Document:

<PAGE>
                                                                    EXHIBIT 10.3

                                VOTING AGREEMENT

                  THIS VOTING AGREEMENT, dated as of October 22, 2001 (this
"Agreement"), among D.R. HORTON, INC., a Delaware corporation ("DHI") and the
record and beneficial stockholders of SCHULER HOMES, INC., a Delaware
corporation (the "Company"), whose names appear on Schedule I (collectively, the
"Stockholders").

                                   WITNESSETH:

                  WHEREAS, contemporaneously with the execution and delivery of
this Agreement, DHI and the Company are entering into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), which provides for
the merger (the "Merger") of the Company with and into DHI and the conversion of
all the outstanding shares of Class A Common Stock and Class B Common Stock,
each with a par value of $.001 per share, of the Company (collectively, the
"Shares") into cash and shares of common stock, par value $.01 per share, of
DHI;

                  WHEREAS, as of the date hereof, each Stockholder owns
(beneficially or of record) no less than the number of Shares set forth opposite
such Stockholder's name on Schedule I (all such Shares and any Shares which may
hereafter be acquired by such Stockholder prior to the termination of this
Agreement, whether upon the exercise of options or by means of purchase,
dividend, distribution or otherwise, (but not any other Shares owned by such
Stockholder on the date hereof but not set forth opposite such Stockholder's
name on Schedule I) being referred to herein as such Stockholder's "Subject
Shares");

                  WHEREAS, the parties to the Stockholders Agreement, dated as
of April 3, 2001, by and among the Company, the Stockholders and the other
parties thereto, have consented to this Agreement and waived the provisions of
such stockholders agreement to the extent inconsistent with the provisions of
this Agreement;

                  WHEREAS, this Agreement has been approved by the Board of
Directors of the Company and such approval is sufficient to render inapplicable
to the transactions contemplated hereby the provisions of Section 203 of the
Delaware Law;

                  WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, DHI has required that the Stockholders enter into this Voting
Agreement; and

                  WHEREAS, in order to induce DHI to enter into the Merger
Agreement, the Stockholders are willing to enter into this Voting Agreement.

                  NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, DHI and each of the Stockholders, severally and not jointly,
hereby agree as follows:
<PAGE>

                                   ARTICLE I.

                         TRANSFER AND VOTING OF SHARES;
                     AND OTHER COVENANTS OF THE STOCKHOLDERS

                  SECTION 1.1. Voting of Shares. During the Term (as defined
below), at any meeting of the stockholders of the Company, however called, and
in any action by consent of the stockholders of the Company, each Stockholder
(a) shall appear at such meeting of the stockholders or otherwise cause the
Subject Shares such Stockholder owns beneficially or of record on the record
date of any such meeting or solicitation of consents to be counted as present
thereat for purposes of establishing a quorum and (b) shall vote its Subject
Shares (i) in favor of the Merger and the Merger Agreement (as amended from time
to time), (ii) against any proposal for a Third Party Acquisition and against
(A) any proposal for action or agreement that would result in a breach of any
covenant, representation or warranty or any other obligation or agreement of the
Company under the Merger Agreement or which is reasonably likely to result in
any of the conditions of the Company's obligations under the Merger Agreement
not being fulfilled, (B) any material change in the present capitalization of
the Company, (C) any other material change in the Company's corporate structure
or business or (D) any other action which could reasonably be expected to
impede, interfere with, delay, postpone or materially adversely affect the
transactions contemplated by the Merger Agreement or the likelihood of such
transactions being consummated and (iii) in favor of any other matter necessary
for consummation of the transactions contemplated by the Merger Agreement which
is considered at any such meeting of stockholders or the subject of any such
consent and in connection therewith to execute any documents which are necessary
or appropriate in order to effectuate the foregoing, including the ability for
DHI or its nominees to vote such Subject Shares directly.

                  SECTION 1.2. No Inconsistent Arrangements. During the Term,
except as contemplated by this Agreement and the Merger Agreement, no
Stockholder shall (i) transfer (which term shall include any sale, assignment,
gift, pledge, hypothecation or other disposition, whether directly or indirectly
by contribution, distribution, dissolution or otherwise), or consent to any
transfer of, any or all of such Stockholder's Subject Shares or any interest
therein, or create or, except as set forth on Schedule 1.2, permit to exist any
Encumbrance (as defined below) on such Subject Shares, (ii) enter into any
contract, option or other agreement or understanding with respect to any
transfer of any or all of such Subject Shares or any interest therein, (iii)
grant any proxy, power-of-attorney or other authorization in or with respect to
such Subject Shares, (iv) deposit such Subject Shares into a voting trust or
enter into a voting agreement or arrangement with respect to such Subject Shares
or (v) take any other action that would in any way restrict, limit or interfere
with the performance of its obligations hereunder or the transactions
contemplated hereby or by the Merger Agreement. Notwithstanding the foregoing,
James K. Schuler shall be permitted to transfer Subject Shares to his Affiliates
that are Stockholders and also parties to this Agreement. For purposes of this
Agreement, a transfer of membership interests in WPH-Schuler, LLC shall be
deemed not to be an indirect transfer of the Stockholder's Subject Shares so
long as such transferee acknowledges and consents to all of the provisions of
this Agreement.

                  SECTION 1.3. Proxy. In order to secure such Stockholder's
agreement to vote in accordance with Section 1.1, each Stockholder hereby
revokes any and all prior proxies or
<PAGE>

powers of attorney in respect of any of such Stockholder's Subject Shares and
constitutes and appoints DHI, or any nominee of DHI, with full power of
substitution and resubstitution, at any time during the Term, as its true and
lawful attorney and proxy (its "Proxy"), for and in its name, place and stead,
to demand that the Secretary of the Company call a special meeting of the
stockholders of the Company for the purpose of considering any matter referred
to in Section 1.1 (if permitted under the Company's certificate of incorporation
or bylaws) and to vote each of such Subject Shares as its Proxy, at every
annual, special, adjourned or postponed meeting of the stockholders of the
Company, including the right to sign its name (as stockholder) to any consent,
certificate or other document relating to the Company that Delaware Law may
permit or require as provided in Section 1.1.

                  THE FOREGOING PROXY AND POWER OF ATTORNEY ARE IRREVOCABLE AND
COUPLED WITH AN INTEREST THROUGHOUT THE TERM.

                  SECTION 1.4. Waiver of Appraisal Rights. Each Stockholder
hereby waives any rights of appraisal or rights to dissent from the Merger.

