Document:

Exhibit
10.6

 

THIRD
AMENDED AND RESTATED

CHANGE OF CONTROL AGREEMENT

Effective January 1, 2010

(Original Date:  February 1,
2000)

 

Dear
Larry:

 

The
Board of Directors believes that it is in the best interests of Meritage Homes
Corporation (“Meritage”), and its shareholders to take appropriate steps to
allay any concerns you (sometimes referred to herein as “Executive”) may have about your future employment
opportunities with Meritage and its subsidiaries (Meritage and its subsidiaries
are collectively referred to as the “Company”). 
As a result, the Board has decided to offer to you the benefits
described below.

 

1.                                       Term of Agreement.

 

This Agreement is effective immediately and will
continue in effect as long as you are employed by Meritage, unless you and Meritage
agree in writing to its termination.

 

2.                                       Severance Payment.

 

If your employment with the Company is terminated
without “Cause” (as defined in Section 7) at any time within 150 days
prior to or within two years following a “Change of Control” (as defined in Section 5),
you will receive the “Severance Payment” described below.  You will also receive the Severance Payment
if you terminate your employment for “Good Reason” (as defined in Section 6)
at any time within two years following a Change of Control.

 

The Severance Payment equals the sum of (i) two
times the higher of (x) your annual base salary on the date of termination
of your employment, or (y) your annual base salary on the date preceding
the Change of Control, and (ii) two
times the highest of the following:  (x) your
average annual incentive compensation for the two years prior to termination of
your employment or (y) your annual incentive compensation for the year
preceding the year in which the Change of Control occurred (for purposes of determining the amount
of the Executive’s incentive compensation paid for any year during this one- or
two-year period, the amount of the incentive compensation considered paid for
purposes of this provision shall be the sum of (A) the actual Bonus paid
to the Executive, or (B) the fair market value (determined at the time of
grant and not at the time of vesting) of the shares of the Company’s restricted
stock, options and other equity-based awards that became vested in such year).  Notwithstanding the above, the Severance
Payment shall not exceed the lesser of (i) an amount that could be paid on
account of a Change of Control that is not subject to the imposition of any
excise tax under Code Section 4999 and is not otherwise subject to the
non-deductibility provisions of Code Section 280G, or (ii) $6
million.

 

The Severance Payment will be paid in one lump sum
as soon as the revocation period of your legal release has expired (explained
in more detail below), but in no event more than 60 days following your termination
of your employment; provided that if you are a “specified employee” (as defined
in Section 409A of the Internal Revenue Code of 1986, as amended 

 

 

(“Code”)) and the payment
does not comply with any exception to Section 409A, the above payment will
be paid to you in one lump sum on the first day of the seventh month following
the date of your “Separation from Service” (as defined in your Employment
Agreement) along with
accrued interest at the rate of interest announced by Bank of
America, Arizona from time to time as its prime rate (the “Prime Rate”) from
the date that payments to you should have been made under this Agreement.  If you die after your termination of
employment but before receiving the above payment, the Company will distribute the
benefits to your beneficiary as soon as administratively feasible following the
date of your death.

 

You are not entitled to receive the Severance Payment if
your employment is terminated for Cause, if you terminate your employment
without Good Reason, or if your employment is terminated by reason of your “Disability”
(as defined in Section 8(d)) or your death (unless death or Disability
occurs after a Notice of Termination). 
In addition, you are not entitled to receive the Severance Payment if
your employment is terminated by you or the Company for any or no reason prior
to 150 days before a Change of Control occurs or more than two years after a
Change of Control has occurred.

 

Notwithstanding anything in this Agreement to the
contrary, in order to receive the Severance Payment described in this Section 2,
you must execute (and not revoke) a legal release (“Release Agreement”), in the
form and substance reasonably requested by the Company, in which you release
the Company, Affiliates, directors, officers, employees, agents and others
affiliated with the Company from any and all claims, including claims relating
to your employment with the Company and the termination of your employment.  The Company shall provide you with the Release
Agreement within five days following your termination of employment (or “Separation
from Service” if you are a “Specified Employee”).  The Release Agreement must be executed and
returned to the Company within the 21 or 45 day (as applicable) period
described in the Release Agreement and you must not revoke it within the 7-day
revocation period described in the Release Agreement.

 

The Severance Payment will be paid to you without
regard to whether you look for or obtain alternative employment following
termination of your employment with the Company.

 

3.                                       Benefits Continuation.

 

If you are entitled to severance under Section 2,
you will continue to receive life, disability, accident and group health insurance benefits substantially
similar to those which you were receiving immediately prior to termination of
your employment for a period of 24 months following termination of your
employment.  Such benefits shall be
provided on substantially the same terms and conditions as they were provided prior
to the Change of Control, provided that, if coverage for such benefits is not
available under the plans of the Company, the Company shall pay you an amount
in cash equal to the cost of your obtaining such alternative coverage.  Such cash payout shall be made within 60 days
of your termination of employment.

 

In-kind benefits otherwise receivable pursuant to
this Section also shall be reduced or eliminated if and to the extent that
you receive comparable benefits from any other source (for example, another
employer); provided, however, you shall
have no obligation to seek, solicit or accept employment from another employer
in order to receive such benefits.

