed by the Company and Executive.


12.           Governing Law.  This Agreement and all questions relating to
its validity, interpretation, performance and enforcement, shall be governed by
and construed in accordance with the internal laws, and not the law of
conflicts, of the State of Arizona.


13.           Notice. 
Any notice required or permitted under this Agreement must be in writing
and will be deemed to have been given when delivered personally or by overnight
courier service or three days after being sent by mail, postage prepaid, at the
address indicated below or to such changed address as such person may
subsequently give such notice of:




	
  if to Parent or Company:

  	
   

  	
  Meritage Homes Corporation

  
	
   

  	
   

  	
  8501 E. Princess Drive,
  Suite 290

  
	
   

  	
   

  	
  Scottsdale, Arizona 85255

  
	
   

  	
   

  	
  Attention: Chief Executive
  Officer

  






 


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  with a copy to:

  	
   

  	
  Gallagher
  & Kennedy, P.A.

  
	
   

  	
   

  	
  2575
  E. Camelback Road, Suite 1100

  Phoenix, Arizona 85016-9225

  Phone: (602) 530-8407

  Fax: (602) 530-8500

  Attention: Jay A. Zweig

  
	
   

  	
   

  	
   

  
	
  if
  to Executive:

  	
   

  	
  C.
  Timothy White

  5515 E. Arcadia Lane

  Phoenix, Arizona 85018

  Phone: (602) 952-2212

  






 


14.           Arbitration.  Any dispute, controversy, or claim, whether
contractual or non-contractual, between the parties hereto arising directly or
indirectly out of or connected with this Agreement, relating to the breach or
alleged breach of any representation, warranty, agreement, or covenant under
this Agreement, unless mutually settled by the parties hereto, shall be
resolved by binding arbitration in accordance with the Employment Arbitration
Rules of the American Arbitration Association (the “AAA”).  Any arbitration
shall be conducted by arbitrators approved by the AAA and mutually acceptable
to Company and Executive.  All such
disputes, controversies, or claims shall be conducted by a single arbitrator,
unless the dispute involves more than $50,000 in the aggregate in which case
the arbitration shall be conducted by a panel of three arbitrators.  If the parties hereto are unable to agree on
the arbitrator(s), then the AAA shall select the arbitrator(s).  The resolution of the dispute by the
arbitrator(s) shall be final, binding, nonappealable, and fully enforceable by
a court of competent jurisdiction under the Federal Arbitration Act.  The arbitrator(s) shall award damages,
reasonable attorneys’ fees and costs to the prevailing party.  The arbitration award shall be in writing and
shall include a statement of the reasons for the award.  The arbitration shall be held in the Phoenix,
Arizona metropolitan area.  The only
exception is that the Company may proceed in any court of competent
jurisdiction to obtain equitable relief under Sections 7 and 8 of this
Agreement, but any claim for monetary damages thereunder is subject to binding
arbitration.


15.           Withholding; Release; No Duplication of Benefits.  All of Executive’s compensation under this
Agreement will be subject to deduction and withholding authorized or required
by applicable law.  The Company’s
obligation to make any post-termination payments hereunder (other than salary and
bonus payments and expense reimbursements through a date of termination), shall
be subject to receipt by the Company from Executive of a mutually agreeable
release, and compliance by Executive with the covenants set forth in Sections
7 and 8 hereof.  If there is
any conflict between the provisions of the Change of Control Agreement and this
Agreement, such conflict shall be resolved so as to provide the greater benefit
to Executive.  However, in order to avoid
duplication of any monetary benefits, any payments or benefits due under
Executive’s Change of Control Agreement, will be reduced by any payments or
benefits (not including salary and bonus payments) provided in Section 6
hereunder.


16.           Successors
and Assigns.  This
Agreement is solely for the benefit of the parties and their respective
successors, assigns, heirs and legatees. 
Nothing herein shall be construed to provide any right to any other
entity or individual.


 


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17.           Related
Party Transactions. 
Executive may not engage in any related party transactions with the
Company unless approved in the specific instance by the Audit Committee of the
Board of Directors of Meritage Corporation.


AGREED to this 30th
day of September, 2005 by:


	
   

  	
  MERITAGE HOMES CORPORATION, a Maryland corporation

   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J Hilton

  
	
   

  	
  Name:

  	
  Steven J Hilton

  
	
   

  	
  Title: 

  	
  Co-Chairman and CEO

  



 


 


AGREED to this 30th
day of September, 2005 by:


	
   

  	
  EXECUTIVE:   C.
  TIMOTHY WHITE

  
	
   

  	
   

  
	
   

  	
  /s/ C. Timothy White

  



 


 


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