                  SECTION 1.5. Stop Transfer. No Stockholder shall request that
the Company register the transfer (book-entry or otherwise) of any certificate
or uncertificated interest representing any of such Stockholder's Subject
Shares, unless such transfer is made expressly subject to Section 3.4.

                  SECTION 1.6. No Solicitation. Upon execution of this
Agreement, each Stockholder shall, and it shall cause its Representatives to,
immediately cease any discussions or negotiations with any parties with respect
to any Third Party Acquisition. During the Term, no Stockholder shall, nor shall
any Stockholder authorize or permit any of its officers, directors, employees,
investment bankers, attorneys and other representatives or agents (collectively,
the "Representatives") to, directly or indirectly, encourage, solicit,
participate in or initiate discussions or negotiations with or provide any
information to any person or group (other than DHI or any designees of DHI)
concerning, or take any other action designed to facilitate any inquiries or the
making of any proposal concerning, any Third Party Acquisition. Each Stockholder
shall promptly (but no later than 24 hours after receipt) notify DHI in the
event it receives any proposal or inquiry concerning a Third Party Acquisition,
including the terms and conditions thereof and the identity of the party
submitting such proposal or inquiry (all in reasonable detail), and shall advise
DHI promptly of any developments concerning the same and the status thereof;
provided, however, that nothing herein shall prevent any Stockholder or
Representative from taking any action, after having notified DHI thereof, or
omitting to take any action, solely as a member of the Board of Directors of the
Company required so as not to violate such Stockholder's or Representative's
fiduciary obligations as a director of the Company after consultation with
outside counsel.

                  SECTION 1.7. Termination of Registration Rights Agreement.
Contingent upon the consummation of the Merger and effective as of the Effective
Time, the Stockholders hereby terminate, and waive any rights in respect of, the
Registration Rights Agreement, dated as of April 3, 2001, among the Company and
the Stockholders signatory thereto, which termination and waiver shall be
effective without any further action by the parties thereto.
<PAGE>

                  SECTION 1.8. Termination Agreement and Mutual Release. On the
Closing Date, each Stockholder and DHI shall execute and deliver the termination
agreement and mutual release contemplated by Section 6.14 of the Merger
Agreement.

                  SECTION 1.9. Section 341(f) Consent. Notwithstanding any
rights to the contrary set forth in Section 6.13 of the Reorganization
Agreement, each Stockholder hereby agrees that it will not request the Company
to file a statement with the IRS consenting to the application to the Company of
Section 341(f) of the Code except for a request made to the Company to file such
a statement immediately prior to the Merger as contemplated in Section 5.4 of
the Merger Agreement.

                                   ARTICLE II.

               REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS

                  Each Stockholder hereby represents and warrants to DHI as
follows:

                  SECTION 2.1. Due Authorization, Enforceability. Such
Stockholder has all requisite power and authority to execute, deliver and
perform this Agreement, to appoint DHI as its Proxy and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement, the appointment of DHI as such Stockholder's Proxy and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of Stockholder. This Agreement has been duly
executed and delivered by or on behalf of such Stockholder and constitutes a
legal, valid and binding obligation of such Stockholder, enforceable against
such Stockholder in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, moratorium or other similar laws and except
that the availability of equitable remedies, including specific performance, is
subject to the discretion of the court before which any proceeding for such
remedy may be brought. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which such Stockholder is trustee
whose consent is required for the execution and delivery of this Agreement or
the consummation by such Stockholder of the transactions contemplated hereby.

                  SECTION 2.2.  No Conflicts; Required Filings and Consents.

                  (a) The execution and delivery of this Agreement by such
Stockholder does not, and the performance of this Agreement by such Stockholder
will not, (i) conflict with or violate any trust agreement or other similar
documents relating to any trust of which such Stockholder is trustee, (ii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to such Stockholder or by which such Stockholder or any of such
Stockholder's properties is bound or affected or (iii) result in any breach of
or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any assets of such Stockholder, including such Stockholder's
Subject Shares, pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which such Stockholder is a party or by which such Stockholder or any of such
Stockholder's assets is bound or affected, except, in the case of

<PAGE>

clauses (ii) and (iii), for any such breaches, defaults or other occurrences
that would not prevent or delay the performance by such Stockholder of such
Stockholder's obligations under this Agreement.

                  (b) The execution and delivery of this Agreement by such
Stockholder does not, and the performance of this Agreement by such Stockholder
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority (other than
any necessary filing under the Exchange Act), domestic or foreign, except where
the failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or delay the performance
by such Stockholder of such Stockholder's obligations under this Agreement.

                  SECTION 2.3. Title to Shares. Such Stockholder is the sole
record or beneficial owner of its Subject Shares, free and clear of any pledge,
lien, security interest, mortgage, charge, claim, equity, option, proxy, voting
restriction, voting trust or agreement, understanding, arrangement, right of
first refusal, limitation on disposition, adverse claim of ownership or use or
encumbrance of any kind ("Encumbrances"), other than as set forth on Schedule
1.2 and other than restrictions imposed by the securities laws or pursuant to
this Agreement and the Merger Agreement. Such Stockholder has the sole right and
power to vote and dispose of such Stockholder's Subject Shares.

                                  ARTICLE III.

                                  MISCELLANEOUS

                  SECTION 3.1. Definitions. Terms used but not otherwise defined
in this Agreement have the meanings ascribed to such terms in the Merger
Agreement.

                  SECTION 3.2. Termination. As used herein, "Term" means the
period beginning on the date hereof and ending on the date this Agreement shall
be terminated in accordance with its terms. This Agreement shall terminate and
be of no further force and effect (i) by the written mutual consent of the
parties hereto, (ii) upon termination of the Merger Agreement, including a
termination of the Merger Agreement pursuant to Section 7.1(d) thereof, in
accordance with its terms, or (iii) automatically and without any required
action of the parties hereto upon the Effective Time. No such termination of
this Agreement shall relieve any party hereto from any liability for any breach
of this Agreement prior to termination.

                  SECTION 3.3. Further Assurance. From time to time, at another
party's request and without consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.

                  SECTION 3.4. Certain Events. Each Stockholder agrees that this
Agreement and such Stockholder's obligations hereunder shall attach to such
Stockholder's Subject Shares and shall be binding upon any person or entity to
which legal or beneficial ownership of such Subject Shares shall pass, whether
by operation of law or otherwise, including such Stockholder's heirs,

<PAGE>

guardians, administrators, or successors. Notwithstanding any transfer of
Subject Shares, the transferor shall remain liable for the performance of all
its obligations under this Agreement.