 

2

 

4.                                       Stock Option and Restricted Stock Acceleration.

 

Notwithstanding anything in this Agreement or in any
option or other award agreement to the contrary, upon a Change of Control, any
stock options, restricted stock and other equity-based awards granted to you
shall accelerate and become vested without further action and, to the extent permitted
under the plan’s governing documents, you shall have a period of one year from
the date of termination to exercise such options (or, if shorter, the earlier
of the original expiration of the option term or 10 years from the date of
grant).  In addition, all restrictions on
awards granted shall lapse.

 

5.                                       Change of Control Defined.

 

For purposes of this Agreement, the term “Change of
Control” shall mean and include the following transactions or situations:

 

(a)                                  The acquisition
of beneficial ownership, directly or indirectly, of securities having 35% or
more of the combined voting power of Meritage’s then outstanding securities by
any “Unrelated Person” or “Unrelated Persons” acting in concert with one
another.  For purposes of this Section,
the term “Person” shall mean and include any individual, partnership, joint
venture, association, trust, corporation, or other entity (including a “group”
as referred to in Section 13(d)(3) of the Securities Exchange Act of
1934 (the “Act”)).  For purposes of this
Section, the term “Unrelated Person” shall mean and include any Person other
than the Company, or an employee benefit plan of the Company, or any officer,
director, or 10% or more shareholder of the Company as of the date of this
Agreement.

 

(b)                                 A sale, transfer,
or other disposition through a single transaction or a series of transactions
of all or substantially all of the assets of Meritage to an Unrelated Person or
Unrelated Persons acting in concert with one another.

 

(c)                                  Any
consolidation or merger of Meritage with or into an Unrelated Person, unless
immediately after the consolidation or merger the holders of the common stock
of Meritage immediately prior to the consolidation or merger are the Beneficial
Owners of securities of the surviving corporation representing at least 50% of
the combined voting power of the surviving corporation’s then outstanding
securities.

 

(d)                                 A change during
any period of two consecutive years of a majority of the members of the Board
of Directors of Meritage for any reason, unless the election, or the nomination
for election by the Company’s shareholders, of each director was approved by
the vote of a majority of the directors then still in office who were directors
at the beginning of the period.

 

6.                                       Good Reason Defined.

 

For purposes of this Agreement, the term “Good
Reason” shall include the following circumstances:  (a) if the Company assigns you duties
that are materially inconsistent with, or constitute a material reduction of
powers or functions associated with, your position, duties, or responsibilities
with the Company, or a material
adverse change in your titles, authority, or reporting responsibilities, or in
conditions of your employment, (b) if your base salary is 

 

3

 

reduced, (c) if the
Company fails to cause any successor to expressly assume and agree to be bound
by the terms of this Agreement, (d) any purported termination by the
Company of your employment for grounds other than for “Cause,” (e) if the
Company relieves you of your duties other than for “Cause,” (f) if you are
required to relocate to an employment location that is more than fifty (50)
miles from Scottsdale, Arizona, or (g) the Company materially breaches its
obligations under this Agreement or your Employment Agreement (as defined in Section 7
below) and such breach is not cured within a reasonable period of time after
written notice from the Executive.  The
Company and you further acknowledge and agree that, if following a Change of
Control, you do not serve or are not serving as Chief Financial Officer of the
parent corporation of the surviving organization, you have experienced a
material reduction of powers or functions associated with your position, duties
or responsibilities with the Company such that Good Reason shall be deemed to
exist.

 

7.                                       Cause Defined.

 

For purposes of this Agreement, the term “Cause” will
exist if Executive, during the term of this Agreement as set forth in Section 1,
(i) has engaged in malfeasance, willful or gross misconduct, or willful
dishonesty that materially harms the Company or its stockholders, (ii) is
convicted of a felony that is materially detrimental to the Company or its
stockholders, (iii) is convicted of or enters a plea of nolo contendere to a felony that materially damages the
Company’s financial condition or reputation or to a crime involving fraud; (iv) is
in material violation of the Company’s ethics/policy code, including breach of
duty of loyalty in connection with the Company’s business; (v) willfully
fails to perform duties under this Agreement or under the Third Amended and
Restated Employment Agreement between you and the Company effective as of January 1,
2010 (“Employment Agreement”) after notice by the Board and an opportunity to
cure; (vi) impedes, interferes or fails to reasonably cooperate with an
investigation authorized by the Board or fails to follow a legal and proper
Board directive; and (vii) a restatement of financial results that occurs
as the result of your willful misconduct or gross negligence pursuant to the
Sarbanes-Oxley Act.

 

8.                                       Termination Notice And Procedure.

 

Any termination by the Company or you of your employment shall be
communicated by written Notice of Termination to you if such Notice of Termination is
delivered by the Company and to the Company if such Notice of Termination is
delivered by you, all in accordance with the following procedures:

 

(a)                                  The Notice of
Termination shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances alleged to provide a basis for termination.

 

(b)                                 Any Notice of
Termination by the Company shall be in writing signed by the Chairman of the
Compensation Committee (the “Committee”) of the Board of Directors of the
Company specifying in detail the basis for such termination.