                  SECTION 3.5. No Waiver. The failure of any party hereto to
exercise any right, power, or remedy provided under this agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance by
any other party hereto with its obligations hereunder, any custom or practice of
the parties at variance with the terms hereof shall not constitute a waiver by
such party of its right to exercise any such or other right, power or remedy or
to demand such compliance.

                  SECTION 3.6. Specific Performance. Each Stockholder
acknowledges that if such Stockholder fails to perform any of its obligations
under this Agreement immediate and irreparable harm or injury would be caused to
DHI for which money damages would not be an adequate remedy. In such event, each
Stockholder agrees that DHI shall have the right, in addition to any other
rights it may have, to specific performance of this Agreement. Accordingly, if
DHI should institute an action or proceeding seeking specific enforcement of the
provisions hereof, each Stockholder hereby waives the claim or defense that DHI,
as the case may be, has an adequate remedy at law and hereby agrees not to
assert in any such action or proceeding the claim or defense that such a remedy
at law exists. Each Stockholder further agrees to waive any requirements for the
securing or posting of any bond in connection with obtaining any such equitable
relief.

                  SECTION 3.7. Notice. All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed to have
been duly given or made if and when delivered personally or by overnight courier
to the parties at the following addresses or sent by electronic transmission,
with confirmation received, to the telecopy numbers specified below (or at such
other address or telecopy number for a party as shall be specified by like
notice):

                  (a)      If to DHI:

                           D.R. Horton,Inc.
                           1901 Ascension Blvd., Suite 100
                           Arlington, Texas  76006
                           Facsimile:  (817) 436-6053 and (817) 856-8252
                           Telephone: (817) 856-8200
                           Attention:  Rick Beckwitt and Ted Harbour

                   (b)     If to a Stockholder, at the address set forth below
such Stockholder's name on Schedule I.

                  SECTION 3.8. Expenses. Except as otherwise expressly set forth
herein, all fees, costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such fees, costs and expenses.

                  SECTION 3.9. Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. When a reference is made in this
Agreement to Sections or Schedules, such

<PAGE>

reference shall be to a section or schedule of this Agreement unless otherwise
indicated. Wherever the words "includes," "include" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."

                  SECTION 3.10. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the maximum
extent possible.

                  SECTION 3.11. Entire Agreement; No Third-Party Beneficiaries.
This Agreement constitutes the entire agreement and supersedes any and all other
prior agreements and undertakings, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof, and this Agreement is
not intended to confer upon any other person any rights or remedies hereunder.

                  SECTION 3.12. Assignment. This Agreement shall not be assigned
by operation of law or otherwise.

                  SECTION 3.13. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed entirely within that
State without regard to the principles of conflicts of law that would apply any
other law.

                  SECTION 3.14. Jurisdiction. Each party hereby irrevocably
submits to the exclusive jurisdiction of the Court of Chancery in the State of
Delaware in any action, suit or proceeding arising in connection with this
Agreement, and agrees that any such action, suit or proceeding shall be brought
only in such court (and waives any objection based on forum non conveniens or
any other objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this Section 3.15 and
shall not be deemed to be a general submission to the jurisdiction of said Court
or in the State of Delaware other than for such purposes. Each party hereto
hereby waives any right to trial by jury in connection with any such action,
suit or proceeding.

                  SECTION 3.15. Amendment. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.

                  SECTION 3.16. Waiver. Any party hereto may (a) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties of the
other parties hereto contained herein or in any document delivered pursuant
hereto and (c) waive compliance by the other parties hereto with any of their
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only as against such party
and only if

<PAGE>

set forth in an instrument in writing signed by such party. The failure of any
party hereto to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.

                  SECTION 3.17. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which shall constitute one and the same agreement.

                            [SIGNATURES ON NEXT PAGE]

<PAGE>

                  IN WITNESS WHEREOF, DHI and the Stockholders have caused this
Agreement to be executed as of the date first written above.

                                      D.R. HORTON,INC.

                                      By:     /s/ DONALD R. HORTON
                                              ---------------------------------
                                              Donald R. Horton
                                              Chairman of the Board

                                      CLASS A STOCKHOLDERS:

                                      THE JAMES AND PATRICIA SCHULER FOUNDATION

                                      By:     /s/ JAMES K. SCHULER
                                              ---------------------------------

                                      JAMES K. SCHULER,
                                      as trustee for the James K. Schuler 1998
                                      Qualified Annuity Trust and the James K.
                                      Schuler Revocable Living Trust

                                               /s/ JAMES K. SCHULER
                                               ---------------------------------
                                               James K. Schuler

<PAGE>

                                      CLASS B STOCKHOLDERS:

                                      WPH-SCHULER LLC
                                      By each of its members

                                               APOLLO REAL ESTATE
                                               INVESTMENT FUND, L.P.

                                               By:      APOLLO REAL ESTATE
                                                        ADVISORS, L.P.
                                                        Its General Partner

                                               By:      APOLLO REAL ESTATE
                                                        MANAGEMENT, INC.
                                                        Its General Partner

                                               By:      /s/ MICHAEL D. WEAVER
                                                        ------------------------

                                               HIGHRIDGE PACIFIC HOUSING
                                               INVESTORS, L.P.

                                               By:      WPH ACQUISITIONS, INC.
                                                        Its General Partner

                                               By:      /s/
                                                        ------------------------
                                               Name:
                                                        ------------------------
                                               Title:
                                                        ------------------------

                                               BLACKACRE WPH, LLC

                                               By:      BLACKACRE CAPITAL
                                                        GROUP, L.P.
                                                        Its Managing Member

                                               By:      BLACKACRE CAPITAL
                                                        MANAGEMENT, CORP.
                                                        Its General Partner

                                               By:      /s/
                                                        ------------------------
                                               Name:
                                                        ------------------------
                                               Title:
                                                        ------------------------

<PAGE>

                                      APOLLO REAL ESTATE INVESTMENT FUND, L.P.
                                      In its individual capacity

                                      By:      APOLLO REAL ESTATE
                                               ADVISORS, L.P.
                                               Its General Partner

                                      By:      APOLLO REAL ESTATE
                                               MANAGEMENT, INC.
                                               Its General Partner

                                      By:      /s/ MICHAEL D. WEAVER
                                               ---------------------------------
                                               Michael D. Weaver
                                               Vice President

                                      HIGHRIDGE PACIFIC HOUSING INVESTORS, L.P.
                                      In its individual capacity