 

(c)                                  If the Company
shall furnish a Notice of Termination for Cause and you in good faith notify
the Company that a dispute exists concerning such termination within the 30-

 

4

 

day period following your
receipt of such notice, you may elect to continue your employment (or you may
be placed on paid administrative leave, at the Company’s option), during such
dispute.  If it is thereafter determined
that (i) Cause did exist, your “Termination Date” shall be the earlier of (A) the
date on which the dispute is finally determined, either by mutual written
agreement of the parties or pursuant to the alternative dispute resolution
provisions of Section 15, or (B) the date of your death; or (ii) Cause
did not exist, your employment shall continue as if the Company had not
delivered its Notice of Termination and there shall be no Termination Date
arising out of such notice.  A
determination of Cause shall be made by a majority of the members of the Board
only after the Executive and his counsel, if any, have been giving an
opportunity to meet with the Board in advance of the Board’s vote on the matter;
provided that, such determination of Cause shall be subject to the dispute
resolution process described in Section 15.

 

(d)                                 If the Company
shall furnish a Notice of Termination by reason of Disability and you in good
faith notify the Company that a dispute exists concerning such termination
within the 30-day period following your receipt of such notice, you may elect
to continue your employment during such dispute (or you may be placed on paid
administrative leave, at the Company’s option). 
The dispute relating to the existence of a Disability shall be resolved
by the opinion of the licensed physician selected by Meritage, provided,
however, that if you do not accept the opinion of the licensed physician
selected by Meritage, the dispute shall be resolved by the opinion of a
licensed physician who shall be selected by you; provided further, however,
that if Meritage does not accept the opinion of the licensed physician selected
by you, the dispute shall be finally resolved by the opinion of a licensed
physician selected by the licensed physicians selected by Meritage and you,
respectively.  If it is thereafter
determined that (i) a Disability did exist, your Termination Date shall be
the earlier of (A) the date on which the dispute is resolved, or (B) the
date of your death, or (ii) a Disability did not exist, your employment
shall continue as if the Company had not delivered its Notice of Termination
and there shall be no Termination Date arising out of such notice.  For purposes of this Agreement, “Disability”
shall be given the meaning ascribed to such term in your Employment Agreement
at the time the Disability determination is being made.

 

(e)                                  If you in good
faith furnish a Notice of Termination for Good Reason and the Company notifies
you that a dispute exists concerning the termination within the 30-day period
following the Company’s receipt of such notice, you may elect to continue your
employment (or you may be placed on paid administrative leave with pay, at the
Company’s option), during such dispute. 
If it is thereafter determined that (i) Good Reason did exist, your
Termination Date shall be the earlier of (A) the date on which the dispute
is finally determined, either by mutual written agreement of the parties or
pursuant to the alternative dispute resolution provisions of Section 15, (B) the
date of your death, or (C) one day prior to the second anniversary of a
Change of Control, and your payments hereunder shall reflect events occurring
after you delivered Notice of Termination; or (ii) Good Reason did not
exist, your employment shall continue after such determination as if you had
not delivered the Notice of Termination asserting Good Reason.  The Company shall be given an opportunity to
cure the event causing Good Reason within the 15-day period following Executive’s
Notice of Termination for Good Reason.

 

(f)                                    If you do not
elect to continue employment pending resolution of a dispute regarding a Notice
of Termination, and it is finally determined that the reason for termination
set 

 

5

 

forth in such Notice of
Termination did not exist, if such notice was delivered by you, you shall be
deemed to have voluntarily terminated your employment other than for Good
Reason and if delivered by the Company, the Company will be deemed to have
terminated you other than by reason of Disability or with Cause.

 

9.                                       Successors.

 

Meritage will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Meritage or any of its
subsidiaries to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that Meritage or any subsidiary would be
required to perform it if no such succession had taken place.  Failure of Meritage to obtain such assumption
and agreement prior to the effectiveness of any such succession shall be a material
breach of this Agreement by Meritage As used in this agreement “Company” shall
mean Company, as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law or otherwise.

 

10.                                 Binding Agreement.

 

This Agreement shall inure to the benefit of and be
enforceable by you and your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.  If you should die while any amount would
still be payable to you hereunder had you continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to your
devisee, legatee or other designee or, if there is no such designee, to your
estate.

 

11.                                 Notice.

 

For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed as shown
in the Employment Agreement, provided that all notices to Meritage shall be directed
to the attention of the Chairman of the Committee with a copy to the Secretary
of Meritage, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of a change of
address shall be effective only upon receipt.

 

12.                                 Miscellaneous.

 

No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and the Chairman of the Committee.  No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.  No
agreement or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement. 
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Arizona without 

 

6

 

regard to its conflicts of
law principles.  All references to
sections of the Act or the Code shall be deemed also to refer to any successor
provisions to such sections.  Any
payments provided for hereunder shall be paid net of any applicable withholding
required under federal, state or local law. 
The obligations of Meritage that arise prior to the expiration of this
Agreement shall survive the expiration of the term of this Agreement.