                                      By:      WPH ACQUISITIONS, INC.
                                               Its General Partner

                                      By:      /s/
                                               ---------------------------------
                                      Name:
                                               ---------------------------------
                                      Title:
                                               ---------------------------------

                                      BLACKACRE WPH, LLC
                                      In its individual capacity

                                      By:      BLACKACRE CAPITAL
                                               GROUP, L.P.
                                               Its Managing Member

                                      By:      BLACKACRE CAPITAL
                                               MANAGEMENT, CORP.
                                               Its General Partner

                                      By:      /s/
                                               ---------------------------------
                                      Name:
                                               ---------------------------------
                                      Title:
                                               ---------------------------------

<PAGE>

                                   SCHEDULE I

<Table>
<Caption>
                                                    Total Number of Shares Owned
Name and Address of Stockholder                               of Record                      Subject Shares
------------------------------------------------- ---------------------------------- --------------------------------
<S>                                               <C>                                <C>
The James And Patricia Schuler Foundation                  500,000 Class A                   500,000 Class A
828 Fort Street Mall, Fourth Floor
Honolulu, HI  96813

The James K. Schuler 1998 Qualified Annuity                314,065 Class A                   314,065 Class A
Trust
828 Fort Street Mall, Fourth Floor
Honolulu, HI  96813

The James K. Schuler Revocable Living Trust               9,619,763 Class A                4,809,881 Class A
828 Fort Street Mall, Fourth Floor
Honolulu, HI  96813

WPH-Schuler, LLC                                         18,754,727 Class B                18,754,727 Class B
400 Continental Blvd., Suite 100
El Segundo, CA  90245

Apollo Real Estate Investment Fund, L.P.
2 Manhattanville Road                                         0 Class B                         0 Class B
Purchase, NY  10577-2118

Highridge Pacific Housing Investors, L.P.                     0 Class B                         0 Class B
300 Continental Blvd., Suite 360
El Segundo, CA  90245

Blackacre WPH, LLC                                            0 Class B                         0 Class B
450 Park Avenue, 28th Floor
New York, NY  10022
</Table>

<PAGE>

<Table>
<Caption>
                                                    Total Number of Shares Owned
Name and Address of Stockholder                               of Record                      Subject Shares
------------------------------------------------- ---------------------------------- --------------------------------
<S>                                               <C>                                <C>
The James And Patricia Schuler Foundation                 500,000 Class A                    500,000 Class A
828 Fort Street Mall, Fourth Floor
Honolulu, HI  96813

The James K. Schuler 1998 Qualified Annuity               314,065 Class A                    314,065 Class A
Trust
828 Fort Street Mall, Fourth Floor
Honolulu, HI  96813

The James K. Schuler Revocable Living Trust              9,619,763 Class A                  4,809,881 Class A
828 Fort Street Mall, Fourth Floor
Honolulu, HI  96813

WPH-Schuler, LLC                                         18,754,727 Class B                18,754,727 Class B
400 Continental Blvd., Suite 100
El Segundo, CA  90245

Apollo Real Estate Investment Fund, L.P.
2 Manhattanville Road                                  9,356,136 Class B (1)              9,356,136 Class B (1)
Purchase, NY  10577-2118

Highridge Pacific Housing Investors, L.P.               7,076,360 Class B(1)              7,076,360 Class B(1)
300 Continental Blvd., Suite 360
El Segundo, CA  90245

Blackacre WPH, LLC                                      2,322,232 Class B(1)              2,322,232 Class B(1)
450 Park Avenue, 28th Floor
New York, NY  10022
</Table>

(1) The beneficial ownership of these entities is based entirely on assumptions
being made as of the date hereof. The actual beneficial ownership of each entity
on the date of the Company's stockholder meeting and on the Closing Date will be
calculated according to the provisions set forth in the amended and restated
operating agreement of WPH-Schuler, LLC.<PAGE>
                                                                    EXHIBIT 10.7

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 22nd day of
October, 2001 by CRAIG A. MANCHESTER, an individual residing at 5 Vintage Drive,
Newport Beach, CA 92660 (the "Employee"), and D.R. HORTON, INC., a Delaware
corporation (the "Company").

                                    RECITALS

         WHEREAS, the Company and Schuler Homes, Inc. ("Schuler") have entered
into an Agreement and Plan of Merger, dated as of October 22, 2001 (the "Merger
Agreement");

         WHEREAS, the Merger Agreement provides that, as a condition to the
consummation of the transactions contemplated thereby, the Company shall have
entered into an employment agreement with the Employee, with employment
thereunder to be effective as of the Closing Date as defined in the Merger
Agreement (such date being the "Effective Date" herein);

         WHEREAS, pursuant to the provisions of the Merger Agreement, the
Company desires to hire the Employee, and the Employee desires to accept
employment with the Company, upon the terms and conditions hereinafter set
forth; and

         WHEREAS, concurrently herewith the Employee is executing a
Confidentiality and Non-Competition Agreement in the form attached hereto as
Exhibit A (the "Confidentiality and Non-Competition Agreement") in connection
with the benefits accruing to the Employee as a result of the merger
contemplated by the Merger Agreement in respect of his indirect ownership
interest in Schuler;

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         1. Employment of Employee. Subject to the terms and conditions hereof,
the Company hereby employs the Employee in the capacity of Vice President of the
Company and Chief Operating Officer of the Company's Schuler Homes Region, and
the Employee hereby accepts such employment.

         2. Duties. The Employee shall have responsibility for the day to day
operations of the Company's Schuler Homes Region. The Company agrees to assign
to the Employee, and the Employee agrees to perform, such duties and
responsibilities as are consistent with the responsibilities assigned to
executives over other regions of the Company as well as such other duties and
responsibilities as the Chairman or Chief Executive Officer of the Company may
from time to time assign. During the term of his employment with the Company,
the Employee shall devote his full time to the business and affairs of the
Company (other than with respect to those activities and investments in which
the Employee is engaged as of the date hereof as more fully set forth on
Schedule B to the Confidentiality and Noncompetition Agreement, dated as of the
date hereof (the "Noncompetition Agreement"), delivered by the Employee in favor
of the Company),

<PAGE>

shall use his reasonable best efforts to discharge the responsibilities of his
office and position as set forth herein, and shall not engage in any other
employment or business activities for any direct or indirect remuneration that
would be harmful or detrimental to, or that may compete with, the business and
affairs of the Company, or that would interfere with his duties hereunder.

         3. Termination of Prior Employment Agreement. On and after the
Effective Date, this Agreement will supersede the Employment Agreement, dated as
of August 29, 2000, between the Employee and Western Pacific Housing
Development, L.P. and any amendments thereto (the "Western Pacific Agreement"),
and such agreement shall thereupon be terminated and no longer in effect. Except
as expressly provided herein, the parties mutually release each other from all
debts, duties, and obligations under the Western Pacific Agreement including,
without limitation, the severance and other obligations of Section 5 thereof.
The release of such obligations and termination of the Western Pacific Agreement
shall not constitute a Termination of Service or a Constructive Termination
thereunder entitling the Employee to severance or any other benefit under the
Western Pacific Agreement. Notwithstanding the foregoing, on the Effective Date,
all options to purchase shares of common stock of the Company granted to the
Employee in replacement of his options to purchase shares of common stock of
Schuler pursuant to the Merger Agreement shall immediately vest and become
exercisable.

         4. Base Compensation; Allowance. During the Term (as defined below),
the Company shall pay to the Employee semi-monthly, as base compensation for the
services to be rendered hereunder, the sum of $14,583.33 less appropriate
deductions and withholdings, with such payments made consistent with the normal
payroll procedures of the Company (the "Base Compensation"). The Base
Compensation shall be prorated for any month during which the Employee is
employed for less than the entire month. During the Term, the Employee shall
receive a $1,000 monthly car allowance.

         5. Bonus. For Schuler's fiscal year ending on March 31, 2002, the
Employee shall receive a bonus of 1.25% of the earnings before taxes
attributable to the operations of Schuler as historically conducted, which bonus
shall be calculated consistent with past practices immediately prior to the
Effective Date and shall be paid to the Employee on or prior to May 15, 2002.
Such bonus shall be offset against any portion of the annual bonus received by
the Employee pursuant to Section 4(b) of the Western Pacific Agreement for such
fiscal year. For the period commencing on April 1, 2002 and ending on March 31,
2003, the Employee shall receive a bonus of $1,150,000, less appropriate
deductions and withholdings, payable in four equal installments of $287,500
following the completion of each calendar quarter during which the Employee
remains employed by the Company (the "Bonus"); provided, however, that the
entire unpaid balance of the Bonus shall be paid to the Employee within 15 days
of any termination of his employment except as set forth in Section 8 below. The
Bonus shall be in addition to any other discretionary incentive compensation
that the Company may elect to provide to the Employee from time to time. Any
such bonus payments may be made under the Schuler's 2000 Incentive Bonus Plan or
the Company's 2000 Incentive Bonus Plan, at the Company's discretion (with
respect to under

                                       2

<PAGE>

which plan such bonus payments shall be made, not with respect to whether such
bonus payments will be made), as the case may be.

         6. Employee Benefits. During his employment, the Employee shall be
entitled to participate, subject to their terms, in those benefit plans and
programs (other than incentive compensation plans) generally available to
similarly situated officers of the Company. Such plans may include, but not
necessarily be limited to, the D.R. Horton, Inc. 1991 Stock Incentive Plan, the
D.R. Horton, Inc. Profit Sharing Plus Plan, the D.R. Horton, Inc. Flexible
Benefits Plan, the D.R. Horton, Inc. Major Medical Health Care Plan, the D.R.
Horton, Inc. Pre-Tax Premium Contribution Plan and such other employee benefit
plans generally available to employees of the Company as may be in effect from
time to time. In addition, during his employment, the Employee shall be eligible
to participate in the D.R. Horton, Inc. Supplemental Executive Retirement Plan
No. 1 and the D.R. Horton, Inc. Supplemental Executive Retirement Plan No. 2.
The Company reserves the right to amend, modify, or terminate such benefit plans
or programs, as well as any benefit arrangement or policy reflected in its
Employee Manual, at any time without notice to the Employee. Additionally, the
Company agrees to reimburse the Employee in accordance with generally applicable
policies of the Company for business expenses reasonably incurred by the
Employee on behalf of the Company.

         7. Term. The term of the Employee's employment hereunder shall commence
as of the Effective Date and, unless sooner terminated as provided in Section 8
hereof, shall continue through March 31, 2003 (the "Term"). Upon termination of
such employment, the provisions of Sections 9 through 14 hereof shall remain in
force pursuant to their respective terms.

         8. Termination. The Employee's employment under this Agreement shall
terminate upon the following circumstances:

                  (a) the death of the Employee;

                  (b) the Employee becomes Permanently Disabled. For purposes of
         this provision, the Employee shall be "Permanently Disabled" if, (i) to
         the extent that the Employee is covered by a policy of disability
         insurance, the Company reasonably determines that the Employee's
         condition satisfies the definition of "disability" therein; or (ii) in
         the event that Employee is not covered by a policy of disability
         insurance, it is determined that, as the result of physical or mental
         incapacity, he has been or will be unable to perform the essential
         duties of his position, even with reasonable accommodation, for a
         period of ninety (90) days or more. The determination of Permanent
         Disability for purposes of subpart (ii) of the preceding sentence shall
         be made by mutual agreement of the Employee and the Company, or if no
         such agreement is reached, shall be determined by a mutually selected
         person who is an expert in the type of disability claimed whose
         determination shall be final and binding. If the parties cannot agree
         on the selection of an expert as provided in the preceding sentence,
         the determination shall be made by an arbitrator selected pursuant to
         the commercial arbitration rules of the American Arbitration

                                       3

<PAGE>

         Association. Nothing in this Agreement shall constitute a promise that
         the Company will provide any form of disability insurance coverage or a
         guarantee that the Employee will receive any benefits under such
         coverage;

                  (c) the engagement by the Employee in any activity that
         constitutes Cause. For purposes of this Agreement, the term "Cause"
         shall mean that the Employee shall have committed any act of fraud,
         embezzlement or theft in connection with his duties hereunder;

                  (d) the delivery by the Employee to the Chairman or Chief
         Executive Officer of the Company written notice of termination; or

                  (e) the delivery by the Company to the Employee of written
         notice of termination.