 

13.                                 Validity.

 

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

 

14.                                 Counterparts.

 

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

 

15.                                 Alternative Dispute Resolution.

 

All claims, disputes and other matters in question
between the parties arising under this Agreement shall, unless otherwise
provided herein (such as in Section 8), be resolved in accordance with the
arbitration or mediation provisions
included in your Employment Agreement.

 

16.                                 Expenses and Interest.

 

If a good faith dispute shall arise with respect to
the enforcement of your rights under this Agreement or if any arbitration or
legal proceeding shall be brought in good faith to enforce or interpret any
provision contained herein, or to
recover damages for breach hereof, the prevailing party shall recover any
reasonable attorneys’ fees and necessary costs and disbursements incurred as a
result of such dispute or legal proceeding, and prejudgment interest on any
money judgment obtained calculated at the Prime Rate from the date that
payments were or should have been made under this Agreement.

 

17.                                 Payment Obligations Absolute.

 

Meritage’s obligation to pay you the compensation
and to make the arrangements in accordance with the provisions herein shall be
absolute and unconditional and shall not be affected by any circumstances.  All amounts payable by Meritage in accordance
with this Agreement shall be paid without notice or demand.  If Meritage has paid you more than the amount
to which you are entitled under this
Agreement, Meritage shall have the right to recover all or any part of such
overpayment from you or from whomsoever has received such amount.

 

18.                                 Effect on Employment Agreement.

 

This Agreement supplements, and does not replace,
your Employment Agreement.  If there is
any conflict between the provisions of this Agreement and your Employment
Agreement, such conflict shall be resolved so as to provide the greater benefit
to you.  However, the 

 

7

 

Company does not intend to
provide duplicative payments, severance or benefits with in the Employment
Agreement or under
any employee severance plan to the extent such a plan exists or is subsequently
implemented by the Company.  As a
result, benefits otherwise receivable pursuant to this Agreement shall be
reduced or eliminated if and to the extent that you receive severance,
consulting or non-competition payments or benefits pursuant to the Employment
Agreement, including, but not limited to, payments or benefits pursuant to Section 6
of the Employment Agreement, or pursuant to an employee severance plan;
provided that, in no event shall this provision affect or negate the
accelerated vesting of stock options, restricted stock and other equity-based
awards described in Section 4.

 

19.                                 Entire Agreement.

 

This Agreement, your Employment Agreement and your restricted
stock and option grant documents set forth the entire agreement between you and
the Company concerning the subject matter discussed in this Agreement and supersede all prior agreements,
promises, covenants, arrangements, communications, representations, or
warranties, whether written or oral, by any officer, employee or representative
of the Company.  Any prior agreements or
understandings with respect to the subject matter set forth in this Agreement
are hereby terminated and canceled. 
Notwithstanding the foregoing, nothing in this Agreement is intended to
affect any previous agreements pertaining to the grant of restricted stock or options
to the Executive, including without limitation, provisions set forth in
Executive’s prior Change of Control Agreement providing for acceleration and
vesting upon a change of control which previous provisions shall be deemed to
apply to all restricted stock, options and other equity-based awards.

 

20.                                 Deferral of Payments.

 

To the extent that any payment under this Agreement,
when combined with all other payments received during the year that are subject
to the limitations on deductibility under Code Section 162(m), exceeds the
limitations on deductibility under Code Section 162(m), such payment will
be delayed until the first year in which it is deductible.

 

21.                                 Parties.

 

This Agreement is an agreement between you and Meritage and
all successors and assigns of Meritage. 
In certain cases, though, obligations imposed upon Meritage may be
satisfied by a subsidiary of Meritage. 
Any payment made or action taken by a subsidiary of Meritage shall be
considered to be a payment made or action taken by Meritage for purposes of
determining whether Meritage has satisfied its obligations under this
Agreement.

 

22.                                 409A
Interpretation.

 

The
parties intend for payments under this Agreement to be exempt from the
requirements of Section 409A of the Code. 
Notwithstanding anything herein to the contrary, in the even that
Executive is determined to be a specified employee within the meaning set forth
in Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as
amended or any successor provision and the Treasury Regulations issued
thereunder, for purposes of any payment on termination of employment hereunder,
payment(s) shall be made or begin, as applicable, on the 

 

8

 

first payroll date which is more than six months
following the date of separation from service, to the extent required to avoid
the imposition of the additional tax under Section 409A of the Code.

 

If you would like to participate
in this special benefits program, please sign and return the extra copy of this
letter which is
enclosed.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  MERITAGE
  HOMES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Hilton

  
	
   

  	
  Name:

  	
  Steven J. Hilton

  
	
   

  	
  Its:

  	
  Chairman and CEO

  
	
   

  	
   

  
	
  Enclosure

  	
   

  

 

ACCEPTANCE

 

I hereby accept the offer to participate in this
special benefits program and I agree to be bound by all of the provisions noted above.

 

	
   

  	
  LARRY
  W. SEAY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Larry W. Seay

  

 

9Exhibit
10.7

 

AMENDED
AND RESTATED

CHANGE OF CONTROL AGREEMENT

Effective January 1, 2010

(Original Date:  September 30,
2005)

 

Dear
Tim:

 

The
Board of Directors believes that it is in the best interests of Meritage Homes
Corporation (“Meritage”), and its shareholders to take appropriate steps to
allay any concerns you (sometimes referred to herein as “Executive”) may have about your future employment
opportunities with Meritage and its subsidiaries (Meritage and its subsidiaries
are collectively referred to as the “Company”). 
As a result, the Board has decided to offer to you the benefits
described below.

 

1.                                       Term of Agreement.

 

This Agreement is effective immediately and will
continue in effect as long as you are employed by Meritage, unless you and
Meritage agree in writing to its termination.

 

2.                                       Severance Payment.

 

If your employment with the Company is terminated
without “Cause” (as defined in Section 7) at any time within 150 days
prior to or within two years following a “Change of Control” (as defined in Section 5),
you will receive the “Severance Payment” described below.  You will also receive the Severance Payment
if you terminate your employment for “Good Reason” (as defined in Section 6)
at any time within two years following a Change of Control.

 

The Severance Payment equals the sum of (i) two
times the higher of (x) your annual base salary on the date of termination
of your employment, or (y) your annual base salary on the date preceding
the Change of Control, and (ii) two
times the higher of:  (x) the average
annual incentive compensation paid to you in the two years prior to termination
of your employment or (y) the annual incentive compensation paid to you in
the year preceding the year in which the Change of Control occurred (for purposes of determining the amount
of the Executive’s incentive compensation paid for any year during this one- or
two-year period, the amount of the incentive compensation considered paid for
purposes of this provision shall be the sum of (A) the actual Bonus paid
to the Executive, or (B) the fair market value (determined at the time of
grant and not at the time of vesting) of the shares of the Company’s restricted
stock, options and other equity-based awards that became vested in such year).  Notwithstanding the above, the Severance
Payment shall not exceed the lesser of (i) an amount that could be paid on
account of a Change of Control that is not subject to the imposition of any
excise tax under Code Section 4999 and is not otherwise subject to the
non-deductibility provisions of Code Section 280G, or (ii) $4
million.

 

The Severance Payment will be paid in one lump sum
as soon as the revocation period of your legal release has expired (explained
in more detail below), but in no event more than 60 days following termination
of your employment; provided that if you are a “Specified Employee” (as defined
in Section 409A of the Internal Revenue Code of 1986, as amended 

 

 

(“Code”)) and the payment
does not comply with any exception to Section 409A, the above payment will
be paid to you on the
first day of the seventh month following the date of your “Separation from
Service” (as defined in your Employment Agreement) along with accrued interest at the rate of
interest announced by Bank of America, Arizona from time to time as its prime
rate (the “Prime Rate”) from the date that payments to you should have been
made under this Agreement.  If you die after your
termination of employment but before receiving the above payment, the Company
will distribute the benefits to your beneficiary as soon as administratively
feasible following the date of your death.

 

You are not entitled to receive the Severance Payment if
your employment is terminated for Cause, if you terminate your employment
without Good Reason, or if your employment is terminated by reason of your “Disability”
(as defined in Section 8(d)) or your death (unless death or Disability
occurs after a Notice of Termination). 
In addition, you are not entitled to receive the Severance Payment if
your employment is terminated by you or the Company for any or no reason prior
to 150 days before a Change of Control occurs or more than two years after a
Change of Control has occurred.

 

Notwithstanding
anything in this Agreement to the contrary, in order to receive the Severance Payment described in this Section 2,
you must execute (and not revoke) a legal release (“Release Agreement”), in the
form and substance reasonably requested by the Company, in which you release
the Company, Affiliates, directors, officers, employees, agents and others
affiliated with the Company from any and all claims, including claims relating
to your employment with the Company and the termination of your employment.  The Company shall provide you with the Release
Agreement within 5 days following your termination of employment (or “Separation
from Service” if you are a “Specified Employee”).  The Release Agreement must be executed and
returned to the Company within the 21 or 45 day (as applicable) period
described in the Release Agreement and you must not revoke it within the 7-day
revocation period described in the Release Agreement.

 

The Severance Payment will be paid to you without
regard to whether you look for or obtain alternative employment following
termination of your employment with the Company.

 

3.                                       Benefits Continuation.

 

If you are entitled to severance under Section 2,
you will continue to receive life, disability, accident and group health insurance benefits substantially
similar to those which you were receiving immediately prior to termination of
your employment for a period of 24 months following termination of your
employment.  Such benefits shall be
provided on substantially the same terms and conditions as they were provided
prior to the Change of Control, provided that, if coverage for such benefits is
not available under the plans of the Company, the Company shall pay you an
amount in cash equal to the cost of your obtaining such alternative coverage.  Such cash payment shall be made within 60
days of your termination of employment.

 

In-kind benefits otherwise receivable pursuant to
this Section also shall be reduced or eliminated if and to the extent that
you receive comparable benefits from any other source (for example, another
employer); provided, however, you shall
have no obligation to seek, solicit or accept employment from another employer
in order to receive such benefits.