         In the event that the Employee's employment is terminated under
subsection (c) above, his right to additional compensation and benefits shall
cease and the Employee shall be entitled only to earned Base Compensation,
accrued Bonus amounts, and accrued but unused vacation time as of the date of
termination. Under such circumstances, the accrued Bonus amount shall be a pro
rata portion of any Bonus that would otherwise have been paid under Section 5 of
this Agreement, calculated by dividing the number of days employed during the
relevant bonus period by the total number of days in such period. If the
Employee's employment is terminated under any subsection other than subsection
(c) above, the Employee shall be entitled to receive as severance an amount
equal to the full Base Compensation and bonus amounts described in Section 5
(including, without limitation, the Bonus) he would have received had he
remained employed by the Company through completion of the Term. For the
avoidance of doubt, and without limiting the provisions of the foregoing
sentence, if the Employee's employment is terminated under any subsection other
than subsection (c) above, the Employee shall be entitled to receive the full
bonus amounts described in Section 5 above of (i) a bonus of 1.25% of the
earnings before taxes attributable to the operations of Schuler as historically
conducted, for the fiscal year ending March 31, 2002, which bonus shall be
calculated consistent with past practices immediately prior to the Effective
Date, and (ii) the full Bonus in respect of the fiscal year ending March 31,
2003 in the aggregate amount of $1,150,000. Any Base Compensation and Bonus
amounts due following termination under this Section shall be paid within 15
days of the date of termination. The severance benefits described in this
Section shall be the exclusive remedy available to the Employee in the event of
termination of his employment under this Agreement.

         9. Company Property. The Employee agrees that any and all home designs,
development techniques or other concepts, products, or processes relating to the
Company's business which the Employee may create, make, discover, introduce or
invent while retained by the Company hereunder, shall belong to and be the sole
property of the Company. The Employee agrees promptly and fully to disclose the
same to the Company and to assign all rights thereto to the Company immediately.

                                       4

<PAGE>

         10. Survival. The parties hereby agree that the provisions of Sections
9 through 14 hereof shall survive the termination of this Agreement.

         11. Governing Law. This Agreement shall be governed by, and interpreted
in accordance with, the laws of the State of Texas.

         12. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the Company, its successors and assigns, and any
corporation with which the Company may merge or consolidate or to which the
Company may sell all or substantially all of its assets, and the Employee and
his executors, administrators, heirs and legal representatives. Since the
Employee's duties and services hereunder are special, personal and unique in
nature, the Employee may not transfer, sell or otherwise assign his rights,
obligations or benefits under this Agreement.

         13. Entire Agreement. This Agreement and the Noncompetition Agreement
contain the entire agreement between the parties relating to the subject matter
hereof and supersede all previous agreements between the parties whether written
or oral with respect to the subject matter hereof. This Agreement cannot be
modified, altered or amended except by a writing signed by all the parties.

         14. Invalidity. If any provision of this Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
or impair the validity or enforceability of the remaining provisions of this
Agreement, which shall remain in full force and effect, and the parties hereto
shall continue to be bound thereby.

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

                                                  /s/ CRAIG A. MANCHESTER
                                                  -----------------------------
                                                  Craig A. Manchester

                                                  D.R. HORTON, INC.

                                                 By: /s/ RICHARD BECKWITT
                                                    ---------------------------
                                                    Richard Beckwitt
                                                    Attorney-in-Fact

                                       5

<PAGE>

                                    EXHIBIT A

                  CONFIDENTIALITY AND NONCOMPETITION AGREEMENT

         THIS CONFIDENTIALITY AND NONCOMPETITION AGREEMENT (this "Agreement") is
being executed and delivered as of __________________, 2001 by Craig A.
Manchester ("Stockholder") in favor and for the benefit of D.R. Horton, Inc., a
Delaware corporation ("DHI").

                                    RECITALS

         WHEREAS, Stockholder beneficially owns, directly or indirectly,
approximately ___% of the outstanding shares of Class B common stock of Schuler
Homes, Inc., a Delaware corporation ("Schuler Homes"), and is the Executive Vice
President and Chief Operating Officer of Schuler Homes;

         WHEREAS, as an employee and stockholder of Schuler Homes, Stockholder
has obtained extensive and valuable knowledge and information concerning the
business of Schuler Homes, including confidential information relating to
Schuler Homes and its operations, assets, contracts, customers, personnel,
plans, and prospects;

         WHEREAS, in connection with the Agreement and Plan of Merger, dated as
of _________________, 2001 (as it may be amended from time to time, the "Merger
Agreement"), between DHI and Schuler Homes, Schuler Homes will, as a result
thereof, merge with and into DHI, with DHI as the surviving corporation and DHI
shall, by operation of law, succeed to all property, rights, privileges, powers
and franchises, and all and every other interest of Schuler Homes, including the
reputation and goodwill associated therewith (the "Merger");

         WHEREAS, the business of Schuler Homes prior to the date of the Merger
Agreement has been (i) the construction or sale of single-family or multi-family
residences, (ii) the development of real property for use as lots for
residential construction, and (iii) activities ancillary or related to the
foregoing activities (collectively, the "Business");

         WHEREAS, DHI and its Affiliates (as defined below) intend to continue
to engage in the Business and like business activities in the cities, counties
and territories set forth on Schedule A hereto (the "Territories");

         WHEREAS, if Stockholder were to compete with DHI or any of its
Affiliates' operation of the Business in the Territories, DHI would be deprived
of the full benefit of any reputation or goodwill associated with Schuler Homes
and DHI as the surviving corporation in the Merger;

         WHEREAS, in connection with the Merger and as a condition to
consummating the Merger and subsequently employing Stockholder, and to more
fully secure unto DHI the

                                       6

<PAGE>

benefits of the Merger, DHI has requested that Stockholder enter into this
Agreement; and Stockholder is entering into this Agreement in order to induce
DHI to consummate the Merger; and

         WHEREAS, the covenants provided herein are material, significant and
essential to effecting the transactions contemplated by the Merger Agreement,
and good and valuable consideration under the Merger Agreement has been
transferred to Stockholder in exchange for such covenants and the goodwill
associated with DHI.

                                    AGREEMENT

         NOW, THEREFORE, in order to induce DHI to consummate the Merger, as a
condition to Stockholder's employment with DHI following the Merger, and in
consideration of the benefits transferred to Stockholder pursuant to the Merger
Agreement and the agreements and instruments related thereto, the receipt and
sufficiency of such consideration being hereby acknowledged by Stockholder,
Stockholder agrees as follows:

         1. Acknowledgments By Stockholder. Stockholder acknowledges that the
promises and restrictive covenants that Stockholder is providing in this
Agreement are reasonable and necessary to the protection of DHI's business and
DHI's legitimate interests in its acquisition of Schuler Homes, including
Schuler Homes' goodwill, pursuant to the Merger Agreement. Stockholder further
acknowledges that, in connection with the consummation of the Merger, all of
Stockholder's shares of common stock of Schuler Homes will be exchanged for cash
and shares of common stock of DHI pursuant to the terms of the Merger Agreement.