 

2

 

4.                                       Stock Option and Restricted Stock Acceleration.

 

Notwithstanding anything in this Agreement or in any
option or other award agreement to the contrary, upon a Change of Control, any
stock options, restricted stock and other equity-based awards granted to you
shall accelerate and become vested without further action and, to the extent
permitted under the applicable Company plan’s governing documents, Executive
shall have a period of one year from the date of termination to exercise such
options (or, if shorter, the earlier of the original expiration of the terms of
the option or 10 years from the date of grant). 
In addition, all restrictions on awards granted shall lapse.

 

5.                                       Change of Control Defined.

 

For purposes of this
Agreement, the term “Change of Control” shall mean and include the following
transactions or situations:

 

(a)                                  The acquisition
of beneficial ownership, directly or indirectly, of securities having 35% or
more of the combined voting power of Meritage’s then outstanding securities by
any “Unrelated Person” or “Unrelated Persons” acting in concert with one
another.  For purposes of this Section,
the term “Person” shall mean and include any individual, partnership, joint
venture, association, trust, corporation, or other entity (including a “group”
as referred to in Section 13(d)(3) of the Securities Exchange Act of
1934 (the “Act”)).  For purposes of this
Section, the term “Unrelated Person” shall mean and include any Person other
than the Company, or an employee benefit plan of the Company, or any officer,
director, or 10% or more shareholder of the Company as of the date of this
Agreement;

 

(b)                                 A sale,
transfer, or other disposition through a single transaction or a series of
transactions of all or substantially all of the assets of Meritage to an
Unrelated Person or Unrelated Persons acting in concert with one another;

 

(c)                                  Any
consolidation or merger of Meritage with or into an Unrelated Person, unless
immediately after the consolidation or merger the holders of the common stock
of Meritage immediately prior to the consolidation or merger are the Beneficial
Owners of securities of the surviving corporation representing at least 50% of
the combined voting power of the surviving corporation’s then outstanding
securities;

 

(d)                                 A change during
any period of two consecutive years of a majority of the members of the Board
of Directors of Meritage for any reason, unless the election, or the nomination
for election by the Company’s shareholders, of each director was approved by
the vote of a majority of the directors then still in office who were directors
at the beginning of the period; or

 

(e)                                  If Steve Hilton is not Chief Executive Officer of the Company and you have
not been offered or provided with an Executive Vice President and General
Counsel or similar position with equivalent duties, responsibility, authority,
compensation, benefits, severance, employment and change of control terms and
which does not require Executive to relocate or to travel more than he does in
his position with the Company.

 

3

 

6.                                       Good Reason Defined.

 

For purposes of this Agreement, the term “Good
Reason” shall include the following circumstances:  (a) if the Company assigns you duties
that are materially inconsistent with, or constitute a material reduction of
powers or functions associated with, your position, duties, or responsibilities
with the Company, or a material
adverse change in your titles, authority, or reporting responsibilities, or in
conditions of your employment, (b) if your base salary is reduced, (c) if
the Company fails to cause any successor to expressly assume and agree to be
bound by the terms of this Agreement, (d) any purported termination by the
Company of your employment for grounds other than for “Cause,” (e) if the
Company relieves you of your duties other than for “Cause,” (f) if you are
required to relocate to an employment location that is more than fifty (50)
miles from Scottsdale, Arizona, or (g) the Company materially breaches its
obligations under this Agreement or your Employment Agreement (as defined in Section 7
below) and such breach is not cured within a reasonable period of time after
written notice from the Executive.  The
Company and you further acknowledge and agree that, if following a Change of
Control, you do not serve or are not serving as Executive Vice President and
General Counsel or comparable position of the parent corporation of the
surviving organization, you have experienced a material reduction of powers or
functions associated with your position, duties or responsibilities with the
Company such that Good Reason shall be deemed to exist.

 

7.                                       Cause Defined.

 

For purposes of this Agreement, the term “Cause” will
exist if Executive, during the term of this Agreement as set forth in Section 1,
(i) has engaged in malfeasance, willful or gross misconduct, or willful
dishonesty that materially harms the Company or its stockholders, (ii) is
convicted of a felony that is materially detrimental to the Company or its
stockholders, (iii) is convicted of or enters a plea of nolo contendere to a felony that materially damages the
Company’s financial condition or reputation or to a crime involving fraud, (iv) is
in material violation of the Company’s ethics/policy code, including breach of
duty of loyalty in connection with the Company’s business, (v) willfully
fails to perform duties under this Agreement or under the Amended and Restated
Employment Agreement between you and the Company effective as of January 1,
2010 (“Employment Agreement”) after notice by the Board and an opportunity to
cure, (vi) impedes, interferes or fails to reasonably cooperate with an
investigation authorized by the Board or fails to follow a legal and proper
Board directive, and (vii) a restatement of financial results that occurs
as the result of your willful misconduct or gross negligence pursuant to the
Sarbanes-Oxley Act.

 

8.                                       Termination Notice And Procedure.

 

Any termination by the Company or you of your employment shall be
communicated by written Notice of Termination to you if such Notice of Termination is
delivered by the Company and to the Company if such Notice of Termination is
delivered by you, all in accordance with the following procedures:

 

(a)                                  The Notice of
Termination shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
alleged to provide a basis for termination.

 

4

 

(b)                                 Any Notice of
Termination by the Company shall be in writing signed by the Chairman of the
Compensation Committee (the “Committee”) of the Board of Directors of the
Company specifying in detail the basis for such termination.

 

(c)                                  If the Company
shall furnish a Notice of Termination for Cause and you in good faith notify
the Company that a dispute exists concerning such termination within the 30-day
period following your receipt of such notice, you may elect to continue your
employment (or you may be placed on paid administrative leave, at the Company’s
option), during such dispute.  If it is
thereafter determined that (i) Cause did exist, your “Termination Date”
shall be the earlier of (A) the date on which the dispute is finally
determined, either by mutual written agreement of the parties or pursuant to
the alternative dispute resolution provisions of Section 15, or (B) the
date of your death; or (ii) Cause did not exist, your employment shall
continue as if the Company had not delivered its Notice of Termination and
there shall be no Termination Date arising out of such notice.  A determination of Cause shall be made by a
majority of the members of the Board only after the Executive and his counsel,
if any, have been giving an opportunity to meet with the Board in advance of
the Board’s vote on the matter; provided that, such determination of Cause
shall be subject to the dispute resolution process described in Section 15.

 

(d)                                 If the Company
shall furnish a Notice of Termination by reason of Disability and you in good
faith notify the Company that a dispute exists concerning such termination
within the 30-day period following your receipt of such notice, you may elect
to continue your employment during such dispute (or you may be placed on paid
administrative leave, at the Company’s option). 
The dispute relating to the existence of a Disability shall be resolved
by the opinion of the licensed physician selected by Meritage, provided,
however, that if you do not accept the opinion of the licensed physician
selected by Meritage, the dispute shall be resolved by the opinion of a
licensed physician who shall be selected by you; provided further, however, that
if Meritage does not accept the opinion of the licensed physician selected by
you, the dispute shall be finally resolved by the opinion of a licensed
physician selected by the licensed physicians selected by Meritage and you,
respectively.  If it is thereafter
determined that (i) a Disability did exist, your Termination Date shall be
the earlier of (A) the date on which the dispute is resolved, or (B) the
date of your death, or (ii) a Disability did not exist, your employment
shall continue as if the Company had not delivered its Notice of Termination
and there shall be no Termination Date arising out of such notice.  For purposes of this Agreement, “Disability”
shall be given the meaning ascribed to such term in your Employment Agreement
at the time the Disability determination is being made.

 

(e)                                  If you in good
faith furnish a Notice of Termination for Good Reason and the Company notifies
you that a dispute exists concerning the termination within the 30-day period
following the Company’s receipt of such notice, you may elect to continue your
employment (or you may be placed on paid administrative leave with pay, at the
Company’s option), during such dispute. 
If it is thereafter determined that (i) Good Reason did exist, your
Termination Date shall be the earlier of (A) the date on which the dispute
is finally determined, either by mutual written agreement of the parties or
pursuant to the alternative dispute resolution provisions of Section 15, (B) the
date of your death, or (C) one day prior to the second anniversary of a
Change of Control, and your payments hereunder shall reflect events occurring
after you delivered Notice of Termination; or (ii) Good Reason did not
exist, your employment shall continue after such determination as if you had
not delivered the Notice of Termination 

 

5

 

asserting Good Reason.  The Company shall be given an opportunity to
cure the event causing Good Reason within the 15-day period following Executive’s
Notice of Termination for Good Reason.

 

(f)                                    If you do not
elect to continue employment pending resolution of a dispute regarding a Notice
of Termination, and it is finally determined that the reason for termination
set forth in such Notice of Termination did not exist, if such notice was
delivered by you, you shall be deemed to have voluntarily terminated your
employment other than for Good Reason and if delivered by the Company, the
Company will be deemed to have terminated you other than by reason of
Disability or with Cause.

 

9.                                       Successors.

 

Meritage will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Meritage or any of its
subsidiaries to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that Meritage or any subsidiary would be
required to perform it if no such succession had taken place.  Failure of Meritage to obtain such assumption
and agreement prior to the effectiveness of any such succession shall be a material
breach of this Agreement by Meritage.  As
used in this agreement “Company” shall mean Company, as hereinbefore defined
and any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law or otherwise.

 

10.                                 Binding Agreement.

 

This Agreement shall inure to the benefit of and be
enforceable by you and your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.  If you should die while any amount would
still be payable to you hereunder had you continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to your
devisee, legatee or other designee or, if there is no such designee, to your
estate.

 

11.                                 Notice.

 

For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed as shown
in the Employment Agreement, provided that all notices to Meritage shall be
directed to the attention of the Chairman of the Committee with a copy to the
Secretary of Meritage, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
a change of address shall be effective only upon receipt.

 

12.                                 Miscellaneous.

 

No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and the Chairman of the Committee.  No waiver by either party hereto at any time
of any breach by the other party 

 

6

 

hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.  No agreement or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this
Agreement.  The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Arizona without regard to its conflicts of law principles.  All references to sections of the Act or the
Code shall be deemed also to refer to any successor provisions to such
sections.  Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law.  The
obligations of Meritage that arise prior to the expiration of this Agreement
shall survive the expiration of the term of this Agreement.