         2. Covenant Not to Compete. During his period of employment with DHI
following the Merger and until 12 months after the Effective Time, except for
(x) activities to be engaged in by him on behalf of DHI (whether as an employee,
director, consultant or in any other capacity) or (y) the activities or
investments engaged by him as of the date hereof that are described on Schedule
B hereto, Stockholder shall not, voluntarily or involuntarily, for any reason
whatsoever, directly or indirectly, individually or on behalf of persons not now
parties to this Agreement, or as a partner, stockholder, member, director,
officer, manager, principal, agent, employee, or in any other capacity or
relationship, for his own account or for the benefit of any other person:

                           (a) engage in the Business or any business activity
competing with the Business within any city or county included within any of the
Territories; or

                           (b) have any interest in, own, manage, operate,
control, or join or participate in the ownership, management, operation, or
control of, or provide consulting services to or otherwise advise or assist,
enable (whether by license, sublicense, assignment or otherwise), or furnish any
capital to or be connected in any manner with, either as a stockholder, joint
venturer, proprietor, member, officer, director, manager, agent, lender,
representative, partner, trustee, affiliate, employee or consultant, or
otherwise engage or invest or participate in the Business or any business that
competes with the Business, whether conducted by DHI, any

                                       7

<PAGE>

Affiliate of DHI or any of their successors or assigns in any city or county
included within any of the Territories; or

                           (c) in any of the Territories, accept any business
relating to the Business from any material customer, supplier or contractor of
DHI, any of its Affiliates, or any of their respective successors or assigns or
solicit or encourage any such person to terminate or adversely alter in any
material respect any relationship such person may have with DHI, any of its
Affiliates or any of their successors or assigns; or

                           (d) market, endorse or promote any products that are
competitive with the Business;

provided, however, that nothing in this Section 2 shall prevent Stockholder from
owning as a passive investment less than 5% of the outstanding shares of the
capital stock of a publicly-held corporation if (i) such shares are actively
traded on an established national securities market in the United States and
(ii) Stockholder is not otherwise associated directly or indirectly with such
corporation or any affiliate of such corporation.

         3. Nonsolicitation. Until 12 months after the Effective Time,
Stockholder shall not nor will he permit any of his Affiliates to:

                           (a) personally or through others, encourage, induce,
attempt to induce, solicit, or attempt to solicit (on Stockholder's own behalf
or on behalf of any other person or entity) anyone who is employed at that time,
or was employed during the previous six (6) months, by DHI, its Affiliates, or
their respective successors or assigns to leave his or her employment with such
entity; or

                           (b) personally or through others, use any trade
secret or proprietary information of DHI or any other improper means to
interfere or attempt to interfere with the relationship or prospective
relationship of DHI, its Affiliates, or their respective successors or assigns
with any person or entity that is, was, or is expected to become a customer or
client of such entity; or

                           (c) solicit the business of any client or customer of
DHI, its Affiliates, or their respective successors or assigns for any activity
relating to the Business, other than on behalf of such entity.

                  4. Confidential and Proprietary Information. Stockholder
acknowledges and agrees that, as an executive officer of Schuler Homes, he has
obtained extensive and valuable knowledge and information concerning the
business of Schuler Homes, including confidential information relating to
Schuler Homes and its operations, assets, contracts, customers, personnel, plans
and prospects. Stockholder further acknowledges and agrees that, through the
dealings in connection with the Merger, he has obtained and will continue to
obtain extensive and valuable knowledge and information concerning the business
of DHI, including confidential information relating to DHI and its operations,
assets, contracts, customers, personnel, plans, and prospects. Collectively, all
of the knowledge and information described in the preceding two sentences

                                       8

<PAGE>

constitutes the "Confidential Information". Stockholder further acknowledges and
agrees that the Confidential Information has been acquired and developed through
the expenditure of valuable resources, that it provides a competitive advantage
over those who do not know and use it and that both Schuler Homes and DHI have
taken reasonable precautions against its disclosure to and use by others.
Accordingly:

                           a. Stockholder shall not, directly or indirectly,
divulge, communicate, disclose, or use any Confidential Information at any time
except as may be expressly authorized by DHI in writing.

                           b. All files, records, documents, computer-recorded
information, marketing surveys, operating manuals, price lists, memoranda, and
similar items arising out of the Business or any business activity of DHI,
whether prepared by Stockholder or otherwise coming into his possession, shall,
following the Merger, be and remain the exclusive property of DHI. Upon the
request of DHI, Stockholder shall immediately turn over to DHI all such
material, along with any copies or derivatives of such material, following the
Merger.

                           c. Notwithstanding the foregoing, this Section 4
shall not preclude Stockholder from disclosing information and material
described herein to the extent that it (i) is or becomes generally available to
the public other than by Stockholder's breach of this Section 4, (ii) is
required to be disclosed by law or court order, and Stockholder has promptly
notified DHI of the requirement to disclose and allowed DHI a reasonable period
to obtain a protective order or take other steps to prevent such disclosure, or
(iii) is disclosed to Stockholder's accountant, lawyer, or other professional
advisor for the sole purpose of receiving professional advice with respect
thereto, provided that such professional advisor does not disclose the covered
information or material to any other person or entity except as permitted by
this Section 4.

                  5. Definition of Affiliate. As used in this Agreement,
Affiliate means a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, the
first mentioned person, including any partnership, limited liability company or
joint venture in which the first mentioned person (either alone, or through or
together with any other subsidiary) has, directly or indirectly, an interest of
10% or more.

                  6. Equitable Remedies. Stockholder hereby acknowledges and
agrees that the obligations under this Agreement are such that DHI, its
Affiliates, and their respective successors and assigns cannot be fully and
adequately compensated by damages for breach of such obligations. As a result,
Stockholder hereby acknowledges and agrees that, in the event of any breach or
threatened breach of this Agreement, DHI, its Affiliates, and their respective
successors and assigns will be entitled not only to damages or other relief at
law, but also to equitable relief to enforce the breached obligations, including
preliminary and permanent injunctive relief (including temporary restraining
orders) without the need to post any bond in connection therewith.