 

13.                                 Validity.

 

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

 

14.                                 Counterparts.

 

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

 

15.                                 Alternative Dispute Resolution.

 

All claims, disputes and other matters in question
between the parties arising under this Agreement shall, unless otherwise
provided herein (such as in Section 8), be resolved in accordance with the
arbitration or mediation provisions
included in your Employment Agreement.

 

16.                                 Expenses and Interest.

 

If a good faith dispute shall arise with respect to
the enforcement of your rights under this Agreement or if any arbitration or
legal proceeding shall be brought in good faith to enforce or interpret any
provision contained herein, or to
recover damages for breach hereof, the prevailing party shall recover any
reasonable attorneys’ fees and necessary costs and disbursements incurred as a
result of such dispute or legal proceeding, and prejudgment interest on any
money judgment obtained calculated at the Prime Rate from the date that
payments were or should have been made under this Agreement.

 

17.                                 Payment Obligations Absolute.

 

Meritage’s obligation to pay you the compensation
and to make the arrangements in accordance with the provisions herein shall be
absolute and unconditional and shall not be affected by any circumstances.  All amounts payable by Meritage in accordance
with this Agreement shall be paid without notice or demand.  If Meritage has paid you more than the amount
to which you are entitled under this
Agreement, Meritage shall have the right to recover all or any part of such
overpayment from you or from whomsoever has received such amount.

 

7

 

18.                                 Effect on Employment Agreement.

 

This Agreement supplements, and does not replace,
your Employment Agreement.  If there is
any conflict between the provisions of this Agreement and your Employment
Agreement, such conflict shall be resolved so as to provide the greater benefit
to you.  However, the Company does not
intend to provide duplicative payments, severance or benefits with in the
Employment Agreement
or under any employee severance plan to the extent such a plan exists or is
subsequently implemented by the Company.  As a result, benefits otherwise receivable
pursuant to this Agreement shall be reduced or eliminated if and to the extent
that you receive severance, consulting or non-competition payments or benefits
pursuant to the Employment Agreement, including, but not limited to, payments
or benefits pursuant to Section 6 of the Employment Agreement, or pursuant
to an employee severance plan; provided that, in no event shall this provision
affect or negate the accelerated vesting of stock options, restricted stock and
other equity-based awards described in Section 4.

 

19.                                 Entire Agreement.

 

This Agreement, your Employment Agreement and your restricted
stock and option grant documents set forth the entire agreement between you and
the Company concerning the subject matter discussed in this Agreement and supersede all prior agreements,
promises, covenants, arrangements, communications, representations, or
warranties, whether written or oral, by any officer, employee or representative
of the Company.  Any prior agreements or
understandings with respect to the subject matter set forth in this Agreement
are hereby terminated and canceled. 
Notwithstanding the foregoing, nothing in this Agreement is intended to
affect any previous agreements pertaining to the grant of restricted stock or options
to the Executive, including without limitation, provisions set forth in
Executive’s prior Change of Control Agreement providing for acceleration and
vesting upon a change of control which previous provisions shall be deemed to
apply to all restricted stock, options and other equity-based awards.

 

20.                                 Deferral of Payments.

 

To the extent that any payment under this Agreement,
when combined with all other payments received during the year that are subject
to the limitations on deductibility under Code Section 162(m), exceeds the
limitations on deductibility under Code Section 162(m), such payment will be delayed until the first year in
which it is deductible.

 

21.                                 Parties.

 

This Agreement is an agreement between you and Meritage and
all successors and assigns of Meritage. 
In certain cases, though, obligations imposed upon Meritage may be
satisfied by a subsidiary of Meritage. 
Any payment made or action taken by a subsidiary of Meritage shall be
considered to be a payment made or action taken by Meritage for purposes of
determining whether Meritage has satisfied its obligations under this
Agreement.

 

22.                                 409A
Interpretation.

 

The parties intend for payments under this Agreement
to be exempt from the requirements of Section 409A of the Code.  Notwithstanding anything herein to the
contrary, in 

 

8

 

the even that Executive is
determined to be a specified employee within the meaning set forth in Section 409A(a)(2)(B)(i) of
the Internal Revenue Code of 1986, as amended or any successor provision and
the Treasury Regulations issued thereunder, for purposes of any
payment on termination of employment hereunder, payment(s) shall be made
or begin, as applicable, on the first payroll date which is more than six
months following the date of separation from service, to the extent required to
avoid the imposition of the additional tax under Section 409A of the Code.

 

If you would like to
participate in this special benefits program, please sign and return the extra
copy of this letter which is
enclosed.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  MERITAGE
  HOMES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Hilton

  
	
   

  	
  Name:

  	
  Steven J. Hilton

  
	
   

  	
  Its:

  	
  Chairman and CEO

  
	
   

  	
   

  
	
  Enclosure

  	
   

  

 

ACCEPTANCE

 

I hereby accept the offer to participate in this
special benefits program and I agree to be bound by all of the provisions noted above.

 

	
   

  	
  C.
  TIMOTHY WHITE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ C. Timothy White

  

 

9

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