                  7. Amendment, Modification and Waiver; Beneficiary. Except as
provided herein, no amendment, modification, alteration or supplement of the
terms or provisions of this Agreement shall be binding unless the same shall be
in writing and duly executed by the parties

                                       9

<PAGE>

hereto, except that any of the terms or provisions of this Agreement may be
waived in writing at any time by the party that is entitled to the benefits of
such waived terms or provisions. Nothing in this Agreement, express or implied,
is intended to confer upon any third person (other than Affiliates, successors,
and assigns of DHI, which are hereby expressly made third party beneficiaries of
this Agreement) any rights or remedies under or by reason of this Agreement. No
waiver of any provision of this Agreement shall be deemed to or shall constitute
a waiver of any other provision hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof.

                  8. Enforceability and Severability. It is the desire and
intent of the parties hereto that the provisions of this Agreement be enforced
to the fullest extent permissible under the laws and public policies of each
jurisdiction in which enforcement is sought. Accordingly, if any provision of
this Agreement shall be adjudicated to be invalid or unenforceable, such
provision, without any action on the part of the parties hereto, shall be deemed
amended to modify (including a reduction in duration, geographical area, or
prohibited business activities), or if such modification is impossible then to
delete, the portion adjudicated to be invalid or unenforceable, such
modification or deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made, and
such deletion or modification to be made only to the extent necessary to cause
the provision as amended to be valid and enforceable.

                  9. Complete Understanding. This Agreement, in combination with
the Merger Agreement and the agreements and instruments related thereto,
constitutes the full and complete understanding and agreement of the parties
with respect to the subject matter hereof and supersedes all prior and
contemporaneous oral understandings and agreements with respect to the subject
matter hereof and all prior written understandings and agreements with respect
to the subject matter hereof.

                  10. Costs. In the event a dispute or controversy arises
hereunder, or any action is brought by any party hereto or any other
party-in-interest to enforce its rights hereunder, the prevailing party in any
such dispute, controversy or action shall be entitled to recover its reasonable
attorneys' fees, court costs and other related expenses of enforcement.

                  11. Section Headings and Construction. The headings of
Sections in this Agreement are provided for convenience only and will not affect
its construction or interpretation. Unless otherwise expressly provided, the
word "including" means including, without limitation, with regard to the items
listed thereafter. Capitalized terms used by not defined herein shall have the
meaning given to such terms in the Merger Agreement.

                  12. Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made if and when delivered personally or by overnight courier to the
parties at the following addresses or sent by electronic transmission, with
confirmation received, to the telecopy numbers specified below (or at such other
address or telecopy number for a party as shall be specified by like notice):

                                       10

<PAGE>

                  If to Stockholder:

                  -----------------------
                  -----------------------
                  -----------------------
                  Telephone No.:
                                 ------------------------
                  Facsimile No.:
                                 ------------------------
                  If to DHI:

                  D.R. Horton,Inc.
                  1901 Ascension Blvd., Suite 100
                  Arlington, Texas  76006
                  Facsimile:  (817) 436-6053 and (817) 856-8252
                  Telephone: (817) 856-8200
                  Attention:  Rick Beckwitt and Ted Harbour

         13. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware without regard to the principles of conflicts of law that
would apply any other law.

         14. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, it being agreed that only an express written amendment, termination, or
waiver of this Agreement by DHI or its Affiliates, successors, or assigns can
relieve Stockholder of his personal obligations hereunder and then only with
respect to the entity executing such amendment, termination, or waiver.

         15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement, and all of which, when taken together, shall be deemed to constitute
one and the same agreement.

         16. Cumulative Remedies. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided under applicable law.

                            [SIGNATURES ON NEXT PAGE]

                                       11

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this Confidentiality
and Noncompetition Agreement as of the date first above written.

                                        THE COMPANY:

                                        D.R. HORTON, INC.

                                        By:
                                           ------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------

                                        STOCKHOLDER:

                                        ---------------------------------------
                                        Craig A. Manchester

                                       12

<PAGE>

                                   Schedule A

                                   Territories

(i) Anywhere within the State of California within the Counties of Alameda,
Contra Costa, Los Angeles, Napa, Orange, Riverside, Sacramento, San Benito, San
Bernadino, San Diego, San Joaquin, San Mateo, Santa Clara, Solano, Stanislaus
and Ventura;

(ii) anywhere else within every other city and county within the State of
California; and

(iii) anywhere within every city and county within the States of Arizona,
Colorado, Hawaii, Oregon and Washington.

<PAGE>

                                   Schedule B

                           Activities and Investments

<Table>
<Caption>
NAME OF ACTIVITY OR INVESTMENT           NATURE OF BUSINESS               INVOLVEMENT IN BUSINESS (NOTE 1)
------------------------------           ------------------               --------------------------------
<S>                                    <C>                                <C>
Ridgeford NJ Investments, L.L.C.       San Francisco condominium          Member in Highridge Group Holdings,
                                       development project                L.L.C., which is a member in Haverford
                                                                          Holdings, L.L.C., which is the sole
                                                                          member of Ridgeford NJ Investments, L.L.C.

Crest Road Homes LLC                   Rancho Palos Verdes single         Limited Partner in Highridge - MDA
                                       family development project         Limited Partnership, which is a general
                                                                          partner in MDA Investment Partnership,
                                                                          which is a member in Crest Road Homes LLC

Hasley Canyon Land Company, L.L.C.     Los Angeles County single family   Member in HR-Hasley Investors, L.L.C.,
                                       development project                which is the Managing Member of Highridge
                                                                          Hasley, L.L.C., which is a member in
                                                                          Hasley Canyon Land Company, L.L.C.

ChicagoLand Associates, L.L.C.         Chicago land development project   Limited Partner in DEM Associates, L.P.,
                                                                          which is a member in CL Associates,
                                                                          L.L.C., which is the Managing Member of
                                                                          ChicagoLand Associates, L.L.C.

Blackridge Southport, LLC              Sacramento land development        Member in Highridge Group Holdings,
                                       project (may be rezoned to         L.L.C., which is a member in Highridge
                                       single family residential lots)    Commercial Group, L.L.C., which is a
                                                                          member in Summit Partners VII, L.L.C.,
                                                                          which is the Managing Member of
                                                                          Blackridge Southport, LLC.

Haverford Capital, Inc.                Los Angeles (Sunset Boulevard)     A Highridge affiliated L.L.C. to be
                                       multi-family development project   formed will hold the Highridge interest
                                       (possible condominium project)     in the project if it proceeds forward.
</Table>

In addition, the Stockholder shall not be restricted from engaging in, and the
definition of the "Business" shall not include, any activity or investment
relating to the development of commercial real estate or residential apartments.

Note 1: Mr. Manchester, either directly or through his affiliated companies, has
an interest in the entities that have an economic interest in these Investments.

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